ERISA & Employee Benefits | Health Insurance Benefits Lawyers

Overview

Employer-sponsored healthcare benefits, including prescription drug coverage, play a critical role in ensuring employees have access to the medical care and medications they need. Our lawyers represent employees and former employees in class action lawsuits when their health plans are improperly managed. Most non-elderly U.S. residents receive their health insurance through an employer-sponsored plan. So when employers or plan administrators mismanage these plans, it can have a significant financial impact on employees and their families.

Prescription Drug Benefits Litigation

We represent employees who believe their prescription drug benefit plans are being mismanaged. Prescription drug coverage is an important benefit in most health plans, especially for individuals with ongoing health conditions that require medication. Typically, the employee is responsible for all or a portion of their monthly insurance premium and for the full cost of purchased prescriptions until they meet the plan’s deductible. Once that deductible is met, the health plan begins to cover a portion of the cost, and the employee continues to pay either a co-pay or co-insurance for each prescription. But sometimes, the employee pays too much because their prescription drug coverage is being mismanaged. That’s where we step in.

What Are Pharmacy Benefit Managers (PBMs)?

 “Pharmacy benefit managers,” or “PBMs,” are third-party providers that many employers hire to manage the prescription-drug component of their health plans. PBMs can negotiate with pharmacies to establish networks where plan participants can fill their prescriptions, manage the health plan’s “formulary” (the list of prescription drugs covered by the plan), process participants’ pharmacy claims, and contract with drug manufacturers to secure discounts or rebates on medications.

A PBM essentially acts as a middleman between the health plan and pharmacy. When a participant fills a prescription, the PBM pays the pharmacy for the cost of the drug, minus the participant’s out-of-pocket cost, and then collects the remaining payment from the health plan. But because some PBMs may prioritize profit over patients, they may design the plan’s formulary to favor more expensive drugs, or charge the plan more for medications than what they paid the pharmacy, pocketing the difference. Because of this, participants might pay much more for prescriptions than they should. Some PBMs also have their own mail-order pharmacies which plan participants are required to use, even though that pharmacy’s prices can be higher than what retail pharmacies charge.

Plan Mismanagement

Health plan fiduciaries are legally required to prudently select, negotiate with, and manage their service providers in a way that ensures the health plan operates efficiently and in the best interests of plan participants. If service providers like PBMs aren’t monitored carefully, it can cost the plan and its participants millions of dollars in the form of higher payments for prescription drugs, increased premiums, higher out-of-pocket costs, higher co-pays, higher coinsurance, and suppressed wages. We represent health plan participants in lawsuits aimed at holding employers and plan fiduciaries accountable for these types of mismanagement, ensuring that the health plan serves the best interests of participants.

How Do I Exercise My Right to Bring a Health Plan Lawsuit?

Under ERISA, the federal law that protects health plans, individuals have the right to take legal action if they believe their health or prescription drug plan is being mismanaged. If you believe you have a claim for mismanagement of your prescription drug plan or health plan, contact our ERISA lawyers to discuss your options.

Examples of Our Healthcare Cases

Our firm is leading the charge on behalf of participants alleging their prescription drug benefits are being mismanaged. Below are examples of the cases we have brought:

Lewandowski v. Johnson and Johnson, No. 3:24-cv-00671(D.N.J.) – Employees allege that Johnson and Johnson mismanaged its prescription drug program with its PBM, Express Scripts,  costing participants millions of dollars in the form of higher prescription drug payments, higher out-of-pocket costs, higher premiums, and ultimately, lower wages. To illustrate, Defendants agreed to make their health plan and its participants pay an average markup of 498% on generic “specialty” drugs – six times as much as what it costs the pharmacy to acquire those drugs.

Navarro v. Wells Fargo & Co., No. 0:24-cv-03043 (D. Minn.) – Participants in Wells Fargo’s health plans allege that Defendants breached their fiduciary duties by failing to ensure reasonable plan costs and by not exercising prudence in selecting the plan’s PBM, Express Scripts. They allege the mismanagement of Wells Fargo’s prescription drug program caused the plan and its participants to pay excessively high out-of-pocket costs and premiums. Plaintiffs also allege that Wells Fargo agreed to pay Express Scripts unreasonably high administrative fees and agreed to require participants to obtain specialty drug prescriptions from Express Scripts’ own mail-order pharmacy, Accredo, at higher prices. Stern v. JPMorgan Chase & Co., No. 1:25-cv-02097 (S.D.N.Y.) – Employees allege that Defendants breached their fiduciary duties by mismanaging the administration of the prescription drug plan and agreeing to pay its PBM, CVS Caremark, inflated prescription drug prices. Employees allege that, rather than making decisions for the exclusive benefit of plan participants, Defendants allowed outside business factors to influence their decisions, including a long-standing relationship between JP Morgan and CVS Caremark.