Over the past several years, the PBM landscape has shifted significantly—and that rapid shift continues today. What was once considered satisfactory, or part of the status quo, is simply no longer acceptable. And we’re not just talking about industry “buzzwords” that have largely gone the way of the cliché. But let’s start there.
The Fall of “Transparency”
While not a legal term, “transparency” is, without a doubt, one of the most overused, over promised, and severely underdelivered concepts in the health benefits space—but particularly in the PBM world. While anyone can say they’re transparent, or claim to deliver the “most” transparent services, what does that actually mean? Well, that can vary tremendously.
The fact is, it’s all relative. While a PBM can be transparent, that doesn’t mean they have a client’s best interest as their top priority. To put it bluntly, they’re often just open about revenue sources (and claim that to be “total” transparency). For the client, however, that doesn’t mean much at all for their bottom line—as these PBMs can still engage in undisclosed spread pricing, rebate-driven revenue models, and markups.
The Rise and Thrive of Fiduciary
With a marketplace demanding more, fiduciary PBMs—like US-Rx Care—have become the clear alternative to the status quo. For fiduciary PBMs, who are contractually obligated to act in the best interest of every client, transparency, fairness, trust, and accountability aren’t just buzzwords that marketers throw around—they are guarantees.
With the fiduciary model, every dollar spent for PBM services MUST be compliant with these contractual obligations. This means the client’s money is only spent on cost savings and service fulfillment. There are no “gotcha” moments. All compensation sources, including rebates, administrative fees, and other revenue streams are clearly disclosed.
The Water Bill Metaphor
Think of the traditional “transparent” vs. fiduciary PBM argument like your monthly water bill. The bill is transparent in the sense that you can see what your total bill is, but you may not necessarily have insight to where every dollar is going or what you’re ACTUALLY paying for. Think of it as “additional” or “admin” fees. But, regardless, you continue to pay to ensure that you have water to use.
Under a fiduciary contract, you would know for certain that you’re getting the best rate possible and that every dollar you are spending is being used to work in YOUR best interest—not to line the pockets of the water company or pay for things that don’t serve any purpose for you directly.
Building an Effective Fiduciary Strategy
Fiduciary PBMs are important today because they provide a more ethical and cost-effective approach to managing prescription drug benefits, which is crucial for controlling the rising costs of healthcare.
An effective fiduciary strategy means full pass-through pricing (no surprises—knowing where every dollar is going), no spread pricing (charging more for drugs just to make a profit), an alignment of interests between the client and the PBM, along with independent and unbiased formulary management.
The result? TRUE transparency, lower long-term costs, and better health outcomes for patients.
Let ‘s talk about what our unique fiduciary approach at US-Rx Care can deliver for you and your clients!
Chronic health conditions are a growing problem for workers, damaging their well-being, productivity and job satisfaction, according to a new study.
The “U.S. Employee Perspectives on Managing Chronic Conditions in the Workplace” poll by the Harvard T.H. Chan School of Public Health and the de Beaumont Foundation found that 58% of U.S. employees report having a physical chronic health condition such as hypertension, heart disease, diabetes or asthma. Among them, 76% need to manage their condition during work hours, yet 60% have never formally disclosed their health issues to their employer.
This lack of disclosure can create issues for both the employer and worker, affecting productivity, job satisfaction and overall workplace well-being.
Implications
Each year, chronic conditions account for $1.1 trillion in health care costs and $2.6 trillion in lost productivity, including $36.4 billion in employee absences, according to Kaiser Permanente.
Employees with chronic health conditions may be keeping mum for a variety of reasons, including:
Fear of stigma,
Concerns about missed work opportunities, and
Negative performance reviews.
As a result, employees are forced to make difficult choices:
36% have skipped medical appointments or delayed care to avoid interfering with their job.
49% felt unable to take time off or even a break despite needing one for their health.
33% reported missing out on additional work hours or projects due to their condition.
25% believe they have been passed over for a promotion because of their health issues.
Unaddressed chronic health conditions contribute to:
Absenteeism,
Decreased performance, and
Increased turnover.
Beyond managing their own health, many employees also care for family members with chronic conditions. One-third of workers have had to help a family member with a chronic illness in the past year, and 45% of those caregivers needed to do so during work hours.
The case for employer support
In a tight labor market, businesses that take proactive steps to support employees with chronic conditions can maintain a healthy workforce and gain a competitive advantage.
A minority of employees feel their workplaces are supportive of their needs:
44% say their employer is very supportive of allowing breaks or paid leave.
