About a year ago, Goodroot CEO Mike Waterbury and Steve Palma, president of medical cost solutions, wrote an article for BenefitsPRO about how the Consolidated Appropriations Act of 2021 (CAA) would soon begin holding employers accountable for upholding their fiduciary responsibility of exploring insurance options that lower the overall cost of employee health care. There was talk then that the CAA would even allow employees to sue employers if they didn’t effectively manage their benefits.
They recently revisited the topic again for BenefitsPRO to write about how the first “fiduciary duty” lawsuit for health benefits will affect employers and employees. This could be a landmark event that spurs major change in the industry. Here’s an excerpt from the article:
That inevitable class action lawsuit was filed earlier this year, alleging that Johnson & Johnson mismanaged drug benefits for employees. The lawsuit states that no prudent fiduciary — by law, someone who manages another person’s money for their benefit — “would agree to make its plan and beneficiaries pay a price that is two-hundred-and-fifty times higher than the price available to any individual who just walks into a pharmacy and pays out-of-pocket.”
Some experts believe this is just the first of many lawsuits that will be the catalyst for revamping the approach to employer-sponsored benefits, and it will ultimately have a positive effect on the health care industry. Change is certainly needed, as the average family premium has increased at a 14% clip year over year for the past two decades.
What has changed for employers?
Employers need to ask themselves what their main obligation is as the fiduciary. It shouldn’t be to simply and minimally meet the requirements of a new law by going through the bureaucratic motions for the sake of being in compliance. It should be about doing what’s truly right by their employees.
The potential impact of this shift is vast. Instead of health care costs steadily rising every year and employees anxiously awaiting the dreaded open enrollment period, we could have a nation of benefits managers working to provide high-quality, accessible care at more affordable rates.
There are real steps to be taken. By far the most important is to enlist a trusted advisor in the form of a benefits navigator that can help employers be fiduciary-compliant. There are brokers, consultants and third-party administrators to deal with and far too much complexity for it to be a reasonable expectation that employers step up and properly handle the situation.
Adding a benefits navigator to a health plan helps employees find low-cost, high-quality options for both providers and prescriptions. A navigation company also helps rectify outstanding medical bills and guides employees through the process of applying for hospital financial assistance, which is available to a larger chunk of the population than people may think.
