Health Plan Management

Employers offering health benefits are in a tough spot right now. How can they meet CAA requirements and their fiduciary duty? --- Plan fiduciaries are in the spotlight since the passage of the Consolidated Appropriations Act (CAA) requirements in 2021. This is crucial information for any employer or plan sponsor, particularly related to the outcomes of the J&J and Wells Fargo lawsuits (links to summaries these in the comments). --- Here are some big, tangible takeaways for plan sponsor fiduciaries: Access to data -#Employers don’t have their data, but access to the data is absolutely crucial. -Even if they get the data, they generally don’t know what to do with it. -It's not simple to get their data, so employers aren’t sure how much to fight for the data to meet their fiduciary duty. They're watching the J&J and Wells Fargo lawsuits to decide how much they should fight for it. There doesn't seem to be real urgency yet, but that will change as soon as we see movement in the lawsuits. Contracts -Employers need help negotiating good contracts. The exact definitions are vital. I've been seeing this first hand in PBM RFPs where there can be no tangible, auditable definition of a brand drug or a rebate. It can take a significant amount of redlining to craft an auditable contract. -All vendors must provide data on all compensation disclosure (aka compensation transparency). This is particularly important when working with vertically integrated companies because the other vendors were chosen with no bid contracts--employers need to know compensation for everyone. -The current pharmacy reimbursement model (AWP discounts, MAC pricing list) may be strongly questioned by employers if these lawsuits go forward. In #pharmacy, it’s pretty easy to see cash prices now with discount cards or the Mark Cuban pharmacy. Fiduciary duty -Employers need a #fiduciary committee. -Being a healthcare benefits fiduciary isn’t straightforward because of the flexibility in benefits. It's not as straightforward as the retirement benefits lawsuits in the past. -There's a fiduciary duty to execute audits or ongoing monitoring of vendors. -There are potential risks for brokers and consultants too, particularly those with conflicts of interest. --- #USHealthcare doesn’t function like any other industry. The barriers and lack of transparency can make it difficult (or impossible) for a plan sponsor to make informed decisions. What else are people doing to meet CAA requirements? Are you seeing traction?

The sleeping giant may finally be awakening. In what could be a watershed moment for corporate governance, JP Morgan Chase now faces an ERISA fiduciary lawsuit over health benefits mismanagement -- with a twist that should send shockwaves through boardrooms nationwide. For the first time, independent board members have been named as defendants -- including Todd Combs (GEICO CEO & Berkshire Hathaway investment officer) and Virginia "Ginni" Rometty (former IBM CEO). Why? Their role on the Compensation Committee allegedly made them responsible for benefit plan oversight. This is precisely what I warned about in my book chapter quoting a Big Four Risk Management practice leader "ERISA Fiduciary Risk Is The Largest Undisclosed Risk I've Seen In My Career" -- published over 8 years ago. The irony? JP Morgan hosts healthcare's premier investor conference, where they've had front-row seats to how companies extract maximum value from employer #healthplans knowing they've been asleep at the wheel. The allegations are stunning: ✔️ JPM's plan paid $6,000+ for MS drugs available for $30 retail ✔️ "Grossly inflated" prescription costs across the board ✔️ Systematic failure to implement known cost-saving measures from Purchaser Business Group on Health (PBGH) and Health Transformation Alliance With healthcare spending exceeding every expense except payroll (Starbucks spends more on healthcare than coffee, GM more than steel), this case highlights a fundamental disconnect: Companies claim employees are their most valuable asset while maintaining health plans that have devastated working Americans' financial security with clear mental health impacts. This is the fourth major ERISA health plan case, following similar actions against J&J, Mayo Clinic and Wells Fargo. The playbook mirrors 401(k) litigation that has netted millions in settlements. The wake-up call is clear: ERISA fiduciary duty is a personal liability. Directors and executives can't hide behind corporate shields when it comes to health plan mismanagement. What's your take? Will this case finally drive the massive shift toward transparent, high-value health plans that we've seen work beautifully in the mid-market? #EmployeeBenefits #ERISA

