You are personally responsible for your company’s health plan. Legally. As a fiduciary. You probably do not remember taking that on, but you did, the day you started offering benefits and the plan became an ERISA plan.
Most owners have no idea. Renewal season is a good time to fix that, because this is the cost center now drawing the lawsuits.
Here is what fiduciary means in plain English. You have a legal duty to run the plan in your employees’ best interest and to make sure what it pays is reasonable. Not the carrier’s duty. Not the broker’s. Yours. The same way you are on the hook for the 401(k), you are on the hook for the health plan. Employees have started suing employers over health plan fees, the same wave that already hit retirement plans years ago. The class-action bar is circling, looking for the next plan that never checked its own costs.
Sit with that at renewal. Accept a number you cannot explain, from vendors whose pay you have never seen, and you are not just overpaying. You are signing off, as the fiduciary, on costs you never checked. That is the exposure. Not a letter from a regulator. A duty you did not know you were carrying.
The good part is that the fix and the savings are the same move. A fiduciary-run plan is a transparent plan. You see the fees, you see the vendor pay, you see the claims, you document that you asked. That is exactly the plan that also costs less, because sunlight drives out the waste. Doing right by your duty and doing right by your budget point the same direction here.
What to do this fall: ask for every fee in the plan, in writing, and ask your advisor to show you how they know your costs are reasonable. Keep the paper. That paper is both your savings trail and your defense.
You would never sign a contract this large without reading it. You already did. Renewal season is your chance to actually read it.
Want to see what you are on the hook for? Let’s talk.
