Can You Be Sued Over Your Health Plan? The Johnson & Johnson Case

A 2024 federal case against Johnson & Johnson pushed ERISA fiduciary liability into new territory: the group health plan. The claim — that the company overpaid for prescription drugs through its pharmacy benefit manager — signaled that the scrutiny long aimed at 401(k) menus now reaches health and PBM arrangements.

The duties are the ones retirement committees already know: loyalty, prudence, and paying only reasonable expenses. What's different is the documentation gap. Most sponsors can show a process behind their retirement plan; far fewer can show one behind their PBM contract, formulary, or rebate terms.

For CFOs and HR leaders, the takeaway is to extend retirement-grade oversight to the health plan — independent benchmarking, conflict analysis, and a documented review of cost and service. Regency works both sides as an independent, fee-only consultant, beholden to no PBM, carrier, or fund family. It builds the same defensible record on the health plan that prudent sponsors keep on the 401(k), shaped around the plan rather than a vendor's revenue.