1. Choose your health plan vendors wisely and monitor their performance

Plan sponsors and their advisors should have a process in place to review information made available under the various transparency laws and regulations and act on it, if appropriate. When working with health plan service providers, keep in mind these best practices:

Carefully review the disclosures made by your health plan vendors. Make sure to understand what the plan's service providers are responsible for, the specific services they provide and how they are paid.
Document a process and frequency for hiring, evaluating and monitoring service providers.
Hire service providers that can assist in performing fiduciary duties and responsibilities, and delegate those responsibilities when permitted. While a plan cannot discharge all of its fiduciary duties under ERISA, it may be able to seek indemnification from the vendors they hired to perform those services.
Meet with alternative PBMs and health plan service providers that offer cost-containment strategies. This ensures you are acting prudently by exploring more cost-effective options.
Use your audit rights whenever practical. Employer-sponsored health plans are not required to have the cheapest nor the most expensive service providers – they just need to have a process for selecting, evaluating and monitoring their providers.

2. Follow your health plan document and processes

When you have a health plan document and an internal process for making reasonable, consistent health plan decisions, you will be better positioned to defend your plan, if challenged. This does not need to be overly complicated; simply holding regular annual meetings, having a clear agenda and recording meeting minutes can be enough to show your process in action.

Instant Insights /

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