A Fee-Only, Embedded-Expert Alternative to Benefits Consultants: How Self-Insured Employers Can Reclaim Their Own Claims Data, Sidestep Predatory TPA & PBM Contract Terms, and Stop Paying for Conflict
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Abstract
The opportunity: most large employers are self-funded (about 65 percent of covered workers per KFF, and north of 80 percent at firms with 200-plus employees), which means they carry the claims risk but rarely control the claims data or the contract terms.
The problem: TPAs and PBMs write the agreements, hold the data, and sell the analytics back. Benefits consultants who are supposed to police this are frequently paid by the carriers and PBMs through overrides and bonuses, so the watchdog has a side hustle with the burglar.
The model: drop a genuinely independent, fee-only expert (someone who used to work inside a TPA, carrier, or PBM and knows where the bodies are) onto the employer’s side of the table. Flat fee, full disclosure, no percentage of “savings,” no carrier money. Think fee-only RIA, but for health benefits.
The minimum viable win: get the employer their own adjudicated claims data on a clean feed, kill the gag-clause and audit-restriction language, and price the PBM as pass-through.
The tailwind: the Consolidated Appropriations Act of 2021, the FTC’s PBM reports, and a wave of ERISA fiduciary suits (J&J, Wells Fargo) that have employers’ lawyers suddenly very awake.
The catch: it’s a talent-constrained business that has to overcome the illusion that consultants are “free.”
The thing Cuban keeps yelling about
Self-funded employers are, on paper, the customer with all the leverage. They are not buying insurance. They are renting an administrative back office and paying their own members’ claims out of their own corporate checkbook, with a stop-loss policy bolted on so one transplant doesn’t blow up the quarter. The employer is the plan sponsor, the fiduciary, the entity legally on the hook to run the plan in the sole interest of the people in it. That is the part nobody acts like is true.
In practice the customer with all the leverage behaves like a hostage. The employer hands the entire operation to a third-party administrator or an administrative-services-only arrangement with a big carrier, signs whatever lands in front of them, and then spends the next several years unable to answer basic questions about money that is leaving their own account. Cuban’s whole noise machine on this topic boils down to one observation that should be embarrassing and somehow isn’t: the people paying the bills usually cannot see the bills. He built a pharmacy company around the pharmacy version of the problem. The broader version, the one that covers medical claims, network repricing, out-of-network deals, subrogation, and the contract terms that lock all of it in place, is wide open and largely unbothered.
The pitch is not complicated. Put a competent, conflict-free human on the employer’s side who has actually read these contracts from the inside, and let them ask the questions the HR generalist does not know to ask. That is the business. Everything else is detail, and the detail is where the money is.
Why the people footing the bill can’t see the receipts