37% report strong employer support for flexible scheduling.
Only 27% say their employer is very supportive of remote work, even when the job allows for it.
How employers can help
According to the Centers for Disease Control and Prevention, many chronic conditions are linked to modifiable behaviors, including:
Tobacco use and secondhand smoke exposure,
Poor diet, including high sodium and saturated fat intake with low fruit and vegetable consumption,
Not being physically active, and
Excessive alcohol consumption.
Here are several ways for employers to support staff with chronic conditions:
Promote open dialogue—Create a culture where employees feel safe discussing their health needs confidentially. Help them access necessary accommodations without fear of judgment or career repercussions.
Encourage regular testing and doctor’s visits—Encourage your staff to take advantage of their health plans’ benefits, like annual blood work and health exams, and to follow physician-recommended regimens.
Offer flexible scheduling and remote work options—Allow employees to adjust their schedules or work from home when needed. This can help them manage medical appointments and symptoms more effectively.
Improve paid leave policies—Provide paid leave to help employees address their own or their family’s health needs.
Promote wellness programs—Offer resources such as health coaching, on-site screenings and wellness incentives that encourage employees to prioritize their health. Offer programs focused on tobacco- and alcohol-cessation programs.
Train managers to support employees with chronic conditions—Educate supervisors about chronic illnesses and workplace accommodations to help create a more inclusive and understanding environment.
There is a general truth in the health insurance sector: If Medicare and Medicaid are given the green light to cover a certain drug, insurers in the group health and individual health insurance market usually follow suit.
The Centers for Medicare and Medicaid Services (CMS) typically allows Medicare drug plans and Medicaid to cover a drug once the Food and Drug Administration approves it for specific conditions. However, despite the FDA’s approval of popular yet pricey GLP-1 drugs like Ozempic and Zepbound for weight loss, these programs do not cover them due to a long-standing rule to not cover so-called “cosmetic” drugs.
However, the comment period for a proposed CMS regulation that would allow Medicare and Medicaid to cover GLP-1s and other drugs specifically for weight loss recently ended, and the industry is waiting to see if the Trump administration will finalize the rule.
If the CMS finalizes the rule, will group health and individual health insurers follow suit?
Current Medicare GLP-1 coverage
Medicare, through Part D drug plans, and Medicaid already cover GLP-1s for certain conditions, including:
Type 2 diabetes, and
Cardiovascular disease.
After the government programs began covering the medications for the above conditions, private insurers have largely done the same.
The drugs approved for these conditions include:
Ozempic,
Mounjaro,
Rybelsus, and
Wegovy.
The fine print
Experts say that if the CMS approves GLP-1s for weight loss, private health insurers would likely do the same. However, this does not mean they would cover them outright. Each plan’s copays, deductibles and coinsurance would still apply, as they do for all other drugs.
The list price of these drugs is around $1,000 a month or more. Since GLP-1s are expensive specialty drugs, insurers would likely put them in their pharmaceutical fee schedule’s most expensive tier, meaning that enrollees would pay higher copays and/or coinsurance for than for lower-tier drugs.
Additionally, health plans that decide to cover these drugs may require plan enrollees to first try less expensive treatments and/or lifestyle changes before approving a GLP-1 prescription.
Effect on costs
The rising cost of specialty drugs are contributing to overall premium inflation.
In 2023, health insurance outlays for prescription drugs increased by 10.8%, compared to 2.6% for all medical expenses, according to the U.S. Department of Health and Human Services. This increase was driven by brand name and specialty drugs, particularly those used to treat diabetes and weight loss, such as GLP-1 drugs. If more insurers start covering these popular drugs, it would likely affect premiums.
However, there could be offsetting cost benefits. Consider that:
These drugs often result in a significant drop in blood-sugar levels, reducing the risk of diabetes-related complications.
GLP-1s yield an average weight loss of 15 to 20%, and about one-third of users lose approximately 10% of their body weight, according to a study.
Multiple studies have shown that they can reduce the risk of cardiovascular events, including heart attack, stroke and death.
The drugs may help people cut back on drinking, according to a study published in JAMA.
A final word
It’s still unclear if the Trump administration will finalize this proposed rule. Much will depend on the new Robert F. Kennedy Jr., the new secretary of the HHS. He has stated his intention to “make America healthy again,” but he has also been critical of vaccines and other medications in in the past.
Each year, mental health issues such as depression and anxiety lead to a staggering 12 billion missed workdays globally, according to a new study by Resolute Psychiatry, an online platform that provides virtual counseling.
