It wasn’t guidance. It wasn’t symbolic.

It was a 10-year mandate that fundamentally changes how pharmacy benefits are designed, priced, and disclosed.

And it affects every employer who offers health insurance.

For a long time, pharmacy pricing has been built around a system most employers never really saw. Rebates tied to inflated list prices. Spread pricing. Complex “guarantees” that sounded good on paper but were difficult to verify in practice.

Members often paid based on sticker prices. Employers were told it would “net out.” Few people had full visibility.

That system is now under direct federal pressure.

Under this new order, Express Scripts can no longer favor higher-priced drugs simply because they generate larger rebates. Members’ out-of-pocket costs must reflect the real, net cost of medications. Rebates and discounts must flow to members at the point of sale. Spread pricing is restricted. Compensation must be disclosed. Insulin affordability programs must be made broadly available.

In plain terms: opacity is no longer acceptable.

This matters because it sets a new baseline for what regulators now consider reasonable and responsible pharmacy benefit design.

When a more transparent, consumer-friendly model is federally required as a “standard offering,” choosing something less aligned is no longer just a budget decision. It becomes a governance decision. A fiduciary decision.

Employers are being asked—implicitly and increasingly explicitly—to understand how their pharmacy benefits actually work.

Who gets paid. How drugs are selected. Where rebates go. How member costs are calculated.

Those questions are no longer optional.

This shift is part of a larger trend across healthcare.

For years, the industry relied on complexity as a shield. If something was hard enough to understand, it rarely got challenged. But that era is ending. Regulators, courts, and plan sponsors are demanding clearer answers.

We are moving from “trust us, it works” to “show us how it works.”

At Level Health & Simpara, this direction feels familiar.

Our pharmacy model has always been built around pass-through pricing, transparent contracts, and alignment with members and employers. No spread pricing. No incentive to inflate list prices. No reliance on rebate arbitrage. No favoring of higher list higher rebated products versus lower cost generics or biosimilars.

We believe healthcare decisions should be medical decisions, not financial engineering.

This FTC order doesn’t force us to change our philosophy. It reinforces it.

For employers, this is a good moment to pause and ask thoughtful questions about their current arrangements.

Do rebates flow to members at the pharmacy counter? Is pricing based on net cost or list price? Are all fees disclosed? Are incentives aligned with lowering total cost?

Clear answers build trust. Unclear answers deserve scrutiny.

While this order applies directly to one major PBM today, its influence will extend much further. It sets expectations. It shapes future enforcement. It changes what “normal” looks like.

Transparency is no longer a differentiator.

It is becoming the floor.

Healthcare works best when incentives are aligned. When employers understand what they are buying. When members understand what they are paying. When vendors are rewarded for lowering costs, not obscuring them.

That is where the industry is heading.

And it is where Level Health & Simpara will continue to focus.

The massive budget reconciliation bill known as the One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump on July 4, 2025. As with many such budget bills, there were various employee benefits provisions tucked into its depths, including changes for health savings accounts (HSAs), dependent care assistance programs (DCAPs), student loan payments under educational assistance programs, and qualified transportation plans. The benefit-related changes are summarized below.

Health Savings Accounts (HSAs) - IRC §223

Summary of OBBBA Changes

• Telehealth – For plan years beginning in 2025, telehealth may be offered with no cost-sharing without impacting HSA eligibility.

• Direct Primary Care – For plan years beginning in 2026, certain direct primary care (DPC) arrangements may be offered with no cost-sharing without impacting HSA eligibility. Additionally, HSA funds can now be used to reimburse any fees paid for such arrangements.

• Marketplace Plans – Beginning in 2026, bronze-level and catastrophic individual plans purchased through the Marketplace will be treated as high-deductible health plans (HDHPs) and allow for HSA eligibility, regardless of plan design. Because this change only affects individual policies, it will have little impact on most employer plans other than those employers offering an ICHRA or QSEHRA.

Only eligible individuals can make contributions to their HSA account. To be eligible to contribute to an HSA, an individual:

• Must be enrolled in a qualifying HDHP;

• May not have any other “disqualifying coverage”; and

• Cannot be claimed as a tax dependent by another individual.

