DOL Finalizes Expanded PBM Fee Disclosure Rules for ERISA Fiduciaries
The Department of Labor has finalized regulations requiring pharmacy benefit managers and certain related service providers to disclose expanded compensation arrangements to fiduciaries of large, self-insured ERISA plans.
According to a Husch Blackwell alert, the Department of Labor has finalized regulations requiring pharmacy benefit managers (PBMs) and certain affiliated service providers to make expanded compensation disclosures to fiduciaries of large, self-insured Employee Retirement Income Security Act plans. The rules place PBM payment practices squarely inside the ERISA fiduciary information framework, extending the disclosure obligations that plan committees rely on when judging whether pharmacy pricing is reasonable and managed prudently.
Why sophisticated counsel should care: PBMs sit at the center of a growing web of spread, rebate and affiliated-entity arrangements, and large employers and multi-employer plans increasingly treat those arrangements as a fiduciary and reputational risk area, not merely a procurement line item. Final rules typically carry effective and compliance dates, and the source material reviewed here does not confirm those dates, the applicable plan-size thresholds, or the full list of covered service providers, so plan sponsors should verify the operative text and transitional timing directly from the Federal Register before amending contracts or disclosure procedures.
Concrete next steps to watch: plan sponsors should inventory PBM and TPA arrangements, map which disclosed items flow to ERISA plan fiduciaries, and align vendor contracts with the new reporting scope; PBMs and their affiliates should audit their disclosure workstreams. Implementation details, litigation risk and plan-side responses should be monitored as they emerge.