In Part One we established the uncomfortable truth: you are a fiduciary of your health plan, and you have been for years. Now for the plot twist that trips up almost every employer who hears it.
You can lose a fiduciary case even if your plan costs went down. And you can win one even if your costs went through the roof.
Read that again, because it is the single most counterintuitive idea in this entire body of law — and once it clicks, everything else makes sense.
Part 01You Are Graded on Your Homework, Not Your Test Score
Fiduciary law does not judge fiduciaries on outcomes. It judges them on process. The legal term is procedural prudence, and the standard is brutal in its simplicity. A court does not ask "did the plan get a good deal?" It asks "did you go about the decision the way a prudent expert would have?"
You are not on the hook for the fact that American healthcare is expensive. You are on the hook for whether you paid attention.
That is oddly good news. If employers were liable for the price of American medicine, we would all be in prison. What you are accountable for is whether you asked questions, compared options, and kept a record of it.
The catch is that most employers cannot demonstrate a shred of process, because they have never seen the numbers that process would be based on. Which brings us to the part where it gets personal.
Part 02For Years, They Were Legally Allowed to Hide Your Own Data From You
Here is something that should make you a little angry. Until recently, health insurers routinely wrote clauses into their contracts that prevented employers from seeing their own claims and pricing data. Not the vendor's proprietary secrets. Your data. Your employees, your plan, your money — and you were contractually forbidden from looking at how it was spent.
These were called gag clauses, one of the rare instances where an industry named a thing exactly what it is. Carriers guarded that data the way Coca-Cola guards the formula, except the formula was just a list of what you already paid for.
Buried in the law was a provision banning those gag clauses outright — and going a step further: every plan sponsor now has to file an annual attestation confirming they are not trapped in one. The first was due at the end of 2023.
Why it matters: if you are not sure whether your company filed it, that uncertainty is itself a finding — and not a fun one.
The same law forced brokers and consultants to disclose exactly how much they earn from your plan, direct and indirect, if they make more than a nominal amount. For decades that compensation moved quietly in the background. Now it comes to you on paper, whether your broker enjoys handing it over or not.
Part 03The Retirement Plans Already Ran This Experiment
If you want to know how this plays out, look at the 401(k) world, which is about fifteen years ahead of you.
There, "we trusted our advisor" stopped being a defense a long time ago. The employers who survived fee litigation were not the ones who happened to pick cheap funds. They were the ones who could produce a paper trail showing they had evaluated the funds, benchmarked the fees, and revisited the decision on a schedule. The ones who lost had great intentions and an empty file.
Same movie, new cast. The health plan version is filming now.
Part 04How to Fix It: Turn On the Lights
This is a legal requirement you may already be out of compliance with. Start here.
Why it matters: it is the one item on this list with a filing deadline already behind you.
You are entitled to it now. Get it, or get a partner who can pry it loose.
Why it matters: you cannot manage, benchmark, or defend a plan you are not allowed to look at.
Read what your own advisors are paid, and by whom.
Why it matters: if the indirect compensation surprises you, that is a conversation worth having before a plaintiff's attorney has it for you.
Prudence requires comparison. A number by itself proves nothing.
Why it matters: a number next to the market proves you looked.
The Takeaway
None of this requires you to become a health economist. It requires you to stop flying blind — a low bar the law now expects you to clear. Next in The Fiduciary Files: the one decision inside your plan that lawyers are already suing over, and the case that cracked the courthouse door open in 2026.
At Hotchkiss, we help mid-market employers get their attestation filed, their claims data released, their broker compensation on paper, and their plan benchmarked against the market — the four things that turn "we did our best" into a documented process.
Talk to Tess— Tess
