Darrow AI, a platform that helps firms spot irregularities in legal cases, says its engine can help employers pinpoint the most extreme ERISA (Employee Retirement Income Security Act of 1974) violations.
In a recent webinar produced by the organization, the company said its algorithm can find violations that affect small businesses and Fortune 500 companies alike.
One of the most prominent legal cases involving ERISA recently is Lewandowski v. Johnson and Johnson, where plaintiffs argue J&J did not ensure prescription drug prices through the company’s health plan were reasonable. They allege mismanagement of increased premiums, out-of-pocket costs and limited wage growth, according to the O’Neill Institute for National and Global Health Law at Georgetown University.
Insurance brokerage and consulting firm Conner Strong & Buckelew said the J&J lawsuit “serves as a reminder to employers they must prudently select and monitor plan service providers, such as PBMs.”
Shai Silberman, a legal data specialist at Darrow, said retirement plans face two problems: They are usually handled by human resource professionals that may choose under-performing funds, and funds are rarely monitored once selected.
But instead of just having lawyers sift through forms manually to identify middling funds and the plans that are invested, Darrow’s algorithms more efficiently find violations by scouring news, SEC filings, social networks and academic papers.
“This shortens research time and ensures that no violations fall through the cracks so that litigators can do what they do best,” he explained.
The company can then create an investment profile for each plan, comparing performance and helping experts spot problems quicker.
Violations under ERISA, through substandard fiduciary management of retirement plans, can have significant impact on an employee’s savings.