Operating a health plan creates significant fiduciary obligations under ERISA. Plan sponsors are legally required to act solely in participants' interests, make decisions through a prudent process, follow plan documents, and monitor service providers. Importantly, these fiduciary responsibilities attach to individual decision-makers—not just the organization. Committee members, executives, and HR leaders involved in plan governance can be held personally liable for fiduciary breaches, including mismanagement of plan assets, imprudent vendor selection, or failure to monitor plan performance.

Many employers unknowingly operate without formal governance structures that would demonstrate compliance with these duties and protect individuals from personal exposure.