BIP Fall 2024

“Fortunately, I caught myself, and rather than make the decision as to what to pay, I advised the client and gave them technical advice on all of their options,” Mordo says. “I took myself out of a financial fiduciary role, which would have been detrimental to me and the client, and let them make the decisions.” In the end, all claims were adjudicated to the satisfaction of the client and the providers. “I walked away a bit of a hero, and they are still clients 25 years later,” Mordo says. “The situation rein forced my role as an advisor and advocate.” In addition to avoiding fiduciary confusion, Ber man emphasizes that agents can’t ignore compli ance. “It’s easy to get overwhelmed, but ignoring compliance can lead to a ‘parade of horrible,’” she says. “The alternative is to lean into it and view it

as another form of risk mitigation. Make sure you know compliance and that the I’s are dotted and the T’s are crossed.” Mordo agrees, saying agents need to be ready to answer questions from their employer clients, such as: What do I need to do? What don’t I have to do? What are the ramifications if I don’t do it? The broker, he says, will ultimately be the one in the hot seat. “Agents need to stay up on current events and when a regulation is issued,” Mordo says. And if an agency doesn’t have someone internally who can take the lead on compliance, they need to employ third-party help. “Eventually, the employer is going to call their broker, and if the broker misspeaks or makes an error giving a piece of advice, the broker is liable,” Mordo says. “We live in a litigious world, and if an employer gets sued, they look to take down anybody and everybody that had something to do with it.” The next 50 years Industry watchers expect ERISA rules and regulations will continue to expand, with an emphasis on transparency. And the buzz phrase of “fiduciary duties” isn’t going anywhere, either. “There’s a lot more pressure on employers to understand their fiduciary duty, not just from a monetary point of view, but legitimately doing what’s in the best interest of their employees,” Mordo says. “ERISA is the foundation for employee protection. And part of that protection is employers understanding their fiduciary duties. That’s where we are, and it’s up to the broker to take the reins and educate the employer.” Berman sees a continued push for fee disclosure and transparency. She anticipates more questions about preemption but ultimately thinks it will stay in place — an issue that is part of NABIP’s advo cacy agenda. “The association is very much in favor of pro tecting ERISA and preemption because it is really what allows employers to offer benefit plans on a national scale,” she says. Berman encourages NABIP members to stay engaged on the issue and look to the association to help keep brokers up to date on evolving regula tions. “The only thing that is certain is that there will be change — and we have to be prepared for it,” she says. Katie Butler is a freelance writer.

COURTS WEIGH IN Key legal cases have shaped the interpretation and implementation of ERISA. PREEMPTION Ingersoll-Rand Co. v. McClendon: Established a broad preemption doctrine under ERISA, preventing state law from interfering with ERISA-governed plans. Pilot Life Ins. Co. v. Dedeaux: Further solidified ERISA preemption, limiting state law remedies for plan participants. FIDUCIARY DUTY Tibble v. Edison Int’l: Emphasized the ongoing duty of prudence for plan fiduciaries, including monitoring investment options. Hughes v. Northwestern Univ.: Clarified the pleading standard for fiduciary breach claims under ERISA. BENEFIT CLAIMS PROCEDURES Firestone Tire & Rubber Co. v. Bruch: Established the arbitrary and capricious standard of review for most ERISA benefit determinations.

MetLife v. Glenn: Addressed potential conflicts of interest when an insurer is also the plan administrator.

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32 bip magazine Fall 2024