Early into Q1-2026, some major changes were brought to pharmacy benefits. The Federal Trade Commission (FTC) reached a major settlement with Express Scripts, Congress passed new pharmacy benefit manager (PBM) reform laws, and the Department of Labor proposed new rules requiring more transparency about PBM payments.
Together, these actions move PBM reform from just a policy discussion to something that employers and health plans will need to actively manage and monitor. Here’s what changed and why it matters:
FTC Settlement with Express Scripts: The settlement requires Express Scripts to stop tying its compensation to the price of drugs, offer transparent “pass-through” pricing, calculate patient cost-sharing based on the drug’s net price instead of the higher list price, and provide drug-level reporting to plan sponsors. The FTC estimates this could save up to $7 billion on insulin alone over 10 years. Similar cases involving Caremark and OptumRx are scheduled for hearings in June 2026.
New PBM Reform Law in the 2026 Federal Spending Bill: The law requires PBMs to pass 100% of manufacturer rebates back to health plans and insurers. It also requires PBMs to send rebates to plans quarterly, with full rights for plans to audit the payments. However, PBM ownership of pharmacies (specialty, mail, or retail) is not prohibited, nor are fees for rebate aggregation. It also attempts to make PBMs “covered entities” and thus accountable under ERISA and, in turn, subject to fines for non-compliance. These regs would not kick in until 2028, and like the below transparency rules, are likely to be heavily litigated between now and then.
Proposed Department of Labor Transparency Rules: PBMs would have to disclose all forms of compensation they receive, including rebates from manufacturers, spread pricing revenue, group purchasing organization (GPO) income, and payments through related companies, to employer health plans governed by ERISA. If PBMs fail to disclose this information, the contract could be considered a prohibited transaction under ERISA.
Launch of TrumpRx: A new government website offering direct-to-consumer discounts on 43 brand-name drugs, including GLP-1 medications. These are cash-pay options only and do not work with employer health plans, so the immediate impact on employer benefits is limited but worth watching. That said, there are multiple emerging avenues for employer self-funded plans to access the “cash prices,” a welcome development of interest to US-Rx and our clients.
Launch of Oral Wegovy: The first daily pill version of a GLP-1 weight-loss drug is now available. Another oral GLP-1, orforglipron, may receive FDA approval in Q2 2026, which could further increase demand for these medications.
Bottom Line for Plan Sponsors
Fiduciary responsibility around pharmacy benefits is no longer optional. Employers now need to make sure their PBM arrangements are transparent and meet stricter disclosure requirements. If they don’t, they could face compliance risks under ERISA.
The traditional rebate-driven PBM model is also starting to fade. The industry is being forced toward more transparent approaches, like pass-through pricing, PBM payments that aren’t tied to drug prices, and benefit designs based on the drug’s net cost rather than the higher list price. What this will all translate into practice after being litigated in the courts has yet to be seen.
Quarterly Pulse: Trends Shaping the Next 90 Days
The Express Scripts Settlement: What Employers Need to Know Now
In February 2026, the Federal Trade Commission (FTC) announced what it described as a major settlement with Express Scripts. The FTC had accused the company of helping drive up the list prices of insulin and other drugs by using rebate practices that limited competition.
Although the case focused mainly on insulin, the changes required under the settlement apply to all drugs managed by Express Scripts. Because of its broad impact, this is considered one of the most significant regulatory actions against a pharmacy benefit manager (PBM) in decades.
Key Settlement Provisions
Net-Price Benefit Design: Express Scripts must offer plans under which the amount patients pay (copays, coinsurance, or deductibles) is based on the actual net price of the drug, not the higher list price. This helps prevent patients from paying inflated out-of-pocket costs tied to high list prices.
Formulary Reform: Express Scripts can no longer structure its standard formulary in a way that favors high-list-price drugs over lower-priced versions of the same medication. This is meant to stop the so-called “rebate trap” that has historically made it harder for lower-cost biosimilars and generics to compete.
Delinked Compensation: Payments that Express Scripts receives from drug manufacturers can no longer be tied to the price of the drug. This removes the incentive to prefer drugs with higher list prices simply because they produce bigger rebates.
Pass-Through Pricing: Express Scripts must give plan sponsors the option to move away from rebate guarantees and spread pricing. Starting in 2028, the company will also need to pass rebates and discounts directly to patients at the pharmacy counter as its standard model.
