ERISA Group Health Plan Fees and Expenses: New Challenges

Description

Over fifteen years ago, the ERISA world was swept by a wave of challenges to the fees and costs charged by third-party service providers to 401(k) and 403(b) plans. Those cases radically changed the way that recordkeepers, investment managers, and plan fiduciaries administer ERISA retirement plans.

Now, a new litigation wave may be on its way—this time targeting fees and expenses charged to group health plans. Several recent signs suggest a potential surge of challenges to the fees and costs associated with health plans. Among other things:

• The 2021 Consolidated Appropriations Act imposes new disclosure obligations on certain group health plan vendors to disclose fees and revenue from third parties;
• The same plaintiff’s law firm that originated the tsunami of 401(k) fee cases has signaled that it is looking to file a new set of lawsuits challenging group health plan fees and expenses;
• New putative class actions have challenged indirect compensation received by third-party service providers to group health plans; and
• Plan sponsors are getting involved too; several unions and Fortune 500 companies have filed novel lawsuits against their third-party administrators, challenging their fees.

Collectively, these developments point to a new series of lawsuits between health plan sponsors, participants, and third-party administrators.

Speakers Andrew Holly, a partner and co-chair of the ERISA Litigation department at Dorsey & Whitney LLP, and Nick Bullard, also a partner at Dorsey & Whitney LLP, will examine these cases and trends. They will look at the issues and challenges that arise in litigation between plan participants, group health plans, and their service providers. They will also look at potential disputes between health plan sponsors and their third-party administrators. And they will offer practical advice about what sponsors and service providers can do to avoid litigation and, if necessary, win it.