UnitedHealthcare just revealed their 2025 Notice of changes to prior authorization requirements and coverage criteria: "Medications used for the purposes of weight loss are typically excluded from benefit coverage." Let’s call this what it is—a calculated move to restrict access to GLP-1s, even as their clinical applications continue to expand (obesity, diabetes and now sleep apnea). The timing isn’t accidental. Here’s what’s really happening: -Payers are scrambling to control costs. With record-high spending on GLP-1 drugs, insurers are adjusting policies to offset financial strain. -Pharma keeps pushing prices up. The explosive demand for these medications has led to double-digit growth quarter over quarter, with no signs of slowing. -Patients are demanding access. A recent KFF survey found that 80% of U.S. adults believe insurers should cover weight loss drugs for those diagnosed as overweight or obese, and half are willing to accept higher premiums for that coverage. -Providers are caught in the crossfire. They’re left navigating prior authorizations and restrictive policies while trying to deliver care. The industry can try to hide behind benefit exclusions and prior authorizations, but the demand isn’t going away. Patients are getting savvier about their options and increasingly frustrated with the “deny and delay” strategy employed by insurers. This isn’t just a question of whether these medications should be covered—it’s a battle over who blinks first: payers, pharma, or patients finding alternative paths to access. The stakes are high. GLP-1 drugs are forcing insurers, employers, and policymakers to confront uncomfortable truths about healthcare coverage and cost. If the industry doesn’t figure this out soon, the pressure from patients and providers alike could break the system. What’s your take? Is this a necessary move to control costs, or is it a sign the system is failing to keep up with innovation and patient needs? #HealthcareTrends #GLP1Drugs #Insurance #HealthcarePolicy

The University of Texas System, which provides health insurance to more than 240,000 people, has announced that it will stop covering two anti-obesity medications, Wegovy and Saxenda, at the end of this month. The decision was made after a review of the clinical and financial impacts of these medications. The UT System claims that these drugs have not shown significant benefits in terms of weight loss or health outcomes compared to other available treatments and that they will save about $15 million per year by discontinuing coverage. They will continue to cover other interventions, such as bariatric surgery, behavioral counseling, nutrition education, and wellness programs. UT was one of the early adopters that tried implementing a generous pharmacological intervention for patients with obesity. There are a lot of studies that show that people with obesity incur higher healthcare costs than people without, so it makes sense that lowering that number should decrease overall healthcare costs. However, these medications cost over $1000/person/month. That means anyone covered by the plan taking these medications now has healthcare costs much higher than the average person. Effectively preventing obesity has the potential to prevent serious conditions like heart attacks, stroke, and end-stage renal disease. The financial implications of treating existing obesity are less clear - especially in people with advanced disease. If the treatment is focused on addressing cardiometabolic dysfunction (and not just the number on the scale), there is potential, but calculating it is a predictive nightmare. Even with a comprehensive strategy, it's going to take a really long time to see a return on investment. The math might never work itself out. Employers shoulder a large portion of the cost of providing healthcare - but employees also cover a significant amount. Budgeting an additional $12K+/year for every eligible plan participant (with a national obesity rate of 42%, that's over 100,000 people within UT's plan) has the potential to break the bank quickly. If the plan costs go through the roof, the employees suffer too. Their contribution goes up, deductibles go up, and money slotted for raises gets funneled to plan costs. This debate about anti-obesity medication coverage is more complex than it seems!!  Link to article in the comments section. #antiobesitymedication, #obesitymedicine

"My Doctor didn't do the Prior Authorization right, and now I can't get this medicine!" This is a complaint I hear frequently; and frankly, it's more complicated than you know. Obesity was declared a "disease" by the AMA only in 2013. For years we have considered obesity to be a "you" problem, until it led to a diagnosis like diabetes, heart disease, etc. And a "you" problem does not have a medical leg to stand on. This, as Peter Attia would say, is Medicine 2.0. For too long, patients have been left on their own to find the "willpower," and to "just eat less and move more." Even today, 12 years into having obesity considered a multi-factorial disease, with multiple organ involvement, there is no mandated coverage for the treatment of obesity. That's right. Until Congress decides to update the list of medical conditions that are REQUIRED to be covered by US health insurance, this disease lacks coverage for most individuals. That's the bottom line here. We all start with ZERO coverage for Anti-Obesity Medications. So why do some people have coverage for Anti-Obesity Medications? It's because their EMPLOYER has chosen to add coverage for obesity treatments, which may include medications and/or surgery. If your employer has chosen to add coverage, then your insurance plan may cover these medications (to variable extents however!). The closest parallel to draw here is fertility treatments, including egg-freezing and IVF. If your employer has added coverage, these are available to you, often at far more affordable rates. This is why some people have a $25 copay for their monthly Wegovy, and others are paying several hundred dollars/month, or using coupons from the manufacturer, turning to compounds, etc. Now, what about Prior Authorizations? Any time you are using health insurance to pay for something expensive (an MRI, chemotherapy treatments, surgeries, etc), there is likely to be a Prior Authorization process. Your physician or healthcare provider sends a request (this may require completing forms, sending records, calling old-school) for Prior Authorization for the treatment, and then usually has to spend time justifying why we should use this treatment. I won't lie, sometimes the questions we are asked are frankly demeaning. But many patients think that if we are simply aggressive enough, that we should get it authorized. But your insurance begs to differ. If you don't have Anti-Obesity Medication coverage on your plan, if "weight management" is excluded, there is no coverage. Period. It's not a matter of arguing. The exceptions to this are when you have cardiovascular disease (Wegovy is approved to treat this) or Obstructive Sleep Apnea (Zepbound is approved to treat this), your insurance *might* make an exception since it is no longer "just weight management." If there is no coverage, there is no coverage. That's why appeal after appeal is not helpful. It's not right that this is the case, but right now, this is the struggle.

