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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

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On Feb. 3, 2026, President Donald Trump signed into law the Consolidated Appropriations Act, 2026 (CAA 2026), a sweeping piece of legislation including provisions that will substantially impact employer-sponsored health plans. Among other items, CAA 2026 tackles pharmacy benefit manager (PBM) drug pricing practices and compensation structures, areas that have long raised concerns due to a lack of transparency. More specifically, the new law requires PBM reporting, contractual protections and employee notices. It also makes noteworthy changes to ERISA’s fiduciary prohibited transaction framework, as applied to employer health plans.

For employer health plans with a calendar-year plan year, CAA 2026’s PBM-related provisions generally take effect Jan. 1, 2029. For employer health plans with a non-calendar plan year, the provisions take effect starting with the first plan year that begins on or after the date that is 30 months after Feb. 3, 2026. For example, the effective date for an employer health plan with a July 1 plan year would be July 1, 2029.

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<strong>Employer Takeaways — For Now</strong>

CAA 2026 introduces substantial changes that employers must carefully consider. The CAA 2026 directs the Departments of Labor, Treasury and Health and Human Services to issue implementing regulations for the PBM-related provisions within 18 months of enactment. Those regulations will provide needed detail on compliance obligations and enforcement. In the meantime, employers should begin familiarizing themselves with the new requirements and consider whether changes to plan governance, vendor oversight and fiduciary responsibilities may be warranted to address the PBM-related provisions.

<strong>Warner Norcross + Judd Has You Covered</strong>

If you have questions about how CAA 2026 affects your health plan or need assistance with future implementation, please contact Stephanie Grant, Cade Bunton or a member of Warner’s Employee Benefits Practice Group.

Senior Counsel

Stephanie H. Grant

Associate

Cade M. Bunton

Employee Benefits

Labor and Employment

PBM Reform is Here: What CAA 2026 Means for Employer Health Plans

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PBM Reform is Here: What CAA 2026 Means for Employer Health Plans

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