On January 12, 2024, the U.S. Department of Labor filed a complaint against Blue Cross and Blue Shield of Minnesota (BCBSM) alleging a series of violations pertaining to the Employee Retirement Income Security Act of 1974 (ERISA). This legal action hasn't yet drawn much attention, but it is early days and I suspect that will change as the case plays out. Certainly, the legal and employee benefits communities will be watching closely, as the case raises fundamental questions about the boundaries of authority and fiduciary responsibilities in the context of third-party administrators (TPAs) of self-funded employee benefit plans.

Another reason this lawsuit is significant is that it was filed by the Department of Labor (DOL) itself, rather than by employers or plan participants. That carries significant implications for the industry. 

Understanding the DOL's complaint

At the core of the DOL's complaint is the assertion that BCBSM exceeded its authorized scope of authority as a third-party administrator for self-funded employee welfare benefit plans governed by ERISA. In order to safeguard the interests of participants and beneficiaries in employee benefit plans, ERISA imposes specific standards of conduct and fiduciary responsibility on plan administrators and related entities. The DOL contends that BCBSM failed to adhere to these standards, thus warranting legal action.