A high-profile lawsuit involving JPMorgan Chase is putting employers on alert that managing a self-insured health plan now comes with serious legal risk. Even responsible companies can be sued if they’re not actively controlling healthcare costs.
In this case, JPMorgan employees claim the company mismanaged its prescription drug benefits by selecting a pharmacy benefit manager (PBM) with conflicts of interest and failing to negotiate cost protections. A generic drug that could be purchased online for $11 allegedly cost the plan over $6,200 through the PBM’s pricing. The plaintiffs argue that JPMorgan’s top executives prioritized corporate relationships over fiduciary duties owed to plan participants.
While the outcome of this suit remains to be seen, it’s likely to move forward – triggering extensive litigation expenses and reputational exposure. This is not an isolated case. Although similar lawsuits involving cost protections, pain and suffering have been filed by employees against Johnson & Johnson and Wells Fargo — and subsequently dismissed for lack of documentation on plaintiff expenses — these cases all point to the same core issue: plan sponsors are being held accountable for how they manage health plan spending.
A key point of these disputes center around the reality that significant medical expenses are covered by the company’s stop loss policy, mitigating the impact on the employee. Furthermore, some of the cases are transitioning to class action lawsuits, although there is not enough commonality on the extent of suffering or the source of the medical expenditures.
Fiduciary Duties Now Firmly Include Health Plans
Under ERISA, employers have a legal duty to act in the best interests of plan participants. Historically, that duty was most visible in retirement plans—but healthcare benefits are now squarely in the crosshairs.
The Consolidated Appropriations Act of 2021 (CAA 2021) raised the bar by requiring plan sponsors to obtain and analyze detailed cost and compensation data from brokers, PBMs and other vendors. Courts are beginning to evaluate whether employers are fulfilling those obligations.
That means the standard is changing. It is not enough to assume your PBM or consultant is acting in your best interest. You are expected to understand how money flows, where fees are being taken and whether pricing is truly competitive.
The Best Defense Is a Smarter Health Plan
The most effective way to avoid litigation is to avoid being an easy target in the first place. Employers that take proactive steps to contain costs and improve transparency demonstrate that they are fulfilling their fiduciary duties under ERISA.
One of the clearest signals of good fiduciary governance is implementing Reference-Based Pricing (RBP) – especially pure RBP. This strategy limits excessive provider and facility charges, protects the plan from arbitrary pricing and often reduces costs for both the plan and participants.
Plans using RBP show they’ve taken deliberate, aggressive steps to manage healthcare spending. That alone makes them far less appealing targets for litigation.
How aequum Helps Employers Stay Out of Court
aequum specializes in helping employers design plans that are legally defensible, cost-effective and aligned with the latest federal requirements. aequum’s services are built to protect your plan and its participants from unreasonable charges and compliance missteps. Here’s what aequum’s services offer:
Legal Support for Billing and Claims Disputes: aequum represents plan sponsors and participants to challenge inflated charges, balance bills and aggressive collection tactics—ensuring that your health plan doesn’t bear costs it shouldn’t.
Reference-Based Pricing Strategy: aequum helps implement and support pure RBP models that eliminate inflated provider markups, reduce participant cost sharing and demonstrate fiduciary responsibility.
Overpayment Recovery and Audit Services: aequum’s legal and claims teams identify and recover overpayments, verify billing accuracy and minimize plan leakage through tighter oversight.
Transparency and Vendor Oversight Tools: aequum delivers the data and insight needed to comply with CAA 2021 and monitor vendor performance, helping plan sponsors make informed, compliant decisions.
Don’t Wait to Be Named in a Lawsuit
JPMorgan has the resources to fight a lawsuit like this. Most employers don’t. The good news is that litigation is avoidable—if your plan is designed with compliance, cost control and transparency in mind.
With aequum as your partner, you can protect your plan from becoming the next headline and demonstrate that you’re acting in your employees’ best interests.
Contact us today to learn how we can help you stay ahead of rising legal risk while strengthening the financial health of your plan.