Employee Benefits Security Administration proposes pharmacy benefit manager fee disclosures for self-insured health plans
As of our last check on November 3, 2026, this is a proposal, not a requirement. Comments closed April 15, 2026.
We check the Federal Register daily for later actions. We check federal court opinions for rulings on published rules weekly, on Mondays. A ruling can take time to reach us, so not finding one here does not mean there is none.
In short
- What changed
- The Employee Benefits Security Administration, part of the Department of Labor, proposes a rule that would require pharmacy benefit managers, and brokers or consultants affiliated with them, to disclose their compensation in detail to fiduciaries of self-insured group health plans covered by the Employee Retirement Income Security Act (ERISA). The comment deadline has been extended to April 15, 2026.
- Who's affected
- Employers that sponsor self-insured or level-funded ERISA group health plans, and the vendors that provide pharmacy benefit services to those plans. Fully insured plans are not covered by the proposal.
- What to do
- This is a proposal, so it creates no new duties for employers now. Employers with self-insured or level-funded plans may want to comment by April 15, 2026, and begin reviewing their pharmacy benefit contracts.
What changed
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From the sourceSUMMARY
The Department is proposing a regulation that would require providers of pharmacy benefit management services and affiliated providers of brokerage and consulting services to disclose information about their compensation to fiduciaries of self-insured group health plans
The Department of Labor proposes a regulation that would require providers of pharmacy benefit management services, and brokers or consultants affiliated with them, to disclose their compensation to fiduciaries of self-insured group health plans.
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From the sourceD.2. Overview of Covered Service Provider Obligations Under This Proposed Regulation
The disclosures generally would be provided on an initial basis prior to the self-insured group health plan entering into the service contract or arrangement and then on a semiannual basis thereafter.
Also: 29 CFR 2550.408b-22(e) (proposed)
(for extensions and renewals, 30 calendar days in advance is deemed to be a reasonable period of time)
Disclosures would be given before the plan enters into the contract and then every six months. For extensions and renewals, 30 calendar days in advance would count as reasonable notice.
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From the source29 CFR 2550.408b-22(j)(1) (proposed)
Not less than once per year, at the written request of the covered plan, the covered service provider shall allow for an audit of the covered service provider for accuracy of any disclosure made to comply with this section.
Also: 29 CFR 2550.408b-22(j)(6) (proposed)
The covered service provider may not impose conditions that would restrict the covered plan's right to conduct an audit under this section, including restrictions on the period of the audit, the location of the audit, or the number of records to be provided
Plans would gain a right to audit the vendor's disclosures at least once a year. The vendor could not restrict the audit's period, location or number of records, except to limit it to the period the disclosures cover.
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From the sourceD.1.2. Covered Plan--Proposed Paragraph (b)
The definition of ``covered plan'' in the proposal excludes fully insured group health plans, and disclosure obligations with respect to these plans are reserved for future action.
Fully insured group health plans are excluded, and rules for them are reserved for future action.
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From the sourceD.11. Proposed Effective and Applicability Dates--Proposed Paragraph (p)
the proposed rule would be effective sixty calendar days after the date of the publication of the final rule.
Also: 29 CFR 2550.408b-22(p)(2) (proposed)
This section shall apply to plan years beginning on or after July 1, 2026.
As proposed, the rule would take effect 60 days after a final rule is published and would apply to plan years beginning on or after July 1, 2026.
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From the sourceSUMMARY
The proposed rule was published in the Federal Register on January 30, 2026, with a comment deadline of March 31, 2026.
Also: SUMMARY
the Department is extending the comment period for an additional 15 days, to April 15, 2026
The comment deadline was March 31, 2026, and is now April 15, 2026.
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From the sourceSUMMARY
On February 3, 2026, the Consolidated Appropriations Act, 2026 amended ERISA to add several provisions relating to providers of pharmacy benefit management services.
Also: SUPPLEMENTARY INFORMATION
The Department therefore asks interested persons to address, as part of their comments on the proposed rule, whether the rule should be adjusted in light of the CAA, 2026 amendments to ERISA, and if so, what adjustments are needed.
The Consolidated Appropriations Act, 2026, signed February 3, 2026, amended ERISA with new provisions on pharmacy benefit management services. The Department asks commenters whether the proposal should be adjusted in light of those amendments.
Who is affected
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From the sourceSUMMARY
If finalized, this regulation would affect sponsors and other fiduciaries of self-insured group health plans and certain service providers to such plans.
If finalized, the rule would affect sponsors and other fiduciaries of self-insured group health plans, and certain service providers to those plans.
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From the source29 CFR 2550.408b-22(b) (proposed)
a ``covered plan'' means a group health plan as defined in section 733(a) of the Act, other than a group health plan in which all of the benefits are provided exclusively through a contract or policy of insurance issued by a health insurance issuer
A covered plan is any ERISA group health plan except one whose benefits are provided entirely through an insurance policy.
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From the sourceD.1.4. Providers of Pharmacy Benefit Management Services--Proposed Paragraph (c)(1)(i)
it is common for group health plans to enter into level-funded arrangements that have excessive stop loss policies to emulate characteristics of fully insured arrangements, such as predictable spending, but that are actually self-funded arrangements.
