CAA 2026 and the DOL's Expanded Enforcement: What Every Self-Funded Plan Fiduciary Must Know Now
- Jun 26
- 7 min read
On February 3, 2026, President Trump signed the Consolidated Appropriations Act of 2026 (CAA 2026) into law, and with it, the regulatory ground shifted beneath every self-funded health plan fiduciary in America. Days earlier, the DOL's Employee Benefits Security Administration (EBSA) had already announced a sweeping overhaul of its national enforcement projects for fiscal year 2026, explicitly shifting significant resources toward health and welfare plan enforcement. And in late December 2025, the plaintiffs' firm Schlichter Bogard LLC, the firm that extracted over $6.5 billion in 401(k) settlements, filed four new ERISA class actions targeting employers and their benefits consultants over the pricing of voluntary benefit plans.
For plan sponsors of self-funded ERISA plans, these three converging forces create an unmistakable message. The era of passive plan governance is over. Independent oversight, transparent documentation, and proactive claims monitoring are no longer best practices. They are fiduciary survival tools.
CAA 2026: PBM Transparency and New Fiduciary Obligations
The CAA 2026 delivers the most significant pharmacy benefit management reform in a generation. The law explicitly classifies PBMs as covered service providers under ERISA, a designation that triggers immediate compensation disclosure obligations for PBMs contracting with ERISA group health plans. This means PBMs must now provide advance reporting of compensation before entering into, extending, or renewing contracts with ERISA plans.
The implications for fiduciaries are direct. If a PBM fails to provide required compensation disclosures, the contract itself could constitute a prohibited transaction under ERISA, exposing plan fiduciaries to personal liability and penalties. Additionally, fiduciaries must now file a notice with the DOL if a PBM fails to comply with a written disclosure request within 90 calendar days.
Key CAA 2026 provisions for self-funded plan fiduciaries include:
100% rebate pass-through. PBM contracts entered into or renewed after the effective date must provide for the complete pass-through of rebates, fees, alternative discounts, and other remuneration, with such amounts remitted quarterly.
Semiannual PBM reporting. For plans with 100+ participants, PBMs must disclose drug-by-drug pricing information, net prices after rebates, and overall prescription drug costs and utilization rates.
Annual audit rights. Plan sponsors gain the right to conduct annual audits of PBM operations using an auditor of their choosing, not the PBM's preferred vendor.
Participant notice requirements. Group health plans must inform participants about PBM reporting obligations and prescription drug cost transparency.
Civil monetary penalties. The CAA 2026 introduces enforcement mechanisms with meaningful financial consequences for PBM noncompliance.
DOL's 2026 Enforcement Overhaul: Health Plans in the Crosshairs
On January 15, 2026, EBSA unveiled its national enforcement projects for fiscal year 2026, and the shift is unmistakable. Historically, the DOL devoted most enforcement resources to retirement plans, with health and welfare plan activity limited primarily to Multiple Employer Welfare Arrangements (MEWAs). That era is over.
EBSA Assistant Secretary Daniel Aronowitz signaled the new posture directly, asking plans and service providers to respond promptly to requests for information. Deputy Secretary Keith Sonderling reinforced the message, stating that EBSA investigators will prioritize serious misconduct and focus on areas that produce the best results.
The FY2026 national enforcement projects targeting health and welfare plans include cybersecurity and data protection, mental health parity barriers, surprise billing compliance under the No Surprises Act, and protection of employee contributions with criminal referrals for embezzlement and fraud involving contributory benefit plans.
For self-funded plan sponsors, the enforcement pivot means one thing. EBSA investigators will be looking at your claims administration, vendor oversight, and fiduciary documentation with far greater scrutiny than in years past. Plans that rely on carrier or TPA self-reporting without independent validation are operating in a high-risk posture.
Schlichter's New Frontier: Voluntary Benefits and the Expanding Definition of Fiduciary
On December 23, 2025, Schlichter Bogard LLC filed four new ERISA class actions against Laboratory Corporation of America, United Airlines, CHS/Community Health Systems, and Allied Universal, along with their benefits consultants Willis Towers Watson, Mercer, Gallagher, and Lockton. The lawsuits allege fiduciary breaches related to the pricing and commissions on voluntary benefit plans, including accident, critical illness, and hospital indemnity insurance.
What makes these cases particularly significant for the broader self-funded plan landscape:
Brokers and consultants are now defendants. Plaintiffs allege that benefits consultants exercised discretion in selecting carriers and structuring plans, making them functional fiduciaries under ERISA, not just intermediaries.
Excessive commissions as prohibited transactions. The complaints allege that broker commission structures tied to higher-premium products constitute self-dealing, creating direct conflicts of interest with participants.
Expanding the fiduciary perimeter. If courts agree that employer endorsement and administration bring voluntary benefits under ERISA governance, it fundamentally changes how employers approach all supplemental benefit programs.
The 401(k) playbook applied to health. Schlichter Bogard pioneered excessive fee litigation in retirement plans, securing billions in settlements. This same legal strategy is now being systematically applied across the full benefits landscape.
This is not a theoretical risk. Legal analysts have noted that all four employers conceded in their annual Form 5500 filings that their voluntary plans are subject to ERISA. For plan sponsors managing any employee benefit program, the message is clear. Document every decision, benchmark every fee, and ensure independent oversight of all service provider relationships.
