Pest Management: Minimizing Health Benefit Plan Losses Through Fee Disclosure

In the fifth and final webinar session of Humaculture, Inc.’s Hidden Opportunities, Strategic Compliance series, Jack Towarnicky, a member of aequum, confirmed how plan sponsors can lower costs and manage risk exposure through a more strategic approach to the new annual fee disclosure requirements. A focus on compliance might simply accept whatever disclosures are received. While a strategic response would obtain all the information needed so that the plan fiduciary can determine an “all in” fee. A strategic response would apply this same process to all plans subject to ERISA, not just group health plans. Once determined, an “all in” fee will identify any “pests” – those service providers with conflicts of interest or fees that exceed the value of services provided.

A recording of Pest Management, Minimizing Plan Losses through Fee Disclosure can be viewed here.

Top takeaways:

  • It seems Congress doesn’t believe group health plan fiduciaries are knowledgeable about fees
  • This may be a first step to shine a bright light on fees – as started over a decade ago in 401(k) and 403(b) plans subject to ERISA
  • The plan fiduciary remains solely responsible for limiting costs to reasonable expenses
  • Leveraging Fee Disclosure as a means of “Pest Management” can:
    • Identify conflicts of interest and inferior value in services provided
    • Avoid advisors who haven’t already fully disclosed their compensation
    • Seek advisors who structure fees to facilitate cost management
    • Employ behavioral designs that align with plan sponsor and participant interests

Since the start of 2022, Towarnicky joined benefits industry colleagues at Humaculture to present s a five-part webinar series on how plan sponsors and third-party claims administrators can go beyond mere compliance to strategically respond to the No Surprises Act (NSA) and Transparency in Coverage requirements – to gain a competitive advantage for both employers and employees while minimizing cost, risk exposure and complexity.

According to Towarnicky, “Plan sponsors should take strategic action – changes that go far beyond simple compliance to ensure that their employer-sponsored, self-insured plans incorporate the most effective strategies available today for the ‘health and wealth’ of their participants. These strategies included reference-based pricing, HSA-capable coverage, acquisition cost-based pharmacy pricing, strategic fee disclosure and management as well as adequate participant protections against balance billing, participant advocacy and litigation support. ( ”

As your partner, aequum is here to help lower costs and support your plan’s member experience and success in 2022 and beyond. Please contact us if you have any questions or need for support. For more information, visit