Evaluating a benefits broker means reviewing what they are paid from every source, what services they actually deliver, and how they surveyed the market on your behalf — then documenting whether the arrangement is reasonable.

Anyone who spent the last two decades around retirement plan oversight has an odd experience reading health benefits news right now. The developments are not surprising. They are familiar.

A request for proposal is a monitoring exercise, not a termination process. Plan sponsors have a duty under ERISA to monitor the services and fees of the providers they hire, and a competitive evaluation is the standard way to do it. Incumbent advisors frequently win these processes. When they do, the plan sponsor ends up holding something they did not have before — documented evidence that the arrangement is competitive.

Most plan sponsors who ask whether their pharmacy benefit arrangement is competitive receive a confident answer. It is usually some version of this: our pooled pricing outperforms what you would get negotiating alone against Caremark, Express Scripts, or Optum.

Retirement plan committees spent roughly  fifteen years learning a set of lessons the hard way. Health and welfare committees are now entering the same sequence —and they have the unusual advantage of being able to read ahead.

I call this Parallel Paths. The premise is simple: the forces that transformed retirement plan governance are appearing in health benefits, in the same order, roughly a decade later.

We benchmarked last year" is one of the most common answers a retirement plan committee gives when asked about provider oversight. It is a legitimate answer. It is also, frequently, an answer to a different question than the one being asked.

For most of ERISA's history, fee transparency was a retirement plan conversation. Group health plan sponsors operated with far less visibility into what their service providers were paid, by whom, and for what. That gap closed in 2021, and it has continued to narrow since.

Pooled employer plans have moved from novelty to mainstream. More than 50,000 401(k) plan sponsors have adopted a PEP model since SECURE 2.0, and adoption continues to build as small and midsize employers revisit vendor contracts and fiduciary workloads.

Most organizations approach the health benefit broker RFP as a procurement exercise. They issue a questionnaire, collect responses, compare fees, and select a winner. That process is better than nothing. But it falls short of what a well-designed RFP is actually capable of — and what regulators, courts, and ERISA counsel increasingly expect.

Most plan sponsors believe their health benefit broker is compensated by a commission or a flat advisory fee. Some are. Many are not — or at least not only. Broker compensation in the health benefits market is layered, and the layers that are hardest to see are often the ones that create the most significant conflicts of interest.

If you ask most health benefit brokers whether they put their clients first, you will get a confident yes. Some will hand you a brochure. Some will point to their mission statement. A few will add language to their service agreement that sounds substantial. Almost none will actually commit to operating as a fiduciary — because that commitment comes with real obligations they are not willing to accept.

For decades, retirement plan advisors operated in a world where conflicts of interest were common, compensation was opaque, and 'what's best for the client' was more of a tagline than a legal obligation. Then came ERISA, DOL rulemaking, and a wave of litigation that changed everything. Retirement advisors today must disclose compensation, avoid prohibited transactions, and in many cases formally adopt a fiduciary standard. That transformation didn't happen overnight — but it happened. Health benefits are next.

One of the most common mistakes organizations make during vendor evaluations is underestimating the amount of time the process requires. Many RFPs begin too late in the cycle — often just months before open enrollment or renewal periods. At that stage, organizations are already focused on implementation and execution. This compressed timeline can limit the effectiveness of the evaluation itself.

Many organizations describe their RFP process as independent. But independence involves more than simply using a third party.

A truly independent process is defined by how evaluation criteria are established, how providers are compared, how compensation is reviewed, and how decisions are documented. The structure behind the process matters.

Fifteen years ago, the retirement plan industry was shaken by a fiduciary reckoning that most employers never saw coming. Brokers who had quietly collected undisclosed compensation from investment providers were suddenly required to disclose every dollar, legally sign on as fiduciaries, and operate in the full light of regulatory scrutiny. The firms that hadn’t prepared paid a steep price.

In many benefit and retirement plan evaluations, the existing broker or advisor plays a central role in managing the RFP process. This arrangement is common throughout the industry.

Advisors often help gather information, coordinate vendors, develop questionnaires, organize responses, and guide sponsor discussions. Their experience and market knowledge can be valuable. However, this structure raises an important question: Can a provider objectively manage an evaluation in which they are also being evaluated?

For many organizations, evaluating benefit and retirement plan vendors has become significantly more complicated than it was a decade ago.

What was once viewed as a periodic administrative exercise has evolved into a process involving:

•       Increasing regulatory expectations

•       Compensation transparency concerns

•       Vendor consolidation

•       Growing fiduciary scrutiny

The advisor relationship is often the hardest fiduciary decision for plan sponsors to examine objectively.

These relationships are usually long-standing, built on years of collaboration, and grounded in genuine trust. The advisor knows the plan, the participants, and the committee. They've been in the room for difficult decisions.

Most retirement plan RFPs are not run with bad intentions.

Plan sponsors and their committees generally approach the process seriously. They collect proposals, review fees, talk to references, and make a decision they believe is sound.

Two plan sponsors conduct retirement plan RFPs in the same quarter.

Both collect proposals from the same providers. Both choose a finalist. Both complete the transition — or decide to stay with the incumbent. From the outside, the processes look similar.