If you run a specialty business in the commercial building sector in Texas—whether you’re managing a fleet of HVAC technicians, overseeing commercial electrical installs, or running large-scale plumbing crews—you know how to spot a line-item markup. If a material supplier tried to secretly double the cost of your copper, pipe, or conduit through hidden fees, you’d fire them on the spot.
Yet, millions of dollars are slipping through the cracks of your business every year in a place you might least expect: your employee health plan’s prescription drug benefit.
Most traditional insurance brokers hand you an expensive renewal package once a year, shrug their shoulders, and blame rising specialty drug costs. What they aren’t telling you is that traditional, big-box health insurance plans are often designed to overcharge you for prescriptions.
The weapon of choice? A legacy structure controlled by Pharmacy Benefit Managers (PBMs).
Fortunately, there is a highly effective financial strategy that the smartest companies that build Texas are using to take back control: implementing customized pharmacy carve-outs.
At Association Benefit Solutions (ABS), we have been protecting the skilled trades since 1978. Here is an honest, no-nonsense look at how pulling your pharmacy benefit out of your standard insurance plan can protect your workforce and your bottom line.
The Hidden Monopoly: How PBMs Drain Your Profits
To understand why custom pharmacy strategies are so critical, you first need to understand how traditional health insurance handles prescription drugs.
When you buy a standard, fully insured health plan from a legacy carrier, your medical coverage and your prescription coverage are bundled together. On the surface, this looks convenient. Beneath the surface, the carrier outsources your prescription drug program to a middleman known as a Pharmacy Benefit Manager (PBM).
PBMs make their billions through structures that actively work against your business:
- Spread Pricing: Charging your health plan one high price for a drug, paying the pharmacy a much lower price, and pocketing the “spread” as pure profit.
- Rebate Retention: Pocketing the massive volume discounts and rebates manufacturer companies give out, rather than passing those savings back to your balance sheet.
- Formulary Manipulation: Pushing higher-priced brand-name drugs over cheaper, equally effective alternatives because the higher-priced drugs yield bigger kickbacks for the PBM.
When a single specialty medication for an employee can cost upwards of $5,000 to $10,000 a month, a PBM’s hidden markups can completely destroy your company’s insurance claims history, leading to massive, double-digit premium increases at renewal time.
PBM spread pricing isn’t the only distortion in the drug supply chain — foreign drug price controls push the cost difference back onto U.S. employers.
What is a Pharmacy Carve-Out?
A pharmacy carve-out is an alternative health plan strategy where an employer unbundles, or “carves out,” the prescription drug benefit from the standard medical plan.
Instead of letting a legacy insurance carrier use their preferred, high-cost PBM, you partner directly with an independent, transparent, pass-through Pharmacy Benefit Manager.
When you implement this strategy, the entire financial dynamic changes:
- True Transparency: You see the exact wholesale cost of every drug. No hidden spreads, no mystery fees.
- 100% Rebate Pass-Through: Every single manufacturer rebate and discount generated by your workforce’s prescriptions is sent directly back to your company’s balance sheet.
- Clinical Management: Independent PBMs actively review high-cost claims to find clinical alternatives, assistance programs, or manufacturer copay cards that lower the cost of the drug to pennies on the dollar.
By exposing the hidden markups and taking control of your pharmacy data, you stop writing blank checks to global pharmacy syndicates.
A carve-out only works if the plan itself is transparent, which is why we pair it with a level-funded plan design.
The ABS Advantage: Institutional Buying Power
Taking on massive PBMs and legacy insurance structures requires a partner with significant leverage. ABS is the proudly endorsed insurance partner of associations throughout the state of Texas. Operating for nearly 50 years, we don’t accept the lazy broker status quo.
We leverage exclusive master-contracts, massive institutional buying power, and true economies of scale to secure heavily negotiated rates on alternative, level-funded, and carved-out health plans. We know commercial builders and the skilled trades inside and out. We know that your workforce needs great coverage to stay loyal and productive on the job site, but we also know that you cannot afford to sacrifice your margins to provide it.
By building customized benefit plans that utilize strategic pharmacy carve-outs, we routinely save construction and construction-related companies 20% to 30% on their total healthcare spend while maintaining or upgrading the quality of care their teams receive.
Included Value-Added Services: We Take On the Heavy Lifting
We understand that changing how your health plan functions sounds like an administrative nightmare for your back office. You are in the business of executing projects, not auditing pharmacy claims.
That is why ABS acts as a true extension of your company. When you partner with us, we handle the administrative heavy lifting. We provide an unmatched suite of premium, included value-added services at absolutely no additional cost to your firm:
- COBRA Administration: Entirely managed by our team to maintain flawless compliance.
- 1094/1095 ACA Reporting: Complex IRS reporting prepared and filed on your behalf to avoid steep federal penalties.
- PCORI Fee Calculations: Computed and compiled automatically for your records.
- Claims Adjudication: If an employee faces a pharmacy or medical claim bottleneck, our team steps in to fight the carriers directly.
- Employee Navigator: A state-of-the-art Employee Benefits Administration System to streamline your onboarding and digital enrollment.
- Access to an Employee Labor Law Firm: On-demand expert legal guidance to insulate your business from regulatory risk.
You focus on winning the next big commercial bid. We will handle the paperwork.
Stop Subsidizing Legacy Brokers and Opaque Plans
If your current insurance broker has never discussed the financial impact of your PBM or explained how unbundled plans work, they are under-delivering. It is time for Texas specialty contractors to treat their benefits package with the same strict financial discipline applied to labor estimates and equipment costs.
You build Texas. We protect your business. Good for your team. Great for your bottom line.
Ready to see exactly where your health plan is bleeding money?
Take the guesswork out of your next renewal cycle. Request a Free Cost Analysis from ABS today. Our process is completely frictionless—no endless applications or historical plan documents required upfront. Just send us a recent, basic employee census spreadsheet, and our analysts will show you exactly how much money a carved-out pharmacy structure can return to your balance sheet.
See the full program on our employee benefits page.
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