Hidden Fee Disclosure Act of 2025
Hidden Fee Disclosure Act of 2025 (H.R. 2041) would strengthen and broaden the fee-disclosure requirements under ERISA for employer-sponsored health plans. The bill expands what counts as a covered service, tightens how disclosures are presented (by service rather than in aggregate), and imposes detailed, annual disclosures specifically for pharmacy benefit management (PBM) services and third-party administration (TPA) of group health plans. It also adds robust privacy protections aligned with HIPAA and HIPAA-related rules, and sets a staggered effective date: new disclosures apply to contracts entered on or after January 1, 2026. The plan is to increase transparency around compensation, rebates, spread pricing, and other payments tied to services provided to employer-sponsored health plans, with the intent of helping fiduciaries and participants understand costs and potential conflicts of interest. In practice, this would mean PBMs and TPAs face much more granular reporting to plan fiduciaries (and tighter privacy controls) and that plan sponsors would be better able to compare costs and value across service providers. The rulemaking authority given to the Labor Department would craft implementation standards, including what constitutes reasonable and necessary disclosures.
Key Points
- 1Expanded scope of fee disclosures to cover a wide range of services for employer-sponsored health plans, including PBM and TPA-related activities, with disclosures made by service rather than only in aggregate.
- 2New requirements for PBMs: contractors must disclose comprehensive compensation (direct and indirect), including rebates, price concessions, spread pricing, payments from drug manufacturers, and other forms of remuneration; requires annual, detailed reporting to plan fiduciaries within 60 days after each plan year.
- 3Expanded PBM definitions: PBM services are defined broadly to include claims processing/payments, network design, rebates, formulary design, pharmacy operations, utilization reviews, and more, with future guidance from the Secretary on additional services.
- 4Expanded TPA disclosures: TPAs must provide annual disclosures of rebates, discounts, cost-sharing recoveries, and all costs under the administrative services agreement; defines TPAs as including broad administrative services such as claims processing, network design, and regulatory compliance.
- 5Privacy and redisclosure rules: disclosures must comply with HIPAA and HITECH privacy regimes; disclosures limited to business associates and covered entities; public disclosure is restricted (with certain exceptions), and information provided must generally be summary health information for public use.
- 6Effective date and implementation: new provisions do not apply to contracts entered before January 1, 2026; rulemaking by the Secretary of Labor within one year of enactment to implement the act and set standards for disclosure of compensation.