Northwestern University was ordered to defend a proposed class action saying its health plan wrongly offers a high-cost benefit tier that provides no extra benefits.
The case involves factual disputes that are better resolved at a later stage of litigation, Judge Jeremy C. Daniel said in an April 2 opinion denying the university’s motion to dismiss. The plaintiff employees alleged a valid injury by saying they paid too much for health-care coverage, and they properly alleged that Northwestern acted in a fiduciary capacity under the Employee Retirement Income Security Act, Daniel said.
The complaint says Northwestern’s health plan includes a premium tier—which charges higher fees but offers lower deductibles—that’s “financially dominated” by the cheaper, high-deductible option. Workers who elect the premium tier end up paying excessive and unnecessary premiums without seeing their out-of-pocket expenses meaningfully reduced compared to those who are charged less, resulting in millions of dollars in collective losses, according to the lawsuit.
Daniel’s order, issued in the US District Court for the Northern District of Illinois, allows the Northwestern employees to press claims of fiduciary breach under ERISA and failure to properly disclose material facts about the health plan.
The University of Rochester is facing similar allegations about its employee health plan.
Groom Law Group and Croke Fairchild Duarte & Beres LLC represent Northwestern. Prinz Law Firm PC, Nichols Kaster PLLP, and Don Bivens PLLC represent the plaintiffs.
The case is Barbich v. Nw. Univ., N.D. Ill., No. 1:25-cv-06849, 4/2/26.
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