The Health Benefit RFP Is Not Just a Procurement Exercise. It's a Fiduciary Document.
The Health Benefit RFP Is Not Just a Procurement Exercise. It's a Fiduciary Document.
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.
What Makes an RFP Fiduciary-Grade
A fiduciary-grade health benefit RFP does several things a standard procurement process does not:
• It requires compensation disclosure from every respondent — not just as a regulatory formality but as a structured part of the evaluation criteria
• It includes a written fiduciary acknowledgment as a threshold requirement — firms that will not commit are eliminated before the evaluation begins
• It is conducted by an independent evaluator — one with no financial relationships with any respondent, so the process itself cannot be influenced by the same conflicts it is designed to surface
• It produces documentation sufficient to demonstrate, after the fact, that the plan sponsor exercised appropriate oversight — that the decision was made through a prudent process, not just with a good outcomeThat last point is critical. Fiduciary liability under ERISA is evaluated based on process, not results. A plan sponsor who selected the wrong broker through a rigorous, documented, independent process is in a far better legal position than one who selected the right broker through an undocumented, cursory review.
The Fiduciary Acknowledgment as a Filter
Culpepper RFP uses a written fiduciary acknowledgment as a prerequisite for inclusion in any health benefit broker evaluation. This eliminates a significant portion of the market. That is intentional.The brokers who will not commit to serving as a fiduciary to the plan are telling you something important: they have compensation arrangements that a fiduciary commitment would require them to abandon. That is not a reason to work with them. It is a reason to understand what those arrangements are and whether they have been affecting your plan.
What the Documentation Should Show
A well-documented RFP process provides a clear record of
• The criteria used to evaluate respondents
• The compensation disclosures received and how they were evaluated
• The fiduciary commitments made by each finalist
• The rationale for the final selection
• Any conflicts of interest identified and how they were addressedThis documentation is not just administrative housekeeping. It is the record that ERISA counsel will rely on if the decision is ever challenged, that the DOL will review in an investigation, and that plan fiduciaries can point to as evidence of a prudent, deliberate process.
Why Independence Is Non-Negotiable
An RFP conducted by the incumbent broker, the plan sponsor's existing advisor, or any firm with financial relationships with respondents is not an independent evaluation. It is a managed one.This is where the retirement plan parallel is most instructive. One of the key lessons from decades of retirement plan litigation is that process integrity requires the evaluator to be structurally independent from the evaluated. That principle applies with equal force to health benefits.Culpepper RFP has no financial relationships with brokers, carriers, TPAs, or any other participant in the health benefit ecosystem. That independence is not incidental — it is the foundation of the service.
If your organization's last health benefit broker evaluation did not include a fiduciary acknowledgment requirement, a full compensation disclosure review, and independent facilitation, it may be time to conduct one that does.
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