Hidden Healthcare Fees Are Creating Fiduciary Risk for Employers | Jamie Greenleaf Explains Why

On this episode of The EOB Podcast, we sat down with Jamie Greenleaf for one of the most important fiduciary conversations we’ve had so far.

And honestly, this episode hit on something we believe most employers still do not fully understand:

The biggest risk inside many healthcare plans may be completely invisible to the employer sponsoring it.

Because right now, a huge portion of the healthcare industry still operates through:

• vague compensation structures
• indirect payments
• hidden fees
• unclear contracts
• undocumented arrangements
• opaque revenue streams

And despite all of that…

Employers are still the fiduciaries responsible for overseeing these plans.

That disconnect is becoming a major problem.

Healthcare Is Following the Same Path the Retirement Industry Already Went Through

One of the most fascinating parts of this conversation was hearing Jamie explain how closely today’s healthcare market mirrors what happened years ago in the retirement industry.

Before entering healthcare, Jamie spent decades working in the retirement and 401(k) space.

And according to her, the patterns are almost identical:

• hidden compensation
• excessive fees
• weak disclosures
• vague vendor relationships
• employers not understanding fiduciary obligations
• litigation eventually forcing change

As Jamie explained during the episode, retirement plans evolved from commission-heavy product sales into a more fiduciary-focused advisory environment over time.

And now healthcare appears to be entering that same transition.

The difference?

Healthcare is arguably even more complex.

Most Employers Still Do Not Understand Their Fiduciary Responsibilities

One of the strongest themes throughout this episode was how many employers still do not fully understand what fiduciary responsibility actually means in healthcare.

Conceptually, most employers understand:

• loyalty
• prudence
• governance
• oversight
• accountability

But many do not realize those same obligations apply directly to their healthcare plans.

And that creates a dangerous situation.

Because employers are often:

• signing agreements they have not reviewed carefully
• relying on vendors they assume are fiduciaries
• receiving incomplete disclosures
• paying fees they cannot explain
• overseeing plans without formal governance processes

Meanwhile, litigation and regulatory scrutiny are increasing rapidly.

“If You Can’t Explain What You’re Paying… You Probably Can’t Defend It”

One of the biggest takeaways from the conversation came when we discussed “reasonable compensation” under ERISA.

Because ultimately, that concept is becoming central to healthcare fiduciary litigation.

Under ERISA, paying a service provider is technically considered a prohibited transaction unless an exemption applies.

And one of the biggest exemptions is:
the compensation must be reasonable.

But that immediately raises a major question:

How can employers prove compensation is reasonable if:

• they never received proper disclosures
• the fees are vague
• the contracts are incomplete
• the compensation is indirect
• the revenue streams are hidden

That is exactly where many employers may find themselves exposed.

And honestly, this is one of the biggest fiduciary issues emerging in healthcare right now.

Compensation Disclosures Are Still a Major Problem

Throughout the episode, we repeatedly discussed compensation disclosures — or more accurately, the lack of them.

As Jamie explained, the Consolidated Appropriations Act (CAA) created disclosure obligations tied to healthcare service providers receiving compensation above certain thresholds.

But in practice, many employers still:

• do not know disclosures are required
• never ask for them
• receive incomplete disclosures
• receive vague disclosures
• assume disclosures are compliant when they are not

And frankly, many of the disclosures that do exist are incredibly broad.

We discussed examples like: “We may receive additional compensation associated with your plan.”

That is not meaningful transparency.

That is ambiguity disguised as disclosure.

Hidden Compensation Exists in More Places Than Employers Realize

One of the more eye-opening parts of the discussion involved indirect compensation.

Because many employers still assume:
“If we pay our broker a visible fee, that’s the only compensation involved.”

That is often not true.

During the episode, we discussed how some brokers, PBMs, and vendors may receive:

• overrides
• persistency bonuses
• script-based payments
• PMPM fees
• affiliate compensation
• indirect incentives
• revenue sharing arrangements

And many employers have absolutely no idea those payments exist.

At one point, Jamie specifically called out situations where brokers may receive additional compensation from PBMs tied to pharmacy utilization.

Which naturally raises another important question:

What service is actually being performed in exchange for those payments?

Because under fiduciary standards, compensation should generally connect to actual services being provided.

The PBM Conversation Became Very Real

The conversation also dug deeply into PBM compensation structures.

We discussed examples involving:

• per-script fees
• rebate arrangements
• hidden revenue streams
• spread pricing
• coalition structures
• opaque pharmacy agreements

And honestly, some of these arrangements become difficult to justify once employers start asking harder questions.

