Independent Fiduciary Services for Final Claim Appeals

Our Mission — CAFS was founded specifically to provide independent claim appeal services for individual claim appeals for ERISA-governed employee benefit plans. CAFS acts as an independent fiduciary, under ERISA, to adjudicate claim appeals for any type of ERISA-governed employee benefit plan. CAFS provides individual claim appeal services for, short and long-term disability plans, pension plans, including defined benefit plans, defined contribution plans such as profit sharing and 401(k) plans, and medical plans and other plans that are subject to the ERISA claims procedure and fiduciary rules

By assuming the important role as the ERISA claim appeal fiduciary, CAFS eliminates conflict of interest, provides a highly analytic assessment, reduces liability and exposure and work load of internal company staff, and overall, improves the quality and integrity of ERISA plan governance and decision-making. CAFS has established its approach to fiduciary decision-making to be a better choice for sponsors, regardless of how final appeals are currently being handled.

When your company retains CAFS to be the independent fiduciary for processing ERISA final claim appeals, your company has chosen an independent fiduciary that is truly independent and provides the highest quality processing and skilled claim analysis, all fully compliant with the ERISA. CAFS establishes credibility for your plan process, eliminates conflict of interest and any perception of conflict of interest, improves employee confidence, increases the integrity of claim processing and provides material advantages to all concerned.

“An ERISA fiduciary must act with prudence, loyalty and disinterestedness, requirements carefully delineated in the statute.” Langbecker v. Electronic Data Systems Corp., Case Number 04-41760, (5th Cir.)(2007).

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Use of an Independent Fiduciary is a Best Practice and Better Alternative

Many companies and their various attorneys and consultants realize that using CAFS as the independent fiduciary for processing all ERISA governed final claim appeals is a perfect fit, and a better alternative to the current handling of final claim appeals. Regardless of whether final claim appeals are handled by internal staff or a committee, or by a third party administrator, or an insurance company, the advantages that CAFS delivers make it the preferred alternative to fiduciary processing of final appeals.

Personal and corporate liability results when internal committees or human resource staff take on the ERISA fiduciary decision-making. In most cases, this exposure is not desirable, yet internal staff rarely have sufficient time for training and education in the areas of ERISA fiduciary law and claim adjudication to keep exposure in check. This has become more of a concern recently, when significant class action lawsuits have been filed regarding a variety of ERISA fiduciary matters. Indeed, it is a matter of best practice to maintain a third party independent source of decision-making, to ensure that the ERISA laws, processes and plan terms are followed.

Moreover, unavoidable conflict of interest arises when companies and internal staff make decisions under the company’s ERISA plans. Internal staff are often seen as protecting the company's economic interests, rather than the plan’s integrity. In addition, maintaining adequate working knowledge of the claims procedure under ERISA Section 503 and developments in judicial decisions, creates a heavy burden on internal staff to make sure the process is fair, and undertaken prudently. This leads to increased costs and a potential loss of integrity in claims processing. Ultimately, time pressures and ever-increasing work loads, means that internal staff do not have sufficient time to fully assess claims, or prepare detailed and complete responses that cite to plan terms, facts, and provide analysis, as required by the ERISA claim regulations (29 C.F.R. §2560.503-1). Invariably, CAFS is a better alternative. top

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The Use of CAFS as an Independent Fiduciary is A Better Way to Manage and Control Plan Operation.

Many sponsors wish to retain substantial control over the process.  While this desire can be admirable, it can be seen as emphasizing the conflict of interest concerns.   CAFS specifically addresses this concern through its process.  CAFS process specifically includes a detailed assessment of company policies, strategies and the input of internal staff.   Thus, CAFS is always focused on the right decision for the ERISA plan, and is able to achieve this, through its detailed and complete process. top

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Independent Fiduciary Services Provided By CAFS is Better than Use of Other Third Parties.

There are drawbacks as well for companies that use outside claims administrators, or insurance companies, as the final appeal fiduciary. These type of administrators are reluctant or refuse to accept a fiduciary role, and when they do, it can be expensive. Often times, these entities create partial fiduciary roles and misplace their focus on protecting themselves rather than the ERISA Plan. In this vital role, these providers do not always provide consistent quality, and do not always employ qualified degreed professionals to ensure the integrity of the appeal process and provide protection for the plan and internal staff.

While third party claims administrators and insurance companies do have an important role as claims administrators for certain types of plans, such as short and long term disability plans and health plans, a number of problems arise when these entities handle all levels of appeal. Such entities have difficulty satisfying the true purpose of the Claims Procedure Regulations, because the entity handling a final claim appeal may not to be a subordinate of the prior decision-maker. This is difficult for a single entity to do, even one that forms different internal committees. When this occurs, such claims administrators are often looked upon with suspicion when they deny claims, and are seen as protecting their own process when they “rubber stamp” prior decisions. Indeed, many times these entities do not and cannot provide the fresh, neutral, complete decision-making required by ERISA.

CAFS is a better alternative for the processing of final appeals for all types of ERISA-governed plans. The independence that CAFS delivers reduces liability and exposure, making CAFS a more efficient and effective alternative. top