April 30, 2026

Fiduciary? Prepare for the PBM Transparency Rule

Plan sponsors are ERISA fiduciaries of their plans; they must be loyal to and practice “prudence” respecting plan management & administration. Goals of the proposed PBM Transparency Rule “Rule” are three-fold:

1. Require transparency into PBM pricing for self-insured plans to determine if pricing is “reasonable” under ERISA arrangements between plans & providers;
2. Evaluate PBM service agreements; and
3. Identify conflicts of interest.

The Rule proposes a dozen disclosures to plan fiduciaries, including direct, manufacturer, and “other” compensation; copay clawbacks; spread pricing; formulary placement incentives; price protection contracts; service descriptions; drug pricing methods; termination clause fees; and statement of fiduciary status & audit right.

The proposed Rule will alter how employer health plans evaluate PBMs. Consider preparing your team for oversight regarding the following:

• Fiduciary Status:Plan fiduciaries will have greater access to data to assess whether PBM compensation is reasonable or present conflicts of interest. Know the plan fiduciaries.
• Contract Negotiations. PBM negotiations regarding rebate pass-through structures, spread pricing arrangements, and audit rights & reporting obligations should be top-of-mind.
• Litigation Risk. Litigation risks may increase if PBM compensation is excessive or inconsistent with fiduciary duties under ERISA.
• Compliance & Business Operations. Employers should review all fiduciary procedures, including formation of a committee, review of plan documents, and creating checklists for compliance. Create a process to regularly monitor vendors to ensure PBM agreements include required disclosures.

Source: Boutwell Fay LLP, 2026

U.S. Health Care Coverage & Spending

Table 1. Health Care Coverage, 2024, Congress.gov

Private Health Insurance Stats:

• predominant source of health insurance coverage in the United States
• includes group & direct-purchase coverage
• ~55% of the U.S. population had group coverage
• ~14% of the U.S. population had direct-purchase coverage
• Nearly 33% of overall Health Care Expenditures in 2024 were due to private health insurance

Source: U.S. Census Bureau, Table HIC-4_ACS, "Health Insurance Coverage Status and Type of Coverage by State-All Persons: 2008 to 2024," in American Community Survey, September 2025. Notes: Italicized = does not add to total. Coverage estimates are not mutually exclusive. CHIP = State Children's Health Insurance Program. Medicaid/CHIP coverage estimate includes all means-tested public coverage (e.g., state and locally financed public coverage).