In a recent webinar hosted by the National Alliance of Healthcare Purchaser Coalitions, Jonathan Levitt, co-founding partner of Frier Levitt, warned that even well-meaning companies could face lawsuits in the coming years over pharmacy benefit and health plan costs. These lawsuits stem from new fiduciary liability standards under ERISA and the Consolidated Appropriations Act of 2021 (CAA 2021), which mandate increased transparency and due diligence from health plan sponsors.
He explores this topic more in a Benefits Pro article, “Even ‘Good’ Employers Face Rising Risk of Lawsuits Over Health Plan Costs” by Allison Bell. Jonathan emphasized that while the legal standards are still evolving, the expectations for employer health plans are clearly rising. Jonathan advised plan sponsors to proactively seek and scrutinize data from PBMs, brokers, and consultants—especially concerning compensation, conflicts of interest, and rebate arrangements. He also raised concerns over the difficulty in accessing data, noting that some PBMs impose restrictive conditions.
Jonathan recommended that employers thoroughly review which specialty generic drugs are included in their coverage, assess the PBM’s supply methods, and closely examine the payment structures to understand who is receiving payments and how much.
For more of Jonathan’s insights and defense strategies, read the article: