Fiduciary Risk Is Real. Just Ask Tiara Yachts.

In late May, the Sixth Circuit Court of Appeals issued a ruling that should make every plan sponsor—and every benefits advisor—sit up and take notice.

The court revived Tiara Yachts’ ERISA lawsuit against Blue Cross Blue Shield of Michigan, allowing claims of fiduciary breach and self-dealing to move forward. The case centers on overpayments and profit-sharing tactics that may have cost the plan millions.

Let that sink in: A plan sponsor sued its health plan administrator for fiduciary breach and is now on its way to trial.

Here’s what happened and why it matters more than ever that your pharmacy benefit manager is a true fiduciary.

The Breakdown: What Tiara Yachts Alleges

From 2006 to 2018, Tiara Yachts entrusted BCBSM to administer its self-funded health plan. But two practices are at the heart of the dispute:

Flip Logic Overpayments

BCBSM allegedly ignored negotiated rates and paid full billed charges on out-of-network claims. Internal emails showed this wasn’t a one-off mistake, it was a pattern affecting multiple clients.

Shared Savings Program (SSP)

Even more troubling, BCBSM allegedly profited from these overpayments recovering some of the funds through a third-party service, then keeping 30% as a fee. In other words:

They created the leak, then charged to fix the plumbing.

The court agreed that BCBSM acted as a functional fiduciary, with meaningful control over plan assets. That opened the door to legal claims for breach of duty, prohibited transactions, and unjust enrichment.

Why This Case Should Alarm Every Plan Sponsor

This ruling makes one thing very clear:

You can’t outsource fiduciary risk. If your PBM or TPA is hiding revenue streams, overpaying claims, or profiting from “cost-saving” fixes, you could be on the hook.

Under the Consolidated Appropriations Act (CAA), plan fiduciaries are now required to understand and document how fees, prices, and payment flows work in their pharmacy benefit program.

Most PBM contracts can’t pass that test.

Because they weren’t built to.

DisclosedRx: A Fiduciary PBM by Design

This is exactly why DisclosedRx exists.

We’re proud to share that we were recently awarded the $100,000 Credibility Guarantee from the Validation Institute, a third-party endorsement earned by companies that prove their financial integrity and value delivery.

What that means for you:

No spread pricing.

No hidden rebates or pharmacy kickbacks.

No secret revenue streams.

No conflicts of interest.

We only get paid by one entity: you.

Every dollar is accounted for. Every decision is made in your best interest.

We don’t just say we’re a fiduciary, we’ve been independently validated to prove it.

Where This Leaves You

The Tiara Yachts case shows just how costly it can be to trust benefit administrators who don't act in your interest. It’s not just about dollars and cents, it’s about legal liability, plan asset protection, and trust.

We applaud Tiara Yachts for having the courage to ask hard questions and stand up for the integrity of their plan. It’s not easy to challenge the status quo, but it’s absolutely necessary when your employees’ dollars and your fiduciary obligations are on the line.

At DisclosedRx, we stand firmly behind employers who are doing the right thing, and doing the right thing is simple with the right PBM. If you’re ready to bring accountability and alignment to your pharmacy benefit, we’re ready to help.

📩 Message us or visit http://www.disclosedrx.com to learn more.