Transparency and Reporting: Express Scripts must provide automated, drug-level reporting to plan sponsors, including annual cost reports and claim-level data. This helps employers better understand their pharmacy spending and evaluate whether their PBM arrangement meets ERISA fiduciary expectations.
GPO Relocation: Express Scripts’ group purchasing organization, Ascent Health Services, must move its negotiation operations, not its headquarters, from Switzerland to the United States.
Compliance Monitor: An independent monitor will oversee Express Scripts’ compliance with the settlement for three years.
The settlement also requires Express Scripts to assist the FTC in its ongoing case against CVS Caremark and OptumRx, including providing witnesses for depositions and trial. A key evidentiary hearing for those two PBMs is scheduled in June 2026.
What This Means for Employers
If your plan uses Express Scripts, you should expect meaningful changes to how formularies are designed, how drugs are priced, how reporting is provided, and the fee structure starting in 2028. Employers should take a proactive look at their PBM contracts and evaluate what it would mean financially to move away from a rebate-driven model to a fee-for-service PBM structure.
If your plan uses Caremark or OptumRx, the Express Scripts settlement could signal what’s coming next. CVS has already indicated it is in discussions with regulators. Employers may want to begin reviewing their PBMs ’ level of transparency and fiduciary alignment now rather than waiting for regulatory changes to force the issue.
For employers overall, the settlement reinforces practices that fiduciary-focused PBMs, such as US-Rx Care, have already adopted. Models built around de-conflicted compensation, pass-through pricing, and full transparency are no longer unique features; they are quickly becoming the minimum standard expected by regulators and plan sponsors alike.
TrumpRx: Headline Grabber or Game Changer?
Launched after the Express Scripts settlement, TrumpRx is a new website that gathers manufacturer discounts and coupons for 43 brand-name drugs and makes them available directly to consumers. The platform advertises large cash discounts on well-known medications such as Wegovy, Zepbound, Ozempic, insulin products, fertility drugs, and treatments for autoimmune conditions.
Some of the pricing looks dramatic, for example, oral Wegovy is listed at about $149 per month compared to a $1,349 list price. However, employer plan sponsors should understand a few important limitations:
Cash-Pay Only: These discounts are intended only for people paying out of pocket. Purchases made through TrumpRx are not intended to go through employer insurance and do not count toward deductibles or out-of-pocket maximums.
Not an Online Pharmacy: The site doesn’t sell drugs itself. It simply gathers coupons and redirects users to manufacturer websites or pharmacy partners where they can buy the medication.
Limited List of Drugs: Right now, the platform only includes 43 medications. Most prescriptions in the U.S. are for generics, and those are not included. Many of the drugs listed are brands for which generics have been on the market for decades.
Separate from Employer Health Plans: Unless new laws are passed allowing these purchases to be covered under health plans, TrumpRx doesn’t really integrate with employer benefits. A proposal called the “Great Healthcare Plan” could change that, but it hasn’t been passed. That said, the Express Scripts settlement specifically says that Express Scripts is expected to access Trump Rx prices, which suggests future intent to open these cash prices directly to self-insured employers’ plans. As noted above, there are multiple options emerging to achieve that end today.
For employers, the biggest issue may be employee confusion. People might see much lower prices for drugs like GLP-1s on TrumpRx and wonder why their insurance plan appears more expensive. Clear communication will be important to explain why insurance copays can differ from cash-pay manufacturer discounts.
US-Rx Care Perspective
TrumpRx is essentially a coupon website, like GoodRx, but with government branding. However, the direct-to-consumer cash prices offer deeper discounts than are achieved through discounts, rebates, and copay assistance, so access to those prices for employers offers good value.
For employer health plans, the Express Scripts settlement represents a potential sea change for the traditional PBM model. As do the Department of Labor’s proposed transparency rules and the PBM reforms included in the 2026 Consolidated Appropriations Act. Those changes are likely to have a significant impact on how pharmacy benefits are priced, managed, and monitored going forward unless they are shot down or watered down through litigation.
