Episode 50 – Annual Review Season

Mike Stull (0:09)

Hi everyone, and welcome to HR Benecast, your source for expert commentary and insights on current health benefits-related news and strategies. This is your host, Mike Stull. Here at Employers Health, we always strive to provide useful content and resources you and your colleagues can use to stay informed on the latest in employee and pharmacy benefits.

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With that, let’s get started.

Right now, we are in the midst of annual review season. Members of our Client Solutions team are traveling across the country to meet with clients to discuss their plan’s performance.

Joining me today are Devin Feriance and Tori Sinclair, directors on the Employers Health client solutions teams. They play a key role in many annual reviews and will talk about some of our clients’ biggest questions and concerns, how they’re being impacted by frequent legislative updates, and of course, how they’re handling GLP-1s.

Welcome, Devin and Tori.

It’s great to have you on the podcast. Kick us off by telling the audience a little bit about yourselves.

Devin Feriance (2:04)

Hi, Mike. Thanks for having me. I’m Devin Feriance, as you mentioned, Director of Client Solutions at Employers Health.

I’ve been here over 11 years. Although I have combined in my career 20 years of client management experience, about nine of that alone is here at Employers Health.

Tori Sinclair (2:27)

Thanks, Mike. Happy to be joining you and Devin today. Tori Sinclair, as you mentioned, Director of Client Solutions.

I am in my fourth year with Employers Health. I’ll be stepping into my fifth year in the fall. And prior to joining Employers Health, I worked nearly 10 years in the group purchasing space and have about five years in public health or population health management prior to that.

Mike Stull (2:52)

Excellent. So let’s talk a little bit about meetings with clients. And Devin, we’ll start with you.

What’s one of the main themes that you’re seeing across all of the clients that you’ve been out meeting with?

Devin Feriance (3:06)

Well, Mike, I will share, it’s been a great year of being able to be in person with our clients. We saw that, right, with COVID. We saw a lot of just the possibility of getting in person with our clients, right?

That was a huge shift in how we work day to day. And this year, we’ve definitely had the ability to be more in person. And frankly, we know that’s a great, successful forum for just having some candid conversations and hearing from our clients what is happening on the day to day.

And so a theme, as this spring we’ve been out with them, I’d say if I had to sum it up, it’s the uncontrollables. And when I say that it’s ranging. It’s covering a multitude of topics that we’re hearing from them, whether they’re a government, higher education, or maybe it’s a private company, right?

The industry is not necessarily as much of a factor or even geography, but those uncontrollables, such as legislation that’s happening at whether it be a federal, state level, along with that policy, economic changes that are happening, such as tariffs, that’s starting to evolve here in 2025. And we’re keeping a pulse on that. Other uncontrollables, such as high-cost drugs, of course, specialty, inflation, right?

These are things that are out of our control. And frankly, our client’s control. And of course, drug shortages, right?

The concern of access for their employees and planned participants to obtain important medications that they need. So, and there’s, I think, a couple other factors you could lump in that, but that’s really, I think, if you had to sum it up in one theme, uncontrollables.

Mike Stull (5:05)

Yeah. And typically in these meetings, they always want to know, well, what do we do about this? And so, it’s hard to have a good answer if there are things that we can’t control, but it also highlights why we need to control the things that we can.

Tori, so Devin mentioned a litany of items that are occurring in the industry. I mean, what are you hearing from your clients in terms of what’s keeping them up at night?

Tori Sinclair (5:33)

Yeah. I mean, to piggyback on what Devin said, I really think it’s those catastrophic things that could or might occur within the industry that really puts a client at financial risk, where they’re really not able to maintain the cost of the plan. So, I would say it’s definitely those things that are not in control, that they don’t have control over.

Things like gene therapies, some of the legislation that we’re seeing that really prevents the plan sponsor from being able to manage their plan in the way that they would like to. One of the things I heard this year was even around federal legislation making rebates point of sale. So, therefore, the cost there can’t be offset by rebates.

So, I think it’s all of those catastrophic things, and that’s not new, but anything that would kind of offset the plan financially and put it at risk there.

Mike Stull (6:41)

Yeah. I think it’s good for the audience to understand that point of sale rebates, they don’t really exist. So, yes, you can have a PBM contract that applies the value of the rebates at the point of sale, but in terms of the actual cash flow, rebates are retrospective, and they’re retrospective in nature because they’re negotiated between PBMs and manufacturers based on the ability to move market share.

That’s how they stay clean in terms of price discrimination settlements that were put together back in the late 90s. So, the idea of a point-of-sale rebate really requires someone to front money, and so that’s something that I don’t think that state legislators actually understand. I get why they’re doing it.

