KFF released its 2026 Employer Health Benefits Survey on October 22, based on interviews with 1,937 employers. One finding stands out for anyone who manages specialty drug costs.
KFF asked firms with 200 or more workers how well they can get information about prescription drugs in their largest health plan. About half (49%) agree they can get sufficient information about rebates and other payments that drug manufacturers make to their insurer, administrator, or pharmacy benefit manager. By comparison, 64% agree they can get sufficient information about the prescription medications their enrollees use.
The detail behind the rebate number is more telling. Only 15% strongly agree that they can get sufficient rebate information, and another 23% say they don’t know. Nearly a quarter of large employers can’t say whether their rebate information is adequate.
Large employers report better visibility into which drugs are used than into the manufacturer payments tied to that use.
Why it matters for self-funded plans
KFF reports that 71% of covered workers are in self-funded plans, including 85% at firms with 200 or more workers. In a self-funded plan, the employer takes direct financial responsibility for enrollees’ claims and typically contracts with a third-party administrator or insurer to administer the plan. For these employers, the drug costs behind manufacturer rebates are plan costs they carry.
KFF asked the rebate question of large employers regardless of how their plans are funded, and it doesn’t break the results out by funding type. Still, because self-funding is so common among large employers, many respondents are answering about costs their own plans carry.
What the question doesn’t separate
KFF asked about rebates related to prescription drug use by plan enrollees. The question did not distinguish drugs covered under the pharmacy benefit from drugs covered under the medical benefit.
That distinction matters for specialty drugs. Many are administered by clinicians in infusion centers, hospital outpatient departments, and physician offices. They are billed as medical claims and processed by the insurer or administrator, not the pharmacy benefit manager.
KFF’s data can’t tell us which benefit respondents had in mind when they answered. An employer could reasonably agree that it gets sufficient rebate information based on PBM reporting alone, with no reporting on medical benefit drugs at all.
What plan sponsors can ask
Heading into 2027 renewals, three questions can clarify what “sufficient rebate information” means for a specific plan:
- Does the rebate reporting we receive include specialty drugs billed under the medical benefit, or only the pharmacy benefit?
- Under our current agreements, who is responsible for pursuing manufacturer rebates on medical benefit drugs?
- If rebates are received on medical benefit drugs, how are they reported and credited to the plan?
The answers show whether the plan’s rebate picture covers both benefits or just one.
If your organization answered KFF’s question, would your answer be the same for medical benefit drugs as for pharmacy benefit drugs? Comment below.
Disclaimer: This newsletter references publicly available findings from KFF’s 2026 Employer Health Benefits Survey. VativoRx is not affiliated with, endorsed by, or partnered with KFF. This newsletter is provided for informational and educational purposes only and does not constitute legal, regulatory, or financial advice. Readers should consult appropriate advisors regarding specific circumstances.