DOL Finalizes PBM Transparency Rule for Large Self-Insured Health Plans
DOL's November 2, 2026 final rule forces PBMs and affiliates to disclose rebates, spread pricing and fees to large self-insured ERISA plans, with detailed duties starting with plan years on or after July 1, 2027.
The Department of Labor published a final rule on November 2, 2026, effective January 4, 2027, requiring PBMs and certain affiliated brokers, consultants and service providers to disclose to plan sponsors the fees and compensation they receive, including manufacturer rebates and discounts, administrative fees, spread pricing, pharmacy recoupments, formulary placement incentives and compensation paid to affiliates and subcontractors, plus drug pricing methodologies and arrangements directing participants to affiliated pharmacies. Detailed obligations generally apply to ERISA self-insured group health plans sponsored by employers averaging at least 100 employees, and can be triggered through TPA or level-funded arrangements; fully insured plans are generally outside the rule's detailed duties, though statutory compensation disclosure requirements enacted in the Consolidated Appropriations Act, 2026 already apply to them. Disclosures are due reasonably in advance of new contracts, renewals and extensions (90 days deemed reasonable) and in reports every six months, or quarterly on request, with material overages generally at 5% or more; covered plans gain contractual audit rights at least annually. Detailed requirements apply to plan years beginning on or after July 1, 2027. Benefits counsel should review PBM, TPA and broker agreements now for compensation, disclosure, audit, formulary and renewal terms, and build a documented process for assessing reasonableness of vendor compensation under ERISA. Watch for implementing guidance and 2027 renewal timing.