LUGPA Policy Brief: DOL Proposed Rule on PBM Fee and Compensation Transparency

February 2026 

At-a-Glance Essentials

What’s Changing
The Department of Labor (DOL) proposes new ERISA disclosure requirements requiring pharmacy benefit managers (PBMs) and certain affiliates to disclose detailed compensation, rebate, and pricing information to fiduciaries of self-insured employer health plans.

Why It Matters
PBM compensation and formulary incentives are often opaque. Increased transparency could help employers and physician practices better evaluate PBM contracts, costs, and conflicts of interest.

Who Is Affected
Self-insured and level-funded employer-sponsored group health plans (fully insured plans excluded).

Key Dates

• Proposed: January 30, 2026
• Effective (if finalized): Plan years beginning on or after July 1, 2026
• Public Comment Period: Open

Overview

On January 30, 2026, DOL issued a proposed ERISA rule to increase transparency into PBM compensation and business practices. The rule would require PBMs and certain affiliated service providers to disclose detailed direct and indirect compensation to fiduciaries of self-insured employer health plans and grant fiduciaries audit rights.

Key Requirements

Who Must Comply
PBMs and related entities expecting to receive at least $1,000 in compensation from a self-insured group health plan.

Core Disclosures

• Advance disclosure before contract execution and at renewal
• Semi-annual updates and disclosures upon fiduciary request
• Plain-language reporting with dollar amounts or reasonable estimates

Required Transparency Includes

• Direct and indirect compensation, including manufacturer rebates and affiliate fees
• Spread pricing between plan charges and pharmacy payments
• Copayment clawbacks and termination-related payments

Formulary and Pricing Information

• Incentives affecting formulary placement or exclusions
• Rationale for excluding therapeutically equivalent alternatives
• Net drug costs or pricing methodologies by distribution channel

Oversight and Enforcement

• Annual audit rights for plan fiduciaries
• Access to PBM contracts with manufacturers and pharmacies
• Non-compliance may constitute a prohibited ERISA transaction

Why This Matters for LUGPA Members

Many LUGPA practices sponsor self-insured plans and also provide high-cost, physician-administered therapies. PBM formulary design, rebate structures, and pricing incentives can directly affect patient access, out-of-pocket costs, and practice sustainability. Enhanced transparency may improve employer oversight of drug spending, but the proposal focuses on disclosure rather than structural reform and excludes fully insured plans, limiting its reach.

What Comes Next

DOL is accepting public comment on the proposal’s scope and whether similar requirements should apply to fully insured plans or additional service providers. LUGPA will continue to monitor developments and evaluate advocacy opportunities related to PBM transparency and patient access.