Health plan cost trend expected to reach 15-year high in 2027

By Alan Goforth – Health plan cost trends for employer-sponsored benefits are approaching their highest levels in 15 years, fueled by inflationary pressure, AI implementation, a broken No Surprises Act dispute resolution process and market consolidation. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Medical and Pharmacy Costs Are Accelerating: The survey projects that the median medical plan trend will climb to 9.9% next year, marking the highest level in 15 years. Prescription drug costs are rising even faster, with pharmacy trends expected at 11.5%. Specialty medications and expanded use of GLP-1 weight-loss drugs are key contributors to this increase. These combined pressures are significantly driving overall employer health benefit spending upward.

2. Structural and Policy Factors Are Adding Billions in Costs: Market consolidation and growing private equity involvement in health care are contributing to higher prices and increased utilization. The Independent Dispute Resolution process under the No Surprises Act has favored providers 88% of the time, adding an estimated $5 billion in system costs since 2022. Additionally, increased coding intensity linked to AI tools is responsible for roughly 20% of inpatient cost growth. Together, these systemic factors are compounding inflationary pressures across employer-sponsored plans.

3. Employers Are Shifting to Targeted Cost-Management Strategies: In response to rising expenses, plan sponsors are adopting approaches focused on direct savings rather than traditional rebate-driven models. Strategies include narrow networks, direct contracting, risk-sharing arrangements and the use of centers of excellence to guide patients toward preferred providers. Many employers are also transitioning to transparent, pass-through pharmacy pricing and steering care to lower-cost settings such as ambulatory surgical centers and home infusion services. These data-informed tactics reflect a more proactive effort to manage affordability challenges.

10 best states for healthcare: US News

By Kelly Gooch – U.S. News & World Report released its annual Best States rankings July 28, evaluating all 50 states on how they best serve their residents across eight categories: healthcare, education, economy, infrastructure, opportunity, fiscal stability, crime and corrections, and natural environment. Utah ranked No. 1 overall for the fourth consecutive year. Read Full Article...

HVBA Article Summary

1. Healthcare Is a Heavily Weighted Ranking Factor: Healthcare makes up 15.51% of each state’s overall Best States score, giving it the second-highest weight among the eight evaluated categories. The rankings draw on data from federal agencies including the CDC and CMS. States are assessed across healthcare access, healthcare quality and public health. This structure means performance in medical coverage, care delivery and population health meaningfully affects a state’s overall standing.

2. Top and Bottom Performers Show Regional Patterns: Hawaii ranks as the best state for healthcare, followed by several Northeastern states including Massachusetts, Connecticut and Rhode Island. In contrast, Mississippi, West Virginia and Oklahoma are among the lowest-performing states. Many of the bottom-ranked states are concentrated in the South. The results highlight persistent geographic disparities in healthcare systems and health outcomes.

3. Subcategory Rankings Reveal Different Strengths: Massachusetts leads in healthcare access, while Hawaii ranks first in healthcare quality and New Jersey tops the list for public health. Access metrics include measures such as insurance enrollment and affordability, while quality metrics evaluate hospitals, nursing homes and Medicare performance. Public health rankings consider indicators like obesity, smoking, infant mortality and mental health. These distinctions show that states may excel in one dimension of healthcare while lagging in others.

FDA offers updated guidance for generics of weight loss blockbusters

By Zachary Brennan – The FDA revised its draft guidance for generic companies looking to develop copycats of some of the world’s best-selling weight loss drugs, including Eli Lilly’s Zepbound and Novo Nordisk’s Ozempic. The updates disclosed Tuesday may help to stem a growing field of compounded GLP-1s and are meant to help generic players enter the multibillion-dollar GLP-1 space more quickly. Even so, due to patent protection, Ozempic and Zepbound generic competitors may not be on the market until the early 2030s. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. USP Updates Quality Standards for Compounded GLP-1 Ingredients: The U.S. Pharmacopeia (USP) has revised its guidance for compounded semaglutide and tirzepatide ingredients, building on recommendations issued in December 2025. The updated standards introduce additional methods to detect and control active ingredient-related impurities that could otherwise go unnoticed. USP noted that low-level impurities in GLP-1 therapies may increase the risk of unwanted immune responses, reinforcing the importance of manufacturing quality and testing.