Attention Health Plan Sponsors and the Public!: A new lawsuit, Navarro et al. v. Wells Fargo & Co., sheds light on alleged mismanagement of prescription drug benefits that cost participants millions. This case, brought by Fairmark Partners, echoes the J&J lawsuit and highlights how fiduciary duties can be breached, leading to skyrocketing drug costs and excessive administrative fees. Key Allegations: Wells Fargo paid significantly more for generic drugs compared to market prices, with a notable example being $9,994.37 for a prescription available for under $1,000 elsewhere. Excessive payments largely benefited the Pharmacy Benefits Manager (PBM), Express Scripts. Administrative fees paid by Wells Fargo to ESI were exorbitant compared to similar-sized plans. The broker, Aon, allegedly had a conflict of interest due to indirect compensation from PBMs. Why This Matters: This lawsuit serves as a crucial reminder for health plan sponsors to exercise diligence in managing their plans. Ensuring transparency and prudence in health plan contracts and administrative fees is essential to protect financial interests and provide affordable healthcare to beneficiaries. Let's stay informed and advocate for better management of our health benefits! Great work and overview Julie Selesnick. #wefixyourhealthcare

Randall Childers, CFC, DABFE wrote in "Forensics of a Medical Plan" Fiduciary Contract Defined: A fiduciary contract is defined to be an agreement by which a person delivers a thing to another on the condition he will restore it to him. Employers have a fiduciary duty to their plan and its' members....full stop. Not to a broker. Not to a TPA. Not to a friend of the CEO. Not to a golfing buddy or Sunday school friend. Employees "invest" in their health care plans with their own hard-earned money on the condition that the employer will "restore it to him" through prudent management of those dollars. If a company refuses to prudently manage the monies that employees invest in the health plan, they've fallen short of their fiduciary responsibility under ERISA, and are subject to litigation from employees. What's a breach? That's being argued in courts right now, in high-profile cases involving large employers like Johnson & Johnson and Wells Fargo. Their own employees have sued them, citing eggregious overspending for prescription drugs and medical care. When employer health plans grossly overpay for care, it's being argued that it is wasting employee money, and a failure of their fiduciary responsibility to not overpay.

CFOs: Could Your Self-Funded Health Plan Be a Silent Financial Liability? You already manage financial risk across your organization, but what about your health plan? More companies are moving to self-funding for cost savings and flexibility, yet many overlook one critical reality: Self-funded plans expose the employer and you to fiduciary liability, regulatory scrutiny, and personal financial risk. In The Silent Danger, I explain the often-misunderstood fiduciary risks tied to self-funded health plans—risks that many CFOs aren’t fully briefed on until it’s too late. Get a free download of Chapter 1: “Why This Book Matters” Understand what’s at stake and what questions you should ask your broker, TPA, and stop-loss carrier. What fiduciary duties do you personally take on under ERISA How to evaluate hidden conflicts, markups, and risk transfer loopholes Real-world missteps that led to costly litigation and fines Risk-mitigation strategies CFOs can implement now Download your free chapter here: https://lnkd.in/eQhJEBsK   Before you sign off on another benefit renewal, read this. #CFO #SelfFunding #FiduciaryRisk #ERISACompliance #HealthPlanStrategy #RiskManagement #PlanSponsor #TheSilentDanger #EmployeeBenefits #FinancialLeadership

ERISA fiduciaries are held to high standards—for good reason. They manage employees’ retirement and welfare benefits, making decisions that impact people’s financial and health futures. So, what exactly does being a fiduciary require? It comes down to duties. 1. Duty of Loyalty Act solely in the interest of plan participants and beneficiaries. That means no personal gain, no hidden agendas, and no conflicts of interest. 2. Duty of Care Exercise the “care, skill, prudence, and diligence” of a well-versed professional. If you don’t have the expertise, you’re responsible for finding the right people or resources who do. 3. Duty to Diversify Fiduciaries must diversify plan investments to minimize the risk of large losses. Putting all the eggs in one basket? Not an option. 4. Duty to Adhere to the Plan Document Fiduciaries must administer the plan according to its governing documents. If it’s written in the plan, it must be followed—no exceptions. 5. Duty to Avoid Prohibited Transactions ERISA strictly prohibits self-dealing and conflicts of interest. Fiduciaries can’t profit at the expense of plan participants—this safeguard is essential for maintaining trust. The bottom line? If you’re serving as a fiduciary, stay on top of the rules, seek qualified help when needed, and always act in the best interest of your plan participants. Which fiduciary responsibility do you think is most frequently overlooked?