[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2041 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 2041
To amend the Employee Retirement Income Security Act of 1974 to clarify
and strengthen the application of certain employer-sponsored health
plan disclosure requirements.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 11, 2025
Mr. Courtney (for himself and Mrs. Houchin) introduced the following
bill; which was referred to the Committee on Education and Workforce
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 to clarify
and strengthen the application of certain employer-sponsored health
plan disclosure requirements.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Hidden Fee Disclosure Act of 2025''.
SEC. 2. CLARIFICATION OF THE APPLICATION OF FEE DISCLOSURE REQUIREMENTS
TO COVERED SERVICE PROVIDERS.
(a) Services.--Clause (ii)(I)(bb) of section 408(b)(2)(B) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1108(b)(2)(B)) is amended--
(1) in subitem (AA) by striking ``Brokerage services,'' and
inserting ``Services (including brokerage services),''; and
(2) in subitem (BB)--
(A) by striking ``Consulting,'' and inserting
``Other services,''; and
(B) by striking ``related to the development or
implementation of plan design'' and all that follows
through the period at the end and inserting ``any of
the following: plan design, claim repricing, insurance
or insurance product selection (including vision and
dental), recordkeeping, medical management, benefits
administration selection (including vision and dental),
stop-loss insurance, pharmacy benefit management
services, wellness design and management services,
transparency tools, group purchasing organization
agreements and services, participation in and services
from preferred vendor panels, disease management,
compliance services, employee assistance programs, or
third party administration services, or consulting
services related to any such services.''.
(b) Disclosures.--Clause (iii)(III) of section 408(b)(2)(B) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1108(b)(2)(B)) is amended by striking ``, either in the aggregate or by
service,'' and inserting ``by service''.
SEC. 3. STRENGTHENING DISCLOSURE REQUIREMENTS WITH RESPECT TO ENTITIES
PROVIDING PHARMACY BENEFIT MANAGEMENT SERVICES AND THIRD
PARTY ADMINISTRATORS FOR GROUP HEALTH PLANS.
(a) Certain Arrangements for Pharmacy Benefit Management Services
Considered as Indirect.--
(1) In general.--Clause (i) of section 408(b)(2)(B) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1108(b)(2)(B)) is amended--
(A) by striking ``requirements of this clause'' and
inserting ``requirements of this subparagraph''; and
(B) by adding at the end the following: ``For
purposes of applying section 406(a)(1)(C) with respect
to a transaction described under this subparagraph, a
contract or arrangement for services between a covered
plan and an entity or subsidiary providing services to
the plan, including a health insurance issuer providing
health insurance coverage in connection with the
covered plan in which the entity or subsidiary
contracts, in connection with such plan, with a service
provider for pharmacy benefit management services shall
be considered an indirect furnishing of goods,
services, or facilities between the covered plan and
the service provider for pharmacy benefit management
services acting as the party in interest.''.
(2) Health insurance issuer and health insurance coverage
defined.--Clause (ii)(I)(aa) of section 408(b)(2)(B) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1108(b)(2)(B)) is amended by inserting before the period at the
end ``and the terms `health insurance coverage' and `health
insurance issuer' have the meanings given such terms in section
733(b)''.
(3) Technical amendment.--Section 408(b)(2)(B)(ii)(I)(aa)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1108(b)(2)(B)(ii)(I)(aa)) is further amended by
inserting ``in'' after ``defined''.
