PBM Disclosure Act Forces Health Plan Brokers to Reveal Hidden Pharmacy Benefit Fees

When your employer offers health insurance, there’s a whole ecosystem of middlemen—brokers, consultants, and those Pharmacy Benefit Managers (PBMs)—who influence what you pay for prescriptions. The PBM Disclosure Act is trying to shine a flashlight into one of the murkiest corners of that system.

This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to explicitly require brokers and consultants who work with employer-sponsored health plans to disclose all compensation they receive related to PBM services. We’re talking about both direct compensation (like a flat fee for negotiating the contract) and, crucially, indirect compensation (like performance bonuses or rebates tied to drug volume).

The Fine Print on Hidden Handshakes

Think of your company’s HR department trying to pick the best health plan. They hire a consultant to help them navigate the PBM landscape. That consultant is supposed to be working for your company’s best interest—and by extension, yours. But if the PBM is quietly offering that consultant a bonus based on how many members they steer toward a certain drug, that’s a conflict of interest that ultimately costs the plan (and you) money.

Section 2 of the Act expands existing disclosure requirements to specifically call out PBM services and related services provided by third-party administrators. The key phrase here is that service providers must disclose compensation they “reasonably expect to receive.” This is where the rubber meets the road: It forces brokers to estimate and report what might otherwise be considered hidden kickbacks or performance incentives, giving the employer (the plan fiduciary) a clearer picture of who is making money and how.

Why This Matters for Your Wallet

This isn't just bureaucratic paperwork; it’s about reducing healthcare costs. When employers have full transparency on PBM compensation, they can better negotiate contracts and spot conflicts of interest. For the average worker, this means your employer is better equipped to choose a plan that prioritizes lower costs and better coverage over maximizing a consultant’s hidden commission.

If the plan is overpaying due to undisclosed arrangements, those costs often trickle down to employees through higher premiums, deductibles, or copays. This bill aims to cut off that trickle at the source by making the financial arrangements visible.

The Implementation Clock is Ticking

While Congress states this is merely a clarification of existing disclosure rules—tying it back to requirements already in effect since the No Surprises Act—it still requires new regulatory action. The Secretary of Labor must issue clarifying regulations within 180 days of enactment. The effectiveness of this transparency push hinges entirely on how quickly and how thoroughly the Department of Labor defines what “indirect compensation” really means and how it must be tracked. Until those rules are finalized, brokers and consultants have some wiggle room, especially when estimating compensation they “reasonably expect to receive.”

In short: If you’re a broker or consultant in the health plan space, get ready to open your books. If you’re an employee paying for prescriptions, this bill gives your employer better tools to fight for a fair deal.