On October 29, the Department of Labor’s Employee Benefits Security Administration (EBSA) released the final Pharmacy Benefit Manager Fee Disclosure Rule. It sets a common standard for what PBMs, and their affiliates disclose to the employers they serve, and how plans can verify it. Whether you sponsor a plan, advise one, or provide pharmacy benefit services, the rule shapes how these relationships are documented and monitored.
Who is covered?
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The detailed requirements apply to providers serving large, self-insured group health plans, generally those with 100 or more participants or offered by employers with 100 or more employees.
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Covered providers expect to receive $1,000 or more in compensation and include PBM-affiliated brokers and consultants.
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The rule defines pharmacy benefit management services by function, so it applies regardless of whether a provider calls itself a PBM.
Service providers to smaller and fully insured plans remain subject to disclosure obligations established by the Consolidated Appropriations Act, 2026, effective February 3, 2026.
What the rule requires
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Initial disclosures: Service providers must provide written disclosures to employers before entering, extending or renewing a contract. For renewals, 90 days in advance is reasonable. Disclosures must cover services provided, direct and anticipated third-party compensation (including manufacturer payments, spread, pharmacy recoupments, price protection agreements), termination-related compensation, formulary placement incentives, net drug pricing, fiduciary status, and audit rights.
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Ongoing disclosures: Service providers must report actual compensation within 30 days after each semiannual period, or quarterly on request. Amounts that exceed the initial disclosure by 5% or more (or a lower agreed upon threshold) require an explanation.
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Format: Disclosures must be clear, specific, and jargon-free, with compensation stated in dollars (good-faith estimates are permitted). Machine-readable files using industry-standard drug identifiers are available on request, and confidentiality protections apply to third parties receiving the information.
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Audits: An auditor chosen by the plan sponsor may review records at least once a year. Providers must acknowledge requests within 10 business days and generally respond within 60 days. Audits cover claims data, records and contracts with pharmacies, manufacturers and rebate aggregators, and are limited to the disclosure period. The plan pays the auditor; the provider pays to produce records.
Timing
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The rule takes effect 60 days after publication in the Federal Register and applies to plan years beginning on or after July 1, 2027. (As of now, the rule has not been published). A temporary enforcement policy in place since February 3, 2026, protects providers fiduciaries from DOL penalties so long as they make a good-faith effort to comply with the law.
Fiduciary protection
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If a provider fails to meet its obligations, the plan fiduciary risks losing its statutory exemption. The final rule includes an administrative exemption for fiduciaries who take certain steps, including notifying DOL when a provider fails to correct a violation.
Learn more on DOL’s website and read the agency’s fact sheet.
