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Twice-Weekly Briefing
Tuesday, October 20, 2026
Issue 261020-73
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The MOC Brief
Health policy, priced and translated for self-funded plan sponsors
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In This Edition
Five developments, and what each one costs you.
| 1. | Per-person spending for under-65 employer coverage rose 18.8 percent from 2019 to 2023, almost all of it price. | | 2. | A company owner is personally liable for employee contributions he withheld, plus the claims his plan denied. | | 3. | A 750,000-member plan will move a hospital system out of network on January 1, 2027. | | 4. | ICHRAs are now CHOICE Arrangements, and CMS is promoting them to employers. | | 5. | CMS says surprise billing arbitration costs keep climbing and the federal filing portal is being replaced. |
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| 1 · CLAIMS COST TREND · October 13, 2026 |
| Rising Prices Accounted for 90 Percent of the 2019 to 2023 Spending Increase in Under-65 Employer Coverage |
| The Health Care Cost Institute published its 2023 Health Care Cost and Utilization Report on October 13, reporting that "Per-person health care spending averaged $6,743 in 2023" for "people under the age of 65 who have insurance coverage through an employer." Spending per person grew 18.8 percent from 2019 to 2023, and 6.5 percent from 2022 to 2023 alone. HCCI puts almost all of that on price: "From 2019 to 2023, rising prices accounted for $959 (90%) of the change in spending," with average prices up 17.7 percent and overall utilization up 1.8 percent across the same five years. Professional services reached $2,019 per person, prescription drugs $1,613 on point-of-sale payments, and inpatient care $1,115. Average out-of-pocket spending was $923 per person, up 10 percent across the five years. Gross spending on GLP-1 medications grew from $45 per person per year in 2019 to $197 in 2023, and HCCI puts net spending after estimated rebates at $20 rising to $93. |
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MOC Perspective
This is 2023 data, so it is a look back and not a 2027 projection. It still tells you where to aim, because HCCI's own decomposition puts almost all of the five-year increase on price rather than on how much care members used. Utilization management cannot carry a renewal against that. Unit price has to. HCCI never splits this population between self-funded and fully insured plans, it states no sample size, and it stops at age 65, so read it as the national shape of employer coverage rather than as your own book.
What to do now
| ▪ | Run the same price and utilization split on your own 2023 to 2025 claims before you sign a 2027 renewal. | | ▪ | Compare your under-65 per-person spend against $6,743 and your out-of-pocket average against $923 to see which side of the national figure you sit on. | | ▪ | Price your GLP-1 exposure twice, gross and net of rebates, because the gap in this report is $197 against $93. |
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| Source: Health Care Cost Institute, 2023 Health Care Cost and Utilization Report |
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| 2 · FIDUCIARY LIABILITY · October 6, 2026 |
| A Company Owner Is Personally Liable for $209,466 After Withholding Contributions He Never Sent the Plan |
| The Fifth Circuit affirmed a judgment against Kelly Sills, "president and sole owner of Coastal Bridge Company, L.L.C.," on October 6 in Sonderling v. Sills, No. 26-30272, on appeal from No. 3:23-CV-41 in the Middle District of Louisiana. The opinion describes the arrangement as "the company's self-funded health plan," with medical coverage administered by Blue Cross Blue Shield of Louisiana under an administrative services agreement. "The insurers terminated coverage in August and November 2019," and "Despite this, Coastal continued withholding employee contributions through December 27, 2019." "At least 78 participants had claims denied, leaving $172,351.35 in unpaid medical expenses," and the court said the record supports each component of the $209,466.34 award, whose other component is $37,114.99 in contributions never remitted across Blue Cross, Guardian and Ameritas coverage. The district court granted summary judgment for the Secretary of Labor and "permanently enjoined Sills from serving as a fiduciary to any employee-benefit plan covered by ERISA," and the panel affirmed the judgment in all respects. The opinion "is not designated for publication" and rests on the circuit's own 2002 decision in Bannistor v. Ullman, so it announces no new rule. |
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MOC Perspective
The word to sit with is personally. Sills argued his company was insolvent and that a surety controlled its receivables, and the panel answered that "the insolvency of a Plan sponsor, or a third party's control of a sponsor's receivables, does not excuse a fiduciary's failure to remit employee contributions." It was also "of no moment" that the administrative services agreement was signed by the human resources director. But read the posture before you read the result: "On April 10, 2024, the Secretary served Sills with requests for admission to which Sills never responded," so he was treated as having admitted that he controlled plan assets and was a fiduciary. The lesson is not that thin facts make an owner a fiduciary, it is that an owner who does not contest the record will be held to it.