Medical plans that cover non-preventive care before the individual meets the minimum statutory HDHP deductible generally cause a loss of HSA eligibility, but there are now specific exceptions for telehealth and certain DPC arrangements.

Telehealth - Beginning in 2025

To encourage individuals to avoid hospitals when appropriate during the COVID-19 health crisis, Congress passed relief permitting plans to cover telehealth and other remote care services before a participant satisfied the HDHP’s deductible without impacting HSA eligibility. Since that time, such relief has been extended on multiple occasions, but the most recent relief expired at the end of 2024 plan years. The OBBBA has now made this relief permanent. Retroactive back to the beginning of 2025, which is when the relief expired for calendar year plans, coverage for telehealth and other remote care services that is available with reduced or no cost-sharing will not affect individuals’ eligibility to contribute to an HSA.

Direct Primary Care (DPC) - Beginning in 2026

Historically, it has been unclear how access to DPC impacted eligibility to contribute to an HSA. Most assumed that access to DPC prior to the minimum HDHP deductible interfered with HSA eligibility. Beginning in 2026, participation in DPC arrangements that meet the following requirements will not cause a loss of HSA eligibility:

• The DPC must be subject solely to a fixed monthly fee of no more than $150 for an individual or $300 for more than one individual (subject to annual indexing); and

• The DPC must involve medical care provided by a primary care practitioner. Procedures that require the use of general anesthesia, prescription drugs (other than vaccines), and laboratory services not typically administered in an ambulatory primary care setting do not qualify as primary care.

In addition, fees paid for such DPC arrangements are treated as eligible medical expenses for purposes of HSA reimbursement. 

Dependent Care Assistance Programs (DCAPs) - IRC §129

Summary of OBBBA Changes

• Beginning in 2026, the maximum annual reimbursement limit is increased from $5,000 to $7,500 (or $3,750 for married individuals filing separately). This amount is still not indexed for inflation, meaning it will remain at $7,500 until Congress changes the limit again.

Student Loan Payments - IRC §127

Summary of OBBBA Changes

• Beyond 2025, employer student loan payments or reimbursements of up to $5,250 (indexed annually) will continue to qualify for tax-favored treatment as a type of §127 educational assistance program.

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, employer payments of student loans were made excludable from employees’ taxable income under §127 up through the end of 2025. The OBBBA makes this ability to treat student loan payments as an eligible expense under §127 permanent. In addition, the annual limit of $5,250 for all §127 eligible expenses is now set to be indexed annually (previously fixed at $5,250).

Qualified Transportation Plans - IRC §132

Summary of OBBBA Changes

• Beginning in 2026, the ability to reimburse employees for bicycle commuting expenses on a tax-favored basis under §132 is permanently removed.

• Beginning in 2026, the method for determining the annual inflation amount for qualified transportation benefits under §132 is adjusted.

End of ACA Enhanced Subsidies

On 1/1/2026 the COVID-ERA enhanced premium subsidies were set to expire. The OBBB did not expand them as expected. The enhanced subsidies have played a huge role in record-high marketplace enrollment. Many are expecting that ACA plan enrollment will shrink substantially come 2026 due to the roll back of financial aid. 

Big Medicaid Impacts: 

The OBBB is expected to reduce federal Medicaid spending by approx. $1T over the next decade. Most of the reductions are the result of work requirements (80 hours per month with some exceptions) and a reduction in provider taxes. Many folks are concerned about the impact on rural hospitals and as a result, the Senate’s version included a rural hospital fund of $10B annually for the next 5 years.

For small to mid-sized business owners and benefits brokers, the expiration of a key telehealth provision on December 31, 2024, poses a challenge—and an opportunity. The ability to offer first-dollar (zero cost-share) telehealth services within a High-Deductible Health Plan (HDHP) compatible with Health Savings Accounts (HSAs) has been a game-changer for employee access to care. However, with this relief now ended, employers must adapt to maintain this valuable benefit without disrupting HSA eligibility. A recent legal memo outlines a clear, compliant path forward, rooted in IRS Publication 969, to keep telehealth free for employees in 2025 and beyond. Here’s what you need to know as of March 5, 2025, and how to act on it.

