In April, Kansas Governor Laura Kelly signed into law the Consumer Protection and Accountability Act (SB 20), allowing regulation of pharmacy benefit managers (PBMs) operating in the state. Effective July 1, 2026, the law gives the state more oversight of PBMs, including licensing, rebate reporting, auditing, and monitoring of business practices. Within Section 5 of the law, rebate and spread-pricing protections are extended to all fully insured plans (private employers, churches, government entities) and non-ERISA self-funded plans (school districts, churches, cities, counties). Under these provisions, the return of all PBM rebates back to the affected health plans is expected to benefit plan members. The law also restricts spread pricing, a practice in which PBMs charge health plans more for prescription drugs than they reimburse pharmacies, retaining the difference. These same plans are also subject to a $10.50 prescription dispensing fee or a dispensing fee defined by state regulations, whichever is greater. The consumer impact of the mandated dispensing fee is unknown at this time.
Importantly, these Section 5 provisions (rebate returns, spread-pricing prohibitions and the mandated dispensing fee) do not apply to ERISA self-funded plans. Federal ERISA law exempts self-funded plans from state insurance mandates.
Click here for a summary of the Consumer Protection and Accountability Act and the PBM relationship with health plans and drug manufacturers.