DOL’s ERISA Proposed Rule: The Fiduciary Reckoning
In January 2026, the U.S. Department of Labor proposed new rules under the Employee Retirement Income Security Act of 1974 (ERISA) that would require pharmacy benefit managers (PBMs), along with related brokers and consultants, to clearly disclose how they are paid to the employers who oversee self-insured health plans. This is the first time the Department of Labor has applied its service-provider transparency rules directly to PBMs.
Under the proposal, PBMs would have to disclose things like:
What pharmacy benefit services do they provide
What does the health plan pay them directly?
Funds they receive from drug manufacturers and rebate aggregators
Revenue from spread pricing, group purchasing organization (GPO) arrangements, and payments involving related companies
Any compensation paid to affiliated brokers or consultants
These disclosures would need to be provided before signing a service contract and then updated twice a year.
Importantly, if a PBM does not provide these disclosures, the contract may no longer qualify for an exemption under ERISA’s prohibited transaction rules. That means the contract itself could be considered a violation of ERISA, and plan fiduciaries (the employers responsible for the plan) could potentially face personal liability if they fail to obtain or act on the information.
Separately, the Consolidated Appropriations Act of 2026 reinforces these transparency efforts. It requires PBMs to pass through 100% of manufacturer rebates to health plans and insurers, send those payments quarterly, and allow plans to audit the payments. If PBMs fail to follow these requirements, it can create another type of prohibited transaction risk under ERISA.
Action Items for Plan Fiduciaries
Take a close look at your current PBM contract. Does it clearly show how the PBM is paid, allow your plan to audit the financials, and ensure that all manufacturer revenue, not just “rebates,” is passed back to the plan? If not, it may be a good time to start that conversation with your PBM. If the PBM makes more money when the plan costs go up, that should also be a reason for concern.
Comments on the proposed rule from the U.S. Department of Labor are due April 2026. If the rule is finalized as written, it would apply to health plan benefit years starting on or after July 2028.
Employers working with a fiduciary PBM such as US-Rx Care may already be well-positioned for these changes. The company has operated under a fiduciary model since 2007, built around full transparency, no spread pricing, no keeping rebates, and avoiding conflicts of interest. To date, US-Rx Care has been compliant both before and after all State and Federal regulations aimed at the traditional PBM model.
From the Pharmacist’s Desk
GLP-1s in 2026: The Coverage Crossroads
GLP-1 drugs are now the single biggest factor driving employer pharmacy costs. With the daily oral Wegovy available, Eli Lilly’s orforglipron possibly launching mid-year, and more medical uses approved beyond diabetes and weight loss, employers are under increasing pressure to set a sustainable coverage strategy.
What’s New in Q1 2026
Oral Wegovy Launched: The first daily pill for weight management, showing about 16.6% average weight loss in clinical trials. Taking away the injection requirement is expected to significantly increase demand.
Orforglipron Nears Approval: A new oral GLP-1 from Eli Lilly could be approved by the FDA in Q2 2026. As a small molecule, it may cost less to make, potentially lowering prices.
CagriSema (cagrilintide/semaglutide): Novo Nordisk’s next-generation dual-action injectable is in late-stage trials, with FDA decisions expected in 2026.
Expanding Indications: Beyond diabetes and weight loss, GLP-1s now have approvals for cardiovascular risk reduction (Wegovy), obstructive sleep apnea (Zepbound), chronic kidney disease (Ozempic), and MASH/liver fibrosis (Wegovy).
The Employer Coverage Dilemma
Coverage is inconsistent among employers. Nearly 20% of large employers now cover GLP-1s for weight loss, especially the largest firms. But many employers are tightening coverage due to high costs.
List prices exceed $1,000/month, making GLP-1s a leading driver of pharmacy spending.
Manufacturers offer direct-to-consumer discounts of around $350–$500/month, and TrumpRx lists oral Wegovy at $149/month, creating noticeable price differences for members.
One Other Drug Class to Watch: Adalimumab Biosimilars
The adalimumab biosimilar market is at a turning point. By late 2024, biosimilars captured 23% of adalimumab prescriptions, mostly through co-branded strategies. With PBMs like ESI and Optum launching their own co-branded options and the FTC settlement requiring fair access, biosimilars should become easier to use.
However, AbbVie’s newer drugs, Skyrizi and Rinvoq, now outsell biosimilars by more than 8 to 1, reducing the market for adalimumab biosimilars. Employers need to ensure formularies capture biosimilar savings while also managing spending on Skyrizi and Rinvoq.
