Employers that pay their workers' medical claims themselves will get a more detailed account of how pharmacy benefit managers make money under a final rule announced by the Labor Department this week. The disclosures go to the people responsible for the health plan, giving them figures to examine when negotiating prescription-drug contracts.
For workers, the change concerns how an employer buys drug coverage. It does not establish an individual refund, require a particular copay reduction or guarantee that a plan will change its pharmacy network.
The rule, "Improving Transparency into Pharmacy Benefit Manager Fee Disclosure," comes from the department's Employee Benefits Security Administration. Its final text is available for public inspection. The Federal Register lists publication as scheduled for November 2. This is the final rule announced October 29, distinct from the proposal issued in January.
Which health plans are covered
The detailed requirements generally cover PBM services for large, self-insured employer health plans governed by ERISA, the federal employee-benefits law. The agency fact sheet describes the size threshold as a plan with at least 100 participants or one offered by an employer with at least 100 employees.
Self-insured employers pay covered claims themselves, although an insurer or another company may administer the benefits. Fully insured plans, whose benefits are provided through an insurance policy, are excluded from this detailed regulatory framework. The rule also excludes certain plans sponsored by or affiliated with drug manufacturers, distributors, wholesalers, PBMs or rebate aggregators.
A covered service provider must reasonably expect at least $1,000 in direct or indirect compensation. The requirements reach compensation flowing through affiliates, agents and subcontractors, and cover affiliated brokers or consultants involved in the specified PBM arrangements. Calling a business something other than a PBM does not by itself remove services such as formulary management, pharmacy-network arrangements or claims processing from the rule.
Smaller and fully insured plans should not read those limits as an exemption from every disclosure duty. The department says broader statutory changes to ERISA took effect February 3, 2026. Those obligations and the narrower detailed requirements have different scopes.
Where the money must be identified
PBMs negotiate with manufacturers and pharmacies and administer prescription benefits. A plan's administrative fee can therefore show only part of the compensation connected with its drug coverage.
The disclosures must describe direct payments from the plan or sponsor, with amounts allocated by service, including a reasonable allocation when services are bundled. They must also account for manufacturer payments, identifying what passes through to the plan and what the provider or its related businesses retain.
Spread pricing receives its own treatment. That is the difference between what the plan pays the PBM and what the PBM pays the pharmacy. The rule requires information by drug and pharmacy channel, helping a plan distinguish that revenue from a separately charged administrative fee.
Other required information includes pharmacy recoupments and copay clawbacks, price-protection payments, termination compensation and arrangements that steer prescriptions to affiliated pharmacies. Formulary disclosures address financial incentives associated with covered drugs. Plans also receive net-price information or a method for determining it.
These categories let a benefits team examine a contract's total compensation instead of comparing an administrative fee while leaving retained rebates or spread revenue out of the calculation. Disclosure itself does not require those amounts to be passed through to the plan.
The reporting and audit calendar
Initial written disclosures are due reasonably before a plan enters, extends or renews an arrangement. For an extension or renewal, disclosure at least 90 days beforehand is deemed reasonable. That does not make 90 days a universal deadline for every new contract.
Ongoing reports are due within 30 calendar days after each six-month reporting period. A plan can request quarterly reporting. These reports show compensation received or reasonably expected for the period, allowing a fiduciary to compare the contract's initial account with subsequent payments.
If compensation is at least 5% above the initial disclosure, the provider must explain the amount and reason for the increase. A contract can set a lower threshold.
Plans can audit the disclosures at least annually and choose their auditor. The provider must acknowledge an audit request within 10 business days and generally supply the requested information within 60 calendar days. Access can include relevant claims, transaction records and manufacturer or pharmacy agreements, subject to reasonable confidentiality protections.
When the requirements begin
The rule becomes effective 60 days after actual Federal Register publication. Its detailed requirements apply to plan years beginning on or after July 1, 2027. Those are separate milestones. For example, a calendar-year plan's first plan year beginning after that threshold starts January 1, 2028.
The department describes a temporary good-faith enforcement policy for the period between the February statutory changes and the rule's applicability. That is not a blanket cancellation of the existing statute.
Fierce Healthcare's reporting describes the disagreement over the change: employer group ERIC supports clearer compensation information, while PBM trade group PCMA argues that overlapping reporting requirements could increase costs and burden smaller PBMs. Those are stakeholder positions, rather than measured results from a rule whose detailed requirements have yet to apply.
For an employer preparing an audit, the rule separates the costs: the plan pays its auditor, while the service provider pays the cost of producing the required information.