(b) Specific Disclosure Requirements With Respect to Entities
Providing Pharmacy Benefit Management Services.--
(1) In general.--Clause (iii) of section 408(b)(2)(B) of
such Act (29 U.S.C. 1108(b)(2)(B)) is amended by adding at the
end the following:
``(VII) In the case of a covered service provider
in a contract or arrangement with a covered plan to
provide pharmacy benefit management services, as part
of the description required under subclauses (III) and
(IV)--
``(aa) all compensation described in clause
(ii)(I)(dd)(AA), including fees, rebates,
alternative discounts, price concessions, co-
payment offsets, and other remuneration
reasonably expected to be received by the
covered service provider, an affiliate, or a
subcontractor from a drug manufacturer,
distributor, rebate aggregator, accumulator,
maximizer, group purchasing organization, or
any other third party;
``(bb) the amount and form of any fees,
rebates, alternative discounts, price
concessions, co-payment offsets, and other
remuneration, including the amount expected to
be passed through to the plan sponsor or the
participants and beneficiaries under the
covered plan;
``(cc) all compensation reasonably expected
to be received by the covered service provider,
an affiliate, or a subcontractor as a result of
paying a lower amount for the drug than the
amount charged as a copayment, coinsurance
amount, or deductible;
``(dd) all compensation expected to be
received by the covered service provider, an
affiliate, or a subcontractor as a result of
paying pharmacies less than the amount charged
to the health plan, plan sponsor, or
participants and beneficiaries (commonly
referred to as `spread pricing');
``(ee) all compensation expected to be
received by the covered service provider, an
affiliate, or a subcontractor from drug
manufacturers or any other third party in
exchange for--
``(AA) administering, invoicing,
allocating, or collecting rebates
related to the covered plan;
``(BB) providing access to drug
utilization data;
``(CC) retaining a percentage of
the list price of a drug; or
``(DD) any other service related to
the role of the covered service
provider as a conduit between the drug
manufacturers or any other third party
and the covered plan.''.
(2) Annual disclosure.--Clause (v) of section 408(b)(2)(B)
of such Act (29 U.S.C. 1108(b)(2)(B)) is amended by adding at
the end the following:
``(III) A covered service provider, with respect to a
contract or arrangement with the covered plan in connection
with providing pharmacy benefit management services, shall
disclose, on an annual basis not later than 60 days after the
beginning of each plan year, to a responsible plan fiduciary,
in writing, the following with respect to the preceding plan
year:
``(aa) All direct compensation described in
subclause (III) of clause (iii) and indirect
compensation described in subclause (IV) of clause
(iii) received by the covered service provider
(including such compensation described in subclause
(VII) of clause (iii)).
``(bb) The total gross spending by the covered plan
on drugs (excluding fees rebates, alternative
discounts, price concessions, co-payment offsets, and
other remuneration).
``(cc) The total net spending by the covered plan
on drugs.
``(dd) The total gross spending on drugs at all
pharmacies wholly or partially owned by the covered
service provider or any entity affiliated with the
covered service provider, including mail-order,
specialty and retail pharmacies, with a breakdown by
individual pharmacy location.
``(ee) The aggregate amount of cost-sharing
collected by the covered service provider from a
pharmacy for a participant or beneficiary in excess of
the contracted rate from such pharmacies, including
mail-order, specialty, and retail pharmacies,
including--
``(AA) categorical explanations (grouped by
the reason for collection of such amounts, such
as contractual true-up provisions,
overpayments, or non-covered medication
dispensed, and including information on the
amount in each category that was passed through
to the covered plan and to participants and
beneficiaries of the covered plan); or
``(BB) individual explanations for such
amounts.
``(ff) Total aggregate amounts of fees collected by
the covered service provider, an affiliate, or a
subcontractor in connection with the provision of
pharmacy benefit management services to the covered
plan, broken down by the source of such fees (such as
the covered plan, participants and beneficiaries of the
covered plan, any drug manufacturer or wholesaler, or
any pharmacy entity).
``(gg) Any information specified by the Secretary
through regulations or guidance that may be necessary
for a responsible plan fiduciary to determine the
reasonableness of the contract or arrangement with the
covered service provider, any compensation paid under
such a contract or arrangement, or any conflicts of
interest that may exist.''.
(3) Pharmacy benefit management services defined.--Clause
(ii)(I) of section 408(b)(2)(B) of such Act (29 U.S.C.
