The regulatory environment for pharmacy benefits is changing significantly at both federal and state levels. For benefits advisors, it is imperative to distinguish between the requirements that new federal laws impose, the obligations that emerging state regulations introduce and the changing role of ERISA protections for plan sponsors, according to the first-quarter market report from RxBenefits.
Federal reforms, most notably the Consolidated Appropriations Act of 2026, impose direct, enforceable mandates directly on pharmacy benefit managers. Key mandates include 100% rebate pass-through, strict limitations on PBM income from fixed administrative and service fees, and comprehensive disclosure of total pharmacy spend.
For employers serving as plan sponsors, federal law now imposes a heightened fiduciary responsibility to act prudently and in the best interest of plan participants. Enforcement shifts mean employers must maintain a level of ongoing oversight and documentation to demonstrate that benefit arrangements across the drug portfolio are structured to meet aggregate, lowest-net-cost standards.
The Department of Labor has intensified oversight by proposing comprehensive fee disclosure rules, placing greater accountability on both PBMs (as service providers) and the employers who select them. These requirements mandate that both PBMs and employers maintain transparent, well-documented benefit arrangements.
"ERISA preemption is no longer a guaranteed shield," said Wes Hill, vice president, regulatory affairs, for RxBenefits. "Employers must now prepare for dual compliance at both federal and state levels, and advisors play a critical role in ensuring they're ready."
At the same time, many states are rapidly enacting their own pharmacy benefit laws to increase transparency and control costs. These statutes introduce mandates such as National Average Drug Acquisition Cost-based reimbursements, minimum dispensing fees (intended to level the playing field for private pharmacies and thereby increase market competition) and explicit transparency and rebate pass-through requirements directed at PBMs.
The report offered these action steps for benefits advisors:
- Audit PBM contracts to identify hidden fees and ensure compliance with new regulations.
- Benchmark PBM performance against industry standards and alternative cost- containment solutions.
- Educate clients on the financial and operational impacts of transitioning to transparent pricing models.
- Partner with independent clinical oversight organizations to validate prescription necessity and optimize plan design.
"Benefits advisors are no longer just intermediaries; they're strategic partners," said Jesse Schultz, senior vice president, broker relations, for RxBenefits. "Advisors who can interpret complex data, audit contracts and benchmark performance will set themselves apart in this evolving landscape."
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