Open Enrollment for Employers: What Tennessee Businesses Need to Know

For the majority of employers, open enrollment is officially underway in Tennessee.  

While group plans can renew any month throughout the year, a majority of commercial plans renew January 1st.  Open Enrollment is the only time employees participating in a Section 125 or Cafeteria plan can make changes to their employer-sponsored coverage. Likewise, it is critical for employers to use the months leading up to this time to assess and refine the benefits they offer. TEBA is here to provide valuable guidance for employers considering the burdensome regulatory market created for them in “business friendly” Tennessee.  

Key Considerations for Employers:  

Navigating health insurance is complex, especially for self-insured employers who build their benefit plans from the ground up. This involves working closely with brokers, third party administrators, reinsurers, pharmacy benefit managers (PBMs), provider networks, and more – a time-consuming process, but essential to offering the best options while controlling costs.  

As if this process weren't complex enough, in walks the Tennessee General Assembly with state regulations on top of onerous federal mandates that you will need to navigate in 2025.   

State regulators in Nashville will now be dictating your pharmacy benefit plan design, breadth of network, and specialty drug sourcing programs to make sure Pharmacists make the maximum amount of profit regardless of what it does to your benefit plan or ability to deliver a legally required benefit to your employees.  How’s that for being caught between a rock and a hard place?   

While TEBA is working for you to fight these misguided laws, we want to provide you with some key questions to ask your various consultants.    

Questions for Tennessee Employers to Ask a Broker: 

As you know, your broker plays a critical role in sifting through the multitude of vendors that would like to work on your behalf.  Given the changes in regulation in Tennessee for the worse, it's important for you to be armed with some information about what these new laws are costing you.  You might ask:  

1. What legislative and compliance changes do I need to be aware of that will change how our plan worked since this time last year? 

2. How can you help us choose vendors that can comply with the law, but still find creative sourcing solutions for items like specialty pharmacy?   

3. What are some changes I can make to my plan to protect our loss fund while maintaining access to high quality care? 

4. What aspects of our plan are not being utilized that could help prevent future claims?  For example, how many of our employees sought preventive care or had a flu shot last year?  What could we do to improve those numbers?   

Questions for Tennessee Employers to Ask About Pharmacy Coverage: 

To help manage costs effectively, it’s crucial for employers to ask the right questions during negotiations. Here are a few questions Tennessee employers should consider asking to better understand savings opportunities and regulatory impacts: 

1. What have we saved our plan through preferred pharmacy networks?  

2. What could we save if Tennessee did not outlaw spread pricing?  

3. What did we pay in dispensing fees last year?  

4. What Tennessee-specific regulations make it harder for you to save us money? 

Pay Attention to Legislation and Use Your Voice: 

While open enrollment for most is at year end, decisions made by the Tennessee General Assembly during session can heavily impact benefit plans all around.  

For example, this past session, some lawmakers tried to pass a bill that would have eliminated the ability for employers to utilize a manufacturer’s assistance program for an eligible employee’s medication.  That means an employee who would normally qualify for a publicly available program due to income or other factors would be deemed ineligible just because of who they work for.  This arbitrary choosing of winners and losers by lawmakers in Nashville means employer costs would increase for specialty medication, forcing them to choose between the well-being of their staff and the ability to stay in business.    

Luckily TEBA and its members were able to voice their opposition to legislators and prevent this bill from passing. Otherwise, Tennessee businesses would have had to further alter their benefit plans, put extra money into their budget to plan for additional costs, and inform their employees of tough decisions made. 

To view other resources that can be helpful when negotiating benefit plans and understanding what to pay attention to legislatively, join TEBA’s newsletter.