Especially when:

• contracts are unavailable
• disclosures are incomplete
• compensation structures remain unclear
• vendors refuse transparency

One example we discussed involved an employer participating in a coalition arrangement without even being allowed to view the underlying contract.

That should concern every fiduciary.

Because how can employers evaluate whether a contract is reasonable…
if they are not even permitted to read it?

Employers Often Think Their Broker Is a Fiduciary

Another huge issue we discussed was the misuse of the word “fiduciary.”

Many employers assume:

• their broker is a fiduciary
• their consultant is a fiduciary
• their adviser is legally obligated to act in the plan’s best interest

But as Jamie explained, many contracts explicitly state the opposite.

And that creates massive confusion.

Because employers often believe they have delegated fiduciary responsibility…
when legally, they may not have delegated much of anything at all.

That misunderstanding could become extremely important as litigation expands.

Litigation Is Moving Faster Than Regulation

One of the biggest themes throughout the episode was that litigation may ultimately force change faster than regulation.

We discussed:

• excessive fee lawsuits
• prohibited transaction claims
• voluntary benefits litigation
• PBM litigation
• compensation disclosure issues
• fiduciary breach claims

And importantly, courts are beginning to take these issues more seriously.

The JP Morgan PBM litigation came up repeatedly throughout the conversation because it may become one of the first major healthcare fiduciary cases centered around “reasonable compensation.”

That case could have major implications for:

• employers
• brokers
• PBMs
• consultants
• service providers
• fiduciary governance overall

Employers Need Process — Not Panic

One thing Jamie emphasized repeatedly throughout the conversation is that employers do not need to solve everything overnight.

But they do need to start.

That was probably one of the most practical and encouraging takeaways from the entire episode.

Because right now, many employers feel overwhelmed by:

• healthcare complexity
• fiduciary obligations
• legal risk
• compensation structures
• vendor relationships
• governance expectations

And honestly, that feeling is understandable.

But Jamie made an important point:
You do not need perfection immediately.

You need process.

That includes:

• creating committees
• documenting decisions
• reviewing contracts
• requesting disclosures
• benchmarking vendors
• monitoring fees
• defining roles
• asking better questions

Even small steps matter.

Good Fiduciary Governance Has Real ROI

Toward the end of the episode, we discussed something that often gets overlooked:

Being a good fiduciary is not just about avoiding lawsuits.

It can create enormous financial value.

As Justin pointed out during the conversation, strong fiduciary governance can lead to:

• better procurement decisions
• lower plan costs
• improved vendor negotiations
• stronger transparency
• more efficient plan design
• better long-term outcomes

And over time, those improvements compound significantly.

That is why fiduciary governance is not simply compliance work.

It is strategic plan management.

Final Thoughts: Employers Need to Start Asking Harder Questions

At the end of the day, this episode came back to one major theme:

Healthcare has become too important — and too expensive — for employers to operate on blind trust anymore.

Employers should know:

• what they are paying
• who is being paid
• why they are being paid
• what services are being provided
• whether contracts are reasonable
• whether compensation is defensible

Because if employers cannot explain those things…

they may eventually struggle to defend them.

And as Jamie repeatedly emphasized throughout the episode:
the best thing employers can do right now is simply start.

FAQ: Healthcare Fiduciary Responsibility & Hidden Fees

What is fiduciary responsibility in healthcare?

Fiduciary responsibility means employers overseeing health plans must act prudently, loyally, and in the best interest of plan participants.

What is “reasonable compensation” under ERISA?

Service providers can only receive compensation that is considered reasonable relative to the services they provide to the plan.

Why are compensation disclosures important?

Compensation disclosures help employers understand direct and indirect payments tied to their healthcare plans.

What is indirect compensation?

Indirect compensation includes payments such as overrides, rebates, bonuses, PMPM fees, or affiliate revenue tied to healthcare arrangements.

Why is PBM compensation receiving scrutiny?

Many PBM arrangements involve opaque revenue streams, rebate structures, and indirect compensation that employers may not fully understand.

What should employers do right now?

Employers should begin documenting fiduciary processes, reviewing contracts, requesting disclosures, benchmarking vendors, and improving governance oversight.

Listen to the Full Episode

To hear the full conversation with Jamie Greenleaf and explore more discussions around healthcare fiduciary responsibility, compensation disclosures, PBM transparency, ERISA risk, and employer health plan governance, visit The EOB Podcast.