According to the experts at World Wide, any individual or individuals that design, manage, or administer benefit plans to employees are subject to fiduciary liabilities. Individuals and/or employers that are authorized to administer any aspect of a plan, whether health and welfare, pension programs, profit-sharing, savings, or otherwise, can be held liable when a breach of duty is suspected or alleged.
The Challenge for Staffing Firms
Those working for a staffing agency find themselves in a unique employment situation. While an employee may be filling a specific role with one company, the individual is solely employed by the staffing agency. As a result, the administrative team at the staffing agency is responsible for overseeing the benefits to which an employee is entitled. Due to the Affordable Care Act, staffing firms have a potential requirement to extend certain healthcare benefits to their employees.
The Potential for Litigation
Staffing agencies must follow a mandate to both offer minimum coverage and make it affordable, either using fully or partially self-funded plans. These employers must keep up with coverage offerings, premium differentials, auto-enrollment, wellness incentives, W2 reporting, and more. All employees must receive timely communications concerning plan options and alternatives as well as the ongoing administration of their benefits. Any error or oversight, no matter how small, presents a fiduciary liability.
Risk management in this area includes using automated processing to help reduce human error, as well as carrying an insurance plan that addresses fiduciary duties.