DOL Issues Final PBM Transparency RulesFresh off the press, the ‘Improving Transparency into Pharmacy Benefit Manager Fee Disclosure’ hit the Federal Register on Monday, 11/2. The DOL’s FAQ is a helpful tool for employer plans sponsors seeking to understand the content of the rule.
- This rule applies to PBMs and their affiliates who contract with large self-insured group health plans to provide pharmacy benefit management services.
- PBMs and their affiliates are required to disclose both direct compensation from the group health plan and compensation expected from other sources. This includes payments from drug manufacturers, spread compensation, claw-backs, and price protection arrangements.
- Initial disclosures must be provided to plan fiduciaries before entering, renewing, or extending a contract. After the initial disclosure, semiannual disclosures (or quarterly, if requested) are required to show the compensation actually received, allowing fiduciaries to monitor the arrangement over time.
- Plan fiduciaries have the right to audit the disclosed compensation information at least once a year. The fiduciary selects and compensates the auditor to ensure accuracy.
- Plans can seek relief through an administrative exemption by taking specific corrective actions, including notifying the Department of Labor, and there will be an online portal for reporting compliance failures.
Your Heffernan Account Team is already busy behind the scenes ensuring our carrier partners and administrative service providers are prepared to support this new chapter in the ongoing transparency efforts within our industry.
The regulatory landscape changes fast. Connect with our in-house ERISA attorneys and compliance team to protect your business today. Email [email protected] to talk to our team.
