H.R. 2041

[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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