The End of First-Dollar Telehealth in HDHPs

The backstory begins with the CARES Act in 2020, which allowed HDHPs to cover telehealth and remote care services without requiring employees to meet their deductible first. This "first-dollar" coverage, extended multiple times, made virtual care accessible during the COVID-19 pandemic and beyond, with the latest extension running through December 31, 2024. The goal was simple: ensure employees could seek care without financial barriers, all while retaining HSA tax advantages.

But that relief has expired. As of January 1, 2025, an HDHP offering first-dollar telehealth coverage no longer qualifies as HSA-compatible. Without amendments to remove this feature, employees under such plans lose HSA eligibility. Worse, any contributions made while ineligible become taxable income, plus a 10% excise tax. For employers who haven’t adjusted their 2025 plan year documents, this is a compliance red flag—and a costly one for employees.

The Stakes for Employers and Employees

HDHPs paired with HSAs remain popular for their cost-sharing structure and tax benefits. In 2025, HDHPs require minimum deductibles of $1,650 (self-only) or $3,300 (family), with out-of-pocket caps at $8,300 and $16,600, respectively. Free telehealth has been a lifeline within this framework, especially for small to mid-sized businesses aiming to support employee health without ballooning premiums. Losing this benefit risks employee dissatisfaction and delayed care, which can drive up long-term costs. The challenge is clear: how can employers preserve free telehealth without sacrificing HSA compatibility?

The Best Path Forward: A Limited Purpose HRA

The legal memo points to a standout solution: a Limited Purpose Health Reimbursement Arrangement (HRA). IRS Publication 969 confirms that while HDHP participants generally can’t have other health coverage, exceptions exist—including for telehealth and remote care. A Limited Purpose HRA fits this exception perfectly. Unlike a general HRA or Health FSA, which could disqualify HSA eligibility by covering broad medical expenses, a Limited Purpose HRA restricts reimbursements to specific services like telehealth, vision, dental, or preventive care—all permissible alongside an HDHP.

Here’s how it works: Employers fund the Limited Purpose HRA to cover 100% of telehealth costs, ensuring employees pay nothing out-of-pocket. The HDHP remains unchanged, meeting deductible requirements for other services, and employees retain HSA eligibility. This approach achieves the goal—free telehealth—with minimal disruption to existing plans. It’s a win-win: employees get seamless access to virtual care, and employers stay compliant with IRS rules.

Why This Matters

For small to mid-sized businesses, this strategy is a lifeline. Telehealth is cost-effective—often cheaper than in-person visits—and vendors offer predictable pricing, like flat per-employee fees. It also meets employee expectations for convenient, modern care, a must in a competitive talent market. Benefits brokers can position this as a proactive fix, blending regulatory savvy with practical value. Plus, it sidesteps the compliance pitfalls of an unamended HDHP, protecting employees from unexpected tax headaches.

Alternative Options

The memo also lists other paths, though they come with trade-offs:

1. Non-HDHP with Embedded Telehealth: Offer a separate, non-HDHP plan with free telehealth. This sacrifices HSA benefits and may increase costs.

2. Ditch the HDHP/HSA Entirely: Switch to a traditional plan with no deductible restrictions. This could raise premiums significantly.

3. Freeze the HSA: Keep the HDHP but stop HSA contributions, offering free telehealth within the plan. This risks IRS scrutiny and loses tax advantages.

4. Discounted Telehealth: Charge a fair market value (FMV) rate for telehealth (e.g., $70 instead of $100), but not zero. This isn’t fully free and requires careful FMV calibration to avoid appearing as first-dollar coverage.

The Limited Purpose HRA stands out for its simplicity and alignment with HSA rules. The alternatives, while viable, either disrupt the HDHP model or fall short of the "free" goal.

Implementing the Solution

Ready to act? Here’s a roadmap:

1. Assess Your HDHP: Confirm it’s updated for 2025, removing first-dollar telehealth if not already done.

2. Set Up a Limited Purpose HRA: Partner with your benefits broker or TPA to design an HRA covering telehealth costs. Fund it to ensure zero employee cost-share.

3. Update Plan Documents: Amend your HDHP and HRA descriptions to reflect this structure, citing IRS Publication 969.

4. Communicate Clearly: Tell employees telehealth remains free via the HRA, and their HSA is safe. Highlight access details.

