A Supreme Shift in Fiduciary Risk: Why Health Plan Sponsors Should Be Paying Close Attention | Employee Benefits

May 17th, 2025

Louis C. Bernardi, “The Benefits Whisperer”

💥 Certified Healthcare Fiduciary Coach and Health Value Advisor 💥 I work with Business Leaders of mid-sized

Did you know that optimizing your healthcare plan can contribute directly to your company’s survival and growth?  ✨ When we compare the benefits of healthcare savings to findings from a recent college essay, “Ten Reasons Why Companies Keep Failing,” the connections are clear. Let’s explore how healthcare optimization addresses these pitfalls:

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On April 17, 2025, the U.S. Supreme Court unanimously ruled in Cunningham v. Cornell University that plaintiffs bringing ERISA claims for prohibited transactions are not required to plead that the transaction doesn’t qualify for an exemption under ERISA Section 1108. In other words, plan participants no longer need to prove a violation and preemptively argue against all the possible defenses a fiduciary might raise later.

Why does this matter?

Because the bar to bring fiduciary breach lawsuits just got lower—and while this particular case was centered around a university’s retirement plan, its implications ripple far beyond pensions. It signals a broader legal shift that health plan fiduciaries, especially those overseeing self-funded or ERISA-regulated medical plans, can’t afford to ignore.

For years, plan sponsors have operated under the assumption that the fiduciary risks tied to 401(k)s or pension funds don’t necessarily apply to group health plans. But this Supreme Court decision should serve as a red flag: the same fiduciary standards apply, and the plaintiffs’ bar is watching.

The Stakes Just Got Higher

ERISA fiduciary claims—once dismissed early for failing to anticipate all defenses—may now proceed to trial more often. That’s a costly and time-consuming proposition for plan sponsors who assumed they were safe simply by following carrier-recommended strategies.

Though Cunningham focused on a retirement plan, ERISA doesn’t draw a line there. It governs employer-sponsored health plans too. And many of the same risky patterns—opaque fees, conflicts of interest, and rubber-stamped contracts—are more common in health insurance arrangements than in retirement funds.

If you’re a plan sponsor, HR leader, CFO, or member of a fiduciary committee, know this: once a claim is filed, it’s now up to you to justify the reasonableness of every dollar spent—from broker commissions to TPA fees to PBM rebates. Can you?

What You Can Do About It — And How We Can Help

If this decision makes you uneasy, that’s a good thing. It means you’re paying attention.

But this isn’t just about risk—it’s about opportunity. There is a better way forward, and it starts with taking your fiduciary duty seriously and building a health plan with intention.

Here’s how:

✅ Conduct a Fiduciary Review Audit your current vendors—insurers, PBMs, brokers, and consultants. Are their incentives aligned with yours? Can they defend their fees? If not, it’s time to reassess.

✅ Demand Full Transparency Insist on clear and auditable reporting of all costs, commissions, and rebates—especially from those claiming to “save you money.”

✅ Adopt a High-Performance Health Plan Strategy Treat your health plan like a business asset. With the right structure, you can reduce spend by 20–30%, improve employee outcomes, and eliminate conflicts of interest that could lead to compliance issues down the road.

That’s exactly what we help our clients do.

At BritePath , we guide plan sponsors through a proven system—called the PLAN System—that puts you back in control. We help you eliminate artificial costs, align with transparent partners, and design a health plan that’s compliant, defensible, and high-performing.

So yes—the legal landscape is shifting. But with the right support, you don’t have to wait for a lawsuit to start acting like a fiduciary. You can start building a better, safer, smarter plan—today.

Want to know how your current plan stacks up? Let’s talk.

Questions? Contact the author at [email protected]

Schedule a call at calendly.com/lcbernardi

Visit our website at www.britepathbenefits.com