IB 
Union Calendar No. 209 
118TH CONGRESS 
1ST SESSION H. R. 4508 
[Report No. 118–259] 
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 
JULY 10, 2023 
Mr. COURTNEY (for himself and Mrs. HOUCHIN) introduced the following bill; 
which was referred to the Committee on Education and the Workforce 
NOVEMBER 1, 2023 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on July 10, 2023] 
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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 re-
quirements. 
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Be it enacted by the Senate and House of Representa-
tives 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 2023’’. 
SEC. 2. CLARIFICATION OF THE APPLICATION OF FEE DIS-
CLOSURE 
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 serv-
ices,’’ and inserting ‘‘Services (including brokerage 
services),’’; and 
(2) in subitem (BB)— 
(A) by striking ‘‘Consulting,’’ and inserting 
‘‘Other services,’’; and 
(B) by inserting ‘‘any of the following:’’ be-
fore ‘‘plan design’’. 
(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 strik-
ing ‘‘, either in the aggregate or by service,’’ and inserting 
‘‘by service’’. 
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SEC. 3. STRENGTHENING DISCLOSURE REQUIREMENTS 
WITH RESPECT TO PHARMACY BENEFIT MAN-
AGERS AND THIRD PARTY ADMINISTRATORS 
FOR GROUP HEALTH PLANS. 
(a) CERTAIN ARRANGEMENTS FOR PBM SERVICES 
CONSIDERED AS INDIRECT.— 
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section 
408(b)(2)(B) of the Employee Retirement Income Se-
curity 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 sub-
paragraph’’; 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 a health 
insurance issuer providing health insurance cov-
erage in connection with the covered plan in 
which the health insurance issuer contracts, in 
connection with such plan, with a service pro-
vider for pharmacy benefit management services 
shall be considered to constitute an indirect fur-
nishing of goods, services, or facilities between 
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the plan and the service provider 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 pe-
riod at the end ‘‘and the terms ‘health insurance cov-
erage’ and ‘health insurance issuer’ have the mean-
ings given such terms in section 733(b)’’. 
(b) SPECIFIC DISCLOSURE REQUIREMENTS WITH RE-
SPECT TO 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) With respect to a contract or ar-
rangement with the covered plan in connection 
with the provision of pharmacy benefit manage-
ment services, as part of the description required 
under subclauses (III) and (IV)— 
‘‘(aa) all compensation described in 
clause (ii)(I)(dd)(AA), including fees, re-
bates, alternative discounts, co-payment off-
sets, and other remuneration expected to be 
received by the covered service provider, an 
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‘‘(AA) administering, invoicing, 
allocating, or collecting rebates related 
to the covered plan; 
‘‘(BB) providing business services 
and activities, including providing ac-
cess to drug utilization data; 
‘‘(CC) keeping a percentage of the 
list price of a drug; or 
‘‘(DD) any other reason related to 
the role of a covered service provider as 
a conduit between the drug manufac-
turers or any other third party and the 
covered plan.’’. 
(2) ANNUAL DISCLOSURE.— 
(A) 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 manage-
ment services, shall disclose, on an annual basis not 
later than 60 days after the beginning of the current 
plan year, to a responsible plan fiduciary, in writing, 
the following with respect to the twelve months pre-
ceding the current plan year: 
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‘‘(aa) All direct compensation described in 
subclause (III) of clause (iii) and indirect com-
pensation described in subclause (IV) of clause 
(iii) received by the covered service provider (in-
cluding such compensation described in subclause 
(VII) of clause (iii)). 
‘‘(bb) For each drug covered under the cov-
ered plan, the amount by which the price for the 
drug paid by the plan exceeds the amount paid 
to pharmacies by the covered service provider. 
‘‘(cc) The total gross spending by the cov-
ered plan on drugs (excluding rebates, discounts, 
or other price concessions). 
‘‘(dd) The total net spending by the covered 
plan on drugs. 
‘‘(ee) The total gross spending at all phar-
macies wholly or partially owned by the covered 
service provider, including mail-order, specialty 
and retail pharmacies, with a breakdown by in-
dividual pharmacy location. 
