Compliance Calendar
Congress finally passed pharmacy benefit manager reform in February 2026, but most of what matters for employers does not take effect until 2028 and 2029. The contract you sign this year will still be in force when it does.
Key takeaways
- The Consolidated Appropriations Act, 2026 requires PBMs serving employer plans to pass 100% of rebates and similar payments to the plan and to report on spread pricing and rebates to larger plans.
- The pass-through rule starts with plan years beginning on or after August 3, 2028, which for a calendar-year plan means January 1, 2029.
- A Department of Labor rule that would force fee disclosure for self-insured plans is still only proposed, and two of the three largest PBMs have settled a Federal Trade Commission insulin case.
- You do not have to wait. Contract language and audit rights can be added at your next renewal.
What the new law does
The Consolidated Appropriations Act, 2026, signed on February 3, 2026, contains the first federal PBM reforms for the commercial market. As summarized by national law firms, it requires a PBM that serves an employer plan to remit to the plan all rebates, fees, alternative discounts and other remuneration it receives, apart from bona fide fixed service fees at fair market value. Remittance is expected on a regular schedule and the plan may choose its own auditor, who cannot be paid by the PBM.
It also requires reporting to larger plans, those with 100 or more participants, on gross and net spend, spread, rebates, formulary rationale and affiliate relationships. Late or false reports carry penalties. Plan fiduciaries get a safe harbor if they demand the money in writing and notify the Department of Labor when the PBM fails to comply. The provisions apply to plan years beginning on or after August 3, 2028. Delinking a PBM’s pay from drug list prices is required in Medicare Part D beginning in 2028, but not in the commercial market.
Rules still in motion
In January 2026 the Department of Labor proposed a rule that would treat PBMs, and brokers who advise on PBMs, as covered service providers under ERISA’s fee-disclosure rules for self-insured plans, with initial and semiannual disclosure of manufacturer payments, spread and claw-backs and an annual audit right. It has not been finalized.
The Federal Trade Commission’s insulin case against the three largest PBMs has moved toward settlement. Reports describe a February 2026 settlement with one and a July 2026 settlement with another, with terms that include a ban on spread pricing for the covered business, cost-based pharmacy payment and passing rebates to clients. Whether the same terms reach your plan depends on which PBM you have and which contract.
At the state level, Michigan has regulated PBMs since January 1, 2024, including licensure and pricing-list transparency. Courts are also testing how far states can go: in 2026 the Eighth Circuit held that some Arkansas network rules are preempted by ERISA, and a separate challenge to Arkansas’s pharmacy-ownership ban is on appeal. For self-funded employers, ERISA often limits what states can require.
Questions to put to your PBM now
- Do you pass through 100% of rebates and other remuneration, and will you say so in the contract?
- Do you keep any spread between what the plan pays and what you pay the pharmacy?
- Who owns the rebate aggregator or group purchasing arrangement and how are its payments treated?
- What are your prices at affiliated specialty and mail pharmacies compared with outside pharmacies?
- Can we audit, with a firm of our choosing, and what data can we receive?
- Do you offer a rebate-free or net-price formulary option?
If your PBM is bundled with your carrier, ask the carrier to put the answers in writing as part of the renewal. If you are self-funded and have not benchmarked pharmacy pricing in the last three years, do that before 2028 pressure arrives. Our PBM contract audit page explains how we do it.
Questions we get
Does this apply to my fully insured plan?
The federal PBM provisions are written for group health plans, but in a fully insured arrangement the carrier holds the PBM contract. Ask the carrier how it will comply and whether the benefit reaches your premium.
Do I have to do something before 2028?
No filing is due now. The sensible step is to add pass-through and audit language to your next contract so you are ready and are not renegotiating under pressure.
What is a rebate-free formulary?
A formulary built on lowest net cost, with no reliance on manufacturer rebates. Some PBMs offer it as an option. It can lower costs for drugs that carry big rebates and high list prices.
Sources: Consolidated Appropriations Act, 2026 (H.R. 7148) summaries; Department of Labor proposed PBM fee disclosure rule (January 2026); FTC announcements; Michigan PBM law (HB 4348, effective January 1, 2024). Effective dates should be confirmed with counsel.
Related Reading
Want your pharmacy contract read before it renews? Send us your renewal and we will mark where it falls short of pass-through terms and what to ask for.
