Can health plan fiduciaries be personally liable?

Personal liability is the sharp edge of ERISA fiduciary status. A fiduciary who breaches their duties can be required to restore plan losses out of their own pocket, disgorge any profits made through plan assets, and pay additional civil penalties — the Department of Labor can assess 20% of amounts recovered in enforcement actions.

Fiduciaries can also be liable for a co-fiduciary's breach if they knowingly participate in it, conceal it, or fail to make reasonable efforts to remedy it once discovered.

Three protections work together: a sound governance process (committees, charters, documented decisions), an ERISA fidelity bond (required by law, protecting the plan against fraud), and fiduciary liability insurance (optional, protecting the fiduciaries themselves). Most employers carry all three once they understand the difference.