Too often the service provider agreements for your company’s benefit plans are negotiated, executed, and promptly stowed away. When was the last time your contractual arrangements saw the light of day and were reviewed by plan fiduciaries to determine whether they continue to be reasonable? Join Andrew Douglass from Polsinelli’s Employee Benefits & Executive Compensation practice and Eric Krieg from Risk International Benefits Advisors as they discuss the rewards of an independent examination of your service provider agreements, and how it can provide behind-the-scenes knowledge that will aid future decisions for your company’s employee benefit plans. Reviews can be done at the time of your annual renewals or conducted periodically through ongoing fiduciary monitoring, and can expose inefficiencies and highlight opportunities to negotiate more favorable commercial terms. Andrew and Eric will lay out a roadmap for companies interested in taking the first step toward an independent review of their ERISA service provider agreements, and cover the following additional topics: -Opportunities created by independent reviews -Recommended frequency of reviews and best practices for compliance with ERISA’s fiduciary duties -Strategies for identifying cost savings and other value opportunities -Negotiating more favorable contract provisions -Monitoring performance of your service providers through ongoing independent reviews

1. Kill Inefficiencies, Find Hidden Value
in the Service Provider Arrangements
for Your Company’s ERISA Plans
Andrew Douglass and Eric Krieg

2. Polsinelli PC
 Polsinelli is an Am Law 100 firm with more than 800
attorneys in 19 offices, serving corporations,
institutions, and entrepreneurs nationally. Ranked in
the top five percent of law firms for client service, the
firm has risen more than 100 spots in Am Law's annual
firm ranking over the past six years.
 Polsinelli attorneys provide practical legal counsel
infused with business insight, and focus on health care,
financial services, real estate, intellectual property,
mid-market corporate, and business litigation.
 Polsinelli attorneys have depth of experience in 100
service areas and 70 industries.
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3. Risk International
Benefits Advisors
Complete Independence From The Insurance Industry
Risk International is an independent, outsourced risk management and
benefits services provider for Fortune 500 and mid-market enterprises with
complex risk management and benefits challenges.
We are distinctly aligned with our clients in navigating the insurance landscape,
with a no commission, fee-for-service model that ensures objective advice.
We balance world class expertise, creative thinking and a fearless approach to
helping businesses convert risk to opportunity.
Our clients gain critical advantage through a reduced total cost of risk,
increased profitability and the peace of mind that comes with a more stable
and predictable risk management model.
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4. Andrew Douglass
 20+ years of experience in the employee benefits
arena.
 Chair of the Employee Benefits and Executive
Compensation practice group at Polsinelli.
 Prior background as an actuarial consultant in the
employee benefits practice of a large public
accounting firm.
 Multi-faceted approach to helping employers
address the legal, financial, and administrative
issues that affect their benefit plans.
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5. Eric Krieg – The Insider
Previous Assignments:
– 30+ years behind the lines
– Vendor/Insurance company relations
– Advisory Boards
– Set and manage budgets
– Broker
– Consultant
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6. Today’s Agenda
 Opportunities created by independent reviews of the
service provider arrangements for your company’s ERISA
plans
 Recommended frequency of reviews and best practices for
compliance with ERISA’s fiduciary duties
 Strategies for identifying cost savings and other value
opportunities
 Negotiating more favorable contract provisions
 Monitoring performance of your service providers through
ongoing independent reviews
– Conflicts and realities
– Roadmap to conducting an independent review
– What can you expect?
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7. ERISA Fiduciary Basics
 Key ERISA fiduciary obligations to keep in
mind for today’s presentation:
– Act solely in the best interests of plan participants
and their beneficiaries with the exclusive purpose
of providing benefits
– Duty to act with prudence, both procedurally and
substantively
– Follow written terms of all plan documents unless
they violate ERISA
– Pay only reasonable expenses from plan assets
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8. ERISA Fiduciary Considerations
Relating to Plan Service Providers
 Selection and monitoring of plan service providers
involves discretionary authority or control over the
management and administration of the plan
– These actions are therefore subject to ERISA’s fiduciary
standards
– DOL recommends a “regular review” of all service
providers to a company’s ERISA plans (best practice is
generally every 3 to 5 years)
 Compensation paid to providers must be reasonable in
amount for the services actually received
 Must be cognizant of potential conflicts of interest, as
well as “self-dealing” situations and other prohibited
transactions involving service providers
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9. Key Items to Review in ERISA
Service Provider Agreements
 Scope of provider’s services
 Reasonableness of fees, expenses, rebates, discounts, and
other pricing features
 Performance guarantees and SLAs
 Provider’s acknowledgment of ERISA fiduciary status
(if appropriate)
 Caps on provider’s indemnification and liability obligations
 Subcontracting, outsourcing, and use of affiliates by provider
 Potential conflicts of interest
 Audit rights
 Ownership of plan data and records
 Termination provisions and other remedial rights
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10. Considerations for Companies
 Periodic Benchmarking of Services and Pricing
 “At-Risk” compensation approaches
 Market Check and Most-Favored-Nation pricing
features
 Audit of provider’s services and pricing
 Monitor industry reputation of providers and
potential conflicts of interest relating to services
 Competitive RFP
BE SURE TO DOCUMENT REVIEW PROCESS!
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11. SERVICE PROVIDER
REVIEW ROADMAP

