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June 10, 2025 5 mins

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Stepping into the often overlooked yet critically important realm of employer responsibilities, today's episode tackles the concept of fiduciary duty in employee health plans. What begins as an admittedly dry-sounding legal term quickly unfolds into a fascinating exploration of how your healthcare decisions are made—and who's accountable when things go wrong.

Did you know your employer has a legal obligation to act in your best interest when selecting and managing your health benefits? The landscape of fiduciary responsibility dramatically changed with the CARES Act, which heightened consequences for employers who fail to properly oversee your healthcare dollars. I break down the four essential pillars of proper fiduciary conduct: serving participants' interests, managing plan assets responsibly, acting prudently through documented decision-making, and diligently selecting service providers.

The stakes couldn't be higher, as demonstrated by recent high-profile lawsuits where employees of corporate giants like JPMorgan Chase and Johnson & Johnson took legal action against their own employers for alleged fiduciary breaches. These cases specifically targeted how companies selected and monitored pharmacy benefit managers—an industry where just three players control over 80% of the market. I share a personal anecdote about being offered a Costa Rica trip by a pharmacy benefit manager (which I declined) to illustrate the conflicts of interest that can compromise your healthcare. Whether you're a CFO, an HR director, or an employee wondering why money keeps coming out of your paycheck each month, understanding fiduciary duty empowers you to ask better questions and demand more transparency. Ready to find out if your company is making healthcare decisions that truly serve your interests?

Music by Alex Lambert.

Contact Justin via text 740-525-5259 or via email JFutrell@TrueNorthCompanies.com

I welcome the opportunity to hear your feedback from this episode!

Thanks again to my musically gifted friend Alex Lambert for the music. Also thanks to Kevin Asehan for the edits.

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Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to another Tuesday morning with Justin.
I'm Justin Futrell, BenefitAdvisor at True North Companies,
and today we are going to talkfiduciary duty.
I know, super exciting.
I promise to keep the legaljargon at a minimum and get to
the core.
But first, what is fiduciaryduty?

(00:21):
Well, fiduciary duty is whatrequires employers to make
decisions that serve in the bestinterest of their members and
plan beneficiaries.
So most transferable in thisconversation is the health plan.

(00:41):
Right, as we think about thehealth plan, it is the chief
financial officer, the humanresources director, to figure
out how to have employees' bestinterest in mind.
Now, in 2022, there were at TrueNorth, my team, myself and

(01:04):
everyone spent a significantamount of time educating people,
fiduciary leaders, peoplesigning off on these decisions.
So think of your executive teamat your company and educating
them that.
Hey, I don't know if you knowthis, but there's this thing
called the CARES document, whichwas one of those big stimulus

(01:28):
packages.
There's about 880 pages.
Read through it if you want tofall asleep, but seven of those
pages are really, reallyimportant to you, and here's why
really important to you, andhere's why they heightened the

(01:50):
consequences if you breach yourfiduciary responsibility and
they just put more work on whatit looks like to be a good
fiduciary.
Now, if I were to put it in fourbuckets, what does it mean to
be a good fiduciary?
I would think one acting in thebest interest of plan
participants.
Two managing plan assets.
Three acting prudently.

(02:12):
This is a big one.
The word prudent is used oftenwith federal legislation.
The concept of prudence relieson the process for making
decisions.
How do you know, how can youprove you're making a good
decision?
And four, lastly, selecting andmonitoring service providers.

(02:36):
One example there serviceproviders, myself included, have
to disclose transparently howmuch compensation we make.
And the key distinction therewas both direct and indirect
compensation.
That means if a PBM tries tofly me to Costa Rica yes, that's
happened before where I've beenoffered that, then I would have

(02:58):
to disclose that to my client,saying, hey, I'm recommending
this pharmacy benefit manager,but, by the way, they're going
to put my wife and I up in CostaRica.
Sorry, Ellie, I never told youabout that because I thought you
might be mad at me, but it's myjob to be a good fiduciary for
my clients.
So I said no, Okay, Focus,Justin, focus.

(03:19):
So why is this important?
It's important because you mayhave seen in the headlines that
JPMorgan Chase was sued by theirown employees for breaching
their fiduciary responsibility.
You go back to Johnson Johnsonin February of 2024, the same

(03:41):
thing Employees said youbreached your fiduciary duties
related to your pharmacy benefitmanager selection and oversight
.
How do you know where to start?
How do you know if you, as anemployee at your company, are
wasting money coming out of yourpaycheck every month?

(04:03):
Well, one way to start is byasking your CFO hey, how are you
making these decisions for whowe hire?
And one big thing that comes upis like the pharmacy benefit
manager, the big three.
We've talked about them beforeOptumRx, Express Scripts and CVS

(04:26):
Caremark.
They have over 80% of themarket.
And if you're a CFO and anemployee asks why we're working
with those because I've read inthe news that they actually
don't have our best interest inmind you better get prepared to
answer that question.

(04:47):
And when you have a good brokerconsultant, then I mean that's
my job, right, it's my job toput good options in front of a
CFO so that he can say, yes,this is why we made the decision
.
It's my job to put good optionsin front of a CFO so that he
can say, yes, this is why wemade the decision.
It's my job to put good optionsin front of a strategic HR
leader so they can say, yes, Iwill defend why we made this

(05:08):
decision.
Well, that's all for today,folks.
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