For plans that haven’t adopted a biosimilar-first strategy, recent regulatory changes (ESI settlement and CAA 2026) create a chance to act.
US-Rx Care has operated as a fiduciary PBM since 2007, following the same ERISA standards that govern plan sponsors. That means:
Fiduciary Commitment: US-Rx Care contractually acts in the best interest of the plan sponsor and its members. All decisions related to pharmacy benefit management are made with the sole objective of lowering costs and improving member outcomes, free from financial incentives that could conflict with the plan’s interests.
No Conflicts of Interest: US-Rx Care doesn’t make money from markups, rebates, spread pricing, or dispensing. It doesn’t own a mail-order or specialty pharmacy, and there are no manufacturing programs that create financial conflicts.
100% Pass-Through: All rebates and discounts from manufacturers go directly to the plan. This has always been the company’s approach, not something done in response to regulations.
Full Transparency: Employers get complete, drug-level reporting, exactly what the DOL now wants all PBMs to provide.
Proven Results: Clients often see 30–50%+ reductions in pharmacy spending without changing benefits or disrupting members.
With new federal rules essentially requiring what US-Rx Care has always done, employers renewing their PBM contract have a simple choice: partner with a PBM whose model is already built to be compliant and aligned with plan interests.
The Conference Collection
Q1 2026 US-Rx Care Pulse
The first few months of 2026 have been busy for the US-Rx Care team, including attending and speaking at several industry events across the pharmacy benefits landscape. Some industry events we’ve attended:
IFEBP Health Benefits Conference + Expo (Ponte Vedra Beach, FL | Jan 20–22)
Ascend (Nashville, TN | Jan 27–30)
You Powered Benefit Symposium (Savannah, GA | Feb 1–4)
Washington Health Alliance: Driving Accountability and Innovation in PBM (Seattle, WA | Feb 4)
National Labor Management Conference (Hollywood, FL | Feb 12–17)
HCAA Executive Forum (San Antonio, TX | Feb 23–25)
NABIP Capitol Conference (Washington, DC | Feb 23)
Advisory Board Meeting (Orlando, FL | Mar 2–4)
PayerAlly Employer & Health Plan Conference (New York, NY | Mar 17–19)
AHIP Medicare Conference (Washington, DC | Mar 23–25)
SIIA Spring Exchange (New Orleans, LA | Mar 30–Apr 1)
Q2 2026 Where You’ll Find the US-Rx Care Team
Looking ahead, the US-Rx Care team will continue engaging with employers, consultants, and healthcare leaders across the country to discuss pharmacy benefit strategy, cost management, and fiduciary PBM practices. Upcoming industry events include:
Southwest Benefits Association Conference (Oklahoma | May 6–8)
Florida Alliance Annual Conference (Orlando, FL | May 13)
Medicare Stars, HEDIS, Quality & Risk Summit (Chicago, IL | Jun 2–4)
GPBCH Annual Conference (Philadelphia, PA | Jun 4)
Ascend (Nashville, TN | Jun 8–9)
National Alliance of Healthcare Purchaser Coalitions Summit (St. Louis, MO | Jun 8–9)
NABIP Annual Convention (Atlantic City, NJ | Jun 27–30)
We look forward to connecting with employers, advisors, and industry partners throughout the year and hope to see many of you at these upcoming events.
Coming Soon Near You
As part of our continued commitment to delivering greater transparency, cost efficiency, and member experience, US-Rx Care is evaluating several enhancements targeted for implementation in 2026. These initiatives are designed to further strengthen plan performance while improving the pharmacy benefit experience for both plan sponsors and members.
Expanded Specialty Pharmacy Network Optimization
US-Rx Care is exploring the expansion of its specialty pharmacy network beyond our current 15 contracted specialty pharmacies to further strengthen our ability to identify the most cost-effective dispensing option for each specialty medication. By increasing network visibility and leveraging competitive pharmacy pricing, it is possible to ensure plans consistently access the lowest net cost specialty drug options while maintaining high standards of patient care and clinical oversight.
Enhanced Member Portal Experience
Enhancements to the member portal are in the works to provide members with greater real-time transparency and engagement with their pharmacy benefits. Planned improvements include expanded visibility into prior authorization status and other benefit details, allowing members to more easily track the progress of their prescriptions through the prior authorization process, as well as better understand their coverage, cost, and cost-saving alternatives.
