PLANSPONSOR Roadmap: Health Benefit Fiduciaries—PBM Fact vs. Fiction

Health benefit plan sponsors can fulfill their fiduciary duties with confidence by negotiating favorable contract terms with pharmacy benefit managers, getting audit performance guarantees from their providers and considering sourcing their prescription drug plan from beyond the “big three” PBMs, according to speakers at the third and final session of the 2026 PLANSPONSOR Roadmap: Health Benefit Fiduciary Duties livestream series.

“For HR benefits professionals, few responsibilities can feel more scrutinized than managing health benefits in an environment of relentless cost pressure,” said Amy Resnick, the event’s introductory speaker and executive editor of PLANSPONSOR digital. “The trends don’t just impact budgets—they directly impact employee affordability, workplace trust and the decisions fiduciaries are expected to defend.”

According to Mercer’s National Survey of Employer-Sponsored Health Plans, average health care benefit costs will rise 6.7% in 2026—after accounting for cost-saving changes employers said they plan to make. Before making changes, employers were expected to face an average increase of more than 9%.

While health benefit costs grew by only about 3% annually in the decade leading up to 2023, the ballooning trend of recent years has placed pressure on broader business operations. In Mercer’s CFO Perspective on Health Survey, about three-quarters of chief financial officers reported that health care costs were among their top five concerns relative to other operating costs. Skyrocketing prices were a top-three concern for 33% of CFOs in 2025, up from 19% in 2024. 

“When you look at these types of costs, you start to think outside the box,” said panelist Rory Kane Akers, vice president and a senior ERISA compliance attorney at Lockton Companies LLC.

Meanwhile, the expectations placed on those who qualify as fiduciaries under the Employee Retirement Income Security Act are becoming “clearer and more demanding,” Resnick added.

Lay of the Land

The largest PBMs—CVS Caremark of CVS Health, OptumRx of UnitedHealth Group and Express Scripts of Cigna—handled nearly 80% of all prescription claims in 2024, according to research by the Drug Channels Institute.

The three firms have received criticism of their rebate modeling, in which drug manufacturers pay them in exchange for favorable placement of a drug-makers’ medications on a plan’s preferred drug list or formulary, Akers explained. Traditionally, PBMs could retain all or a portion of the rebates as revenue, along with spread pricing—the practice of billing plans more than they reimburse pharmacies and pocketing the difference—administrative fees, and other service fees.

In February, Congress baked a mandatory “rebate pass-through” requirement from drug manufacturers to plans into a federal budget law, in addition to requiring PBMs to report prices, rebates, fees, alternative discounts, spread pricing arrangements and information on why higher-cost drugs receive preferential formulary placement over cheaper alternatives.

But “most recent legislation on fiduciary standards does not start until 2029,” said Barbara Delaney, a principal at StoneStreet Benefit Advisors and moderator of the session.

The provisions take effect 30 months after enactment, landing in August 2028, which means for most plans, the changes will kick in during 2029. In the meantime, alternatives to the “big three” have emerged.

Congress began reinforcing health plan sponsors’ fiduciary duty in the Consolidated Appropriations Act of 2021, which amended ERISA to increase transparency related to health plan service providers. That law also requires that fiduciaries ensure the fees paid to service providers are reasonable and that service providers are delivering the contracted services and collecting only the agreed-upon compensation.

Like the Department of Labor regulations published in 2012 that require service providers to disclose compensation to retirement plan fiduciaries to ensure fee reasonableness, the panelists expect changes will come to health plans as well.

Alternative Providers

Over the past seven to 10 years, more middle-market PBMs have come into the market with cost and transparency models unlike the bigger providers, Akers said. For plan sponsors looking to branch out from the largest firms, the first step is to determine whether the terms of their current contract allow them to do so. Akers added that while it may be prudent for some plan sponsors to use a mid-market PBM, it may not be the wisest decision for all fiduciaries.

“It’s not a silver bullet,” Akers said. Plan sponsors have to understand where they are “getting the most bang for [their] buck.”

Panelist Sean Schantzen, a co-founder of nonprofit health benefit advisory organization Health Rosetta, said health plan fiduciaries face challenges distinct from those serving as retirement plan fiduciaries. He explained that it can be easier to obtain fee transparency in the retirement market because stocks and bonds are mostly publicly traded and have market-clearing prices that are consistently updated.

Additionally, Generally Accepted Accounting Principles—the framework of accounting standards intended to ensure accuracy, consistency and transparency in financial statements for publicly traded companies—are applied to capital markets transactions, but not to health benefit offerings. That difference makes it harder for health benefit plan fiduciaries to benchmark the fees they pay.

In research aimed at identifying every revenue stream a PBM would capture, Schantzen found only three of the 17 total streams were disclosed to clients.

Plan sponsors “can’t know that the fees [their plan is paying] are reasonable if [they] don’t know what they are,” Akers said.

Schantzen said there have been proposals by plenty of high-profile people—including entrepreneur and investor Mark Cuban and President Donald Trump—to improve the access to and affordability of pharmaceuticals by directly contracting with large pharmaceutical companies. But he cautioned that all efforts are necessary, but not sufficient, to reign in health care costs. 

Only a certain number of drugs are currently available through Cuban’s Cost Plus Drugs Co. and the government’s TrumpRx, Akers said. Health benefit plan sponsors still have many plan participants taking medications that are not available through those lower-price programs.

“Fiduciary decisionmaking around pharmacy benefits is in a new phase,” Resnick said.

Mercer’s National Survey of Employer-Sponsored Health Plans was fielded from June through August 2025 among 2,010 U.S. employers with at least 50 employees. Its CFO survey was fielded in February among 161 CFOs and individuals in finance or accounting with health budget oversight.