August 20, 2024

Key Takeaways

• Based on the survey data, employers appear to be sending a clear message that they are looking for greater value and a stronger commitment from all of their partners.
• Employers are reassessing their partnerships, with 22% saying that they are looking to change health and well-being vendors in 2025 and an additional 38% are putting out RFPs or assessing current offerings. PBM relationships are particularly under scrutiny, with a third of employers planning an assessment and/or RFP process in 2025.
• Seven out of ten employers believe that control of whether a vendor partner serves as a fiduciary should remain with the employer as plan sponsor; half of those would welcome vendor partners presumed to be fiduciaries with employer discretion to opt out of having the vendor serve as fiduciary.

Concerns over partnerships and the value each of them delivers began coming to light in the findings from last year’s survey.

Over the past year, the pace of employer scrutiny has accelerated considerably. According to the 2025 survey, employers have zeroed in on other health and well-being vendors, a category that includes point solutions, navigators and others, with 22% saying that they will be changing vendors in 2025 and 38% considering conducting RFPs or assessing current offerings.

“

New add-on programs must enhance what we already have and demonstrate what value they will bring and why they are the right vendor in that space. ”

- Kevin Theissen, Nestlé

Employers are also taking a close look at their PBMs. While only 6% will be changing PBMs in 2025, one-third could be putting out an RFP or actively assessing their PBM (Figure 3.1). Health plans will be impacted as well – in 2025, 15% of employers will make a health plan change, with an additional 18% putting a health plan out to bid.

Important Aspects of Partnerships

Taking on Fiduciary Responsibilities

To strengthen vendor performance and accountability, employers want clearer standards and more deliberate control over a vendor's services being delivered as a co-fiduciary, meaning that they would be legally required to act in the best interests of the ERISA health plan. A little more than a third of employers (37%) believe that plan vendors should be presumed to be fiduciaries unless the plan’s named fiduciaries make a different determination. Furthermore, 19% of employers think that federal definitions should be updated to clarify when a vendor's role would trigger a fiduciary-level obligation so that the parties can have clearer contracting and administrative responsibilities (Figure 3.3).

While less common, 13% of employers agree that all or some vendors should be required to be co-fiduciaries. This is a more aggressive position in that it would potentially require employers to forsake aspects of control over the plan in exchange for the vendor having heightened accountability. However, a similar number of employers (14%) either believe no action is needed or would like to leave it up to competition and innovation to address fiduciary and non-fiduciary services, which in the end removes government policy intervention from the equation. Notably, 17% of employers expressed uncertainty on whether or which changes would be desirable, which may reflect the complex plan-by-plan implications of making such changes.

Vendors Should Take Notice

As employers consider strategies for addressing rising costs for 2025 and beyond, vendors should expect their performance and outcomes to be scrutinized even more closely. If pressed to aggressively manage costs in the near-term, employers will assess their partnerships in terms of cost and value, with 30% planning to leverage the RFP process to secure better pricing from vendors and another 52% strongly considering doing so (see Part 1, Figure 1.3).

Employers have also made it clear that they expect more accountability from their partners. With calls for more clarity, standards and employer control for fiduciary responsibility, employers are challenging the model for vendor partnerships to improve the value of their investment.

Related Business Group on Health Resources

• The Voices of Virtual Health: From Digitization to Transformation
• Integrated Benefits Experience: Four Key Considerations for Employers
• What Your CEO Is Reading: A New Lawsuit Brings the Fundamentals of ERISA’s Fiduciary Prudence and Duty of Care into Focus

More Topics

Resource Vendor Management Cost Management