Access to Manufacturer Direct Pricing
US-Rx Care is also evaluating expanded access to manufacturer-direct pricing opportunities. The goal is to provide access to medications at pricing negotiated directly with manufacturers, helping reduce overall drug costs while maintaining transparency in the supply chain and visibility as a plan sponsor.
Upcoming Webinar
Lastly, US-Rx Care is hosting a webinar on May 28 at 2:00 PM ET to cover the impact of the FTC settlement, PBM reform law, and DOL proposed rule for employers. Panelists include Darren Fogarty, Associate Director, Purchaser Value and Policy at PBGH, and Shawn Gremminger, President & CEO of the National Alliance of Healthcare Purchaser Coalitions.
The Federal Trade Commission’s recent settlement with Express Scripts quickly became one of the most discussed developments in the PBM industry. While the headlines focused on insulin pricing, the broader conversation is about something larger: the future of PBM accountability.
The announcement itself is not brand new. What becomes important over the following weeks is understanding the broader implications. As the initial reaction settles, employers and advisors are left with more practical questions about what this means for their own plans. That is why we are addressing it now.
At US-Rx, we believe these developments deserve thoughtful analysis, not quick commentary. The details of the settlement matter, but so does the larger conversation it prompts about incentives, transparency, and alignment in pharmacy benefits.
For employers and advisors, this is worth paying attention to. Not because it is dramatic, but because it brings long-standing structural concerns into public view.
You can review the FTC’s official announcement here.
Understanding the Core Allegations
The settlement addressed allegations that Express Scripts favored higher-cost branded insulins over lower-cost alternatives when building its formularies. The concern was that rebate arrangements tied to list prices may have influenced those decisions. To understand
why this connects directly to the future of PBM accountability, it helps to look at how many traditional PBM contracts operate.
Manufacturers often pay rebates that are calculated as a percentage of a drug’s list price. Higher list prices can produce larger rebate checks. Depending on the structure of a contract, a PBM may retain a portion of the rebate or incorporate it into pricing guarantees.
Over time, this can create tension within the model. If revenue is connected to list price magnitude, higher-priced drugs may generate more income than lower-cost options. Patients with deductibles or coinsurance often pay cost-sharing based on the list price rather than the net price after rebates. Employers may see pharmacy spend increase even when reported rebate totals appear substantial.
For organizations evaluating alternatives, many look toward a transparent pass-through pharmacy structure that removes retained rebate economics and aligns incentives more directly with total cost reduction. The regulatory attention surrounding this case reflects growing concern that incentive design, not just isolated decisions, can influence cost trajectories.
Why This Could Influence the Broader Market
Large PBMs operate complex, vertically integrated models. Rebates are only one piece of the equation, but they have historically played a meaningful role in revenue generation. If rebate practices face tighter oversight, PBMs may adjust how they generate margin. Specialty pharmacy, mail order dispensing, and administrative fee structures already represent significant revenue channels. Greater scrutiny of rebate economics could increase focus on those areas.
For employers, the important point is this: understanding a PBM relationship requires looking at the entire economic model. If one source of revenue tightens, another may expand. Alignment depends on how the model is built from the start.
This is why many plan sponsors choose to formally evaluate their PBM contract and overall incentive alignment rather than focusing on a single pricing lever.
The Regulatory Environment Is Evolving
This settlement arrives during a period of sustained federal and state interest in PBM practices. Other large organizations remain under investigation, and legislative proposals continue to circulate.
Employers are also more aware of pharmacy trend then they were even a few years ago. Pharmacy benefits now represent a significant and growing share of health plan costs.
Advisors are fielding more questions about transparency, oversight, and fiduciary responsibility. That broader environment makes this moment more consequential than a single enforcement action might suggest.
Questions Employers Should Be Asking
Events like this tend to prompt internal review, which is healthy.
Employers may want to revisit how their formularies are constructed and whether financial incentives influence drug placement. They may want to confirm that rebates are fully passed through and that spread pricing is eliminated. It is also worth examining where revenue is generated across specialty, mail order, and affiliated entities.
None of these questions are accusatory. They are part of responsible plan governance. Increased scrutiny raises the standard for understanding how pharmacy contracts operate.