They’re doing it to try to ease the burden on individual participants, but a point-of-sale rebate doesn’t actually exist. It’s manufactured by the PBM in order to offset some of the costs by the participant, but plan sponsors pay to have that money fronted at the point of sale. So, I think that’s really important to remember.

You mentioned other legislative updates. We know they’ve been nonstop for the last several years. How are your clients dealing with this dynamic, and from your view, has it altered client behavior?

Tori Sinclair (8:26)

I will say one of the things I noticed this year is a heightened sense of awareness around state and federal legislation. I kind of felt like in prior years, it wasn’t really being talked about at the employer level, not as much as it is this year. I do think that’s a good thing, because a lot of clients are asking good questions.

They’re requesting updates from our legislative team, as well as the PBMs inquiring about what’s happening there. I do feel clients struggle a bit with what to do with the information. Our client contacts, of course, are HR folks, right?

They’re not lobbyists. So, I think they’re looking really to Employers Health and to the PBMs to advocate on their behalf. From my perspective, I’m not seeing much action from clients around this.

I do think they’re looking for some more direction in that space, but I am definitely seeing a heightened sense of awareness and really looking for those updates regularly from our team.

Mike Stull (9:40)

Yeah, thank you. I think most employers are in the business of something other than healthcare. And so, asking them to be super involved in lobbying efforts at the state level around healthcare is typically a heavy lift.

And so, totally understand it. I would just say that a lot of these state legislative requirements will create some type of plan change that our employers and clients need to undertake.

We’re ready for it. We have flexibility in the contract to be able to adapt to it, but it’s probably going to raise costs for employers, particularly any state legislation that looks at setting an acquisition cost plus a mandatory dispensing fee. So, if you think about adding a $10 or a $13 dispensing fee, all of the cheap generics are now going to cost way more. And so, a lot of state legislative efforts aren’t about lowering drug costs, actually about changing who gets reimbursed what. And most of them are driven by independent pharmacies within those local states.

So, it’s a really interesting dynamic that’s going on. We understand why independent pharmacies are doing it. It will definitely raise costs for employers.

So, Devin, let’s shift a little bit here to GLP-1s and the anti-obesity landscape. So, here at Employers Health, we have around 40% of our clients or so that are covering anti-obesity medications.

There’s a range of utilization management strategies and other strategies being implemented. Talk to us about one or more of the unique solutions that you’re seeing in your client base.

Devin Feriance (11:36)

So, I’ll start with saying that the discussion around this has started long before this annual review season. Mike, you mentioned right now we’ve got about 40% of our groups that cover anti-obesity medications. Two years ago, it was 50%, right?

So, the trend that we’re seeing is excluding those that previously covered it now, excluding that coverage. And I don’t know if I would call it a unique but a successful approach. What we are seeing now that clients are adopting, right, with a focus on how do they sustain that cost as these drugs continue to come to market, new ones with expanded indications.

It’s a multifaceted approach is where we’re seeing clients having the best success and maybe helping them sleep a little bit more at night. And so, when I say multifaceted, it’s almost similar to like we’re managing a specialty medication, right? So, multifaceted in the sense that, you know, we look at plan design from a few different directions, meaning like we’re looking at prioritization.

So, looking at the clinical management that’s on those drugs, the higher BMI threshold and weight loss threshold for continuation of staying on those, looking at plan design edits such as tightening up the refill threshold to limit waste because some of these members cannot withstand some of the side effects that come with starting them. And then limiting day supply, another lever to limit potential waste and unnecessary spend both the plan and the member because we know these are high-cost drugs. And then another facet of plan design has been adjusting the member cost share just in that category alone for GLP-1s for anti-obesity medications and potentially adding a lifetime maximum out-of-pocket similar to how we manage fertility medications.

And then lastly, so they suppress the appetite, but does a member want to stay on them lifelong? So, adding potentially a lifestyle management program to give them a road, you know, for maybe an off-ramp, let’s say, to successfully get off those medications, adjust their nutrition, lifestyle habits, and potentially successfully get off them and sustain that lower weight.

Mike Stull (14:04)

Tory, anything to add there?

Tori Sinclair (14:06)

Yeah, I think, you know, for me within my personal book of business, I kind of saw two main themes and Devin had alluded to one of them. There were a handful of clients in the last year, of course, that had covered that elected to remove that coverage, a little bit painful, right? Because they obviously have to hear from those folks.

But that was primarily done because of the financial reasons. We had clients that were just concerned about maintaining those costs in the long term. I will also say for others that have coverage of weight loss, they’re looking to layer in that lifestyle management program and, of course, require that as a component of obtaining those medications at the co-pay on the plan.

