The Compliance Download, November Vol. 2: Preparing for 2027 – PBM Transparency and IRS Limit Updates

As 2027 planning gets underway, two federal updates belong on your agenda: a new Department of Labor (DOL) rule requiring pharmacy benefit managers (PBMs) to disclose their fees and compensation, and the IRS’s 2027 limits for several tax-favored benefits.

New DOL Rule Requires PBM Fee Disclosures: Do You Know What You’re Paying For?

What’s the issue: The Department of Labor has issued a final rule requiring pharmacy benefit managers (PBMs) and certain affiliated brokers and consultants to disclose fees, compensation, and potential conflicts of interest to fiduciaries of large, self-insured group health plans. The rule is designed to improve transparency around PBM compensation and other arrangements that can affect plan costs. It generally covers providers that contract with self-insured plans that have at least 100 participants, or plans sponsored by employers with at least 100 employees, and that expect to receive $1,000 or more in compensation. The rule applies to plan years beginning on or after July 1, 2027.

What PBMs must provide:

• Upfront disclosures: Before a plan enters into, extends, or renews an arrangement (at least 90 days in advance is considered reasonable for a renewal), PBMs must describe their services and all direct and indirect compensation, including manufacturer payments and spread compensation, formulary placement incentives, and how much of each payment they keep versus pass through to the plan.
• Ongoing reporting: PBMs must report actual compensation within 30 days after each six-month period, or quarterly if the plan asks, and explain any compensation that runs 5% or more above what was disclosed.
• Audit rights: Plans may audit their PBM at least once a year and choose their own auditor. The PBM must acknowledge the request within 10 business days and generally produce the information within 60 calendar days.

Why it matters: Prescription drug costs remain one of the largest health plan expenses, yet many plan sponsors have limited visibility into how PBMs are compensated. The new disclosure requirements are intended to help you determine whether PBM arrangements and fees are reasonable under ERISA. For more on why oversight matters, read You Can’t Oversee What You Can’t See.

Bottom line: The new rule gives you greater visibility into PBM compensation and stronger tools to evaluate pharmacy benefit costs. Taking time now to understand your PBM arrangements will position your health plan to effectively manage costs and negotiate future terms.

Download the PBM Rule Summary (PDF)

Source: DOL Fact Sheet: Pharmacy Benefit Manager Fee Disclosure Final Rule

2027 IRS Benefit Limits for FSAs, Commuter Benefits, QSEHRAs and More

The IRS recently released its 2027 inflation-adjusted limits for many employer-sponsored benefits in Revenue Procedure 2026-35. Several key limits will increase beginning in 2027. The table below outlines these changes:

Benefit Programs	2026	2027
Health FSA Salary Reduction Contributions	$3,400	$3,500
Health FSA Carryover Limit	$680	$700
Qualified Transportation and Parking Benefits (monthly)	$340	$350
QSEHRA Reimbursement (Self-Only)	$6,450	$6,700
QSEHRA Reimbursement (Family Coverage)	$13,100	$13,550
Adoption Assistance	$17,670	$18,250
Employer-Provided Childcare Tax Credit*	$500,000	$515,943.67

*$619,132.40 if the employer is an eligible small business

What to do now:

• Review health FSA administration: Confirm the new $3,500 contribution limit and $700 carryover maximum are updated in enrollment systems, payroll platforms, and employee communications.
• Verify transportation benefit limits: Work with payroll and benefit administrators to implement the new $350 monthly maximum for commuter and qualified parking benefits.
• Assess QSEHRA programs: Make sure plan documents, notices, and administration reflect the new reimbursement caps.
• Update employee communications: Review open enrollment materials, summary plan descriptions, and educational resources for consistency with the 2027 limits.
• Coordinate with vendors: Engage benefit administrators, payroll providers, and third-party administrators early so system updates are in place before the new plan year.

Download the 2027 IRS Limits Summary (PDF)

Source: IRS Revenue Procedure 2026-35

Frequently Asked Questions

When does the DOL PBM fee disclosure rule apply?

The rule applies to plan years beginning on or after July 1, 2027.

Which health plans does the PBM rule cover?

It generally covers self-insured group health plans with at least 100 participants, or plans sponsored by employers with at least 100 employees.

What is the 2027 health FSA contribution limit?

The 2027 limit is $3,500, up from $3,400 in 2026. For plans that allow carryovers, the maximum carryover rises to $700.

What is the 2027 commuter benefit limit?

The monthly limit for qualified transportation and qualified parking benefits rises to $350 in 2027, up from $340.

Questions about how these updates affect your plans? Connect with us or learn more about Bolton’s Health practice.