Johnson & Johnson Class Action Lawsuit: What it means for self-insured employers
What is the Consolidated Appropriations Act (CAA)?
The Consolidated Appropriations Act (CAA) of 2021 expanded the Employee Retirement Income Security Act of 1974 (ERISA), which assigns fiduciary responsibility to self-insured employers for the healthcare services they purchase. *
While this responsibility is nothing new, the CAA recently expanded its scope, requiring employers to demonstrate the healthcare services they purchase are cost-effective, high quality and align with mental health parity and pharmacy benefit requirements. This also means employers are expected to exercise prudence when selecting their benefits programs.
Johnson & Johnson Class Action Lawsuit
In early February, a federal class action lawsuit was filed against Johnson & Johnson (JNJ) and its plan fiduciaries, alleging overpayment for prescription drugs within its prescription drug plan.* It is claimed that the plan fiduciaries failed to act prudently by agreeing to terms with a pharmacy benefit manager (PBM) that resulted in excessive costs for numerous drugs compared to other market options.
Self-funded employers will have greater impetus to negotiate quality and costs because they could be at risk of serious fines and penalties.
How does this claim impact my business?
Given the evolving landscape and heightened litigation risks, health plan fiduciaries must take proactive steps to mitigate exposure and safeguard the interests of plan participants.
Our team can help you establish a process that evaluates plan design, vendors and performance metrics annually to monitor plan performance.
Learn more about the J & J lawsuit or connect with our team today.
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