News
On Dec. 30, the Department of Labor (DoL) issued guidance on the Consolidated Appropriations Act, 2021 which clarifies the inclusion of standalone dental plans in the group market requirements for covered service provider and broker fee disclosures. The guidance specifically discusses section 408(b)(2) of the act, which requires brokers and consultants to disclose direct and indirect compensation related to “covered plans.” The act states that the requirements include “vision and dental” plans, which is in conflict with usual Employee Retirement Income Security Act (ERISA) excepted benefits statute. NADP sought clarity on the requirements from DoL in July 2021.
“The view of the Department is that limited scope dental and vision plans, although excepted from certain requirements in Part 7 of ERISA, are “covered plans” subject to the requirements of ERISA section 408(b)(2)(B). The definition of a “covered plan” in ERISA section 408(b)(2)(B) refers to ERISA section 733(a), without any indication that the definition is further limited by ERISA section 733(c)(2). That conclusion is further supported by the definition of a “covered service provider” in ERISA section 408(b)(2)(B)(ii)(I)(bb), which states that covered brokerage services in subparagraph (AA) include such services rendered to a “covered plan with respect to the selection of insurance products (including vision and dental)” and that covered consulting services in subparagraph (BB) include services “related to the development or implementation of plan design, insurance or insurance product selection (including vision and dental)[.]”
Contact Director of Government Relations Owen Urech with any questions.