JPMorgan accused of allowing excessive CVS Caremark fees in employee health plan

By Alan Goforth – A federal district judge in Manhattan on Monday cleared the way for employees to pursue a lawsuit alleging that JPMorgan Chase mismanaged its benefits program, resulting in them overpaying for prescription drugs and premiums. The employees can attempt to prove that the company allowed repeated, unauthorized excessive payments to CVS Caremark, U.S. District Judge Jennifer Rochon ruled. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. JPMorgan Lawsuit Alleges Flawed Selection of CVS Caremark: A proposed class action lawsuit claims JPMorgan used a “fundamentally flawed” process when hiring CVS Caremark as the pharmacy benefit manager for its employee health plan, potentially violating ERISA fiduciary obligations. The complaint also alleges a potential conflict of interest because CVS Caremark’s parent company, CVS Health, is an investment banking client of JPMorgan. It further states that the bank was aware of opportunities to reduce health care costs, referencing CEO Jamie Dimon’s previous collaboration with Warren Buffett and Jeff Bezos on the health care venture Haven.

2. Allegations of Significant Generic Drug Price Markups: The lawsuit alleges that JPMorgan allowed CVS Caremark to mark up the prices of 366 generic drugs by an average of 211% within its employee health plan. According to the complaint, these pricing practices resulted in some employees paying more for medications than uninsured patients. One example cited is the multiple sclerosis drug teriflunomide, whose price allegedly increased from $16.20 to $6,229.23 for a 30-unit prescription.

3. Legal Rulings and Broader Implications for Health Plan Oversight: A federal judge dismissed some claims, stating that corporate strategy or business relationships do not automatically constitute fiduciary actions under ERISA. However, other claims remain after a recent U.S. Supreme Court decision clarified that plaintiffs only need to plausibly allege prohibited transactions for cases to proceed. Legal analysts note that lawsuits like this highlight the importance of employers monitoring health benefit plan costs, as mismanagement can contribute to higher premiums, increased out-of-pocket drug costs, and pressure on employee wages.

Health plans with no providers may reshape Obamacare

By Maya Goldman – The Trump administration is planning something new for people shopping for Affordable Care Act coverage next year: health plans without a list of in-network doctors and hospitals. Why it matters: The "non-network" plans could inject a dose of long-sought innovation into health care pricing. But they also could expose patients to more surprise bills and further destabilize ACA markets, policy experts warn. Read Full Article...

HVBA Article Summary

1. ACA Marketplace Proposal Introduces Non-Network Health Plans: The Trump administration has proposed allowing health insurance plans on the Affordable Care Act marketplaces that do not contract with a defined network of providers. Instead, insurers would set a fixed payment rate for covered services, and patients would need to find providers willing to accept that rate or pay the difference themselves. Supporters say this structure could encourage price competition among providers and potentially lower premiums.

2. Debate Centers on Consumer Protections and Administrative Burden: Traditional ACA plans negotiate rates with a specific network of doctors and hospitals, which helps control costs and ensures patients have access to covered care. Critics argue that non-network plans could expose patients to surprise medical bills and shift more administrative work—such as negotiating payment—to patients and providers. Some supporters counter that plans paying any provider could reduce existing frustrations with network restrictions and long wait times for in-network care.

3. Policy Details and Market Effects Remain Unclear: The proposal would require insurers to demonstrate that a minimum share of local providers accept their payment rates, though the rule does not define what percentage qualifies. States would have the authority to decide whether these plans can be sold on their ACA exchanges. If the plans offer lower premiums, they could influence subsidy benchmarks and potentially reshape how other marketplace plans are priced and selected.

Health, voluntary benefits face surging ERISA litigation

By Kristen Smithberg – While 401(k) plans remain the primary target of ERISA fiduciary litigation, health plans and voluntary benefits programs are facing growing legal scrutiny, according to a new report from Encore Fiduciary. In 2025, plaintiffs' law firms filed 155 class actions alleging fiduciary breaches, approaching near-record levels and continuing the frenetic pace seen in recent years, Encore said. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Health Plan Litigation Expands Beyond Traditional ERISA Claims: Historically, ERISA litigation has focused on excessive fees and imprudent investments in retirement plans, but lawsuits are increasingly targeting employer health plans. One growing area involves tobacco premium surcharges, where plans charge higher premiums to tobacco users to offset expected health costs. Plaintiffs allege these surcharges may violate ERISA fiduciary duties if they are poorly disclosed, inconsistently applied, or inadequately monitored by plan sponsors.