5. Monitor Costs: Work with a telehealth vendor for predictable pricing, keeping the HRA sustainable.

Looking Ahead

The expiration of first-dollar telehealth relief doesn’t have to derail your benefits strategy. The Limited Purpose HRA leverages IRS exceptions to keep telehealth free, maintaining the HDHP-HSA framework your business relies on. As of March 5, 2025, no legislative extension has emerged, but stay vigilant—retroactive relief could shift the landscape. For now, this approach offers certainty and value.

Small to mid-sized employers can’t always match the resources of larger firms, but they can lead with smart, compliant solutions. The legal memo’s guidance, grounded in IRS rules, empowers you to do just that. Act now to preserve telehealth access, protect HSA eligibility, and reinforce your commitment to employee well-being. Your team—and your bottom line—will feel the difference.

*Note: This reflects guidance as of March 5, 2025. Consult IRS.gov/Pub969 for the latest updates.*

The end of the declared drug shortage means that compounding pharmacies can no longer print copies of the drug for cheap. Virtual health companies like HIMS and HERS, Weight Watchers, Noom, Ro pivoted their businesses to cater to the demand. If the stock tumble of HIMS and HERS is any indication, the industry is going to be scrambling for the next big thing.

But manufacturers are already responding to the market demand. Patients can now get Zepbound - directly through Lilly - at cash pay prices as low as $349/month. When insurance is not involved, market dynamics play out in interesting ways.

On February 21, 2025, the U.S. Food and Drug Administration (FDA) announced that the shortage of semaglutide injection products, including Ozempic and Wegovy, has been resolved. These medications, used for diabetes management and weight loss, had been in short supply since 2022 due to increased demand. The manufacturer has confirmed sufficient production capacity to meet current and future national needs, though minor local supply disruptions may still occur as distribution normalizes.

In light of the resolved shortage, the FDA has outlined a transition period for compounding pharmacies and outsourcing facilities that have been producing compounded versions of semaglutide:

• State-licensed pharmacies or physicians compounding under section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act) are permitted to continue compounding, distributing, or dispensing semaglutide injection products that are essentially copies of FDA-approved products until April 22, 2025 (60 days from the announcement).

• Outsourcing facilities under section 503B of the FD&C Act have until May 22, 2025 (90 days from the announcement) to cease such activities.

This grace period aims to prevent unnecessary disruptions in patient care. The FDA may still take action against any violations unrelated to the shortage status, particularly if a product is found to be of substandard quality or poses safety concerns.

The resolution of the semaglutide shortage has also impacted the market, notably leading to a significant drop in the stock price of Hims & Hers Health Inc., a company that had been providing compounded versions of these medications during the shortage.

In contrast, major pharmaceutical companies that manufacture these drugs saw positive movements in their stock prices. Novo Nordisk's shares rose by 5.1%, and Eli Lilly's shares increased by 1.7% following the FDA's announcement.

For a link to the FDA’s announcement today, click here.

“You f’d up, you trusted us.”  

Otter, Animal House

The thing about being a fiduciary is that all responsibility and liability rests on the plan sponsor. You can hire some pretty awful vendors to manage components of your health plan but mismanagement, excess fees, self-dealing, and profiteering are the plan sponsors peril.  

Here’s text from Section 9 of the lawsuit:  

9. Defendants failed to satisfy their fiduciary obligations… in agreeing to pay excessive fees to Express Scripts, in agreeing to contract terms with Express Scripts that needlessly allows Express Scripts to enrich itself at the expense of the Plan and its participants/beneficiaries, in failing to monitor Express Scripts and the prices charged for prescription drugs, in failing to address conflicts of interest, in failing to actively manage and take reasonable measures oversee key aspects of the company’s prescription-drug program, and failing to take available steps to rein in Express Scripts’ profiteering, protect plan assets, and avoid unnecessary costs to participants and beneficiaries and protect their interests.

Express Scripts isn’t a defendant. They’re not on trial. But their actions are the employer’s liability. And while most of the plan sponsors across this great country can’t count the same number of enrolled employees as Wells Fargo’s nearly 200,000, Express Scripts blankets a quarter of all PBM business in the U.S.A. 1 out of 4.

