When a TPA is plausibly an ERISA fiduciary

A federal judge in Philadelphia just held that a TPA was plausibly an ERISA fiduciary in a case where an employer is alleging some damning claims processing conduct.

This is going to be one to watch.

On August 13, Judge Pappert let Aramark’s ERISA lawsuit against its own claims administrator move forward. Aramark audited its self-funded health plan TPA, QCC Insurance Company, an Independence Blue Cross subsidiary operating as Independence Administrators.

The results weren’t great: Aramark alleges the audit found nearly 5,000 duplicate claims, 2,300 payments for excluded services, and cross-plan offsetting that credited recoveries to Independence’s fully insured business instead of Aramark’s plans.

The fiduciary holding rested partly on the underlying agreements, which named the TPA as claims fiduciary and gave it sole check-writing authority over the plan account. QCC argued that Aramark left the “Claims Fiduciary” box unchecked on the 2024 renewal. Against that, the court said an unchecked box on a renewal proposal doesn’t decide the question at this stage.

The case is relevant to all self-funded plans, even if your ASA never uses the word “fiduciary.” The court held QCC also qualified as a functional fiduciary, and that test ignores the labels entirely. A TPA with leeway in deciding whether and how much to pay claims has discretionary authority over plan administration. And where plan assets are involved, the bar drops further: any authority or control over plan money is enough, no discretion required. QCC had sole signing authority on the plan’s checking account. That alone put it in fiduciary territory.

These are allegations, not findings. But two things make this case matter for every self-funded employer in NJ, DE, and PA. First, it’s the Tiara Yachts playbook landing in the Third Circuit’s backyard, against the region’s dominant carrier. Second, the court confirmed Aramark itself is a fiduciary because it selected, retained, and monitored the TPA.

I’ve been talking about making sure your fiduciary file is ready for years now. This is another reason why.