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Greetings, Does anyone have a good contact at the DOL that they could share? I have been looking into the question of when ERISA bonding is required under Section 412 with respect to a TPA that collects premiums from plan sponsor and remits to the carrier (note: TPA does not pay claims). My feeling is that these monies are not "plan funds" that trigger the bonding requirement until they are in the hands of the carrier, and thus the TPA does not need to have an ERISA bond in place. I base this mostly on Section 2580.412-5 "Determining when 'funds or other property" belong to a plan. https://www.law.cornell.edu/cfr/text/29/2580.412-5 Any information, whether it be a contact # or experience relating to the above issue, would be most appreciated. Thank you. -
Plan is a self-insured plan that contracts with a Non-traditional Third Party Administrator. The TPA does not collect any premiums or pay out any claims (claims are handled by Care First). Carefirst adjudicates all claims, and debits an account belonging to Plan Sponsor. Role of the TPA is to process enrollment, provide other administrative services(billing, prepare 5500s, PPACA reporting, consulting, etc), for which it receives a "fee for service." Additionally, TPA collects and remits to CareFirst the fees paid by Plan Sponsor. Since TPA does not "handle" plan assets and does not exercise any discretion or control over the Plan, it is our belief that the TPA does not fall under the ERISA definition of Fiduciary. Would you agree? If TPA is arguably not a fiduciary, would an argument exist that the TPA is not required to fulfill the ERISA bonding requirements under Section 412? A review of Field Assistance Bulletin No. 2008-04 leads me to conclude that since TPA does not "handle funds or other property" of the plan (merely collects ans remits a fee to Carefirst) and does not adjudicate Claims, it would not be deemed a "Plan Official." Thoughts? Thank you...