2. FDA Highlights Safety Concerns With Compounded GLP-1 Products: The revised USP guidance follows a recent FDA warning regarding the safety of compounded GLP-1 medications, which have expanded rapidly in the marketplace. The FDA reported receiving multiple adverse event reports, including cases requiring hospitalization, that may be linked to dosing errors involving compounded injectable semaglutide products. As of May 31, the agency had received 990 adverse event reports associated with compounded Ozempic and more than 730 reports linked to compounded Zepbound, while Novo Nordisk estimated that up to 1.5 million U.S. patients may be using compounded GLP-1 therapies.

3. Strong Demand Continues for Branded GLP-1 Medications: Despite the growth of compounded alternatives, branded GLP-1 therapies continue to generate significant commercial demand. During the first quarter of 2026, Lilly reported approximately $4.2 billion in U.S. revenue from Zepbound, while Novo Nordisk reported approximately $4 billion in U.S. revenue from Ozempic. The updated USP standards and FDA safety communications may influence ongoing discussions around quality assurance, patient safety, and the use of compounded GLP-1 medications.

Caribou Systems Is Asking the Right Question, and Plan Sponsors Should Listen

By Jake Velie – Caribou Systems recently published a piece that every self-funded plan sponsor should read: “You’re the Fiduciary. Can You Prove It?” It’s a direct, uncomfortable question, and that’s exactly why it matters. Their argument is simple and correct: ERISA fiduciary compliance isn’t about outcomes. It’s about process. Specifically, can you produce an independent, time-stamped trail showing you were actively verifying your pharmacy benefit spend, catching errors, and acting on what you found? For most plans, the answer is still no. Read Full Article...

HVBA Article Summary

1. Fiduciary Compliance Centers on Documented Process: The article emphasizes that ERISA fiduciary responsibility is measured by the quality and independence of oversight processes rather than simply by financial results. Plan sponsors must be able to demonstrate a clear, time-stamped audit trail that shows active monitoring of pharmacy benefit spending. Relying solely on reports generated by pharmacy benefit managers (PBMs) may not meet the standard of independent verification. The focus is on proving prudent oversight, not assuming it.

2. Independent Auditing Infrastructure as Risk Mitigation: Caribou Systems positions its 100% claims re-adjudication model as a way to create defensible fiduciary documentation. The company reports auditing more than 200 million pharmacy claims annually and conducting over 75 pre-implementation audits each year. By reviewing every claim rather than a statistical subset, the model aims to reduce exposure to billing errors and undisclosed discrepancies. This approach is framed as building a compliance record that can withstand regulatory or legal scrutiny.

3. Comprehensive Strategy Beyond Error Detection: The article argues that verifying PBM performance is only one layer of fiduciary responsibility. It highlights additional cost-containment strategies such as 340B pricing, biosimilars delivering 60–80% savings, and site-of-care optimization that can lower infusion costs by 40–60%. Ongoing ERISA litigation involving large employers underscores the expectation that plan sponsors evaluate alternative models and cost structures. Together, independent auditing and proactive cost optimization are presented as complementary components of a stronger fiduciary posture.

Judge rejects North Dakota bid to pause 340B ruling

By Ella Jeffries – A federal court has denied North Dakota’s request to pause enforcement of a ruling that struck down its 340B drug pricing law while the state appeals, according to a July 27 court order. Read Full Article...

HVBA Article Summary

1. Court declines to stay injunction during appeal: The U.S. District Court for the District of North Dakota permanently blocked the state’s 340B law in April and rejected the state’s later request to pause that decision. Although North Dakota appealed April 29, it did not seek a stay until July 7, citing supportive appellate rulings from other circuits. The court determined that the delay undermined the state’s argument that immediate relief was necessary. As a result, the injunction remains in effect while the appeal proceeds.

2. Judges distinguish North Dakota’s law from others: In its analysis, the court found North Dakota’s statute more punitive than similar laws because it includes criminal penalties. The court also concluded that the measure regulates drug pricing rather than focusing solely on pharmacy distribution practices. Drugmakers AbbVie and PhRMA opposed the stay, arguing the state had not demonstrated harm from the injunction. The court ultimately agreed with the manufacturers on each factor it considered.