If the leverage of Wells Fargo’s health plan produced a PBM contract like this one, how can any smaller employer, business coalition, or consortium do any better?

“Money’s just something you throw off the back of a train.”

Tom Waits, “Long Way Home’

This lawsuit is but the tip of the iceberg. It follows on the heels of a similar class action suit against Johnson & Johnson, who’s PBM is….(you guessed it), Express Scripts.

So what are methods that plan sponsors can take to shore up their fiduciary responsibilities related to prescription drug coverage?

Here are six recommendations:

1. Contractual covenants that ensure that the plan sponsor receives 100% of participating pharmacies negotiated discount for the drug dispensed – without any reclassification, mark-up or spread by the PBM.

2. Drugs should be priced to the lowest of the MAC pricing, acquisition cost, or AWP discount

3. Firm contractual language defining generic, brand, and specialty drugs that prohibit reclassification to game different pricing schedules or withheld rebates

4. Unbundling of functions. Your PBM should not be your preferred pharmacy. Your PBM should not be your sole pharmacy source for specialty drugs.

5. PBM revenues should be strictly defined and solely isolated to per script or per member monthly fees

6. Rebates should be defined to include compensation or remuneration of any kind received or recovered from a pharmaceutical manufacturer or any other third party. (H/T Tyronne Squires, CPBS of Transparent Rx)

With pharmacy expenditures eclipsing 25% of overall health spend, these lawsuits should be a good wake up call for plan sponsors. The good news is that action taken means lower costs not just for plan sponsors but for employees and their families as well.

“The most basic question is not what is best, but who shall decide what is best.”

– Thomas Sowell

“This case involves mismanagement of prescription-drug benefits. Over the past several years, Defendants breached their fiduciary duties and mismanaged Wells Fargo’s prescription-drug benefits program, costing their ERISA plan and their employees millions of dollars in the form of higher payments for prescription drugs, higher premiums, higher out-of-pocket costs, and lower wages or limited wage growth.”

-Paragraph 3, class action complaint: Navarro et al. vs. Wells Fargo & Co.

It’s like the flood gates have opened. What a few of us have been screaming about for years is suddenly coming into focus. The class action lawsuits are here and this is a Big One.

But first, two graphics from the FTC report published July 2024 titled: Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies

“Oh those mighty kings of the jungle, I can hardly stand to see ‘em”

-Bob Dylan, “When I Paint My Masterpiece”

Anyway, nothing to see here. Back to our lawsuit.

We don’t have to read deep into the 102 page filing to get to the goods. Page 3 provides this nugget:

Fingolimod, a generic drug used to treat multiple sclerosis costs $648 at Wegmanns (90-day fill) and $895.63 at Walmart. If you’re enrolled on Wells Fargo’s employee health and welfare plan however, the cost is $9,994.37. A staggering 15x multiple from the cash-pay price at these local retailers. But how? Wells Fargo’s health plan covers over 200,000 lives. They have a leading benefits brokerage division and regularly publish economic insights and analysis on the health care landscape. I guess they forgot the number 1 rule: put your oxygen mask on before helping others.

The suit continues….Defendants designated approximately 300 drugs as “preferred” thus requiring that patients fill them from Express Scripts - who is not only the PBM for Wells Fargo but also the designated pharmacy to fill these drugs. These drugs all had an average markup of more than double the cost of those very same drugs. Neat!

Then there’s the classic game of reclassifying drugs. We have generics that are now given a novel moniker of “specialty generics” and all of a sudden the markup explodes to 5x the acquisition cost.

For those readers with mail-order pharmacy benefits, are your copays less than going to a retail pharmacy? I bet they are. There’s a nice incentive to use mail-order pharmacy. But in this case, as with many others, the mail order pharmacy is none other than….Express Scripts.

In just the first 4 pages of the lawsuit, we learn that Express Scripts is 3 different companies:

1) Pharmacy Benefit Manager (negotiator of drug prices)

2) Specialty Pharmacy

3) Mail Order Pharmacy

The prices must be unmatched at Express Scripts if Wells Fargo selected to use them for all 3 functions!

