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Protect your health plan, your people, and your bottom line—it's the law.
View ResourcesThis act clarified what many employers didn’t realize: as a health plan sponsor, you’re a fiduciary—and that comes with real responsibilities.
This law puts the burden of care squarely on employers, which should strongly motivate them to demand transparency from PBMs and plan vendors, rein in wasteful spending, and ensure employees get real value from their health benefits.
Specifically, employers have a duty to:
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Major companies like Johnson & Johnson, Wells Fargo, and JPMorgan Chase are facing class-action lawsuits from employees over mismanaging the pharmacy portion of their health plans.
The allegations from employees include:
These cases are a wake-up call—and a call to lead. Failing to manage your health plan could cost you a lot.
In June 2025, a federal court ruled CVS Caremark must repay $95 million (potentially tripling to $285 million) under the False Claims Act for inflating Medicare Part D drug prices—even while underpaying pharmacies—between 2010 and 2016. A former Aetna employee blew the whistle, exposing how PBMs can steer public payers into overpaying—not just commercial plans.
This is a great reminder to employers: if it can happen to Medicare, it can happen to your plan. Fiduciary duty means asking tough questions, demanding transparency, and ensuring your PBM isn’t quietly eroding value.
Employers don’t need to be experts in drug pricing to fulfill their fiduciary duties—but they do need a process.
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Establish a group responsible for overseeing benefit decisions, contracts, and compliance. This ensures there’s a clear structure for fiduciary accountability—and that someone is asking the right questions. Similar to how employers oversee their 401k plans, add structured protocols to your vendor management and plan design functions.
Make sure plan fiduciaries are covered under existing liability insurance and indemnified in plan documents. If something goes wrong, your leadership team should be protected.
Contracts with PBMs, brokers, and third-party administrators (TPAs) should include language requiring full cost transparency, disclosure of conflicts, and indemnification. Don’t just sign boilerplate terms—negotiate for visibility and value.
In PBM contracts, require that the lowest cost options are offered for each drug class, ban spread pricing, pass rebates through to participants during their deductible period, and ensure all service costs are fully disclosed.
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