The unfolding story around the lawsuit against Johnson & Johnson illuminates an uncomfortable truth about the current state of employer-sponsored healthcare. A proposed class-action lawsuit levels accusations against J&J, its Planning & Benefits Committee, and all individual fiduciaries within that committee, alleging negligence in their duty to prudently manage health plans. This oversight has reportedly led to employees facing staggering overpayments for prescription drugs. This revelation is a pivotal moment for employers across the board, compelling us to scrutinize our roles and responsibilities in the realm of employee health benefits with renewed vigor.
The J&J lawsuit underscores the fiduciary duties employers are obligated to uphold under the Employee Retirement Income Security Act of 1974 (ERISA)—to manage health benefits with care, skill, prudence, and diligence, always in the best interest of their plan participants. It serves as a stark reminder that employees can—and will—hold their employers accountable for the stewardship of their health benefits –including seeking legal action. Today’s employer must go beyond merely offering health benefits. The allegations shed light on the essential requirement for us to proactively manage the health plans we sponsor, ensuring that costs are kept in check and, most importantly, that we fulfill our role as protectors of our employees’ health and financial well-being. At its core, ERISA is really just urging employers to do right by their people. While certainly easier said than done, the intent behind these regulations is clear—encourage employers to take active, responsible steps towards safeguarding their employees’ healthcare interests.
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6 Steps Employers Need to Take Now:
1. Own Your New Role as Healthcare Fiduciary
Employers cannot delegate this tremendous responsibility to others. Your health plan broker cannot assume this duty. You must take it seriously and implement a plan with key actions and documentation that shows you have been thorough and diligent in selecting and managing your employees’ benefit plan. Find a trusted advisor that is completely independent and transparent.
2. Market Check
Regularly performing a competitive analysis through annual RFPs for medical and pharmacy coverage ensures that your benefits stay competitive and cost-effective.
3. Introduce a Navigator
By integrating healthcare navigation into your plan, you provide employees with a guide to finding cost-effective, quality healthcare options. This support is not just a service—it’s a lifeline for many who feel lost within the healthcare maze.
4. Implement Oversight Programs
Oversight programs for fraud, waste, and abuse are not simply administrative tools. They’re shields that protect your employees’ hard-earned dollars and ensure that every penny spent towards health benefits counts.
5. Review and Understand
Committing to regular reviews of health plan data isn’t just about compliance. It’s about caring deeply for the well-being of your employees, ensuring that the benefits you offer truly benefit them. You can be active in your management and still compliant with PHI requirements.
6. Document & Communicate
Document your process and communicate to your employees your commitment to representing their best interests.
How Employees Also Play a Crucial Role in This Ecosystem
The efficacy of any health benefit plan is as much a function of how it’s managed by employers as it is of how it’s utilized by employees. As stewards of these benefits, employers can lay the groundwork for a robust healthcare management system. However, the realization of its full potential is a collaborative effort. Employees must take an active role for the system to work effectively.
Engagement
Being proactive about your health benefits, understanding them and using them wisely is crucial. Be willing to consider care and treatment options that are more cost effective.
Utilize Navigation Services
Take advantage of employer-provided services designed to help you navigate the healthcare system effectively.
Make Informed Choices
Choosing healthcare providers and medications wisely can have a significant impact on costs, not just for you but for your fellow employees. Even if your employer is paying some or all of a medical or pharmacy bill, spend the money prudently—as if it were your own. Be willing to step through lower-cost remedies before pursuing more expensive options.
Prevent Waste
Mindfulness in how healthcare benefits are used contributes to the sustainability of health plans. Avoiding unnecessary procedures, medication stockpiling, or opting for high-cost providers when equally effective, lower-cost options are available can make a substantial difference.
In this climate, ignorance is no longer an option. Understanding healthcare intricacies and the choices available has become a necessity, driven by the threat of legal repercussions. It’s a mandate for change, forcing employers to delve into the intricate details of their health benefits and question the status quo. Are our medical and pharmacy costs reasonable? Why are our employees’ drug costs exorbitant? What’s driving up their out-of-pocket costs? Who’s responsible for assessing our costs each year and ensuring they’re fair? Who are our healthcare vendors being compensated by? These crucial questions prompt employers to scrutinize their relationships with Pharmacy Benefit Managers (PBMs), brokers, TPAs and carriers. Employers should constantly assess their formularies, reevaluate their health plan contracts, and seek out innovative medical cost-containment solutions.
Fellow employers, let the J&J lawsuit be the catalyst for change, inspiring you to reevaluate and enhance your healthcare benefit strategies. Start demanding excellence and accountability from your healthcare partners, ensuring you’re not just passive participants but active advocates for your employees’ health and financial well-being. It’s time to move beyond the status quo, embracing our roles as fiduciaries with the seriousness and dedication they require. Together, we can make healthcare not just a perk of employment, but a pillar of employee support and satisfaction.