Specifically, bexarotene gel is available for a cash price (i.e., without using insurance) of $3,750 at Rite Aid, $4,129 at Wegmans, $7,256 at Walgreens, and $10,310.07 at Cost Plus Drugs, but costs $69,806.75 from Accredo [Express Scripts]. In short, Defendants are steering Plan participants/beneficiaries toward an option that, for many drugs, wastes thousands of dollars in Plan assets while enriching Express Scripts by that same amount.

Damnit. I was wrong.

I’m only on page 9 of this 101 page document and i need to go to bed.

Good night.

Permalink

]]>Adam BerkowitzWed, 07 Aug 2024 22:36:57 +0000https://www.simparahr.com/blog/2024/8/7/valuehealth-benefits-administrators-closes-its-doors580f72b0e4fcb54017ef3443:58b6e6cfbf629ae535e0bafc:66b3f60d8f7de82cfaa0598b

update: monday, August 12, 2024

Major TPA Shuts Down, Jeopardizing Healthcare Access

 A large regional third-party administrator, ValueHealth Benefit Administrators (VHBA), abruptly ceased operations, placing healthcare access and plan sponsors in limbo. The sudden closure leaves critical questions unanswered regarding claim payments, client bank accounts, and contract obligations.

According to The Great Bend Tribune, the shutdown was announced via a late-night text message, followed by a virtual meeting on Wednesday, August 8, 2024, where employees were informed that BMI, a division of VHBA, had filed for bankruptcy and ceased all operations.

Their website and their social accounts seem to have been taken down or deleted, leaving plan sponsors, members and brokers no way to contact them.

We are updating this page as more information emerges.

Q&A: What You Need to Know

Q: How does this affect my healthcare plan?

A: The abrupt closure of VHBA means that claim payments and other administrative services may be disrupted. We recommend contacting your plan sponsor or HR department for immediate guidance.

Q: Are existing contracts still valid?

A: PBM and Stop Loss contracts are independent of VHBA, and can likely can maintained if funded in a timely manner.

Q: What steps should plan sponsors take now?

A: Plan sponsors are fiduciaries, and are required to ensure their proper administration of their health plan. Plan sponsors may be liable for plan assets that aren’t handled properly, and should consult with their legal and financial advisors immediately to explore alternative arrangements and ensure continued access to healthcare services for their members.

Q: Will my healthcare claims be paid?

A: Not by VHBA. The processing of claims is one of the key concerns, and plan sponsors should ensure continuity concerns are addressed as soon as possible.

Q. Will a new TPA be able to access my claims/deductible data?

A. Yes, sources close to VHBA say the data is independently warehoused, and can be recovered and restored with a new TPA relationship.

Knowing how your PBM makes money is likely the most important component to optimizing your health plan’s Rx spend.

Here are the most common:

1) ADMIN FEES- these should be straightforward as either a PMPM, PEPM, or per script fee. All 3 methods are transparent and simple.

2) SPREADS - the cost of the acquired drug is marked up by the PBM to profit the PBM.

3) MANUFACTURER REVENUE - retained rebates, fees, and other remuneration from Rx manufacturers

4) CHANNEL OWNERSHIP - the big 3 PBMs and many others, own their own mail order pharmacies (mandatory use is common) and specialty pharmacies. The 3rd biggest pharmacy in the US is UHC.

5) DIR FEES - These fees may include "pay-to-play" fees for network participation, periodic reimburse-reconciliations, or non-compliance with quality measures.

The point of using PBMs is, by-large, to reduce/minimize Rx spend. I’m not certain that this is happening. This may all seem trivial, but the PBM market is expected to reach US$ 683590 million by 2028. When the PBM is big enough to acquire the insurance co, we need to pay attention. The patient, after all, funds the entire thing.

Simpara is announcing that four of their esteemed clients will be honored by Health Rosetta Institute for providing employees one of “America’s Top 50 Health Plans.”

Simpara founder and president, Adam Berkowitz says this is all about how forward-thinking employers “walk the talk” of putting their employees first. “Since our founding, we’ve remained steadfast that hard-working Americans deserve access to high-quality and affordable health care.” Berkowitz believes that his clients represent “leadership of the highest order” and that these plans – and this recognition – are a reflection of having common-sense, people-first values.

The four honorees are:

●      Woodard Cleaning & Restoration

●      Schaefer Autobody

●      Cosmos

●      Waterford Union High School

For securing this recognition, all four are invited to attend the Rosie Awards banquet on Chicago’s Navy Pier on August 8.

