Could your employees sue you over what your plan pays for drugs?

Could your own employees sue you over what your health plan pays for prescriptions?

A federal court in New York let exactly that case proceed in March 2026, against JPMorgan Chase. Employees analyzed all 404 generic drugs on their plan's formulary and alleged an average markup of 211% on 366 of them.

Why it matters: if you sponsor a self-funded plan, you are an ERISA fiduciary. The theories plaintiffs' lawyers spent twenty years perfecting on 401(k) plans are now being pointed at health plans, and the data to build those cases is public.

Where this actually stands:

• It is genuinely unsettled. Similar cases against Johnson & Johnson and Wells Fargo were dismissed because the claimed injury was too speculative. The J&J dismissal is on appeal. The JPMorgan court went the other way and said paying more for drugs is a real injury.
• Transparency rules built the evidence. Machine-readable pricing files and pharmacy reporting mean anyone can now compare what your plan paid against what a retail pharmacy charges cash.
• PBM disclosure is coming. The Consolidated Appropriations Act of 2026 requires PBMs to disclose all direct and indirect compensation to plan sponsors, effective for calendar-year plans in 2029.
• The claims are widening. Beyond pharmacy, suits now target administrative fees, network access fees, tobacco surcharges and voluntary benefit programs.

Here is the practical read. Nobody expects you to always pick the cheapest vendor, and ERISA does not require that. What it requires is a documented, prudent process: competitive bidding, independent benchmarking, and a record showing you monitored what you were being charged.

Most employers have never benchmarked their PBM contract, not because they were careless but because the pricing was designed to be hard to see. That is a fixable gap, and fixing it usually pays for itself before the governance value even shows up.

When was the last time anyone put your pharmacy contract next to a market benchmark?

Sources: https://www.jonesday.com/en/insights/2026/05/rising-scrutiny-of-employer-health-plan-administration-erisa-fiduciary-litigation-federal-transparency-initiatives-state https://www.truckerhuss.com/2026/03/employees-of-jpmorgan-may-proceed-with-their-lawsuit-over-high-drug-costs-in-health-plan/