Policy Experts Continue to Urge the DOL to Prevent Harm to Small Businesses 

This week marked the 6-month anniversary of the Consolidated Appropriations Act (CAA), which included the most comprehensive, sweeping pharmacy benefit manager (PBM) reform in history. Within the wide-ranging law are several provisions focused on expanding the transparency that America’s employers, unions, and the government have into their pharmacy benefits.

Yet progress in this space is being threatened by a pending Department of Labor (DOL) rule that economist Ike Brannon called “the most expensive kind: a rule whose costs are buried in the paperwork itself,” in a new op-ed.

Just how redundant is the DOL proposal? A new graphic outlines the transparency policy provisions that overlap between the enacted CAA and the proposed DOL rule:

Brannon underscored this redundancy in his piece, arguing that “Congress already addressed PBM transparency comprehensively with a provision in the CAA” and goes on to explain why the DOL rule will put unnecessary burdens on America’s small employers, while directly conflicting with the thoughtful timeline enacted by Congress:

“That redundancy would be a reason for indifference if it were free, but it is not. Most of the CAA’s provisions phase in over the next several years, with the central requirements taking effect for plan years beginning in 2028 and 2029; the DOL rule starts sooner and would impose its own categories, formats, and timing. As a result, employers will be forced to sign up to build compliance infrastructure twice…  

For a large plan sponsor with a benefits department, that would constitute a mere waste of time. For a small employer without dedicated benefits staff, the compliance cost is heavy enough to drive them out of self-insuring altogether.” 

He concludes by pointing out that “importantly, none of this affects what employers pay for drugs.” And he urges the DOL to stop the pending rule from harming small businesses, remarking, “the DOL can still prevent this by withdrawing the rule and rewriting it to implement the law we now have.” 

Download the graphic HERE.

And read Ike Brannon’s full op-ed HERE.