Employer-sponsored group health plans are facing a growing wave of ERISA class action lawsuits, and the claims are getting bolder, including claims of “financial dominance”. In our previous post on this topic, we analyzed Barbich et al. v. Northwestern University et al., No. 1:25-cv-06849 (N.D. Ill.), which introduced a novel “financial dominance” theory to challenge employer health plan design choices under ERISA. That post explained how plaintiffs alleged that Northwestern breached its fiduciary duties by offering a more expensive health plan option that provided no financial advantage over a cheaper alternative, regardless of how much medical care a participant used.
Since then, Barbich has cleared a major hurdle, and two new complaints have been filed that take the financial dominance theory even further. These new cases make clear that the plaintiffs’ bar continues to view financial dominance claims as a growing area of opportunity, and employers need to pay attention.
Link to Barbich Survives the Motion to Dismiss Barbich Survives the Motion to Dismiss
On April 2, 2026, the U.S. District Court for the Northern District of Illinois denied Northwestern’s motion to dismiss in full. This was a significant win for plaintiffs and a warning sign for employers. The court found that employees who alleged they overpaid for health coverage had standing to sue, even though they received the benefits they were promised. As the court put it, “[a]lleging that they paid more for the benefits than they should have is an injury sufficient to confer standing.” The court also declined to rule that Northwestern was acting as a plan “settlor” (exempt from fiduciary duties) rather than a fiduciary, finding that this fact-intensive question should be resolved later in the case.
On the merits, the court allowed both claims to proceed: the claim that offering the dominated Premier PPO option was imprudent, and the claim that Northwestern failed to disclose material information about the PPO option’s dominated status. The court was particularly influenced by allegations that Northwestern’s own benefits department, after consultation with actuaries, had determined that “it is unlikely that there is a scenario where one would be financially better off with the Premier PPO option.” The Barbich ruling gives plaintiffs a roadmap, and as discussed below, subsequent complaints have already cited it as supporting authority.
Link to Ebarle v. Abbott Laboratories: Targeting Corporate Self-Interest Ebarle v. Abbott Laboratories: Targeting Corporate Self-Interest
On June 10, 2026, a new class action was filed against Abbott Laboratories in the Northern District of Illinois. Ebarle III v. Abbott Laboratories, No. 1:26-cv-06834 (N.D. Ill.), alleges that Abbott’s “Traditional PPO” option was financially dominated by its “Health Investment Plan” option (“HIP”). Both options used the same provider networks, but the Traditional PPO option costs more at every level of medical spending. The complaint asserts three counts: breach of fiduciary duty for offering the dominated option, failure to inform participants, and failure to monitor.
The Ebarle complaint goes further than Barbich in several important ways. Most notably, it alleges that Abbott actually profits from offering the dominated option. Because premiums sit in Abbott’s general assets, the complaint claims Abbott earns income by investing those dollars between collection and claims payment and reduces its payroll and income tax burden through higher premium withholdings. This framing shifts the narrative from employer negligence to employer self-interest.
On the evidentiary front, Ebarle introduces a new strategy by mining Abbott’s public Form 5500 filing, which disclosed no broker, consultant, or adviser was compensated for medical plan design work. Plaintiffs argue this supports the inference that Abbott did no meaningful benchmarking or actuarial analysis. This may or may not be true. If Abbot had paid for consulting or advisory work out of corporate assets to support its settlor plan design decisions, such amounts would not have been disclosed on their Form 5500. However, whether or not accurate, this new tactic could lead to increased risk of litigation for other group health plans with similar filings.
Link to Beyers v. Caterpillar: Expanding the Scope Beyers v. Caterpillar: Expanding the Scope
The most recent class action complaint, filed on August 4, 2026, is Beyers et al. v. Caterpillar, Inc. et al., No. 1:26-cv-09260 (N.D. Ill.). The complaint alleges that Caterpillar falsely informed plan participants that if they elected a health plan option with lower monthly premiums and higher deductibles, they would likely pay more in out-of-pocket costs than if they elected an option with higher premiums and lower deductibles.
Beyers is far broader in scope than the earlier cases. While the earlier cases each challenged a single dominated plan option covering active employees, Beyers alleges that two of Caterpillar’s low-deductible options are financially dominated by a single high-deductible option, and it extends those claims to both the active employee plan and the retiree plan. With over 63,000 combined participants across those two plans, the potential scope of liability dwarfs the earlier cases.
The complaint also seeks more aggressive relief than its predecessors.Beyond restoring plan losses, Beyers asks for disgorgement of employer profits, appointment of an independent fiduciary, and removal of existing fiduciaries.
Link to The Trend Is Clear: These Suits Are Getting More Aggressive The Trend Is Clear: These Suits Are Getting More Aggressive
Looking at these three cases together, the pattern is unmistakable. Each successive complaint covers more participants, challenges more plan options, and seeks broader relief. The Ebarle complaint explicitly cited the Barbich ruling as supporting authority, and the Beyers complaint pushed the theory into new territory by targeting retiree plans and multiple dominated options at once. Employers should expect this trend to continue as the plaintiffs’ bar refines its playbook.
Link to Thompson Hine Takeaways Thompson Hine Takeaways
Here is what self-funded group health plans should be thinking about right now:
- Run a financial dominance check. Work with your benefits consultants and actuaries to determine whether any health plan option costs more than another at every enrollment tier and every level of medical spending.
- Document your process. The Ebarle complaint used public Form 5500 filings to argue that Abbott had no benefits consultant on record for plan design decisions. The lesson: retain qualified advisors, memorialize your benchmarking and analysis, and keep records showing a thoughtful fiduciary process.
- Scrub your enrollment materials. All three cases emphasize the duty to disclose material information. Make sure your enrollment materials accurately describe what each plan option actually costs and do not suggest that a more expensive option provides savings it does not deliver.
- Consider the risk. If your analysis reveals a dominated option, consider whether to reduce the risk of a similar lawsuit by repricing the option or restructuring employer HSA contributions to close the gap.
- Stay informed. All three cases are pending in the Northern District of Illinois, and further rulings will shape how far this theory goes. Work with experienced ERISA counsel to stay ahead of developments.