For years, employers could throw up their hands about health care costs: the prices were hidden, so how could anyone know whether a plan was overpaying? That excuse is gone. Federal transparency rules have put negotiated prices out in the open, and a fast-growing wave of lawsuits is testing whether employers are living up to their legal duty to manage those costs.
What Changed
Two things collided. First, the Transparency in Coverage and hospital price transparency rules now require health plans and hospitals to publish their negotiated rates. The data is messy, but revealing: the same procedure can cost wildly different amounts depending on the carrier and the facility, sometimes by tens or even hundreds of thousands of dollars. (Fierce Healthcare highlighted research from Trilliant Health showing exactly that.)
Second, the Consolidated Appropriations Act of 2021 banned the “gag clauses” that used to keep employers from seeing their own claims and pricing data, and it requires plans to attest each year that those clauses are gone. Put the two together and the message is clear: the information is available, and fiduciaries are expected to use it.
Why This Is a Fiduciary Issue
Most people associate ERISA fiduciary duty with 401(k) plans, but it applies to health plans too. An employer that sponsors a plan has a duty of prudence: act in the participants’ best interest, and make sure the plan pays only reasonable fees for the services it gets. Once the cost data is sitting there for anyone to see, choosing not to look starts to resemble a breach of that duty.
The Lawsuits Putting It to the Test
A new line of class actions is aimed squarely at health plan sponsors, mostly over prescription drug and PBM costs:
- Lewandowski v. Johnson & Johnson and Navarro v. Wells Fargo both alleged employers failed to rein in drug costs. Each was dismissed, but on “standing” (a procedural question of whether employees could show concrete harm), not on the merits of the fiduciary claims.
- Stern v. JPMorgan Chase, filed in 2025, cleared that hurdle in part and moved into discovery, which means it could produce the first real precedent on an employer’s duty to monitor its PBM.
The trend line is the point: by one count, more than a fifth of all ERISA lawsuits in 2025 (about 22%) involved health plans. Even the dismissed cases are a warning shot, not an all-clear.
What Brokers and Employers Should Do
- Treat the health plan like the 401(k): stand up a benefits committee, meet regularly, and keep minutes that document a prudent process.
- Get and actually review the data, claims, pricing, and PBM compensation, then benchmark those fees against the market.
- Watch the moving rules: new PBM compensation-disclosure requirements and state laws (like California’s SB 41) are tightening the screws further.
The Bottom Line
Transparency cuts both ways. It hands employers the data they need to negotiate a better deal, and it strips away the excuse for not trying. For brokers, this is one of the most valuable conversations you can have with a client right now: help them build a documented, prudent process before a plaintiff’s attorney asks why they didn’t.