PBMs Must Disclose Drug Pricing Secrets; New Employer Health Plans Roll Out in 2026

The “Lower Health Care Premiums for All Americans Act” is a major overhaul that touches three core areas of the health insurance market: how small businesses buy insurance, how employers offer benefits, and the opaque world of drug pricing.

This bill’s main goal is to shake up the market by giving employers more ways to pool risk and offer coverage, while simultaneously forcing Pharmacy Benefit Managers (PBMs)—the middlemen of the drug supply chain—to reveal exactly how they price prescriptions. The changes are significant, ranging from guaranteed funding for ACA subsidies to new rules for self-employed individuals looking for coverage.

The New Way Small Businesses Can Buy In: Association Health Plans

Title I introduces a major expansion of Association Health Plans (AHPs), which allow groups of employers to join together to buy health insurance. Think of it like a co-op for health benefits. Under this bill (Sec. 101), an association must have existed for at least two years for a purpose other than just providing insurance, and it needs to cover at least 51 employees across its membership. This could be a boon for small business owners who currently face high premiums because they can’t access the lower rates available to large corporations.

Here’s the catch for small employers: while the AHP must pool all participant claims to set a base rate, it can then turn around and adjust an individual employer member’s premium based on that employer’s specific risk profile. This means if your small construction company has an older workforce with more chronic conditions, your premium might be higher than the clean-living tech startup down the street, even though you’re in the same AHP. For a small business owner, this flexibility could mean cheaper premiums if their staff is young and healthy, or a surprise rate hike if a few employees get seriously ill.

Title I also creates “CHOICE arrangements” (Sec. 103), effective in 2026. This allows employers to fund a specific type of Health Reimbursement Arrangement (HRA) that reimburses employees for medical costs only if they are also enrolled in individual market insurance (like a plan bought on the ACA Marketplace) or Medicare. This gives employers a fixed budget for benefits and allows employees to choose their own plan—a major flexibility win for both sides.

PBMs: The Curtain Gets Pulled Back

For many people, the most impactful part of this bill might be Title II, which focuses on PBM transparency (Sec. 201). PBMs manage prescription drug benefits for health plans, and their pricing models are notoriously opaque. Starting 30 months after enactment, this bill demands PBMs hand over detailed, semi-annual reports to the health plans they serve.

For large employer plans (100+ employees), the PBM must disclose drug-specific data, including the contracted price paid to the PBM, the price paid to the pharmacy, the difference between the two, and the total rebates and fees the PBM received. If your plan spends more than $10,000 on a specific drug, the PBM has to explain the formulary decision for that drug. This is huge: it finally gives plan sponsors (and by extension, the people paying the premiums) a clear view of where the money is going and how much the PBM is keeping. Failure to comply or knowingly providing false information can trigger civil penalties up to $10,000 per day or $100,000 per false item.

ACA Subsidies and a Critical Restriction

Section 202 deals with the Affordable Care Act (ACA) marketplace. It permanently appropriates the necessary funding for Cost-Sharing Reduction (CSR) payments starting in 2027. CSRs are subsidies that help lower the out-of-pocket costs (like deductibles and co-pays) for low-income individuals enrolled in marketplace plans. Making this funding permanent removes a major uncertainty that has plagued the ACA market for years.

However, this guaranteed funding comes with a specific restriction: none of the appropriated CSR funds can be used for any qualified health plan that covers abortion services, except in cases of rape, incest, or when the mother’s life is endangered. For individuals relying on these subsidies, this provision could limit their choices in the marketplace. If an insurer offers plans that cover elective abortion and refuses to create a separate plan without that coverage, they would lose access to the CSR funding, potentially forcing them to drop out of the market or pass the loss onto consumers through higher premiums.