How does DOL/ERISA view payments to the TPA besides the basic contract admin. fee?
We live in an era of tie-in deals, discounts, rebates, etc. However, DOL/ERISA takes a very old-fashioned traditional view. They assume that all money generated related to the existence of the plan belongs to the plan. For example, a TPA may feel that he worked hard to earn the commission for placing the stop-loss. However, DOL would say, “But if there wasn’t a plan, then there wouldn’t have been a commission…therefore the commission belongs to the plan.” They apply that thinking to discounts, rebates, etc. It’s not that DOL won’t allow the plan to knowingly designate that kind of side money to you. It is just that they see it as a distribution of plan assets, so they think the client plan should be as aware of the amounts & arrangements as they would be if they wrote a check.
Related Questions
- Does the enrollment contract oblige the student to pay the entire program fee even if he/she decides to leave before taking all the courses?
- I am a current DIR-contracted vendor. How do I sign up for automatic transfers of admin fee payments?
- How does DOL/ERISA view payments to the TPA besides the basic contract admin. fee?
