When that spreadsheet-driven plan design causes delays, denials, or dropped coverage, it’s not just a bad look. It’s a legal liability.
Under ERISA and the CAA, fiduciary duty isn’t a slogan—it’s a legal obligation to act solely in the interest of plan participants. Especially when they’re sick, vulnerable, and relying on the benefits you manage to get care they literally can’t afford to lose.
The good news? Doing the right thing for your people is also the smartest move for your organization. Plans that align with participant interests tend to deliver lower costs, better benefits, and fewer legal risks.
In this issue, we introduce the Participant Interest Mindset—a practical framework for making decisions that are not just compliant, but compassionate and cost-effective.
You’ll find the key questions every board should be asking—and the steps every leader must take to ensure their health plan reflects both the law and the people it’s meant to protect.
The Participant Interest Mindset is a decision-making framework grounded in both law and leadership. At its core is one defining question:
“Is this in the best interest of plan participants?”
It sounds simple—but it’s transformative.When applied, the Participant Interest Mindset:
✅ Reduces legal risk by aligning with ERISA and CAA
✅ Turns compliance into strategy delivering better benefits
✅ Improves trust by delivering real outcomes, not optics
It’s not a philosophy. It’s a shift in how you evaluate every vendor, contract, and coverage decision.
The people who depend on their health plan the most aren’t reading board minutes or reviewing contracts. They’re navigating a diagnosis, appealing a denial, or trying to fill a prescription they can’t afford.
This mindset puts the participant at the center of every contract, every policy, every dollar spent.
Because when your plan prioritizes participants, it doesn’t just prevent lawsuits.
It prevents Delays. Illness. Misdiagnoses. Deaths. Bankruptcies.
When plans fail to serve participants, it’s not theoretical. It’s personal.
This is where real leadership shows up.
6 Core Elements of the Mindset
How to cultivate a Participant Interest Mindset:
Education
Train fiduciaries like it matters—because it does. Make it a standing agenda item.
Empathy
We’re all one diagnosis away from needing the plan to work. Center every decision on the patient.
Advocacy
Create real-time channels to help participants. Especially during denials, appeals, and care delays.
Data-Driven Decisions
Benchmark everything. Trust nothing without verification. Use data to lead—not defend.
Transparency
Share clearly, early, and often. Participants should always know what’s covered, what it costs, and where to get help.
Monitoring
Don’t set it and forget it. Track performance, fees, outcomes—and act on what you find.
Case Study
The Situation:
A large employer faced soaring pharmacy costs. Its PBM and stop-loss carrier recommended cutting coverage for high-cost autoimmune drugs and “lasering” (excluding) several high-risk employees from coverage.
The Temptation:
Those moves would have lowered short-term spending—but at a steep human and perhaps legal cost. Participants with chronic illnesses would lose access to essential medications. And the company would face serious compliance risks, including potential ERISA violations.
The Mindset Shift:
Instead of defaulting to vendor recommendations, the fiduciary committee asked a better question: “What’s in the best interest of our participants?”
The Actions Taken:
Rejected discriminatory coverage cuts
Hired an independent pharmacy advisor to evaluate drug pricing
Adopted a transparent PBM contract with pass-through pricing
Implemented care management to better support high-risk members
The Outcome:
The company reduced pharmacy spend without restricting access to critical medications. Employees with complex conditions received better support. And the committee documented every decision to strengthen legal protection.
Why It Matters:
It’s not about being soft—it’s about being smart, strategic, and defensible.
And it’s how today’s fiduciaries earn trust while avoiding lawsuits.
This is the Participant Interest Mindset in action: strategic, defensible, and deeply human.
Boardroom Reflections
Putting participants first isn’t a suggestion—it’s your fiduciary duty.
The question is: Does your governance reflect that?
These 10 Boardroom Reflections are designed to challenge assumptions, expose blind spots, and help leadership teams align their oversight with legal standards and lived reality.
If you want to know whether you’re leading with a Participant Interest Mindset—start here. These aren’t hypotheticals—they’re real questions your fiduciary committee should be asking.
Could your board be personally liable—for decisions that harmed participants?
ERISA doesn’t care about job titles. If your actions hurt the people your plan is meant to protect, you’re on the hook.
Would you bet your personal assets that your decisions serve participants—not the company or the vendor?
Because that’s the legal standard: participant interest first, always.
Could you prove—under oath—that every plan decision was made solely for the benefit of participants?
“Mostly” or “balanced” doesn’t cut it. ERISA demands sole interest.
Have your vendors had more influence over plan design than your fiduciary committee—at the expense of participants?
When outsiders drive decisions, participants often pay the price.
Would we still hire this vendor if we prioritized participant outcomes over relationships or convenience?
Loyalty to a vendor should never outweigh loyalty to your people.
Does our committee structure ensure participants’ interests are represented and protected?
Governance should be built for action—not optics.
Would our compliance record show that we fought for participant value—or settled for the status quo?
If it’s not documented, it’s not defensible. But if it is documented, it should reflect advocacy.
Do we know who profits when participants overpay—or go without care?
Hidden margins and misaligned incentives often come at the expense of participants.
Can we demonstrate how we’re actively monitoring vendors to protect participant access, cost, and quality?
A passive committee puts participants at risk—even unintentionally.
When participants are harmed, how do we make it right—and prevent it from happening again?
A fiduciary doesn’t just notice problems. A fiduciary resolves them.
Ways to Use These Reflections
Open with Intention: Start each fiduciary committee meeting with one reflection to build awareness and accountability.
Facilitate Real Discussion: Use the full set in a governance retreat or annual offsite to uncover gaps and set goals.
Track Progress Over Time: Pick 2–3 reflections each quarter and review where your plan stands—and what’s changed.
However you use them—use them. These reflections turn governance into action.
Final Takeaway
Fiduciary leadership isn’t about checking boxes—it’s about protecting people.
It’s not compliance versus compassion. It’s compliance through compassion.
You don’t need perfection. But you do need discipline, documentation, and a mindset that centers your people—especially when it’s inconvenient.
Start there. And you won’t just avoid lawsuits. You’ll earn trust—and lead with integrity.
Better benefits start with better oversight
If you’re ready to cut costs, reduce risk, and protect your people—start here.
No pressure. No pitch. Just a clear look at where you stand.
📩 Book your no-risk vendor evaluation today.
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📬 PAY IT FORWARD: Feel free to forward this offer to your broker, PBM, or other vendors. Don’t hesitate to tell them you will favor validated vendors as part of your modernized procurement processes. Strong compliance and better benefits begin with validation.
Don’t be a bystander. Change the status quo and reap the benefits of The Health Plan Compliance Advantage.
