Federal oversight of the pharmacy benefit manager (PBM) industry has increased. On January22, 2026, the House of Representatives passed the Consolidated Appropriations Act (CAA) of2026, which includes significant PBM reforms. As the bill moves to the Senate, the U.S. Department of Labor (DOL) has also proposed new PBM fee‑disclosure rules, underscoring the federal government’s growing focus on PBM regulation.
PBMs are third-party administrators that handle most health plans’ prescription drug benefits, including processing claims, designing pharmacy networks, and negotiating rebates with drug manufacturers. However, increased concerns about limited transparency and practices such as retaining portions of rebates and using spread pricing have led to heightened scrutiny and a rapid expansion of state PBM regulations in the absence of federal oversight.
To address these concerns, the CAA bill proposes robust PBM reforms. Key provisions for health plan sponsors and health insurance issuers include:
PBMs must give group health plans and health insurance issuers detailed prescription drug spending data at least twice a year, or quarterly upon request. They must also provide drug spending summaries that plans can share with participants and beneficiaries on request.
Each year, group health plans must give participants and beneficiaries a written notice explaining that their PBM is required to submit prescription drug spending reports. This notice can be included in plan documents or sent separately. Upon request, plans must also provide the PBM’s summary document and, for large plans, information showing the difference between what the plan paid the PBM and what the PBM paid the pharmacy for a covered drug tied to the requester’s claim.
Failure to provide the required information may result in civil monetary penalties of$10,000 per day for each day the data is not reported, with additional penalties possible for false reporting. Penalties may be waived when employers demonstrate a good‑faith effort to comply.
To meet ERISA compensation disclosure requirements, PBMs must remit 100% of all rebates, fees, alternative discounts, and other remuneration to group health plans and issuers. These amounts are generally paid quarterly, fully disclosed and itemized to the plan or issuer, and subject to repayment if an audit by the plan sponsor, issuer, or a designated third party finds an overpayment.
If a PBM does not remit the required rebates, plan fiduciaries will not be treated as violating ERISA if they meet certain conditions. The bill also broadens ERISA’s definition of “covered service provider” to include PBM and other health plan services, requiring these providers to disclose specified information about their services and all expected direct and indirect compensation so fiduciaries can assess the reasonableness of their contracts.
The bill also introduces key Medicare Part D reforms, including:
Similar to the CAA, the DOL’s proposed rule would significantly expand PBM disclosure obligations under ERISA’s compensation disclosure provisions, implementing an April 2025 Executive Order to improve employer health plan transparency around PBM compensation.
PBMs for ERISA-covered self-insured group health plans would be required to share detailed compensation information with plan fiduciaries so they can evaluate whether PBM compensation is reasonable and aligned with their fiduciary duties. Disclosures would include:
The proposal would also give fiduciaries audit rights to verify the accuracy of PBM disclosures and offer additional protections if a PBM does not comply. While fully insured group health plans are excluded for now, the DOL indicated that disclosure requirements for these plans are under consideration and requested public comments. Comments are due on or before March 31, 2026. Download the bulletin for more details.