HR-2041-119
Referred to the House Committee on Education and Workforce.
Sponsored by Joe Courtney (D-CT)
What it does
This bill would amend the Employee Retirement Income Security Act (ERISA) to expand and strengthen fee disclosure requirements for companies that provide services to employer-sponsored health plans. It would require pharmacy benefit managers (PBMs) and third-party administrators (TPAs) to disclose — in detail and annually — all forms of compensation they receive, including rebates, spread pricing, and payments from drug manufacturers. Disclosures would apply to contracts entered into on or after January 1, 2026, and the Department of Labor would be required to issue implementing regulations within one year of enactment.
Who benefits
Employers who sponsor health plans and serve as plan fiduciaries, who would gain visibility into how much their vendors are earning from hidden or indirect sources. Employees and their dependents enrolled in employer-sponsored plans, who may benefit if employers use the disclosed information to negotiate lower costs or switch vendors. Independent PBMs and TPAs that already operate transparently, who would compete on a more level playing field. Benefits consultants and brokers who advise employers on plan design. The Department of Labor, which would gain new enforcement data. Taxpayers broadly, if greater transparency reduces inflated drug and administrative costs in employer plans.
Who is hurt
Large, vertically integrated PBMs — particularly those that own affiliated pharmacies, rebate aggregators, or specialty drug operations — who currently retain undisclosed revenue streams. Third-party administrators that earn indirect fees from provider networks or overpayment recoveries without itemizing them. Health insurers that contract with PBMs on behalf of employer plans and would now be subject to indirect-compensation disclosure rules. Companies that may face compliance costs to build new reporting systems. Smaller employers with limited administrative capacity who must process and act on more complex annual disclosures.
Supporters argue
Supporters argue that PBMs and TPAs currently operate with near-total opacity, collecting billions in rebates, spread pricing, and manufacturer payments that employers — who are legally obligated fiduciaries — cannot see or evaluate. They contend that a 2022 FTC report found the three largest PBMs controlled 80% of the market and retained significant rebate revenue without passing it to plan sponsors or patients, directly inflating drug costs. Supporters argue that ERISA already requires fee transparency for retirement plans, and this bill simply closes a long-standing gap for health plans, giving employers the information they need to fulfill their fiduciary duties and negotiate on behalf of workers.
Opponents argue
Opponents argue that the bill's disclosure mandates are extraordinarily granular — requiring line-item breakdowns of every rebate, spread pricing transaction, and manufacturer payment — and that this level of reporting would impose significant compliance costs on PBMs and TPAs, particularly smaller ones, potentially consolidating the market further around large players who can absorb the burden. They contend that many of the compensation arrangements targeted are already subject to existing ERISA and Consolidated Appropriations Act (2021) disclosure rules, making the new requirements duplicative. Opponents also argue that mandatory public disclosure of proprietary pricing arrangements could undermine PBMs' ability to negotiate confidential rebates with drug manufacturers, potentially raising net drug costs for plans.
Constitutional context
Congress regulates employer-sponsored benefit plans under the Commerce Clause (Art. I, §8, cl. 3), and ERISA has been the established statutory framework for this since 1974. The bill delegates rulemaking authority to the Secretary of Labor, which under Loper Bright v. Raimondo (2024) means courts will independently review whether any implementing regulations stay within the bill's statutory boundaries, rather than deferring to the agency's interpretation.
Checks and balances
The executive branch (Department of Labor) gains new rulemaking and enforcement authority over health plan service providers; this authority is checked by the notice-and-comment rulemaking requirement in the bill, congressional oversight, and post-Loper Bright judicial review of any agency regulations.
Historical precedent
The Consolidated Appropriations Act of 2021 established the first federal fee disclosure requirements for health plan brokers and consultants under ERISA Section 408(b)(2), which this bill directly builds upon and expands.