This absenteeism not only affects personal well-being but also results in significant financial losses. Employees who are struggling with their mental health can be less productive and may have lapses in concentration that can lead to poor performance and even workplace accidents.
Production and financial losses due to missed workdays, for any reason, cost the U.S. economy $1 trillion each year.
The compounding effects of these health challenges — fatigue, poor concentration, detachment, stress and physical symptoms — are obviously a serious challenge for businesses. Fortunately, there are steps that companies can take to provide mental health support in the workplace.
Access to mental health resources
One of the best ways to support staff dealing with depression and anxiety is to implement an employee assistance program. EAPs offer confidential services, including counseling, wellness workshops and access to mental health apps.
These programs can reduce barriers to seeking help and they address a range of issues such as substance abuse, occupational stress, relationship problems, emotional distress and major life events, providing employees and their families with essential support.
One issue, though, is that EAPs are often limited in the amount of sessions that an employee can attend without out-of-pocket costs. A typical EAP limits counseling appointments to around three to six sessions per issue per year.
Train managers on mental health support
Equipping managers with the skills to recognize and address mental health challenges is vital for fostering a supportive workplace culture. Training should focus on:
Recognizing signs of mental health challenges: Managers should be trained to identify indicators such as changes in behavior, decreased productivity, increased absenteeism, and signs of stress or withdrawal.
Initiating supportive conversations: Managers need guidance on how to approach employees sensitively and confidentially, expressing concern and offering support without judgment.
Providing resources and referrals: Training should include information on available mental health resources, both within the organization (like EAPs) and externally, enabling managers to guide employees toward appropriate help.
Encourage staff to use their health plan
All Affordable Care Act-compliant health plans cover nearly all mental disorders, as well as substance use disorders and treatment for alcohol and chemical dependency.
In addition, federal law requires that mental health and substance use disorder benefits are covered in the same way as most medical and surgical services. This means that things like deductibles, copays and insurance must be the same for mental health and substance use as for other medical benefits.
Offer flexible work options
Developing flexible work arrangements, such as remote work opportunities, adjustable hours and designated mental health days, can significantly aid employees in managing their mental health. These arrangements can allow workers to take time off to take care of errands and other matters, or to attend counseling sessions.
These options help reduce stress, improve work-life balance and enhance overall job satisfaction. If you have an employee who is struggling with depression or anxiety, you may want to consider:
Adjusting roles and responsibilities, or
Moving to a different role or department if the current job negatively impacts their mental health.
The takeaway
Since the COVID pandemic, mental health issues have risen to the fore and employers have experienced the effects on their workers. Many Americans are dealing with growing stresses in their lives, particularly with the cost of living having skyrocketed during the last few years, the tenor of national discourse and global problems.
By integrating the above strategies, organizations can create a more supportive environment that addresses mental health proactively, benefiting both employees and the company’s bottom line.
Companies that self-insure their group health benefits, or are in partial self-insured plans called level-funding, are likely to see higher stop-loss insurance renewal rates due to the rapidly increasing costs of specialty drugs and cancer surgery claims.
Stop-loss insurance steps in to pay claims when they reach “catastrophic levels,” or if the aggregate amount of claims exceeds a set dollar amount. The increases in stop-loss insurance rates are also likely to affect group health plan providers, which typically pass on their higher costs to employers.
Executives of Cigna Corp., which provides medical stop-loss coverage to employers, warned of the coming wave of stop-loss increases during the company’s Q4 2024 earnings call with analysts in late January. Brian Evanko, the company’s chief financial officer, said that Cigna’s stop-loss insurance costs had spiked in the fourth quarter.
The main drivers of the cost increase were:
Spending on costly injectable specialty drugs, like Keytruda, an anti-cancer drug, and
Higher spending on inpatient surgeries for serious conditions such as cancer and heart problems.
Cigna’s experience mirrors what’s been happening in the overall stop-loss insurance market.
From 2022 through 2024, the overall individual coverage stop-loss insurance premium rates grew at an annualized rate of between 10.4% to 13%, depending on the deductible size, according to the 2024 “Aegis Risk Medical Stop Loss Premium Survey.”
Deductibles are usually in increments of $100,000 per claim. The average monthly premium per employee for a $100,000 individual deductible was $210.80 per month last year, while for a $500,000 deductible the cost was $46.30 a head.
Sun Life, another stop-loss insurer, has noted equally rising costs. In its 2024 “Sun Life Stop-Loss Research Report,” it said that:
Million-dollar claims rose 8% on a claims-per-million-covered-employees basis
between 2023 and 2024, and were up 50% over the past four years.
