Is a new wave of ERISA fiduciary litigation targeting group health plan sponsors on the horizon? There have already been a few examples of health plan fee cases, such as claims challenging the billing practice between insurers and their subcontractors or challenging commissions paid in connection with multi-employer plans. Recent advertisements by the class action plaintiffs’ firm Schlichter Bogard soliciting current participants in particular companies’ health plans relating to the fees they are being charged in those plans suggest the trend is continuing. 

The Consolidated Appropriations Act of 2021, or CAA, created new disclosure requirements for entities providing brokerage and consulting services to ERISA-covered group health plans. The CAA amended section 408(b)(2) of ERISA to require certain service providers of group health plans to disclose specified information to a plan fiduciary, including the compensation the service provider expects to receive in service of the plan. Additionally, the CAA requires a determination of “reasonableness” for vendor fees and services for healthcare plan providers. Similar disclosure requirements enacted for defined contribution plans in 2012 kicked off the current wave of defined contribution plan fee litigation, and the CAA’s new regulations prompted questions as to whether group health plans are the next targets. 

Schlichter’s advertisements for potential plaintiffs for this new round of litigation are yet another sign of what’s to come. While nothing has been filed yet, and representatives from Schlichter have represented that they are conducting targeted investigations only, group health plan sponsors and fiduciaries should remain vigilant and review their and their service providers’ compliance with section 408(b)(2)’s requirements. 

Jackson Lewis will continue to closely monitor these types of cases and this new trend in ERISA litigation. Please contact a Jackson Lewis ERISA Litigation team member or the Jackson Lewis attorney with whom you regularly work if you have questions or need assistance.

Tags: consolidated Appropriations Act, ERISA, Group Health Plan, Group Health Plan Service Provider
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of René E. Thorne René E. Thorne

René E. Thorne is co-leader of the firm’s ERISA Complex Litigation group, and is a principal in the New Orleans, Louisiana, office of Jackson Lewis P.C. René started the New Orleans office and was the managing principal for ten years.

Her national practice…

René E. Thorne is co-leader of the firm’s ERISA Complex Litigation group, and is a principal in the New Orleans, Louisiana, office of Jackson Lewis P.C. René started the New Orleans office and was the managing principal for ten years.

Her national practice covers the full range of complex benefit litigation matters, including representation of employers, plans, plan fiduciaries, third party administrators, and trustees. In that regard, she has handled numerous ERISA class actions alleging breach of fiduciary duty; breach of the duty of loyalty; prohibited transactions; 401(k) plan asset performance, fees, and expense issues; defined benefit plan asset issues, accrual issues, and cut-back issues; cash balance plan issues; ESOP litigation; fiduciary misrepresentation claims; sophisticated preemption issues; executive compensation litigation, both pension and welfare claims; retiree rights litigation; severance plan claims; Section 510 cases; and complex benefit claim cases.

Read more about René E. Thorne
Show more Show less
Photo of Stacey C.S. Cerrone Stacey C.S. Cerrone

Stacey C.S. Cerrone is a principal and office litigation manager of the New Orleans, Louisiana, office of Jackson Lewis P.C. and a core member of the Employee Benefits and the ERISA Complex Litigation practice teams. Her nationwide practice focuses on the defense of…

Stacey C.S. Cerrone is a principal and office litigation manager of the New Orleans, Louisiana, office of Jackson Lewis P.C. and a core member of the Employee Benefits and the ERISA Complex Litigation practice teams. Her nationwide practice focuses on the defense of complex ERISA class actions filed against public and private single employer ERISA plan sponsors and fiduciaries, as well as multi-employer plans and fiduciaries and ERISA plan services providers. Stacey litigates a wide variety of class action claims, including 401(k) fee claims, stock drop claims, “church plan” and “government plan” claims, health and welfare plan claims, and ERISA Section 510 claims. She also litigates ERISA benefit claims and claims involving non-ERISA plans.

Read more about Stacey C.S. Cerrone
Show more Show less
Photo of Lindsey H. Chopin Lindsey H. Chopin

Lindsey H. Chopin is a principal in the New Orleans, Louisiana, office of Jackson Lewis P.C. and a member of the firm’s ERISA Complex Class Action, Employee Benefits and Class Action groups.

Lindsey focuses her practice on the defense of complex ERISA class-actions…

Lindsey H. Chopin is a principal in the New Orleans, Louisiana, office of Jackson Lewis P.C. and a member of the firm’s ERISA Complex Class Action, Employee Benefits and Class Action groups.

Lindsey focuses her practice on the defense of complex ERISA class-actions filed against public and private single employer ERISA plan sponsors and fiduciaries, as well as multi-employer plans and fiduciaries and ERISA plan services providers. She has litigated a wide variety of class action claims, including 401(k) fee claims, stock drop claims, defined benefit mortality assumption claims, “church plan” and “government plan” claims, health and welfare plan claims, and ERISA Section 510 claims. Lindsey also litigates ERISA benefit claims and claims involving non-ERISA plans.

Read more about Lindsey H. Chopin
Show more Show less
Related Posts
Class Action Alleges “Scheme” by TIAA and Morningstar to Drive Participants into TIAA’s Most Profitable Funds
September 4, 2024
Fifth Circuit Remands ESG Rule in First ERISA Test Case Post-Chevron
August 6, 2024
Evonik Corporation Beats 401(k) Plan Challenge with Evidence of Rigorous Fiduciary Process
July 17, 2024