1108(b)(2)(B)) is amended by adding at the end the following:
``(gg) The term `pharmacy benefit management
services' includes any services provided by a covered
service provider to a covered plan with respect to the
administration of prescription drug benefits under the
covered plan, including--
``(AA) the processing and payment of
claims;
``(BB) design of pharmacy networks;
``(CC) negotiation, aggregation, and
distribution of rebates, discounts, and other
price concessions;
``(DD) formulary design and maintenance;
``(EE) operation of pharmacies (whether
retail, mail order, specialty drug, or
otherwise); recordkeeping;
``(FF) utilization review;
``(GG) adjudication of claims; and
``(HH) any other services specified by the
Secretary through guidance or rulemaking.''.
(c) Specific Disclosure Requirements With Respect to Third Party
Administration Services for Group Health Plans.--
(1) In general.--Clause (iii) of section 408(b)(2)(B) of
such Act (29 U.S.C. 1108(b)(2)(B)), as amended by subsection
(b)(1), is further amended by adding at the end the following:
``(VIII) With respect to a contract or arrangement
with the covered plan in connection with the provision
of third party administration services for group health
plans, as part of the description required under
subclauses (III) and (IV)--
``(aa) the amount and form of any rebates,
discounts, savings fees, refunds, or amounts
received from providers and facilities,
including the amounts that will be retained by
the covered service provider;
``(bb) the amount and form of fees expected
to be received from other service providers in
relation to the covered plan, including the
amounts that will be retained by the covered
service provider as a fee, to the extent
feasible; and
``(cc) the amount and form of expected
recoveries by the covered service provider,
including the amounts that will be retained by
the covered service provider (disaggregated by
category), as a result of--
``(AA) overpayments;
``(BB) erroneous payments;
``(CC) uncashed checks or
incomplete payments;
``(DD) billing errors;
``(EE) subrogation;
``(FF) fraud; or
``(GG) any other reason on behalf
of the covered plan.''.
(2) Annual disclosure.--Clause (v) of section 408(b)(2)(B)
of such Act (29 U.S.C. 1108(b)(2)(B)), as amended by subsection
(b)(2), is amended by adding at the end the following:
``(IV) A covered service provider, with respect to a
contract or arrangement with the covered plan in connection
with providing third party administration services for group
health plans, shall disclose, on an annual basis not later than
60 days after the beginning of each plan year, to a responsible
plan fiduciary, in writing, the following with respect to the
preceding plan year:
``(aa) All direct compensation described in
subclause (III) of clause (iii).
``(bb) All indirect compensation described in
subclause (IV) of clause (iii) received by the covered
service provider, an affiliate, or a subcontractor
(including such compensation described in subclause
(VIII) of clause (iii)).
``(cc) The aggregate amount for which the covered
service provider, an affiliate, or a subcontractor
received indirect compensation and the estimated amount
of cost-sharing incurred by plan participants and
beneficiaries as a result.
``(dd) The total gross spending by the covered plan
on all costs and fees arising under or paid under the
administrative services agreement with the covered
service provider (not including any amounts described
in items (aa) through (cc) of clause (iii)(VIII)).
``(ee) The total net spending by the covered plan
on all costs and fees arising under or paid under the
administrative services agreement with the covered
service provider.
``(ff) The aggregate fees collected by the covered
service provider, an affiliate, or a subcontractor from
any source.
``(gg) Any other information specified by the
Secretary through regulations or guidance that may be
necessary for a responsible plan fiduciary to determine
the reasonableness of the contract or arrangement with
the covered service provider any compensation paid
under such a contractor or arrangement, or any
conflicts of interest that may exist.''.
