Federal oversight efforts directed at the pharmacy benefit manager (PBM) industry continue to expand, marked by several significant actions.
The Consolidated Appropriations Act of 2026 (CAA, 2026) was signed on February 3, 2026; the U.S. Department of Labor (DOL) issued its final rule on October 29, 2026, establishing new PBM fee-disclosure obligations and underscoring the federal government’s increasing focus on regulating the industry.
The DOL did not align its rule’s timing with the CAA’s, explaining that doing so would unnecessarily delay transparency in PBM contracting.
Rule or Law | Requirement or Policy | Timing |
|---|---|---|
DOL Final Rule | PBM fee-disclosure requirements | Apply to plan years beginning on or after July 1, 2027 |
DOL Final Rule | Temporary enforcement policy while parties develop processes to meet the new disclosure requirements | February 3, 2026, until the final rule’s requirements apply |
| CAA, 2026 | PBM reporting and group health plan notice requirements | Apply to plan years beginning on or after August 3, 2028 |
CAA, 2026 | Regulations establishing a standard PBM reporting format, aligned with current prescription drug reporting requirements to the extent practicable | Due no later than August 3, 2027 |
CAA, 2026 | PBM rebate pass-through provisions | Apply to contracts entered into, renewed, or extended for plan years beginning on or after August 3, 2028 |
Beginning with plan years on or after July 1, 2027, the final rule generally covers large, ERISA-covered, self-insured group health plans – typically those with 100 or more participants. Fully insured group health plans are outside this final rule’s detailed PBM-disclosure requirements. However, service providers to fully insured plans remain subject to applicable statutory ERISA disclosure requirements. DOL announced temporary enforcement relief from February 3, 2026, until the final rule’s requirements apply.
PBMs, including certain PBM-affiliated brokers and consultants, must provide plan fiduciaries with written initial and ongoing compensation disclosures. Initial disclosures should arrive reasonably before a contract is entered into, extended, or renewed; for renewals and extensions, at least 90 days in advance is considered reasonable. Disclosures cover services, direct and indirect compensation, manufacturer payments, pricing methodology, and other specified arrangements.
Ongoing disclosures generally are due semiannually, or quarterly if the plan requests. Plans may audit disclosures at least annually. PBMs generally must acknowledge an audit request within 10 business days and provide the requested information within 60 calendar days.
Review upcoming PBM contract renewal dates and consider how the disclosure, reporting, notice, and audit requirements may affect contract terms and internal processes. Plan Sponsors can also coordinate with their PBMs, insurers, consultants, and benefits counsel to determine which requirements apply to their plan.
This article is for general informational purposes only and is not legal or tax advice. Federal requirements and timelines may change, and their application depends on a plan’s circumstances, funding arrangement, and contract terms. Plan sponsors should consult their benefits advisors and legal counsel about their specific situations. Sentinel Group does not provide legal or tax advice.
This website uses cookies. By accepting the use of cookies, this message will close and you will receive the optimal website experience. For more information on our cookie policy, please visit our Privacy Policy.