3. Financial and national implications: AbbVie estimated that compliance with the blocked law would have cost it $10 million in 2025 and an additional $35 million in 2026 in discounts it otherwise would not provide. The court noted that North Dakota did not submit evidence showing the injunction harmed residents’ access to care. The ruling comes amid a broader split among federal appellate courts over states’ authority to regulate 340B contract pharmacy arrangements. Different circuits have reached varying conclusions on similar laws in states including West Virginia, Mississippi, Louisiana, Arkansas and Missouri.

Constructing Clear, Action-Oriented Communications During Open Enrollment

By Emily Boyle – Open enrollment season is quickly approaching, with plan sponsors, recordkeepers and participants alike preparing for what Steve Mann calls a “marquee” event of every year. With many health insurance open enrollment windows set to begin on November 1, benefits-eligible employees will have about two weeks to make selections about their 2027 benefits. Mann, a senior vice president in Fidelity Investments’ workplace consulting group, says addressing healthcare inflation is inevitable this season—but doing so transparently is the key to doing it well. Read Full Article...

HVBA Article Summary

1. Healthcare Cost Pressures Demand Transparency: Employers are facing significant cost increases, with last year’s projections estimating median healthcare costs for 2026 would rise 9% over 2025 levels. In reality, some fully insured plans experienced premium hikes ranging from 18% to 25%, and in certain cases exceeding 60%. Plan sponsors must decide how to allocate these added expenses between the organization and employees, often requiring plan design changes or higher deductibles. Experts emphasize that clearly explaining what is changing and why is critical to maintaining employee trust.

2. Operational Accuracy and Personalization Are Priorities: Recordkeepers and benefits teams are focused on executing open enrollment accurately and efficiently, given its complexity and scale. Fidelity leaders note the importance of supporting employees with education and decision tools while providing employers with strong data processing and analytics capabilities. Looking ahead, there is an increased emphasis on personalization that goes beyond cost and claims to reflect individual behaviors, risk tolerance and financial goals. This approach aims to reduce friction and help employees make more informed benefit selections.

3. Clear, Action-Oriented Communication Drives Engagement: Industry leaders from Vanguard and Bank of America stress that concise and relevant messaging improves participation during open enrollment. Communications should minimize unnecessary steps and provide simple, direct calls to action so employees can respond quickly. Messaging written in accessible language and tied to decisions employees care about is more likely to resonate than generic notices. Offering immediate next steps—such as digital links or access to advisers—helps meet participants where they are and encourages meaningful engagement.

Is GLP-1 coverage actually delivering value?

By Linda Anegawa – For the past few years, benefits consultants have spent considerable energy helping employers understand and navigate the dynamic GLP-1 landscape. It's a space moving faster than most can keep up with: new drugs entering the market, new indications and mounting cost pressures. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Real-World Results Often Fall Short of Clinical Trials: While clinical trials show GLP-1 medications can drive 10% to 20% weight loss, real-world outcomes frequently lag behind those benchmarks. The article attributes this discrepancy not to drug failure, but to insufficient behavioral and clinical support for patients. Without guidance on nutrition, exercise, and side-effect management, adherence declines and weight regain becomes more likely. This gap raises concerns about whether employer investments are translating into durable health improvements.

2. Integrated Support Programs Improve Outcomes: Evidence from programs that combine GLP-1 therapy with structured coaching suggests significantly stronger performance. Some integrated models report up to 16% weight loss in the first year and sustained results lasting more than four years. These programs emphasize personalization, flexibility, human accountability and coordinated clinical oversight. The data indicate that pairing medication with comprehensive support can substantially enhance both health outcomes and return on investment.

3. Employers Must Shift from Coverage to Accountability: The article argues that employers should treat GLP-1s as part of a broader clinical strategy rather than a standalone pharmacy benefit. Employers are encouraged to define success metrics beyond simple access, including long-term metabolic improvements, persistence rates and cost savings. With annual spending that can reach $15,000 per member, evaluating value requires examining sustained outcomes rather than short-term uptake. Brokers and consultants play a key role in guiding clients toward governance frameworks that ensure measurable, lasting impact.