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2026 CAA Imposes PBM Transparency and Rebate Pass-Through Requirements

The Consolidated Appropriations Act of 2026 (enacted February 3, 2026) formally designates pharmacy benefit managers (PBMs) as "covered service providers" under ERISA, subjecting them to new reporting and transparency requirements. PBMs must provide detailed drug-level reports to large group health plans (100+ participants) and summary documents to all group health plans, at least every six months. The law mandates that PBMs pass through 100% of rebates, fees, alternative discounts, and other drug-related remuneration to plans or health insurers, with quarterly remittance required no later than 90 days after quarter close. Compliance with reporting requirements begins for plan years after August 3, 2028 (January 1, 2029 for calendar-year plans), while the rebate pass-through applies to contracts entered or renewed on or after that date.

Powell v. Ocwen Financial Corp. — ERISA Plan Assets and RMBS Trust Certificates

The Second Circuit partially affirmed and partially vacated the Southern District of New York's summary judgment in Powell v. Ocwen Financial Corp., a case brought by trustees of an ERISA-regulated pension fund against mortgage servicers for alleged breach of fiduciary duty regarding residential mortgage-backed securities investments. The court held that mortgages underlying RMBS notes issued under indenture agreements lack substantial equity features and therefore are not plan assets under the DOL's plan-asset regulation (29 C.F.R. § 2510.3-101). However, the court held that mortgages underlying RMBS trust certificates do represent equity interests and therefore qualify as plan assets under ERISA's look-through exception. The case was remanded for further proceedings on the certificate-based investments.