2. New Legal Theories Target Provider Networks and Prescription Drug Costs: Lawsuits are also emerging around “ghost networks,” where participants claim that inaccurate provider directories or limited access to in-network care reflect inadequate oversight of third-party administrators and provider networks. Prescription drug pricing has also become a potential litigation focus, with two ERISA lawsuits filed in 2024 and another in 2025 challenging pharmacy benefit arrangements. While courts are still determining whether these cases establish legal standing, legal experts note that if a clear roadmap emerges, additional lawsuits targeting prescription drug costs could follow.

3. Settlements Are Significant but Individual Recoveries Remain Modest: Over the past five years, ERISA-related settlements have exceeded $1.3 billion, although individual participant payouts are typically small. In 2025, excessive fee and imprudent investment cases averaged just over $3 million per settlement, while tobacco surcharge claims averaged nearly $5 million. Participants generally received about $55–$70 each, with plaintiffs’ attorneys often taking roughly one-third of settlement amounts, and many lawsuits are dismissed early or resolved before reaching trial.

It Took Years for Congress to Enact PBM Transparency, Delinking. What About Vertical Integration?

By Marissa Plescia – In February, Congress finally took action to rein in PBMs via the Consolidated Appropriations Act of 2026. It included reforms like the delinking of PBM compensation from the price of a drug in Medicare Part D and more detailed reporting to plan sponsors. But this is only the tip of the iceberg when it comes to the PBM reform that advocates are calling for. Many would like to see Congress address vertical integration with insurers and pharmacies. Read Full Article...

HVBA Article Summary

1. Limited Prospects for Major Vertical Integration Reform: Despite the recent passage of PBM transparency and compensation reforms, experts believe that more sweeping legislation targeting vertical integration in healthcare is unlikely to pass in the near future. The Break Up Big Medicine bill, which seeks to separate PBMs, insurers, and providers under common ownership, faces significant political and industry resistance. The entrenched nature of these business structures and the influence of large healthcare conglomerates make substantial reform a challenging prospect.

2. Bipartisan Efforts and Legislative History: Over the past decade, Congress has introduced numerous bipartisan bills aimed at increasing PBM transparency and accountability, but most have failed to advance beyond committee stages. While some reforms have been enacted as part of larger appropriations bills, standalone measures—especially those as ambitious as breaking up vertically integrated companies—have struggled to gain traction. The slow progress highlights the complexity and contentiousness of addressing consolidation in the healthcare sector.

3. Economic and Political Complexities: Experts point out that the profits generated by large, vertically integrated healthcare companies are intertwined with public pension funds and retirement accounts, complicating efforts to dismantle these entities. Additionally, the lobbying power of major industry players and the potential for widespread disruption to existing healthcare structures further diminish the likelihood of passing comprehensive reform. Nonetheless, the introduction of such bills is seen as valuable for sparking public debate and drawing attention to conflicts of interest within the current system.

What 2026 open enrollment reveals about cost pressures ahead

By Bruce Shutan – The most recent open enrollment may portend what's around the corner for HR and benefits professionals, according to the head of a leading advisory across North America. Perry Braun, president and CEO of Benefits Advisors Network, says that with health insurance marketplaces hardening, benefit advisers should expect to have some difficult conversations and level with their clients that current conditions are likely to spill into next year and possibly even the year after that. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Growing Executive Involvement in Benefits Decisions: Rising healthcare costs are prompting employers to involve more senior leadership in benefits decisions during open enrollment. In some cases, 12 to 15 individuals are now participating in selecting a benefits broker, compared with the smaller HR-led processes typical in the past. This expanded decision-making approach reflects greater attention to how benefits spending affects organizational finances and long-term strategy.

