PBM Disclosure Act
- Bill Number
- S. 3349
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-12-04: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2026-01-07T17:18:52Z
AI-Generated Summary
Purpose
The PBM Disclosure Act (S. 3349) aims to clarify existing disclosure rules under the Employee Retirement Income Security Act of 1974 (ERISA) for compensation received by brokers and consultants who work with employer-sponsored health plans. Specifically, it ensures that direct and indirect payments from pharmacy benefit managers (PBMs, which help manage prescription drug benefits) and third-party administrators (TPAs, which handle claims and benefits processing) are transparently reported to plan sponsors.
Key Provisions
- Amendment to ERISA: Adds a new requirement (subitem (CC)) to ERISA Section 408(b)(2)(B)(ii)(I)(bb), mandating that covered service providers (like brokers and consultants) disclose any direct or indirect compensation they reasonably expect from PBM services or related TPA services.
- Regulatory Guidance: The Secretary of Labor must issue regulations within 180 days of enactment, using a public notice-and-comment process, to explain how these disclosures apply to the specified services. These rules take effect for plan years starting at least 6 months after issuance.
- Sense of Congress Statement: Emphasizes that this change clarifies pre-existing disclosure obligations stemming from the No Surprises Act (a 2020 law protecting against unexpected medical bills), without creating any new requirements under ERISA.
Significant Changes to Existing Law
- Expands the list of services subject to compensation disclosure in ERISA by explicitly including PBM and TPA services, which were previously covered more broadly but not itemized.
- Builds directly on the No Surprises Act's application date (starting in 2022), reinforcing that disclosures for these services have been required since then, but now with clearer language to avoid ambiguity.
Potential Impacts
- On Government Agencies: The Department of Labor (DOL) will need to develop and enforce new regulations, potentially increasing administrative workload but promoting better oversight of health plan operations.
- On Citizens: Employees and beneficiaries in employer-sponsored health plans may indirectly benefit from greater transparency, which could lead to more informed decisions by employers on plan costs and services, possibly reducing hidden fees in prescription drug and benefits management.
- On International Relations: No direct impacts, as the bill focuses on domestic U.S. employment-based health plans.
- Overall, it could foster accountability in the pharmaceutical supply chain, potentially lowering costs for plans without altering core operations.
Main Stakeholders Affected
- Covered Service Providers: Brokers and consultants to employer-sponsored plans, who must now explicitly disclose PBM and TPA compensation.
- Pharmacy Benefit Managers (PBMs) and Third-Party Administrators (TPAs): Entities providing drug benefits and claims services, whose payments to intermediaries will face heightened scrutiny.
- Employer-Sponsored Health Plans: Plan sponsors (typically employers) who receive disclosures and may adjust vendor selections based on revealed compensation structures.
- Department of Labor: Responsible for rulemaking and enforcement.
- Plan Participants: Employees and dependents covered by these plans, who stand to gain from reduced conflicts of interest in benefits administration.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens ERISA's fiduciary standards by reducing potential conflicts of interest through mandatory disclosures, potentially leading to fewer disputes over "prohibited transactions" (deals that could harm plans). It aligns with the No Surprises Act without expanding liability.
- Constitutional: No apparent challenges, as it involves federal regulation of interstate commerce in employee benefits, a well-established congressional authority under the Commerce Clause.
- Political: Promotes transparency in the often-criticized PBM industry, which handles a large portion of U.S. prescription drug spending; it reflects bipartisan interest (introduced by senators from both parties) in curbing opaque practices without imposing broad new mandates.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Sen. Blunt Rochester, Lisa [D-DE]
Recent Actions
- 2025-12-04: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-12-04:
- 2025-12-04: Introduced in Senate
Bill Versions
- PBM Disclosure Act — issued 2025-12-04 — PDF (3 pages)