What passed
The Consolidated Appropriations Act, 2026 was signed into law on February 3, 2026. Alongside government funding, it included the most significant federal PBM reforms to date, affecting both ERISA group health plans and Medicare Part D.
Reporting to plan sponsors
PBMs must give group health plans detailed prescription drug spending reports at least twice a year, or quarterly on request. For larger plans the reports include what the plan paid the PBM for each drug, what the PBM paid pharmacies, and what the plan and PBM received from manufacturers and other entities.
Plans must give participants an annual notice about these reports, and PBMs that fail to report face civil penalties of up to $10,000 per day.
100% rebate pass-through
For a PBM contract to be considered reasonable under ERISA's compensation disclosure rules, the PBM must pass through 100% of rebates, fees, alternative discounts and other remuneration tied to drug utilization. Reasonable, transparent fees for bona fide services are still permitted. Fiduciaries are protected if a PBM fails to remit, provided they meet certain requirements.
PBMs become covered service providers
The law expands ERISA's covered service provider definition to include PBM services, so PBMs must disclose their services and all expected direct and indirect compensation, allowing fiduciaries to judge whether the contract is reasonable.
Effective dates
- Regulations setting a standard reporting format are due by August 3, 2027.
- Reporting and participant notice requirements apply to plan years beginning on or after August 3, 2028.
- Rebate pass-through applies to contracts entered into, renewed or extended for plan years beginning on or after August 3, 2028. For calendar-year plans, that effectively means January 1, 2029.
- Medicare Part D delinking, which requires flat bona fide service fees not tied to drug prices or rebates, takes effect January 1, 2028.
What to do now
Contracts signed today may run into the new rules. Ask your PBM now how it will meet the reporting and pass-through requirements, and build those terms into any renewal rather than waiting for 2029.