What to do now
| ▪ | Confirm this week that every dollar withheld from payroll for health coverage reaches the plan inside your stated remittance window. | | ▪ | Name in writing, before your next payroll cycle, the one person who answers for remittance, because delegation to a human resources director did not protect the owner here. | | ▪ | Read your fiduciary liability policy for an insolvency exclusion before your 2027 renewal, since insolvency was the losing argument. |
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| Source: U.S. Court of Appeals for the Fifth Circuit, No. 26-30272, via the Government Publishing Office |
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| 3 · NETWORK TIERING · October 14, 2026 |
| A 750,000-Member Plan Will Move a Hospital System Out of Network After a Judge Refused Its Restraining Order |
| The North Carolina State Health Plan said on October 14 that "Beginning Jan. 1, 2027, Atrium Health will move to the out-of-network tier for the Plan" "except for the previously agreed to 'access' level facilities." The day before, the Plan reported that "A Superior Court judge denied the State Health Plan's (Plan) request for a temporary restraining order" against Atrium Health's "Affordability Program." The Plan's objection is jurisdictional as much as financial. Back on October 9 it said that "State law assigns the Treasurer, and the Treasurer alone, the duty to set the Plan's copays," deductibles and coinsurance, while Atrium "believes it can change these amounts simply by posting new ones on its website." That same October 9 notice extended Open Enrollment "through Nov. 6, 2026" for the Plan's 750,000 members, saying the program had been announced "less than a week before Open Enrollment begins." The Plan says members who choose Atrium providers and facilities "are held harmless under this action," assuming Atrium follows through with its program. |
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MOC Perspective
Set the North Carolina specifics aside and this is a question any tiered network raises: what happens when a provider prices around your tiers without your consent. This plan reached for a court first, got refused, and re-tiered the provider the next day, and that order of operations is the part worth studying. The move is aimed at the provider's terms rather than at member cost, though the hold-harmless is conditional on Atrium following through. Treat the plan's figures as the plan's own: the "quarter of a billion dollars" carries no period or baseline at the source, and the premium projection, "as much as $50 per month in 2028" against 2027 premiums the Plan says it "could more than double," is an estimate rather than a rate filing. A denied restraining order is also not a ruling on the merits.
What to do now
| ▪ | Read your hospital contracts this month for any language letting a provider change member cost sharing without your written consent. | | ▪ | Write into your next tiered network agreement who controls copays, deductibles and coinsurance, which are the three amounts in dispute here. | | ▪ | Extend your own enrollment window if a network tier moves mid-cycle, as this plan did through November 6, 2026. |
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| Source: North Carolina Department of State Treasurer |
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| 4 · INDIVIDUAL COVERAGE HRAS · October 16, 2026 |
| ICHRAs Are Now Called CHOICE Arrangements, and CMS Pitched Them to Ohio Employers as a Group Plan Alternative |
| CMS, the Small Business Administration and a company called Take Command held an event on October 16 titled "CHOICE in Action: Ohio," where CMS Administrator Mehmet Oz and SBA Deputy Administrator Bill Briggs "heard directly from Ohio employers and workers." The release settles the name question in four words at the agency's own page, "Recently renamed from ICHRA," and then describes CHOICE Arrangements as letting an employer put a tax-advantaged contribution toward an employee's individual health coverage in place of a traditional group health plan. A separate paragraph describes the original instrument the same way, as letting employers make tax-favored contributions toward qualifying individual coverage "instead of offering a traditional group health plan." Oz called them "a practical alternative to traditional group health insurance." The release carries no adoption count, no employer count and no dollar figure of any kind, and it gives no date for the rename. Separately, a rule titled "Expanding Access to Individual Coverage Health Reimbursement Arrangements (CMS-9876)" has sat at the Office of Information and Regulatory Affairs since October 5, 2026 under RIN 0938-AW00, with a status of "Pending Review" and a blank concluded date, so nothing has been proposed. |
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MOC Perspective
The name is the actionable part. Every vendor deck, broker proposal and plan document you see from here will say CHOICE Arrangement where it used to say ICHRA, and it is the same instrument, so do not let a renamed product reach you as a new one. The economics have not moved either. You would be trading a plan you control for a fixed contribution toward coverage your employees buy individually, which takes claims risk off your books and takes plan design off your desk. Watch RIN 0938-AW00, because the terms of any expansion will be in that rule and not in an event recap.
