Employer Group Health Plans

Privately insured enrollees are generally satisfied with their health plan selection process and benefits, according to recently released data from the Employee Benefit Research Institute (EBRI) and Greenwald Research.

The Consumer Engagement in Health Care Survey found that the majority of adults surveyed obtained their health insurance coverage through their job or a spouse’s job. Most individuals said they were satisfied with various aspects of their health plan coverage. Over half of enrollees were extremely or very satisfied with their open enrollment process.

A lawsuit filed by an employee against Johnson & Johnson could signal that significant changes in the legal obligations of commercial plan sponsors and PBMs around drug pricing are coming, experts say. The suit alleges that J&J violated its fiduciary obligations as a health plan sponsor under the Employee Retirement Income Security Act (ERISA) of 1974 by overpaying the plan’s PBM for employees’ medications.

If it’s successful, the suit could expose plans, plan sponsors and PBMs to significant, ongoing legal risk, experts say. However, they add that the opacity and complexity of drug pricing dynamics mean that the suit’s success is far from certain.

Since the Supreme Court overturned Roe v. Wade last year, 8% of large firms offering health insurance to their employees reduced or expanded their coverage for abortion. That’s according to an analysis of KFF’s Employer Health Benefits Survey, which found that 3% of firms whose largest plan does not cover abortion or covers it under limited circumstances reduced or eliminated coverage for abortion. Meanwhile, 12% of firms whose largest plan covers abortion in most or all circumstances added or expanded abortion coverage. KFF defined large employers as those with at least 200 workers.

U.S. health insurance companies’ capitalization levels are expected to increase this year but at a lower rate than last year, according to an AM Best report released on Feb. 29. The credit rating firm noted that the growth should slow because many insurers are seeing less profitability in their Medicare Advantage and managed Medicaid books of businesses. The report found the growth in net premiums written by health insurers increased 10% in 2022 and 7.6% through the first three quarters of last year.

More than half — 52% — of adults covered by commercial insurance deal with social risk factors that can raise health care costs, according to a Feb. 20 white paper from UnitedHealth Group and the Health Action Council (HAC). UnitedHealth and HAC executives say that the report’s findings can help health plans and plan sponsors be more proactive in addressing social determinants of health (SDOH)-related needs in commercial populations.

Some SDOH challenges faced by the commercially insured population include social isolation and problems with finances, food, and housing, per the report. Twenty-six percent of the studied group faced one SDOH risk, 16% faced two SDOH risks and 10% faced three or more.

Although Blue Cross Blue Shield plans’ margins started rising again in 2023 after a two-year slump, industry analysts say that a diverse array of factors could prevent continued margin expansion among the Blues this year.

“We don’t question that Blues overall will probably remain profitable…but the improvement in the margins in ’23 probably is not going to reoccur [this year],” says Bridget Maehr, director at the insurance-focused credit rating firm AM Best. “We’re probably going to see a little bit more of a normalization of margins.”

According to a new analysis from Mark Farrah Associates, Blues’ aggregate profit margin — net income divided by total revenues — swelled to 6.1% in the third quarter of 2020. During that time, the uptick in COVID-19-related care was far outpaced by declines in routine care, causing coffers to fatten across the insurance industry. Blues’ aggregate margin then declined to 3.9% by the third quarter of 2021, and it fell further to 3.0% in the third quarter of 2022.

Change Healthcare, which UnitedHealth Group acquired in October 2022, has been targeted by a cyberattack. UnitedHealth said in a regulatory filing that on Feb. 21 it discovered “a suspected nation-state associated cyber security threat actor” had gained access to some of Change Healthcare’s information technology systems, and the firm reacted by isolating the affected systems. According to the latest update on a website dedicated to information about the incident, as of Feb. 23 “the disruption is expected to last at least through the day.” All other systems across UnitedHealth Group’s enterprise are operational, and the company said in the filing that it’s working with security experts and law enforcement to address the incident. “The cyberattack against UnitedHealth Group, one of the largest U.S. commercial prescription processors, is credit negative for the company, as financial and reputational impacts may ensue,” Moody’s Investors Service Vice President and Senior Credit Officer Dean Ungar said in a statement emailed to reporters about the incident.

A study published this month in JAMA Health Forum indicates people with diabetes can see short-term health benefits from enrolling in plans offering preventive drug lists (PDLs) that sharply reduce or eliminate cost-sharing for certain medications. However, the study’s lead author and a pharmacy benefits consultant tell AIS Health, a division of MMIT, that more work needs to be done to evaluate whether such programs are cost-effective for employer-sponsored plans.

Still, they were encouraged with the results, which found that people who switched to plans with PDLs had an 8.4% reduction in acute, preventable diabetes complication days compared with the non-PDL group. In addition, there was a 10.4% reduction in preventable diabetes complication days among members from lower-income areas who switched to PDLs.

A lawsuit filed by an employee against Johnson & Johnson could signal that significant changes in the legal obligations of commercial plan sponsors and PBMs around drug pricing are coming, experts say. The suit alleges that J&J violated its fiduciary obligations as a health plan sponsor under the Employee Retirement Income Security Act (ERISA) of 1974 by overpaying the plan’s PBM for employees’ medications.

If it’s successful, the suit could expose plans, plan sponsors and PBMs to significant, ongoing legal risk, experts say. However, they add that the opacity and complexity of drug pricing dynamics mean that the suit’s success is far from certain.

A recent report from Morgan Health, JP Morgan Chase & Co.’s health care venture fund and consultancy, documents troubling disparities for health care access and outcomes among Black, Asian American and Hispanic employer-sponsored insurance plan members; lesbian, gay and bisexual (LGB) plan members; and ESI members with low incomes. Experts tell AIS Health, a division of MMIT, that plan sponsors and insurers must consider plan design and provider incentives, among other strategies, to close health disparity gaps.

Plan sponsors and insurers can take proactive steps to reduce health disparities among their plan members, experts say — and they add that there are clear business incentives for doing so.

During the recent fourth-quarter earnings calls held by their diversified parent companies, the Big Three PBMs — The Cigna Group’s Express Scripts, UnitedHealth Group’s Optum Rx and CVS Health Corp.’s Caremark — factored prominently into discussions of the firms’ financial results and future growth strategies.

When CVS Health reported its quarterly and full-year results on Feb. 7, CEO Karen Lynch wasted little time before describing what she called CVS’s “innovative models and offerings that create more transparency and choice for consumers and clients.”