12. Can You Really Do Better?
Common Deal Myths:
 My size will guarantee the best arrangement
 My top-tier broker/consultant gets me the best
deal
 My procurement team will ensure that the
arrangements are the best deal for my company
 Our internal team has a ton of experience and is
effectively managing all of our vendor
arrangements
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13. Do Bigger Companies
Get Better Deals?
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14. Conflict of Interest
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15. Perspectives and Motivations
Employer HR/Benefits LeaderInsurance
Companies
Healthcare Providers Other Benefits Suppliers Brokers/Consultants
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Employees

16. Good Deal vs. Great Deal
“Good is the enemy of great. And that is one of the
key reasons why we have so little that becomes great.
– James C. Collins, Good to Great
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17. A Good Value is the
Enemy of the Best Value
What’s between you and the best value?
 Conflict of interest
 Not seeing all the
options
 A slanted view of options
presented
 Is the extra effort worth
the end result
 It’s only $100,000 or so…
 Relationship vs. results
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18. Typical Client Arrangements
15 vendors, 22 different benefits/services (11 fully-insured, 4 self-funded and 7 fee/commission-based)
Benefit/Service Vendor Cost-Sharing Funding Mechanism
Medical Aetna Shared Self-Funded
Medical MVP Shared Full-Insured
Medical Kaiser Shared Full-Insured
Medical HMSA Shared Full-Insured
Prescription Drug Express Scripts Shared Self-Funded
Stop-Loss Sun Life 100% Company-Paid Fully-Insured
HSA (administration) PayFlex 100% Company-Paid Fee-Based
Dental MetLife Shared Self-Funded
Vision EyeMed Voluntary (100% Employee-Paid) Fully-Insured
Basic Life MetLife 100% Company-Paid Fully-Insured
AD&D Prudential Voluntary (100% Employee-Paid) Fully-Insured
Short-Term Disability Prudential 100% Company-Paid Self-Funded
Short-Term Disability (Statutory) Prudential 100% Company-Paid Fully-Insured
Long-Term Disability Prudential Voluntary (100% Employee-Paid) Fully-Insured
Benefits Admin. System Aon Hewitt Voluntary (100% Employee-Paid) Fee-Based
Business Travel Accident Prudential Voluntary (100% Employee-Paid) Fully-Insured
Telemedicine Teladoc 100% Company-Paid Fee-Based
Employee Advocacy Health Advocate 100% Company-Paid Fee-Based
Supplemental Life Prudential Voluntary (100% Employee-Paid) Fully-Insured
FSA (administration) PayFlex 100% Company-Paid Fee-Based
EAP Beacon Health Options 100% Company-Paid Fee-Based
Group Legal ARAG Voluntary (100% Employee-Paid) Fee-Based

19. Manage Benefits Risk
Who’s responsibility is it to manage vendor
arrangements?
 Do your plans reflect what you purchased?
 Would any of your contract elements surprise you?
 Are there steps you should follow every year?
 How to enhance plan performance
 Do you know your rights?
 Extract all the value from
your arrangements
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20. Down to Brass Tacks
 Where to start?
 Plan maintenance vs. plan management
 What is a contract review?
 Vendor management
– Contract management
 Provisions
– Data ownership
– Performance Guarantees
– Audit provisions
– Termination provisions
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21. Employee Pay All Plans
 Managed with the same scrutiny as employer
funded arrangements?
 Distribution of employer vs. employee
premiums
 ERISA Plans
 Compensation
 Loss ratios
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22. Recommended Process
Inventory Roadmap Execution Evaluation Adjustment
• Service provider
contracts
• Plan documents
• Summary Plan
Descriptions
(SPD)
• Plan performance
• Value equation
• Key contract
provisions
• Service
improvement
• Prioritize
• Create game plan
• Establish roles/
responsibilities
• Create
operational plan
• Maximize internal
and external
resources
• Accountability
• Establishment of
key metrics
• Contract terms vs.
performance
• Contract terms vs.
market
• Adapting to
change
 Market
circumstances
 Economy
 Business
conditions
 Demographic
changes
 Regulatory
• Revise game plan
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23. In Data We Trust
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24. Comprehensive Summary Report
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25. Case Study: Midwest Employer
3,500 employees
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26. Take Action
 Understand the scope and impact of the
opportunity
– What if you could reduce cost by 20%
– What if you could increase
value of your arrangements?
 Reward outweighs effort
 Pick a starting point
 You don’t have to go at this alone
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27. Contact Us
Andrew Douglass | Polsinelli
Chair, Employee Benefits and Executive Compensation
adouglass@polsinelli.com
312.873.2933
161 N. Clark Street, Suite 4200
Chicago, IL 60601
Eric Krieg | Managing Director
riskinternational | RIBA
4055 Embassy Parkway, Suite 100 | Fairlawn, OH 44333-1781
o: 216.255.3435 | c: 216.789.2517
ekrieg@riskinternational.com | my_linkedin
riskinternational.com | theinsider.riskinternational.com
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28. Questions
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29. Polsinelli provides this material for informational purposes only. The material
provided herein is general and is not intended to be legal advice. Nothing
herein should be relied upon or used without consulting a lawyer to consider
your specific circumstances, possible changes to applicable laws, rules and
regulations and other legal issues. Receipt of this material does not establish
an attorney-client relationship.
Polsinelli is very proud of the results we obtain for our clients, but you should
know that past results do not guarantee future results; that every case is
different and must be judged on its own merits; and that the choice of a
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