What to do now
| ▪ | Ask any broker who proposes a CHOICE Arrangement to show you the same numbers under the name ICHRA, since the October 16 release names no rule change behind the new label. | | ▪ | Model one employee class under a fixed contribution before your 2028 planning cycle rather than the whole population. | | ▪ | Set a standing check on RIN 0938-AW00 at reginfo.gov, which has carried no concluded date since October 5, 2026. |
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| Source: Centers for Medicare and Medicaid Services |
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| 5 · SURPRISE BILLING ARBITRATION · October 2, 2026 |
| CMS Says Surprise Billing Arbitration Has Closed More Than 7 Million Disputes and Will Replace Its Portal |
| CMS said on October 2 that it had convened representatives from all 17 active certified independent dispute resolution entities the day before, alongside officials from HHS, Labor and Treasury, CMS Administrator Mehmet Oz and Labor Assistant Secretary Daniel Aronowitz. The agency gave its own count: "Since it began in April 2022, the federal IDR process has received and closed more than 7 million disputes," which CMS calls "far exceeding expectations." CMS wrote that the process "was expected to reduce net costs to the U.S. healthcare system" but "has encountered delays and unexpected costs," and that "IDR case volume continues to grow, and associated costs continue to rapidly increase." The stated purpose of the meeting was to address "the increasingly high IDR-associated costs affecting the United States healthcare system." CMS also announced "the fundamental technological evolution of the Federal IDR Portal into the IDR Gateway, which will launch in late 2026," giving no more specific date. |
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MOC Perspective
CMS names "plans and insurers" as the parties on one side of these disputes. Our own read on what that means for you: awards against your plan come out of plan assets. So when the agency running the process says volume keeps growing and costs keep rising rapidly, it is describing a line in your claims spend that nobody budgeted. The 7 million is CMS's count of disputes received and closed since April 2022, not a dollar amount and not a tally of awards against plans, so it cannot be converted into a cost. A new portal before year end also means new filing mechanics for whoever challenges dispute eligibility on your behalf, which is usually your administrator rather than you.
What to do now
| ▪ | Ask your administrator for your own count of arbitration disputes and awards since January 2026, not a national figure. | | ▪ | Confirm in writing who files your eligibility challenges before the IDR Gateway launches in late 2026. | | ▪ | Add out-of-network arbitration awards as a named line in your 2027 claims budget, because CMS says the costs are rising rapidly. |
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| Source: Centers for Medicare and Medicaid Services |
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The Bottom Line
Four of these five land on something you already have in hand: your claims file, your remittance records, your hospital contract, your broker's proposal. The fifth runs on a federal arbitration process you do not control at all, and the agency running it says the costs keep climbing. None of this is a 2027 forecast. It is 2023 claims data, one 2026 ruling and three 2026 announcements, which is exactly why each one can be worked before your renewal is signed. That company owner argued insolvency and lost anyway, and it is the cheapest lesson in the issue: money withheld from payroll was never the company's to hold.
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Jude Odu
Founder and Principal, Model Optimal Care
Author of Model Optimal Care: End U.S. Healthcare Waste, One Health Plan at a Time
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