‘‘(ff) The aggregate amount of clawback 
from pharmacies, including mail-order, spe-
cialty, and retail pharmacies. 
‘‘(AA) 
categorical 
explanations 
(grouped by the reason for clawback, such as 
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contractual true-up provisions, overpay-
ments, 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 
clawbacks. 
‘‘(gg) Total aggregate amounts of fees col-
lected by the covered service provider in connec-
tion with the provision of pharmacy benefit 
management services to the covered plan. 
‘‘(hh) Any other information specified by 
the Secretary through regulations or guidance 
that may be necessary for a responsible plan fi-
duciary to consider the merits of the contract or 
arrangement with the covered service provider 
and 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 manage-
ment services’ includes any services provided by 
a covered service provider to a covered plan with 
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respect to the administration of prescription 
drug benefits under the covered plan, includ-
ing— 
‘‘(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 mainte-
nance; 
‘‘(EE) operation of pharmacies (wheth-
er retail, mail order, specialty drug, or oth-
erwise); recordkeeping; 
‘‘(FF) utilization review; 
‘‘(GG) adjudication of claims; and 
‘‘(HH) any other services specified by 
the Secretary through guidance or rule-
making.’’. 
(4) CLAWBACK DEFINED.—Clause (ii)(I) of sec-
tion 
408(b)(2)(B) 
of 
such 
Act 
(29 
U.S.C. 
1108(b)(2)(B)), as amended by paragraph (3), is 
amended by adding at the end the following: 
‘‘(hh) The term ‘clawback’ means amounts 
collected by a pharmacy benefit manager from a 
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pharmacy for copayments collected from a par-
ticipant or beneficiary in excess of the contracted 
rate.’’. 
(c) SPECIFIC DISCLOSURE REQUIREMENTS WITH RE-
SPECT 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 amended by add-
ing at the end the following: 
‘‘(VIII) With respect to a contract or arrange-
ment 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 re-
ceived from providers and facilities, including 
the amounts that will be retained by the covered 
service provider as a fee; 
‘‘(bb) the amount and form of fees expected 
to be received from other service providers in re-
lation to the covered plan, including the amounts 
that will be retained by the covered service pro-
vider as a fee; and 
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‘‘(cc) the amount and form of expected re-
coveries by the covered service provider, includ-
ing the amounts that will be retained by the cov-
ered service provider as a fee (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 add-
ing 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 begin-
ning of the current plan year, to a responsible plan 
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‘‘(gg) Any other information specified by 
the Secretary through regulations or guidance 
that may be necessary for a responsible plan fi-
duciary to consider the merits of the contract or 
arrangement with the covered service provider 
and 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 paragraphs (3) and 
(4) of subsection (b), is amended by adding at the end 
the following: 
‘‘(ii) 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 administra-
tion of health benefits under the covered plan, in-
cluding— 
‘‘(AA) the processing, repricing, and 
payment of claims; 
‘‘(BB) design, creation, and mainte-
nance of provider networks; 
‘‘(CC) negotiation of discounts off gross 
rates; 
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‘‘(DD) benefit and plan design; nego-
tiation 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 simi-
lar agreement or specified by the Secretary 
through guidance or rulemaking.’’. 
(d) RULE OF CONSTRUCTION.—Nothing in the amend-
ments 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. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on January 1, 2025. 
SEC. 4. IMPLEMENTATION. 
Not later than 1 year after the date of enactment of 
this Act, the Secretary of Labor shall issue notice and com-
ment rulemaking as necessary to implement the provisions 
of this Act. The Secretary shall ensure that such rule-
making— 
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(1) accounts for the varied compensation prac-
tices of covered service providers (as defined under 
section 408(b)(2)(B); and 
(2) establishes standards for the disclosure of ex-
pected compensation by such covered service pro-
viders. 
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Union Calendar No. 209 
118TH CONGRESS 
1ST SESSION 
H. R. 4508 
[Report No. 118–259] 
A BILL 
To amend the Employee Retirement Income Secu-
rity Act of 1974 to clarify and strengthen the ap-
plication of certain employer-sponsored health 
plan disclosure requirements. 
NOVEMBER 1, 2023 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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