Where the Fiduciary Model Differs
The concerns highlighted in the settlement revolve around incentive structure. When revenue depends on higher list prices, rebate retention, or dispensing spreads, employers may be exposed to costs that are not immediately transparent.
US-Rx was built with the future of accountability in mind.
Our compensation is not tied to drug list prices. We do not engage in spread pricing, and rebates are passed through in full. Revenue is structured to align with reducing total pharmacy spend for plan sponsors rather than benefiting from higher prices. You can learn more about our fiduciary pharmacy model here.
The economic structure is independent of manufacturer rebate magnitude and dispensing spreads; clients are insulated from many of the conflicts that have drawn regulatory attention.
Looking Ahead
The Express Scripts settlement will not resolve every rebate surrounding PBM practices. It does, however, bring incentive alignment into sharper focus for regulators, employers, and advisors. For plan sponsors, this is an opportunity to examine pharmacy relationships with a more detailed understanding of how revenue flows through the system. For advisors, it reinforces the importance of recommending models built on structural alignment rather than rebate maximization.
At US-Rx, we will continue to monitor these developments carefully and contribute to the broader industry discussion. Pharmacy benefits represent too significant a component of healthcare spend for incentive design to remain secondary.
As employers face rapidly rising health insurance costs for their employees, industry pundits are increasingly urging benefit leaders to confront “stealth” cost drivers that quietly inflate spending year after year.
While headline issues like premium increases draw the most attention, some of the most meaningful opportunities to control costs lie in areas that are often underinvested or poorly integrated into benefit strategies.
Addiction support services
Behavioral health, and particularly substance use disorders, remains one of the most expensive and least efficiently managed areas of employer-sponsored health care.
Untreated mental health and addiction issues contribute to higher medical claims, absenteeism and lost productivity. According to the Center for Prevention and Health Services, untreated mental health concerns can cost a single organization tens of thousands of dollars annually and amount to more than $100 billion nationwide.
Despite those figures, addiction and recovery services have historically received less attention than other wellness initiatives. Inpatient treatment models can be disruptive for employees and expensive for employers, while high relapse rates have made some organizations hesitant to invest more heavily in this space.
Employer actions: As a result, employers are increasingly looking at more structured, accountable recovery programs that focus on ongoing support, medication-assisted treatment and measurable outcomes.
Improving access to specialty care
Employees may technically have coverage, but long wait times for specialists can delay treatment and worsen underlying conditions. Nationally, more than 100 million specialty referrals are issued each year, yet patients in many metropolitan areas wait more than a month to see specialists such as gastroenterologists, dermatologists or cardiologists.
When employees cannot access specialty care in a timely manner, they are more likely to rely on emergency rooms or urgent care, which drives up costs.
Employer actions: Some employers are responding by supplementing traditional plans with specialty telehealth solutions or third-party platforms that shorten wait times and improve care coordination.
Consider surveying employees to identify gaps in access and understand whether additional solutions are warranted.
Accessing plan analytics to tailor benefits
Because many organizations still design benefits based on assumptions rather than real utilization patterns, only a small share of workers report being truly satisfied with their benefits — suggesting a disconnect between what is offered and what is needed.
Employer actions: Use carrier-provided tools, if available, such as reporting dashboards, health risk assessments or plan modeling software. Review claims data at least quarterly to identify cost trends, any under- or overutilization, emerging risks or cost anomalies.
Understanding which programs are being used, where employees are falling through the cracks and which interventions are producing results allows organizations to refine benefits with greater precision and financial discipline.
The takeaway
Rising health care costs are unlikely to ease in the near term, but employers are not without options. While there are many areas that can be addressed, focusing on emerging cost-containment efforts could be a winning strategy for employers.
When people sign up for a new health insurance plan, be that an employer-sponsored plan or one purchased on the Affordable Care Act (ACA) exchange, they can often be confused about when coverage starts, what is covered and whether they have to share in the medical bills.
The Kaiser Family Foundation recently compiled a list of seven takeaways from stories about people who ended up paying large out-of-pocket expenses for medical care. Health plan enrollees should read the following to learn how they can better use their plan and avoid financial blowback.
1. Most insurance coverage doesn’t start immediately
Many new plans come with waiting periods, so it’s important to maintain continuous coverage until a new plan kicks in.