(3) Third party administration services for group health
plans defined.--Clause (ii)(I) of section 408(b)(2)(B) of such
Act (29 U.S.C. 1108(b)(2)(B)), as amended by subsection (b)(3),
is amended by adding at the end the following:
``(hh) The term `third party administration
services for group health plans' includes any services
provided by a covered service provider to a covered
plan with respect to the administration of health
benefits under the covered plan, including--
``(AA) the processing, repricing, and
payment of claims;
``(BB) design, creation, and maintenance of
provider networks;
``(CC) negotiation of discounts off gross
rates;
``(DD) benefit and plan design; negotiation
of payment rates;
``(EE) recordkeeping;
``(FF) utilization review;
``(GG) adjudication of claims;
``(HH) regulatory compliance; and
``(II) any other services set forth in an
administrative services agreement or similar
agreement or specified by the Secretary through
guidance or rulemaking.''.
(d) Privacy Requirements.--Section 408(b)(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)), as
amended by subsection (c), is further amended by adding at the end the
following:
``(C) Privacy requirements.--Covered service providers
shall provide information under subparagraph (B) in a manner
consistent with the privacy regulations promulgated under
section 13402(a) of the Health Information Technology for
Clinical Health Act (42 U.S.C. 17932(a)), and consistent with
the privacy regulations promulgated under the Health Insurance
Portability and Accountability Act of 1996 in part 160 and
subparts A and E of part 164 of title 45, Code of Federal
Regulations (or successor regulations) and shall restrict the
use and disclosure of such information according to such
privacy, security, and breach notification regulations and such
privacy regulations.
``(D) Disclosure and redisclosure.--
``(i) Limitation to business associates.--A
responsible plan fiduciary receiving information
disclosed under subparagraph (B) may disclose such
information only to the entity from which the
information was received, the group health plan to
which the information pertains, or to that entity's
business associates as defined in section 160.103 of
title 45, Code of Federal Regulations (or successor
regulations) or as permitted by the HIPAA Privacy Rule
(parts 160 and 164, subparts A and E of title 45, Code
of Federal Regulations).
``(ii) Clarification regarding public disclosure of
information.--Nothing in this section shall prevent a
group health plan or health insurance issuer offering
group health insurance coverage, or a covered service
provider, from placing reasonable restrictions on the
public disclosure of the information described in this
subparagraph, except that such plan, issuer, or entity
may not restrict disclosure of such information to the
Department of Labor.
``(E) Additional privacy requirements.--
``(i) In general.--Covered service providers shall
ensure that information provided under subparagraph (B)
contains only summary health information, as defined in
section 164.504(a) of title 45, Code of Federal
Regulations (or successor regulations).
``(ii) Restrictions.--A group health plan shall
comply with section 164.504(f) of title 45, Code of
Federal Regulations (or successor regulations) with
respect to any information received by the plan or
disclosed to a plan sponsor or any other entity
pursuant to this section, and a responsible plan
administrator who is a plan sponsor shall act in
accordance with the terms of the agreement described in
such section.
``(F) Rule of construction.--Nothing in this section shall
be construed to modify the requirements for the creation,
receipt, maintenance, or transmission of protected health
information under the privacy regulations promulgated under the
Health Insurance Portability and Accountability Act of 1996 in
part 160 and subparts A and E of part 164 of title 45, Code of
Federal Regulations (or successor regulations).''.
(e) Rule of Construction.--Nothing in the amendments made by this
section shall be construed to imply that a practice in relation to
which a covered service provider is required to provide information as
a result of such amendments is permissible under Federal law.
(f) Effective Date.--The amendments made by this subsection shall
not apply to any contract or arrangement entered into prior to January
1, 2026. Such amendments shall apply to any contract or arrangement
entered into on or after to such date, including any extension or
renewal of a contract or arrangement, regardless of the date on which
the original contract or agreement (or any previous extension or
renewal) was entered into.
SEC. 4. IMPLEMENTATION.
Not later than 1 year after the date of enactment of this Act, the
Secretary of Labor shall issue notice and comment rulemaking as
necessary to implement the provisions of this Act. The Secretary shall
ensure that such rulemaking--
(1) accounts for the varied compensation practices of
covered service providers (as defined under section
408(b)(2)(B); and
(2) establishes standards for the disclosure of expected
compensation by such covered service providers.
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