“We’ve long recognized our company’s biggest asset is our team members,” says Jaime Matthews, Schaefer Autobody‘s Vice President. “Being able to craft such an amazing health plan for our employees is a testament to our values, culture and unwavering support from our wonderful team.”

Simpara expressed that the firm is impressed by the commitment each of these employers has demonstrated to their employees, ensuring that their health and wellness needs are met, their medical care covered and their out-of-pocket costs reduced. “We are extremely proud to represent [these clients] and help them develop their award-winning health plans,” says Ashley Smith, VP of Client Success. “Health plans like [these] are changing employees’ expectations for healthcare, and we’re thrilled to be part of the movement.”

Cosmos Corporation, a recognized leader in natural health, wellness and care products, is also receiving the award. A spokesperson for the company says, “At Cosmos, we truly care for our employees and we have an employee-first culture. This health plan proves to them we care.”

Berkowitz – whose company designs health plans for employers that seek to significantly reduce health care costs – believes this is a signal of what’s possible and a sign for other small-to-midsize companies to take note. “The financial windfall, to both company and employee, [that comes] by making health care benefits better, should be a clarion call to employers across our region and country that ‘a better way’ is within reach.”

WITH HUMIRA’S EXPIRED PATENT, COMES LONG AWAITED COMPETITION

Our Humira-Watch continues as a flood of biosimilars hit the market. Due to settlements with AbbVie, Humira’s manufacturer, list prices for these alternatives only became available as the drugs hit the shelves. Previousl,y we shared the news about Amjevita – the first Humira biosimilar with a dual price point: 1) with a small discount and high rebate and 2) another with a large discount and no rebate attached. We also shared the news of the first interchangeable Humira option, unfortunately savings for this one are scant. While employers remain attached to their rebates, and Humira’s net price is estimated to be about 40% below it’s list price, many of these new biosimilars are priced 80% or more below Humira’s list price. The savings to health plans – as well as patients - is significant.

The list of Humira biosimilars and their pricing is below. If you’re wondering the efficacy of patients changing their meds, this major study concludes that biosimilars yield therapeutically equivalent outcomes relative to the reference drug. For a medication costing plan sponsors nearly $70k/year per patient, employers would be wise to begin educating employees on their options and encourage conversations with prescribing physicians.

BUT….its wholesale price is only 5-7% less expensive than Humira. That’s a pittance.

Amjevita reigns as the lowest cost option on the market for Humira. (Assuming you go the non-rebate route). Amjevita is 55% less expensive than Humira.

Speaking of interchangeables, are you still seeing Lantus in your drug claims? Cheaper biosimilars exist and a good PBM and consultant teams have already made the necessary formulary changes to take advantage of the spread.

July is going to see a flurry of additional Humira biosimilars including YUSIMRY, which made news earlier this year announcing a partnership with Mark Cuban’s Cost Plus Pharmacy to sell for $569 + tax and shipping.

Has your health plan taken advantage of this yet?

#health #humira #biosimilars

In a quiet announcement last week, CMS issued a new set of FAQs related to Gag Clause Prohibitions  – a provision included in the Consolidated Appropriations Act of 2021. The new FAQs clarify what we’ve argued for so long, that employers and plan sponsors are entitled to all price and quality data as it relates to their contracts with their TPA, provider Networks, or service provider offering access to a network of providers. Plans that engage with 3rd parties with contractual language preventing such data sharing are prohibited transactions.  

The Federal government is finally waking up to the massive asymmetry of information in the commercial health plan space. This represents a huge win for plan sponsors. In addition to providing clarity, the FAQs unveil a web portal for plan sponsors to submit complaints or concerns related to their issuer’s compliance related to gag clause prohibitions.  

Excerpts from the FAQ:  

1. What is a Gag Clause:   A “gag clause” is a contractual term that directly or indirectly restricts specific data and information that a plan or issuer can make available to another party.