So I would say those are the two main themes. In terms of the unique solutions, and Devin had alluded to a number of them, things like higher co-pays, putting in a PA with a higher BMI threshold, looking at, like, maps, lifetime maximums, like what you see on fertility. A lot of clients are inquiring about that.

They want to know more information, but we’re not seeing a ton of traction there in terms of action and moving forward with those. We do have some with the higher co-pays, of course, in place. But I think for a lot of clients, there’s concern around legality there, putting a higher co-pay in for a particular class, something different than what you’re doing for other medications that are covered on the plan.

And I do also think, like I mentioned, the financial aspect of it, clients are concerned around that. And then I also think the self-pay options, a lot of the manufacturers now have promoted those self-pay options. And for clients that are excluding or for clients that have removed the coverage, they’re really looking to push out those as options for people who are inquiring about weight loss medications when they don’t have access to them through the plan.

Mike Stull (16:18)

Well, and it’s certainly going to raise an issue for plan sponsors to have self-pay at $499. And if you’re in a high-deductible plan and there’s coverage, then the list price is $1,300 or so. So, there’s going to have to be some adjustment made from a plan sponsor perspective to adjust for the difference in prices, whether you self-pay or whether it’s covered under the plan.

And, I mean, it’s all rebate-driven behind the scenes, so we know why one is able to offer it at $499, and the other one is a higher price. But it’s something that we’re going to have to reconcile.

To finish this out here, so in terms of trends that you’re seeing as employers plan for open enrollment and benefits heading into 2026, Tori, we’ll start with you on this one.

Tori Sinclair (17:18)

I know we touched on the legislative space. I think primarily the focus on that is driving some of our clients to take a closer look at the documents that they have in relation to their plan. So, we are seeing more clients tap into the offering that we have here at Employers Health to draft an Rx SPD and ensure that that’s in place.

And I think that kind of ties into some of the things that we’ve seen in the news about fiduciary responsibility and that type of thing. In terms of weight loss coverage, I think, as I said, one of two things are happening there for the most part. Either clients are layering in a lifestyle management program or looking to do that if they don’t already have that in place and they cover weight loss.

And I think for clients that do cover weight loss, they’re looking at additional layers of management to try and help with spend there. I think more companies are soliciting feedback from their plan participants as well. So, I think we kind of saw that as a theme or something that clients are even looking to do moving forward where they’re utilizing surveys to really gather that feedback and to incorporate the feedback that they’re getting into their planning for what to do moving forward as far as plan design and overall benefits that are offered to employees and spouses and dependents that are on the plan.

Devon, did you have anything to add to that?

Devin Feriance (18:48)

Yes, I would add looking towards 2026, our clients are looking to continue to expand with other benefit offerings, right? So, looking at other ways, number one, it can help manage some of these high-cost classes such as dermatologicals, rheumatoid arthritis, even infertility. So, looking at programs such as concierge services to layer on that can support members as they navigate some of these tough disease states.

So, infertility, dermatologicals, musculoskeletal, of course, high blood pressure, we’re hearing a lot more of our clients that they want to look deeper into potential outside vendors that work well with PBMs and can support those members kind of navigate healthcare as it continues to get a little bit more complicated and challenging as we continue on.

Mike Stull (19:51)

And we didn’t even mention the formulary changes that are occurring mid-year. So, we have, you know, maybe for the, I guess it’s the second time that we’ve had a biosimilar switch mid-year. Although, in this case, the originator product, Stelara, won’t be excluded from CVS. It will be excluded for our OptumRx clients. And then on the CVS side, we also had a change to the preferred GLP-1 for weight loss.

So, managing the plan year-round is becoming more and more of a thing and making sure that employers are ready and have the support that they need to make adjustments during the year is definitely important as we think about formulary changes and also legislative changes.

So, I know that’s a big part of the role that our client solutions team plays is making sure that we’re there to help our employers.

All right. So, thank you both for joining me today and sharing some of your thoughts and your experiences being out there with our clients in the first part of the year.

I really appreciate you coming on and sharing.

Devin Feriance (21:19)

Thanks for having us, Mike.

Tori Sinclair (21:21)

Yes. Thank you so much for having us.

Mike Stull (21:24)

Before we go, I want to thank our sponsors for helping to not only make this podcast possible, but for supporting us and providing great employee benefits-related content. Thanks to annual supporters, CVS Health and OptumRx, and our premier supporters, EyeMed, AbbVie, Genentech, Quantum Health, Merck, Eli Lilly, ComPsych, Progyny, Novo Nordisk, Noom, Lantern, and Empyrean. Visit employershealthco.com/supporters for a full list of sponsors.

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