The U.S. Department of Labor (DOL) and Employee Benefits Security Administration (EBSA) have issued newly proposed regulations on fee disclosures by pharmacy benefit managers (PBMs). The proposed regulations would require PBMs to make disclosures to plan fiduciaries that would allow them to assess the reasonableness of compensation for the PBMs’ services and to fulfill their duties under ERISA.
Specifically, the proposed regulations would require PBMs to disclose the following information to employer plan sponsors of self-insured group health plans:
Note: The proposed regulations do not apply to fully insured group health plans.
In addition, the proposed regulations would allow plan fiduciaries to audit the accuracy of PBM disclosures and provide relief for plan fiduciaries if their PBM fails to meet its obligation.
The proposed regulations would apply to “covered service providers,” which includes providers of PBM services and providers of advice, recommendations or referrals regarding PBM services who are themselves providers of PBM services or their affiliates. PBM services are defined in the proposed regulations as services necessary for the management or administration of a covered plan’s prescription drug benefits, and the proposed regulations include examples of PBM services.
Under the proposed regulations, covered service providers would be required to provide an initial disclosure and a semiannual disclosure to employer plan sponsors. The initial disclosure would need to be provided within a reasonable time period before entering into, extending or renewing a service contract or arrangement with an employer plan sponsor (for extensions and renewals, 30 calendar days in advance is considered reasonable). The semiannual disclosure would need to be provided no later than 30 calendar days after the end of each six-month period beginning on the date the employer plan sponsors entered into the contract or arrangement, covering the preceding six-month period. The proposed regulations specify the content requirements for both disclosures.
Comments on the proposed regulations are due on or before March 31, 2026. As proposed, the rules would be effective 60 days after the final regulations are published and would apply to plan years beginning on or after July 1, 2026.
