The highly publicized insurance industry investigations have spawned concern over how employers can meet their ERISA obligations when it comes to maintaining life and disability programs for their employees. (Read about the ERISA implications of the investigations in this previous post–“Action Required by ERISA Fiduciaries in Recent Insurance Probe.”) This article from BenefitNews.com–“Scandals may prompt more online insurance bidding“– indicates that “some consultants are recommending that employers use online bidding for their plan purchases to avoid any hint of impropriety” and that “the software lowers benefit costs” and “adds transparency to the bidding process.”
The article rightly points out that an “employer’s ERISA fiduciary duty demands companies choose benefits on more than price alone.” Before jumping on this bandwagon, an employer should consult with its legal adviser to determine what other “prudent practices and procedures” should be involved in assessing the carriers, in order to make sure that the employer and/or fiduciaries of the plans are meeting their fiduciary obligations under ERISA.