Archimedes’ Post

Oof. Perhaps the most powerful paragraph in Ms. Lewandowski’s complaint against Johnson & Johnson is Paragraph 157: “157. In 2023, JnJ wrote to the Pennsylvania Department of Insurance about a practice through which PBMs and health plans alter specialty drugs classifications to avoid regulatory caps on patient out-of-pocket expenses. The letter explained that ‘PBMs carve out a list of specialty drugs for third-party companies to manage. These third party companies can increase the patient's copay for the given drug to an artificially high amount—often thousands of dollars per dose.’ Yet that is precisely the fate to which Defendants consigned the Plans and JnJ's tens of thousands of employees.” Ms. Lewandowski's lawsuit accuses Johnson & Johnson of failing to negotiate lower prescription drug prices within their employee health plans, leading to millions in overpayments for generic drugs by workers. The complaint highlights instances like - an HIV antiviral costing the plan $1,629 for 90 pills, where pharmacies might only charge about $180, and - a multiple sclerosis medication costing the health plan $10,200 versus the typical $77 out-of-pocket cost. This mismanagement is alleged to be in violation of the federal Employee Retirement Income Security Act (ERISA). For a more detailed summary and to understand the breadth of the allegations, you can review the lawsuit here: Lewandowski v. Johnson & Johnson (https://lnkd.in/eCVmB7fs). It's critical for employers and advisors to look under the hood of vendors to ensure that the costs incurred are in line with the market and that employee benefits are managed prudently. #fiduciary #erisa #employeebenefits

An ERISA Fiduciary Test Question for you… Upon taking a fiduciary role for the Buckeye Pension Plan, Zeke realizes that his predecessor Eddie breached his fiduciary duties relating to plan investments. Question - Can Zeke be held personally liable for Eddie's breach? Answer - No liability for predecessor breach BUT Zeke has an obligation to remedy the outstanding breach AND the failure to do would be a separate breach. This is a Q&A from my ERISA Fiduciary training materials (can you guess where I went to college?). Why am I mentioning this today? I have the ERISA fiduciary litigation vs. the Johnson & Johnson health plan in mind. This lawsuit should be an eye opener for everyone in the employee benefits world…but also should not come as a massive surprise either. There are a number of things that plan sponsors should being doing day to day to make sure they are fulfilling their ERISA fiduciary responsibilities – often the focus is on retirement plans, but we must NOT forget about our health plans and this litigation should be a wake-up call. It’s time to dig into our relationships with our health plan vendors (especially if you haven't been on top of it). And remember that if you are “new-ish” to the fiduciary role, you cannot just bury your head in the sand and point to your predecessor who blessed the vendor agreement(s). #ERISA #Fiduciary #HealthPlan #EmployeeBenefits https://lnkd.in/gX4_GZ3Q

When it comes to ERISA litigation for retirement and employee benefits.   It's about process!   ·     Documenting decisions is a key component of procedural prudence.   ·     More importantly, demonstrating procedural prudence can be a complete defense regardless of what the outcome is.   ·     When it comes to ERISA litigation history has shown us with retirement plan fiduciary's that were sued on the basis of (excessive) fees, that could demonstrate through documentation that plan expenses investments were monitored regularly, founded was a winning strategy in ERISA litigation.   Fiduciary In a Box, is a SaaS based solution for brokers and consultants to manage a clients fiduciary process and scale your business. Schedule a meeting to find out more about how we can help your organization grow.   See link in comments section to schedule a meeting.

"Understanding fiduciary responsibilities is essential for a group health plan’s security and compliance with the law. ERISA requires fiduciaries to discharge their duties with respect to employee benefit plans: -Solely in the interest of plan participants and their beneficiaries; -For the exclusive purpose of providing plan benefits or for defraying reasonable expenses of plan administration; -With the care, skill, prudence and diligence that a prudent person in similar circumstances would use; -The duty to act prudently is one of a fiduciary’s central responsibilities. As highlighted in the J&J lawsuit, ERISA requires fiduciaries to prudently select and monitor plan service providers while considering various factors, including the service provider’s fees and expenses."

Attention employers! 📣 Find out how IBX Medicare Advantage Plans can help your employees start a new chapter with the same trusted care that they enjoyed during their career. #IBXInsiders

Fee Disclosure on Heathcare plans? This might cause a little disruption... Build your understanding of the CAA of 2021's fee disclosure requirements. #CAA2021 #408b2

Attention employers! 📣 Find out how IBX Medicare Advantage Plans can help your employees start a new chapter with the same trusted care that they enjoyed during their career. #IBXInsiders

What if I'm next? A self-serving PBM discretely deploys tactics that further their own interests at the expense of their employee-plan clients and plan members.  PBMs use their service agreements with benefit plans to impose their self-scheming schemes through often overlooked contractual provisions.  Inevitably, these self-service provisions increase the plan's total drug spend and the out-of-pocket costs borne by plan beneficiaries, but allow the PBM to increase its own compensation through hidden channels.  When faced with these increasing costs, JNJ's employees took action against their employer due to JNJ's alleged inability to adhere to their fiduciary duties and protect the plan from these common PBM schemes.  It’s not just PBM’s. Pharmacy costs make up a quarter of your health plan. The medical side is equally problematic, and the issues are starting to be revealed. Don’t be next. A third party independent review company is crucial to protect your plan and ensure ethical and fair billing. https://lnkd.in/gd7djY3N

I've posted about this case before, but I encourage everyone in the employee benefits community to read the J&J health plan ERISA litigation complaint. At the very least, it serves as an important reminder about fiduciary duties under ERISA. By the numbers - The words “prudent”/”prudence”/”prudently” appear 86 times in the complaint. "Fiduciary"/"Fiduciaries" appear 155 times. https://lnkd.in/gRMxUjiM #ERISA #Fiduciary #EmployeeBenefits #HealthPlans

CEOs, CFOs, and CHROs: URGENT!  Johnson & Johnson Fiduciary Lawsuit May Impact Your Company. Three pivotal forces we monitor continuously. have converged to create a crucial window for change: Social Factors: Employers and Employees are weary of escalating healthcare costs. Economic Factors: Rising benefit costs have eroded Employees' take-home pay and rank among your organization's top expenses. Education, Knowledge, and Technology Factors: Our transparent insights into insurance practices reveal crucial truths, empowering you to act. The below sites fit perfectly in #3. Copy of the J&J lawsuit: https://lnkd.in/dKgfnAR6 Bloomberg Law article https://lnkd.in/dGKs33yZ   The implications are clear: failing to exercise prudent fiduciary oversight of your company's healthcare spend exposes you and your organization to substantial legal and financial risks. As experts in healthcare cost management and compliance, we can help you navigate these challenges and ensure that your company meets its fiduciary obligations under ERISA and the Consolidated Appropriations Act of 2021. Let's schedule a meeting to assess areas where you may be overspending on your health plan and discuss strategies to ensure compliance and mitigate risks. https://lnkd.in/gygYGHve