ARTICLE
16 January 2025

This Week From The Hill (January 12 – 18, 2025)

GG
Groom Law Group

Contributor

Groom Law is the nation’s preeminent benefits, retirement, and health care law firm. We built our success over decades of solving complex ERISA/employee benefits challenges in the public and private sectors, providing innovative legal solutions, value, and true partnership to our clients every step of the way.
The latest continuing resolution ("CR") that expires in mid-March would have included significant PBM reforms that, although they did not become law in 2024...
United States Employment and HR

Each week while Congress is in session, our Policy team delivers a key update to highlight a topical benefits, health, or retirement news item from the Hill, such as a newly introduced bill, a summary of a committee hearing, or another hot-button matter.

The latest continuing resolution ("CR") that expires in mid-March would have included significant PBM reforms that, although they did not become law in 2024, will likely be reconsidered by Congress in the future.

Specifically, the legislation would have included the following policy changes:

  • Transparency. The legislation would have required PBMs to provide semi-annual reports to group health plans that included, among other things, detailed information about drugs on the formulary, utilization, and benefit design features that encourage the use of the PBM's affiliates. The legislation included a penalty of up to $10,000 per day for failing to provide the required information.
  • Rebate Pass Through. The legislation would have amended section 408(b)(2)(B) of ERISA to render any new contract or contract renewal unreasonable unless the PBM passes through 100% of the rebates, fees, alternative discounts, and other remuneration received from certain entities, including drug manufacturers and rebate aggregators. Payments were required to made on a quarterly basis, and plans and issuers were provided rights to audit rebates.
  • Fee Disclosure. The legislation included a sense of Congress aimed at clarifying the application of the brokerage and consulting compensation disclosure provisions of Consolidated Appropriations Act of 2021. In particular, the provision would have clarified the applicability of the rules to consulting arrangements.
  • Prohibited Transactions. The legislation would have amended section 406(a) of ERISA to specify that a plan's contract with a service provider, including a health insurance issuer, under which the service provider has a separate contractual agreement with a PBM to provide PBM services to the plan, will be considered an indirect furnishing of goods, services or facilities between the plan and the PBM acting as the party in interest.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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