119-hr2041

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2041 Introduced in House

    (IH) ]

<DOC>

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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