Avoid Lawsuits and Stay Compliant: How to Meet Your ERISA Duties

The alarm bells are ringing. Major lawsuits against Wells Fargo and JP Morgan are making waves, spotlighting how companies manage their employee benefit plans. The message is clear: plan sponsors are being held accountable. It’s time to take a hard look at your healthcare plan because failing to meet your fiduciary responsibility puts your plan at risk for very costly lawsuits. 

Recent ERISA Lawsuits: What Employers Need to Know

ERISA (Employee Retirement Income Security Act) is a law that requires employers to act in the best interest of their employees when managing health and retirement plans. Recent lawsuits claim that some companies have failed to do this with their healthcare plans. 

Notable Lawsuits: 

• Wells Fargo was accused of mismanaging their health plan which caused the members to pay egregious prices for prescriptions. The complaint says people paid over $9,994 for a 90-day supply of an MS drug, while it cost just $648 without insurance. Similarly, an HIV drug was $3,107 but available for $123 (a 2,400% mark-up). 

• JP Morgan is facing similar claims that it allowed high fees and poor plan management. The suit claims a 30-unit prescription of an MS drug cost as little as $11.05 without insurance, yet plan members were charged $6,229. 

These cases show that plan sponsors need guidance when putting together benefit plans. Compliance is no longer optional, but mandatory. 

5 Key Steps Employers Can do to Avoid an ERISA Lawsuit

With more lawsuits happening, employers need to take action now. Here’s what you can do: 

1. Keep costs transparent. Make sure your health plan has clear, transparent pricing and no hidden fees. 

2. Review your vendors. Look at the companies that manage your benefit plan and ensure decisions are being made with your employees' best interest in mind. 

3. Analyze your data. Review what you’re paying, and MOST importantly, why you’re paying for it. 

4. Stay informed. Understand your ongoing responsibilities as a 5500-form signer and follow best practices to stay compliant. 

5. Get a medical and prescription check-up. Novo Connection offers an in-depth review of your plan, pointing out anything that could be putting you and your plan at risk. 

   
   

What If You Discover an ERISA Violation? 

Don’t wait. Take action immediately. 

If you’re currently looking over your healthcare plan and find ERISA violations, switching to a compliant plan is crucial. 

Novo Connection simplifies your fiduciary responsibility by offering the best, and always compliant, self-funded plans. With transparent pricing, data-driven recommendations, and vendor accountability, we help businesses take control of their healthcare spending. Our team also ensures compliance with ERISA regulations, so you can focus on what matters most - running your business. 

Protect Your Business from Lawsuits. Review Your Benefit Plan Today! 

Are you currently reviewing your benefit plan? Ensure your company stays compliant with ERISA regulations and avoid costly lawsuits. Contact Novo Connection today at info@novoconnection.com for a comprehensive plan review and risk assessment.