The Department treats level-funded arrangements as self-funded, so plans using them would be covered.
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From the source29 CFR 2550.408b-22(c)(1) (proposed)
a ``covered service provider'' means a service provider that enters into a contract or arrangement with the covered plan and reasonably expects $1,000 or more in compensation, direct or indirect, to be received in connection with:
Also: D.1.4. Providers of Pharmacy Benefit Management Services--Proposed Paragraph (c)(1)(i)
If the TPA contracts with the self-insured group health plan to provide pharmacy benefit management services, the TPA would be a covered service provider under this regulation, even if it intends to rely on another provider to perform those services.
The disclosure duty would fall on vendors that contract with the plan and expect $1,000 or more in compensation for pharmacy benefit management services, or for related advice when the adviser is that vendor or its affiliate. A third-party administrator that contracts to provide these services would be covered even if another firm performs them.
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Our analysisFootnote 101
However, Title I of ERISA specifically does ``not apply to any employee benefit plan if . . . such plan is a governmental plan.''
Health plans of government employers appear to fall outside the proposal, because the ERISA rules it builds on do not apply to governmental plans.
What it means in practice
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Our analysisA. Executive Summary
The responsible plan fiduciaries would be able to use the disclosures in their process of selecting a provider of pharmacy benefit management services, engaging an affiliated broker or consultant, monitoring these service providers' operations and compliance with contractual obligations
Benefits teams at self-insured employers would receive far more detailed pricing and compensation data from pharmacy benefit vendors, and would be expected to use it when selecting and monitoring those vendors.
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From the source29 CFR 2550.408b-22(j)(4) (proposed)
The covered plan shall bear responsibility for all expenses related to the selection and retention of the auditor. The covered service provider shall bear the cost of providing the requested information.
Under the proposal, the plan would pay for the auditor, and the vendor would pay the cost of providing the information.
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From the source29 CFR 2550.408b-22(n)(1)(iii) (proposed)
If the covered service provider fails to comply with the written request described in paragraph (n)(1)(ii) of this section within 90 calendar days of the request, the responsible plan fiduciary notifies the Secretary of the covered service provider's failure
If a vendor failed to comply, the plan fiduciary would keep relief from the prohibited transaction rules only by requesting a correction in writing and, if the vendor did not comply within 90 calendar days, notifying the Department of Labor.
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From the sourceD.9. Consequences of Non-Compliance and Proposed Administrative Class Exemption for Responsible Plan Fiduciary--Proposed Paragraph (n)
If the terms of an exemption are not satisfied, responsible plan fiduciaries entering into service arrangements with parties in interest to self-insured group health plans, and the parties in interest themselves, may be subject to enforcement action by the Department and imposition of a civil penalty.
When an exemption's terms are not met, plan fiduciaries and their service providers may face enforcement action and civil penalties from the Department.
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Our analysis29 CFR 2550.408b-22(k)(4) (proposed)
the covered service provider and its affiliates, agents, and subcontractors may not impose restrictions on the covered plan's use of disclosures required under this section
Existing pharmacy benefit contracts with restrictive audit or confidentiality terms would likely need to be revised if the rule is finalized as proposed.
What to do
Required
This is a proposed rule. It creates no requirement for employers or plan fiduciaries now. If finalized as proposed, it would apply to plan years beginning on or after July 1, 2026.
Worth considering
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Our suggestion29 CFR 2550.408b-22(b) (proposed)
a ``covered plan'' means a group health plan as defined in section 733(a) of the Act, other than a group health plan in which all of the benefits are provided exclusively through a contract or policy of insurance issued by a health insurance issuer
Consider confirming whether your group health plan is self-insured or level-funded, and which vendor contracts with the plan for pharmacy benefit services.
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Our suggestionDATES
Comments should be received on or before April 15, 2026.
Consider submitting comments, including on how the proposal should fit with the Consolidated Appropriations Act, 2026 amendments.
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Our suggestion29 CFR 2550.408b-22(j)(6) (proposed)
The covered service provider may not impose conditions that would restrict the covered plan's right to conduct an audit under this section, including restrictions on the period of the audit, the location of the audit, or the number of records to be provided
Consider reviewing current pharmacy benefit contracts for audit limits and confidentiality terms the proposal would bar.
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Our suggestion29 CFR 2550.408b-22(e) (proposed)
(for extensions and renewals, 30 calendar days in advance is deemed to be a reasonable period of time)
Consider noting your pharmacy benefit contract renewal dates, since the proposal would require disclosures at least 30 days before a renewal or extension.
Open questions
The source leaves these open. We'll update this record if a later document answers them.
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Will the Department change the proposal to align with the Consolidated Appropriations Act, 2026 amendments on pharmacy benefit management services?
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How much would the proposal cost employers that sponsor self-insured plans?
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How far in advance would vendors have to give notice of material formulary changes?
Related changes
History
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Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure; Extension of Comment Period Source (opens in a new tab)
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Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure Source (opens in a new tab)