One exception: An employee can opt into a COBRA policy or purchase a plan on the ACA marketplace (healthcare.gov or a state-run plan in certain states) within 60 days of losing their job-based coverage. With COBRA, once you pay, the coverage applies retroactively, even for care received while you were temporarily uninsured.
They will also qualify for a special enrollment period on the ACA marketplace to get coverage for the rest of the year. Coverage can start the first day of the month after someone loses their employer-sponsored coverage.
2. Check coverage before checking in
Some plans come with unexpected restrictions, potentially affecting coverage for care ranging from contraception to immunizations and cancer screenings.
Enrollees should call their insurer — or, for job-based insurance, their human resources department or retiree benefits office — and ask whether there are exclusions for the care they need, including per-day or per-policy-period caps, and what they can expect to pay out-of-pocket.
3. ‘Covered’ does not mean insurance will pay
Carefully read the fine print on network gap exceptions, prior authorizations and other insurance approvals. The terms may be limited to certain doctors, services and dates.
Also, while the service may be covered, sometimes it won’t be until the deductible or out-of-pocket maximum is met.
4. Get estimates for nonemergency procedures
Before scheduling a nonemergency procedure, an enrollee may be able to shop around among different providers that offer the procedure. Request estimates in writing and if an enrollee objects to the price, they should negotiate before undergoing care.
5. Location matters
Prices can vary depending on where a patient receives care and where tests are performed. If a patient needs blood work, they should ask their doctor to send the requisition to an in-network lab.
A doctor’s office connected to a health system, for instance, may send samples to a hospital lab, which can mean higher charges if it’s not in-network.
6. When admitted, contact the billing office early
When an enrollee or a loved one has been hospitalized, it can help to speak to a billing representative if possible. Questions to ask:
Has the patient been fully admitted or are they being kept under observation status?
Has the care been determined to be “medically necessary?”
If a transfer to another facility is recommended, is the ambulance service in-network or is it possible to choose one that is?
7. Ask for a discount
Medical charges are almost always higher than what insurers would pay, and providers expect them to negotiate lower rates. Health plan enrollees can also negotiate.
Uninsured or underinsured patients may be eligible for self-pay or charity care discounts.
Applicable large employers face a familiar but unforgiving task each winter: reporting their group health coverage details to the IRS. With key ACA Affordable Care Act filing deadlines falling in early 2026, employers with 50 or more full-time equivalent employees should already be reviewing records, reconciling data and preparing required forms to avoid penalties.
ACA reporting is largely about accuracy and timing, and problems often stem from waiting too long to pull information together. Here’s how to get it right and avoid penalties.
Who must report and why
An applicable large employer, or ALE, is generally an employer that averaged at least 50 full-time employees, including full-time equivalents, during the prior calendar year. Employers that met that threshold in 2025 must comply with ACA employer shared responsibility reporting in 2026.
ALEs must report whether they offered minimum essential coverage to full-time employees and whether that coverage met affordability and minimum value standards. The IRS uses this information to determine whether an employer must pay a penalty for failing to meet these requirements and to verify employees’ eligibility for premium tax credits if they purchase their own health insurance on the ACA marketplace.
The required forms
ACA reporting for ALEs revolves around two forms:
1. Form 1095-C — This form must be furnished to each full-time employee, regardless of whether the employee enrolled in coverage. The form reports the health coverage offered, if any, for each month of the year.
2. Form 1094-C — This form is filed with the IRS and serves as a summary transmittal of all 1095-C forms. Form 1094-C aggregates employer-level data, including employee counts and whether the employer is part of an aggregated group.
Due date: Employers must file paper Forms 1094-C and 1095-C with the IRS on or before March 2 for firms eligible to file on paper and electronically on or before March 31, and no additional extensions are available. Employers that file a combined total of 10 or more information returns must file electronically.
Prepare
The most common ACA reporting issues trace back to incomplete or inconsistent data. Employers can reduce risk by preparing well in advance:
Confirm 2025 full-time and full-time equivalent counts to ensure ALE status was correctly determined.
Review payroll, time-tracking and benefits systems to ensure hours worked, eligibility and coverage offers align.
Verify employee names and Social Security numbers.
Confirm monthly employee contributions for the lowest-cost, self-only plan that provides minimum value.