The DOL's EBSA Proposed Rule: PBM Fee Disclosure on Steroids
Just days before the CAA 2026 was signed, EBSA published a proposed rule on January 30, 2026, titled Improving Transparency into Pharmacy Benefit Manager Fee Disclosure. This rule would further expand PBM disclosure requirements beyond even the CAA 2026 provisions, requiring PBMs to disclose payments from drug manufacturers (including rebates, administrative fees, and price protection fees), identify spread amounts with respect to pharmacies, and permit annual audits.
The comment period on the proposed rule closed on March 31, 2026. When finalized, the CAA 2026 and the EBSA proposed rule will create the most comprehensive PBM transparency framework in U.S. history. Fiduciaries who do not use these new data access rights will find it increasingly difficult to demonstrate prudence under regulatory scrutiny or in participant lawsuits.
What This Means for Self-Funded Plan Fiduciaries: Five Actions to Take Now
The convergence of CAA 2026, expanded DOL enforcement, and escalating ERISA litigation creates a clear action agenda for plan sponsors:
Review your PBM contracts immediately. Ensure compensation disclosure provisions are in place before any contract extension or renewal. Under CAA 2026, noncompliant contracts may constitute prohibited transactions.
Demand and exercise data access rights. The CAA prohibits gag clauses. Use your rights to obtain raw claims data, PBM cost reporting, and vendor performance metrics. Data you do not access is exposure you cannot manage.
Implement independent claims oversight. TPA and carrier self-reporting is not independent oversight. Engage a conflict-free partner to review claims Pre-Pay and Post-Pay, before regulators or plaintiffs do it for you.
Document every fiduciary decision. EBSA's expanded enforcement and Schlichter's litigation playbook both depend on the same question. Can you prove you acted prudently? Minutes, benchmarking reports, vendor evaluations, and independent review results are your defense.
Review all service provider compensation. The Schlichter voluntary benefits suits allege failures to monitor and benchmark broker commissions. Extend that scrutiny to TPA fees, PBM compensation, network arrangements, and all intermediary payments.
The ClaimInformatics Perspective
At ClaimInformatics, we have been preparing plan sponsors for this moment for years. The regulatory framework is now catching up with what fiduciary duty has always required. Independent verification, transparent documentation, and proactive oversight of every dollar flowing through your plan.
ClaimInformatics delivers what no carrier-affiliated solution can:
100% independence. No revenue from TPAs, carriers, networks, or providers. Zero conflicts of interest.
Pre-Pay claims editing. Clinical logic and 15 published-rule categories stop improper payments before they happen.
Post-Pay analysis and reclamation. Historical claims review identifying an 8.7% error identification rate over the last 6 months, with provider-friendly recovery processes.
Defensible fiduciary documentation. Every finding includes transparent rationale and citations, purpose-built for DOL scrutiny.
SOC 2-certified, HIPAA-compliant platform. Enterprise-grade security protecting plan data at every level.
Don't wait for a DOL investigation or a Schlichter lawsuit to expose gaps in your plan's oversight. Contact us to learn how independent oversight protects your plan, your participants, and your fiduciary standing.
Frequently Asked Questions
What is the CAA 2026, and how does it affect self-funded health plans?
The Consolidated Appropriations Act of 2026, signed into law on February 3, 2026, introduces sweeping PBM transparency requirements, including mandatory compensation disclosures, 100% rebate pass-through, semiannual reporting for large plans, and annual audit rights. For ERISA self-funded plans, these provisions create both new data access opportunities and new fiduciary obligations to act on that data.
What are the DOL's health plan enforcement priorities for 2026?
EBSA's FY2026 national enforcement projects for health and welfare plans focus on cybersecurity, barriers to mental health and substance use disorder benefits, surprise billing compliance, and protection of employee contributions. The DOL has explicitly shifted significant resources toward health plan enforcement, signaling greater scrutiny of claims administration, vendor oversight, and fiduciary governance.
How do the Schlichter Bogard lawsuits affect plan sponsors and brokers?
The four ERISA class actions filed in December 2025 target both employers and their benefits consultants, alleging breaches of fiduciary duty related to voluntary benefit plan pricing and broker commissions. If courts agree that employer endorsement brings these plans under ERISA, it would expand fiduciary exposure for any employer offering supplemental benefits and put broker compensation arrangements under unprecedented scrutiny.
What does independent oversight mean for CAA 2026 fiduciary compliance?
Independent oversight means engaging a conflict-free partner: one with no revenue ties to TPAs, carriers, networks, or providers, to review claims, benchmark fees, and validate vendor performance.
What penalties do plan fiduciaries face for noncompliance in 2026?
Penalties include $2,739 per day for late Form 5500 filings, $195 per day for failure to produce documents requested by the DOL, and personal liability for ERISA fiduciary breaches. The CAA 2026 also introduces civil monetary penalties specific to PBM disclosure failures, and noncompliant PBM contracts may constitute prohibited transactions under ERISA.
The Bottom Line
The regulatory and legal landscape for self-funded plan fiduciaries has shifted decisively in 2026. CAA 2026 delivers unprecedented data access and transparency rights. The DOL's enforcement overhaul puts health plan governance squarely in the crosshairs. And Schlichter's expanding litigation campaign is redefining who qualifies as a fiduciary and what prudent oversight actually requires.
The fiduciaries who act now, demanding data, engaging independent oversight, and documenting every decision, will be the ones who survive the scrutiny ahead. Those who wait will be the case studies.
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