Assistant Secretary of Labor Lisa Gomez, the head of the Employee Benefit Security Administration, explained Thursday that she sees the key challenge related to the department’s ESG rule as educating people on what the rule does and does not say.
Gomez, speaking at the Employee Benefit Research Institute’s 2023 Spring Policy Forum in Washington, D.C., emphasized that fiduciaries must at all times act for the benefit their participants, and the new rule does nothing to modify that requirement. Fiduciaries cannot subordinate participant interest to other goals; the rule is meant to clarify that plan sponsors may consider ESG factors in their fiduciary analysis.
The rule, permitting environmental, social and governance considerations when selecting retirement plan investments, currently facing legal challenges, was on the assistant secretary’s mind; she joked that it is “very good that it was non-controversial.”
Gomez also briefly addressed the SECURE 2.0 Act of 2022, saying that EBSA is “doing various studies,” presumably on the implementation of various of the law’s provisions. She mentioned only one provision specifically: the requirement for the Department of Labor to study changes to Bulletin 95-1, which describes fiduciary duties for defined benefit plans purchasing annuities with plan funds.
The remainder of Gomez’ remarks focused on the expiration of the government’s classification of the COVID-19 pandemic as a public health emergency, and the requirements for health care plans that came with that status end today.
Gomez said health plans are no longer required to cover COVID-19 diagnostic tests at no cost to the consumer, including those purchased over the counter, but they may choose to continue doing so. For COVID-19 vaccines, health plans still must provide full coverage at no cost for in-network providers but may impose cost-sharing for out-of-network providers.
Educating participants, especially those who made frequent use of the previous benefits, of these changes is an important EBSA goal, Gomez said. She said she hopes health plan providers will also invest in informing participants of these changes.
Gomez also spoke about mental health parity in health plans, saying that there is “no greater priority than mental health parity” for EBSA at the moment, and she intends to invest an “unprecedented amount of resources into enforcement for mental health parity.” Health care plans are forbidden by federal law from imposing spending limits on mental health coverage that are lower than those for medical and surgical coverage.
Also, with the end of COVID-19 as an official public health emergency, the assistant secretary of labor wants to make sure participants understand the new normal.