$1,000 is the number that matters. A covered service provider expecting to collect that much from your group health plan has to give you a written accounting of what it is paid — direct compensation and indirect — reasonably in advance of the contract being signed, extended, or renewed. Until this year, “covered service provider” meant your broker and your consultant. The Consolidated Appropriations Act, 2026, signed February 3, 2026 as Public Law 119-75, stretched the term across most of the vendors a health plan actually pays.
That matters most in the fourth quarter, because Q4 is when plan sponsors sign things. Administrative services agreements, pharmacy benefit management contracts, stop-loss placements, navigation and utilization-management vendors, benefits administration platforms — the January 1 contracts get executed between now and December. Every one of those signatures is a contract “entered into, extended, or renewed” after February 3, 2026.
What actually changed on February 3
The original rule came from the Consolidated Appropriations Act, 2021 — Public Law 116-260, signed December 27, 2020 — which added ERISA § 408(b)(2)(B) and made brokerage and consulting compensation for group health plans disclosable for contracts entered into, extended, or renewed on or after December 27, 2021. A covered service provider expecting $1,000 or more in direct or indirect compensation had to describe its services, state whether it was acting as a fiduciary, and detail what it earns — including who pays the indirect money, how much, and under what arrangement. Compensation flowing to affiliates and subcontractors counted toward the threshold. Groom Law Group has a clear walkthrough of the mechanics.
CAA 2026 kept that architecture and widened who it captures. As Trucker Huss reads the amendment, the disclosure obligation now reaches vendors providing plan design, insurance and insurance-product selection including vision and dental, recordkeeping, medical management, benefits administration selection, stop-loss insurance, third-party administration, pharmacy benefit management, wellness design and management, disease management, transparency tools, group purchasing arrangements, preferred vendor panels, and employee assistance programs. Morgan Lewis frames the same change as PBMs being pulled squarely inside the covered-service-provider definition, with compensation that must be both disclosed and reasonable.
Two things are worth being precise about. The list is broad, but it is a list — a vendor outside those categories, such as outside counsel or a print-and-fulfillment shop, is not a covered service provider and owes you nothing under this section. And the trigger is not the calendar. It is your own signature.
The courts stopped treating this as theoretical
For two years, participant suits over health plan costs failed at the courthouse door. The motion to dismiss in Lewandowski v. Johnson & Johnson (D.N.J., No. 3:24-cv-00671) was granted in late 2025; judgment was entered January 12, 2026 and the plaintiffs filed a notice of appeal on January 16, 2026. Navarro v. Wells Fargo & Co. (D. Minn., No. 0:24-cv-03043) was dismissed a second time on March 3, 2026, with a notice of appeal filed April 1, 2026. Both courts found the alleged injuries too speculative to be concrete — and both rulings are now in front of appellate courts, so neither is the last word.
Then, on March 9, 2026, the Southern District of New York let Stern v. JPMorgan Chase & Co. proceed on the out-of-pocket cost claims. As Jones Day describes the ruling, the court distinguished the earlier dismissals because the plaintiffs pleaded specific overpayments on specific dates at specific markups, and it applied the lower pleading standard for prohibited-transaction claims from Cunningham v. Cornell Univ., 604 U.S. 693 (2025).
That is the first time this theory cleared standing. It does not mean the plaintiffs win, and it does not mean the case is home — the defendants have a motion for judgment on the pleadings pending, with briefing that ran through the summer. What it does show is that the line between a case that ends at the pleadings and one that goes forward was drawn at specificity: what the plan can be shown to have paid, to whom, and when. That is exactly what a compensation disclosure produces.
Worth noting alongside it: in December 2025, financial officers from twelve states wrote to Fortune 500 companies asking them to describe their fiduciary oversight process for health plan vendors. The questions are arriving from more than one direction.
