20-40%

Typical Total Cost Savings Identified

20-40%

Typical Total Cost Savings Identified

20-40%

Typical Total Cost Savings Identified

ERISA imposes personal liability on employer plan sponsors for failing to prudently select and monitor health plan service providers. A commission-based broker who has never raised this with you has a reason not to.

What ERISA Actually Requires of Employer Plan Sponsors

ERISA governs employer health plans under four fiduciary duties. Most CFOs have heard of them in the context of 401(k) plans. The DOL is now applying the same enforcement rigor to health plan administration — and class-action litigation against employer plan sponsors for fiduciary breach is active and increasing.

Duty of loyalty — every plan decision must be made solely in the interest of plan participants and beneficiaries, not in the interest of the employer's administrative convenience or the broker's compensation structure.

Duty of prudence — the plan must be managed with the care and expertise of a knowledgeable person in the field. If the plan sponsor does not possess that expertise internally, ERISA requires them to hire someone who does. Retaining a generalist broker and deferring to carrier recommendations does not satisfy this standard.

Duty to follow plan documents — the plan must be administered in strict accordance with its governing documents. Gaps between the written plan and actual administration create fiduciary exposure that accrues silently.

Duty to monitor service providers — the plan sponsor is legally obligated to prudently select and continuously monitor every service provider: broker, TPA, PBM, stop-loss carrier, and any other vendor with a financial relationship to the plan. Retaining the same broker arrangement year after year without documented review is the most common fiduciary breach in employer health plans — and the one the DOL is increasingly focused on.

The FiduciaHealth Governance™ Framework

FiduciaHealth Governance™ is Scott's proprietary fiduciary operating model for employer health plans — the structured methodology that converts ERISA compliance from a passive legal obligation into an active governance function.

The framework is built around four disciplines:

Transparency before strategy — no plan design or vendor recommendation is made without full disclosure of the cost economics underlying the current arrangement. The employer sees the numbers before any changes are proposed.

Control before cost reduction — employer authority over vendor selection, plan design decisions, and claims data must be established before cost reduction strategies are implemented. Control is the prerequisite, not the outcome.

Alignment before optimization — vendor compensation structures are evaluated and restructured for fiduciary alignment before any optimization work begins. A vendor whose income scales with utilization cannot be optimized — it must be replaced.

Accountability across all vendors — every vendor relationship is monitored on a documented quarterly cadence, producing the ongoing oversight record that satisfies the duty to monitor and creates the compliance history that protects the plan sponsor.

The Fiduciary Risk Scoring Model™ benchmarks the employer's plan against this framework before and after engagement — producing a measurable governance score that CFOs can present to general counsel and the board as evidence of prudent oversight.

Co-Fiduciary Engagement: What It Means for the Plan Sponsor's Liability

When Scott is engaged as a co-fiduciary, he accepts shared legal responsibility for service provider selection and oversight under ERISA. This is not a consulting arrangement in which Scott advises and the employer decides in isolation. It is a legally structured relationship in which fiduciary accountability is formally distributed between the plan sponsor and a credentialed fiduciary professional.

For the CFO or plan administrator who carries personal liability for plan decisions, co-fiduciary engagement produces two outcomes that no broker arrangement provides:

• First, it legally redistributes a portion of the personal liability for vendor selection and monitoring from the plan sponsor to the co-fiduciary.
• Second, it creates a documented governance record — quarterly fiduciary reports, vendor monitoring documentation, decision rationale — that demonstrates prudent oversight in the event of a DOL inquiry or participant litigation.

The governance work is Scott's to produce. The governance record is yours to keep.

What the DOL Enforcement Expansion Means for Plan Sponsors in 2026

DOL enforcement of ERISA fiduciary standards on the health plan side is expanding to mirror the rigor applied to 401(k) plan administration for decades. Class-action lawsuits against employer plan sponsors for failing to prudently monitor brokers, TPAs, and PBMs are active across multiple federal circuits. The legal standard being applied is the same one that has produced nine-figure 401(k) settlements against large plan sponsors.

The common thread in active litigation is not egregious misconduct. It is passive reliance — plan sponsors who retained legacy broker arrangements without documented evidence of prudent selection, who accepted carrier-produced cost reports without independent verification, and who never exercised the audit rights their plan documents provided.

Passive reliance on a legacy broker arrangement is an increasingly untenable compliance posture. The question is not whether the DOL's enforcement attention will reach mid-market employer plans. It is whether the plan sponsor has a documented governance record when it does.

See What Fiduciary Governance Has Produced for Employers on Our Framework