2. Alternative Enrollment Timing and Process Adjustments: Enrollment timing is also evolving as organizations look for ways to improve planning and reduce administrative strain. Approximately 80% of employers renew their benefits plans on January 1, which can create resource bottlenecks for brokers, employers, and employees. Some companies are experimenting with off-cycle renewals or separating voluntary benefits to gain better pricing and provide more time for employee education and decision-making.

3. Employee Enrollment Behavior and Communication Trends: Employers are also refining communication strategies to better guide employees through benefits selection. In many organizations, 25% of employees enroll on the first day, 25% enroll gradually during the enrollment window, and 50% wait until the final day regardless of how long the process lasts. Improved pre-enrollment communication has enabled some employers to shorten enrollment periods while still ensuring employees understand upcoming changes and available benefits.

GLP-1s: What’s fueling surging employee demand?

By Jen Colletta – Among the biggest recent headline grabbers in the employee benefits space is the rapidly rising popularity of expensive GLP-1 drugs for weight loss—challenging employees to meet employee demand while containing soaring costs. But what exactly is driving so many Americans to consider GLP-1s? According to new research, direct-to-consumer health advertising is playing a significant role. Maven Clinic’s State of Women’s & Family Health Benefits Report found that 61% of employees took action after seeing an advertisement for GLP-1s—often before consulting with a physician or an employer-sponsored benefit program. Read Full Article...

HVBA Article Summary

1. Impact of Direct-to-Consumer Advertising: The article highlights that direct-to-consumer advertising is a major driver behind the increased interest in GLP-1 drugs among employees. Many individuals are prompted to seek out these medications after exposure to frequent advertisements, sometimes even before consulting healthcare professionals. This trend suggests that marketing efforts can significantly influence employee health decisions and expectations regarding benefits.

2. Challenges for Employers and Benefit Design: Employers are facing growing pressure to address employee demand for GLP-1 coverage, but simply offering coverage may not be sufficient. The research indicates that employees often lack the necessary context to make informed choices about these medications, as advertising may not provide comprehensive information. As a result, organizations are encouraged to prioritize education, clinical guidance, and navigation support in their benefits design to ensure safe and effective use of new treatments.

3. Shift in Employee Health Decision-Making: The findings suggest a shift in how employees approach healthcare decisions, with many acting independently based on online information and advertisements. Some employees even purchase medications without medical consultation, raising concerns about safety and long-term outcomes. This underscores the need for employers to move beyond basic coverage and offer evidence-based resources that help employees make thoughtful, informed decisions about emerging health options.

How does healthcare use virtual agents and chatbots?

By Caroline Catherman – A new tool to tackle healthcare issues is stepping up to the plate: virtual agents. Virtual agents, also known as chatbots or AI voice agents, are offered by electronic health record ( EHR) giants including Epic, Athenahealth, and Oracle as well as major US insurers like UnitedHealthcare and Elevance to help users with tasks such as estimating healthcare costs and scheduling appointments. These agents communicate with patients via voice or chat in order to lighten administrative load during staffing shortages and save money amid financial strain. Some healthcare leaders even see the potential for AI voice agents to help improve access to care and patient outcomes. Read Full Article...

HVBA Article Summary

1. Expansion of Virtual Agents in Healthcare: Virtual agents and chatbots are being widely adopted by both electronic health record companies and major insurers to streamline administrative processes. Their primary functions include assisting with appointment scheduling, cost estimation, and answering patient inquiries. This adoption is partly driven by ongoing staffing shortages and the need to reduce operational costs.

2. Technological Advancements Over Traditional Systems: Unlike older interactive voice response (IVR) systems, modern AI agents can engage in more dynamic and personalized conversations with patients. These agents are powered by large language models, enabling them to remember past interactions and adapt to individual needs. This technological leap allows healthcare organizations to automate more complex tasks and potentially improve patient engagement.

3. Impact on Patient Care and Cost Savings: Health systems are leveraging AI agents not only for administrative efficiency but also for proactive patient outreach, such as managing chronic conditions and supporting preventative care programs. Examples include increased patient engagement in screening programs and significant cost savings in call center operations. As the market for healthcare AI voice agents grows, these tools are expected to play a larger role in democratizing access to care and improving health outcomes.