Review affordability calculations using the 2026 affordability threshold of 9.96%.
Be aware that hybrid and remote work arrangements can complicate efforts to track employee hours and determine eligibility. Make sure your system accurately captures hours worked regardless of the employee’s location.
Potential penalties for noncompliance
Late, incomplete or incorrect filings can trigger penalties under Internal Revenue Code Sections 6721 and 6722 for failure to file correct information returns and failure to furnish correct payee statements. Penalties generally apply per form and can add up quickly.
Separately, inaccurate reporting can expose employers to employer shared responsibility assessments if at least one full-time employee receives a premium tax credit through a marketplace. For 2026:
The penalty is $3,340 per full-time employee, excluding the first 30 employees, if coverage was not offered to at least 95% of full-time employees and dependents.
The penalty is $5,010 per affected employee if coverage was offered but was unaffordable or failed to meet minimum value, and the employee received a premium tax credit.
Bottom line
ACA reporting is not just a new year task. Employers that reconcile data throughout the year, confirm affordability calculations and review forms before deadlines are far less likely to face penalties or IRS follow-up.
Preparation should be well underway in January. Waiting until February often leaves too little time to fix errors before the March filing deadlines arrive.
Employers are heading into what may be one of the most challenging years for managing group health costs.
The new “Trends to Watch in 2026” report by Business Group on Health (BGH) outlines developments that will shape next year’s benefits environment. Rising medical and pharmacy spending, a rapidly changing policy landscape and increased pressure for innovation may pressure employers to revisit long-standing strategies and consider new ones.
Below are six trends the report predicts will affect health plans.
1. Affordability pressures intensify
Employers project a median 9% increase in health care costs for 2026, dropping to 7.6% after plan design adjustments. These increases follow two years of costs that ran higher than expected, signaling that inflationary pressure has become a persistent challenge.
Chronic conditions, an aging workforce, higher medical and pharmacy prices and ongoing system fragmentation all contribute to the strain. As a result, employers may need to weigh short-term mitigation tactics against longer-term structural changes, including program reductions or redesigned plan approaches.
2. Emphasis on preventive care and primary care
With chronic disease remaining the top cost driver, employers are expected to “get back to basics.” That means increasing the focus on preventive care, evidence-based screenings and stronger primary care engagement.
Many organizations will also reassess well-being and chronic-condition programs to ensure they produce measurable results. Incentives or alternative plan designs that encourage screenings, primary care use or condition management may become more common as employers push to improve long-term health trends.
3. Pharmacy costs will continue to weigh
Drug spending is one of the fastest-growing costs, driven by GLP-1 drugs, gene and cell therapies and broader price inflation. Existing mitigation strategies are losing effectiveness, prompting employers to re-examine pharmacy benefit manager (PBM) relationships, transparency, contracting terms and utilization controls.
The rise of direct-to-consumer cash prices adds another layer of complexity, as employees may seek lower-cost options outside the plan. Employers will need a clear stance on whether to support or discourage such use.
4. Streamlining and tightening vendor partnerships
As a result of years of adding new programs, many employers now face fragmented, duplicative services and inconsistent data integration. In 2026, the report predicts that employers will place vendors under greater scrutiny and focus on measurable outcomes. Vendors will be expected to improve data sharing, coordinate care with other partners and demonstrate value.
5. Faster adoption of alternative plan models
To manage rising costs, employers will continue to explore new plan structures. Options such as copay-based designs, virtual-first plans, primary care-centered models and network-less structures are gaining traction.
We can help you compare these models with traditional preferred provider organization, health maintenance organization and high-deductible health plan options.
6. Shifting policy landscape adds uncertainty
PBM reforms, updated preventive care guidelines and new chronic-disease coverage policies may influence employer plan design. Potential ACA subsidy expirations and ongoing Medicaid eligibility changes could increase reliance on employer coverage.
With the 2026 midterm elections approaching, legislative action may slow while regulatory activity increases. Employers will need to monitor these developments closely to anticipate compliance obligations and communicate changes to employees.
Takeaway
If the BGH report is accurate, many employers will be looking for ways to cut costs, boost vendor accountability and explore new plan structures.
If you are interested in alternative plan models, we can help you compare them with preferred provider organization, health maintenance organization and high-deductible health plan options.
