Hidden Fee Disclosure Act of 2025

The Hidden Fee Disclosure Act of 2025 amends the Employee Retirement Income Security Act of 1974 to clarify and strengthen disclosure requirements for employer-sponsored health plans, focusing on fees and compensation from service providers, especially pharmacy benefit managers and third-party administrators.

Sec. 2, Clarification of fee disclosure requirements: This section expands the definition of services that trigger disclosure obligations for covered service providers, including brokerage, consulting, and other services like plan design, claim repricing, insurance selection, recordkeeping, medical management, benefits administration, stop-loss insurance, pharmacy benefit management, wellness design, transparency tools, group purchasing agreements, preferred vendor panels, disease management, compliance, employee assistance programs, and third-party administration. It also requires that compensation be disclosed by service, not in aggregate.

Sec. 3, Strengthening disclosure for pharmacy benefit managers and third-party administrators: This section treats contracts for pharmacy benefit management services as indirect arrangements between the plan and the service provider. It requires detailed disclosure of all compensation from drug manufacturers and other third parties, including rebates, discounts, price concessions, co-payment offsets, spread pricing, and fees for services like rebate administration or data access. Annual disclosures must include gross and net drug spending, pharmacy-level spending, cost-sharing collected, and fees by source. Similar requirements apply to third-party administrators for group health plans, covering rebates, fees from providers, and recoveries from overpayments or fraud. The section also defines these services broadly and includes privacy rules for handling disclosed information, limiting redisclosure and requiring compliance with HIPAA and HITECH privacy regulations. A rule of construction clarifies that required disclosures do not imply the practices are legal.

Sec. 4, Implementation: The Secretary of Labor must issue notice and comment rulemaking within one year of enactment to implement the Act, accounting for varied compensation practices and establishing standards for disclosing expected compensation.