Erin Sweeney commented on relationships between ERISA plans and service providers during an American Bar Association Employee Benefits Committee meeting. As the U.S. Department of Labor increases their focus on relationships between ERISA plans and service providers, plan fiduciaries should proceed carefully in drafting provider agreements, panelists said. ERISA plans have a duty to make sure the fees they pay service providers are reasonable. In addition, Sweeney highlighted the importance of fee vigilance. "Always pay attention to hidden fees, because hidden fees can surprise you in a whole variety of contexts," she said.
Sweeney discussed contracts governing pharmacy benefit managers and specialty drugs, which she defined as drugs that must be administered in a medical setting such as a doctor's office. Specialty drugs are tricky, she said, because they may implicate "anti-kickback issues" and are "incredibly expensive." Given this information, she advised ERISA plans to "look under the hood a little with specialty drugs" and consider using a different provider than the one used for pharmacy benefit management services.