What lands later, and why it changes what you sign now
Two pieces of CAA 2026 do not bite for a while. PBMs must pass through 100 percent of rebates, fees, and other remuneration tied to drug utilization, and a new ERISA § 726 requires semiannual reporting — quarterly on request — to plans with 100 or more participants, covering contracted rates, spread pricing differences, rebate detail, participant cost share, and drugs exceeding $10,000 in gross spend. Both apply to plan years beginning on or after 30 months from enactment: August 3, 2028, which for a calendar-year plan means January 1, 2029. Civil penalties run up to $10,000 per day for late reporting, and up to $100,000 where false information is provided knowingly.
Separately, the Department of Labor proposed Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure (RIN 1210-AB37, docket EBSA-2026-0001) on January 30, 2026. It covers self-insured plans, sets the same $1,000 threshold, requires initial disclosure before contracting plus semiannual reporting of compensation actually received, and gives the responsible fiduciary an annual right to audit the accuracy of what was disclosed. DOL extended the comment period to April 15, 2026 specifically so commenters could address how CAA 2026 changed the picture. As proposed, it would have applied to plan years beginning on or after July 1, 2026. That date has now passed with no final rule published, so the applicability date will move — do not put it on a calendar yet. What the comment record does show is momentum: 45 state attorneys general wrote in support in mid-April 2026, asking mainly that the final rule preserve state PBM laws alongside it.
The reason the 2029 provisions matter today is contract length. A PBM agreement signed this quarter with a three-year term runs straight through the rebate pass-through and § 726 reporting dates. If the contract has no language obliging the vendor to deliver that reporting, you will be renegotiating under deadline pressure instead of now.
What a CFO or HR director should do in the next 90 days
Inventory The Contracts You Are About To Sign. List every group health plan vendor whose agreement is being executed, extended, or renewed between now and January 1. That list is the population that owes you disclosure.
Ask For The Disclosure In Writing, Before Signing. Request the § 408(b)(2) description of services, fiduciary status, and direct and indirect compensation — including what affiliates and subcontractors receive. Put the request in the file with a date on it. The documentation of the request is doing as much work as the answer.
Read What Comes Back Against The Contract Itself. Fee exhibits and schedules do not always match the summary a vendor provides, and per-employee-per-month administrative charges have a way of sitting in a signed schedule long after everyone has stopped discussing them. Reconcile the disclosure line by line to the executed agreement.
Add Forward-Looking Terms Now. Reporting obligations, audit rights, and a mechanism for the § 726 data are cheap to negotiate before signature and expensive afterward.
Put It On The Same Calendar As The Rest Of Your Compliance Work. This sits next to ACA reporting, COBRA administration, nondiscrimination testing, required participant notices, plan documents, and the gag clause prohibition compliance attestation due December 31. One calendar, one owner, one file.
Know What To Do If Nothing Arrives. If a covered service provider does not furnish the disclosure after a written request, ERISA contemplates the fiduciary notifying the Department of Labor and considering whether to terminate the arrangement. Where the answer turns on your specific contracts and facts, that is a question for your ERISA counsel, not a blog post.
None of this is about catching anyone out. ERISA judges fiduciaries on process, not outcomes, and a documented process is the asset. The vendors in a self-funded arrangement multiply quickly — Sun Life’s 2026 high-cost claims report, published May 21, 2026, drew on more than 70,000 high-dollar claims from over 3,300 self-funded employers, and every one of those plans is paying a chain of administrators, networks, pharmacy vendors, and stop-loss carriers. Knowing what each link in that chain earns is now part of the job.
DSG Benefits Group is independent, and we disclose our own compensation and our reasoning as a matter of course. We take time to understand your organization’s objectives and tailor each client’s plan design so it is aligned with those objectives. We do not believe in a one-size-fits-all approach. If you want a second set of eyes on the disclosures you have — or have not — received before you sign your 2027 contracts, let’s talk.
Related reading: What the 2026 Stop-Loss Report Means for Your Renewal · Are Pharmacy Claims Driving Your High-Cost Claims?