Legacy Abandons PacificSource for Employee Health Plan, Citing Fiduciary Responsibilities
On July 1, Legacy Health announced that it will no longer use PacificSource as the administrator of its employee health plan beginning in 2027. According to an internal email to employees, PacificSource participated in a competitive review process, but Aetna was ultimately selected. Legacy stated that, “The decision was made as part of [Legacy’s Benefits Administrative] Committee's fiduciary responsibility to ensure the long-term affordability, sustainability and effectiveness of the Legacy Employee Health Plan.”
Legacy's announcement raises an important question: if another administrator is now viewed as offering a better path toward affordability and value for employees, what does that say about the arrangement that existed for the last nine years? To understand why this change is significant, it's worth looking back at the history of PacificSource's role in Legacy's employee health benefits.
Nearly a Decade of High Healthcare Costs for Employees
In 2017, Legacy acquired an ownership interest in PacificSource and moved employees into PacificSource-administered health plans. At the time, employees could reasonably have expected that closer alignment between their employer and insurer might lead to more affordable healthcare coverage. Instead, employee premiums increased by more than 36 percent over the next five years--about three times the regional average.*
Today, costs remain high for Legacy employees. In a review of employee health plans offered by major competitors (PeaceHealth, Kaiser, Providence, OHSU), Legacy appears to be the only employer that does not offer a $0-premium individual employee plan. The same analysis revealed that Legacy's health coverage is also comparatively expensive, with employees paying nearly $400 per month or more than $4,500 annually for family coverage. In addition to higher premiums, employees face significant out-of-pocket costs when they use their benefits: Legacy’s health plan relies on 10% coinsurance for many services rather than the predictable flat copays offered by other health system employee plans.
Those costs have had real consequences for workers. Employees have reported taking on credit card debt, borrowing money from family and friends, or delaying needed care because they could not afford medical bills generated through their employer-sponsored coverage. Others have described being sent to collections or having wages garnished after receiving care at Legacy facilities.
If PacificSource Was the Best Deal for Employees, Why Is Legacy Replacing It?
Legacy has not publicly explained why PacificSource was not selected to move forward as its health benefit administrator starting in 2027. But the decision is notable: after nearly a decade of managing employee health benefits through an insurer in which Legacy held a 50% ownership interest, the organization concluded another administrator was better positioned to deliver the affordability, sustainability, and effectiveness employees need.
For workers who have spent years coping with rising premiums, medical debt, and high out-of-pocket costs, the announcement naturally raises a question: if a better option exists today, why did affordable coverage remain out of reach for so long?
*The average increase in employee health premiums experienced by employees in the healthcare industry in the Western United States was 11.5%. Source: 2025 KFF Annual Employer Health Benefits Survey | KFF.Results were filtered to show healthcare employers in the West region only (AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY)