2. How Does Federal Law Prohibit group health plans from entering into agreements that contain gag clauses?  
   The Code, ERISA and PHS Act generally prohibit group health plans and issuers offering group health insurance from entering into agreements with providers, TPAs, or other service providers that include language that would constitute a “gag clause,” specifically:  
   
   (1) restrictions on the disclosure of provider-specific cost or quality of care information or data to referring providers, the plan sponsor, participants, beneficiaries, or enrollees, or individuals eligible to become participants, beneficiaries, or enrollees of the plan or coverage; 
   
   (2) restrictions on electronic access to de-identified claims and encounter information or data for each participant, beneficiary, or enrollee upon request and consistent with the privacy regulations promulgated pursuant to section 246(c) of HIPAA, GINA, and the ADA; and  
   
   (3) restrictions on sharing information or data described in (1) and (2), or directing that such information or data be shared, with a business associate, as defined in 45 CFR 160.103, consistent with applicable privacy regulations. 

Plans will have to submit annual attestations that their contracts do not contain prohibited gag clauses. 

The full FAQ can be found here.  

Amjevita, the first biosimilar competitor to Humira hit the U.S. market at the end of January.  Showcasing the dysfunction of our healthcare delivery system, the copycat drug came to market with two drastically different list prices. One, a mere 5% discount relative to Humira and another with a 55% discount. Why two prices and who would pay for the more expensive option?  

The dual pricing strategy echoes strategies of insulin biosimilars designed to optimize market uptake. On its recent earnings call, Amjevita’s manufacturer, Amgen, was unambiguous about its rationale for the dual-pricing strategy: 

“With respect to the two list price approach that we've employed here at this launch, this is really to address the complexity of the U.S. market. Pharmacy benefit managers have a business model that requires that they negotiate rebates with manufacturers, and so they would prefer a high list price and negotiate rebates to net the price down and then pass those rebates through to their upstream employer clients.” 

Thus we have two versions: 1) high-list/high-rebate 2) low-list/low-rebate 

Most plans in the market will adopt the 1st version. Wise employers are the ones seeking the lowest net-cost approach and one that benefits all stakeholders, including their members (i.e. the patient). But, will Amjevita disrupt Humira’s $21 Billion reign?  

Our recommendation is that employers consider adopting a targeted strategy:  

1. Remove Humira from the formulary and replace it with Amjevita (55% discount version) 

2. Patients already taking Humira will receive overrides to continue with Humira and be slowly nudged (and incentivized financially) to switch to Amjevita

3. Add step-therapy to therapeutic alternatives for Amjevita  

More Humira copycat drugs will hit the market throughout 2023. Some will include the coveted “interchangeable” designation. Prudent employers will act now versus taking a wait-and-see approach. If your PBM pushes back on your ability to execute the steps above, reach out to us for help.  

The Department of Labor gave employers an early Christmas gift last week by issuing a new set of FAQs related to the Consolidated Appropriations Act (CAA) and specifically the new health plan reporting requirements.

On December, 23, 2022 the DOL issued a six-part Q&A related to enforcement of prescription drug and health care spending reporting requirements for 2020 and 2021 which was previously due on December 27, 2022. The following summarizes the key points:

1.     Reporting Deadline Extended: While December 27th remains the initial 2020 and 2021 reporting deadline, the Department will allow submissions up to January 31, 2023 as considered timely.

2.     Good Faith Effort: the DOL will not take enforcement action with respect to any plan or issuer that uses a good faith, reasonable interpretation of the regulations and the Prescription Drug Data Collection (RxDC) Reporting Instructions in making its submission. This is a huge relief for many employers who encountered challenging registering their accounts with the HIOS system or simply collecting the necessary data from their PBM and TPA in a timely manner.

3.     Multiple Submissions by the Same Reporting Entity Allowed. Interim rules had required that plan sponsors should generally create only one submission in HIOS. The FAQ relaxes this provision to allow multiple submissions if necessary.

4.     Submissions by Multiple Reporting Entities Allowed. Instead of collecting data from multiple sources and producing a single submission, the Department is allowing submissions from multiple reporting entities such as your PBM, TPA, Plan Sponsor, etc.

The FAQs provide much-desired relief for many plan sponsors especially given the relaxation of enforcement for those that apply a good faith effort.

Simpara will continue to monitor for additional updates. Should you have any questions related to the new CAA reporting provisions, you can reach out team at info@simparaHR.com

 For the full DOL release please visit: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-56