Average cost of cardiovascular disease treatment was up 33%, higher than expected given medical inflation, and significantly higher than average cost for all claims, which was 5.9% over the same period.
Five new drugs entered the 20 high-cost injectable drugs list in 2023; two are used
primarily in the treatment of cancer, and one each for immunodeficiency disorders, gout and blood disorders.
The takeaway
If you are a self-insured employer or have a level-funded plan, you’ll want to budget for these higher stop-loss rates as you will likely see your premium rise.
You can always tinker with your deductible as well to lower your costs, but that could mean holding more of the bag for any high-dollar claims. But you can also take steps to address your health plan’s cost drivers. For example, you can:
Consider encouraging your employees to engage in programs that focus on general health management, such as monitoring of blood pressure and blood sugar, weight management and exercise to improve their overall health.
Ensure that your employees have access to mental health services, particularly those who are dealing with a chronic or acute high-cost condition.
Ensure plans offer coverage for preventive care during pregnancy.
Provide assistance to employees who are having trouble navigating the health care and health insurance system.
Finally, to get a good understanding of your potential costs and for planning purposes, you should know the average cost of various high-cost claim conditions. Sun Life’s report has extensive lists of how much these types of claims are costing. You can find it here.
A recent survey found that the majority of employees prefer traditional employer-sponsored health insurance over receiving cash through an individual coverage health reimbursement arrangement (ICHRA) to buy their own coverage on the Affordable Care Act marketplace.
The survey, conducted by Softheon, a health coverage distribution technology firm, and its subsidiary W3LL, found that 80% of respondents would rather have their employer provide health insurance, while only 20% preferred receiving employer funds to purchase their own plan.
The findings also showed that 54% of workers favored their firm offering multiple health plan options, while 26% preferred a single plan.
The findings reflect the importance of educating workers about ICHRAs if an employer is planning to start offering these vehicles.
How ICHRAs work
ICHRAs allow employers to provide tax-free funds that employees can use to purchase their own health insurance on the marketplace or through private insurers.
With an ICHRA, employers set a fixed allowance for employees to use toward their health insurance premiums and qualifying medical expenses. Employees then select their own coverage and pay premiums upfront, submitting receipts for reimbursement up to their firm’s contribution limit.
The employer’s funding is tax-deductible, and reimbursements are tax-free for employees as long as they purchase a plan that meets the ACA’s qualifying criteria.
These plans have grown in popularity as companies look for cost-effective alternatives to group health insurance, especially small and mid-sized businesses that may struggle with the rising costs of traditional plans.
While ICHRAs provide greater customization, they also require employees to take a more active role in selecting and managing their own health coverage, which can be a barrier for those unfamiliar with navigating the insurance marketplace.
Employee comfort levels with ICHRAs
Workers’ attitudes toward ICHRAs varied depending on how the questions were framed. When asked directly about receiving a cash stipend for health coverage:
29% said they were very comfortable with the idea.
40% said they were somewhat comfortable.
31% expressed discomfort with the concept.
Concerns about selecting their own coverage were also significant:
30% of respondents worried about choosing the wrong plan and either getting too much or too little coverage.
29% were primarily concerned about paying too much for a plan.
63% believed that employer assistance in navigating the ACA marketplace would improve their experience.
ICHRA awareness and adoption
Four out of five respondents admitted to knowing little or nothing about ICHRAs, while 20% said they were somewhat or very familiar with the concept, even though they didn’t have ICHRA coverage themselves.
In light of this lack of awareness, if you plan to offer an ICHRA, you’ll want to educate your staff about the arrangements and ensure employees understand that they are responsible for selecting their own individual health insurance plan under an ICHRA.
Key points to cover when educating staff:
Basic definition: Explain what an ICHRA is, highlighting that it’s a reimbursement account where the employer contributes a set amount towards the employee’s individual health insurance premiums.
Eligibility: Clearly state who is eligible for the ICHRA within the company, including any criteria based on job role or location.
Allowance amount: Specify the monthly or annual ICHRA allowance each eligible employee will receive.
Plan selection process: Guide employees on how to shop for an individual health insurance plan on the marketplace or through other providers, emphasizing the importance of comparing coverage options to find the best fit for their needs.
Reimbursement process: Explain how to submit claims for reimbursement, including required documentation and deadlines.
Impact on premium tax credits: Inform employees how the ICHRA may affect their eligibility for premium tax credits, and how to navigate this aspect when selecting a plan.
