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The Consolidated Appropriations Act (CAA) of 2021 introduced a complex set of transparency-related compliance requirements for health plans, insurance issuers, agents, and providers – all designed to improve clarity and accountability in health care.
 
One of the CAA’s key transparency initiatives is the annual Rx Data Collection (RxDC) reporting requirement, which mandates that health plans and insurance issuers submit data on prescription drug costs and overall health care spending. This information allows the Centers for Medicare & Medicaid Services (CMS) to generate reports for Congress and federal agencies – including the Department of Labor (DOL) and Health and Human Services (HHS) – providing insights into prescription drug trends, rebates, and health care pricing.
 
These requirements apply to group health plans of all sizes, both fully insured and self-funded (including level-funded plans), as well as other plans such as Individual and Family Plans (IFP), student health plans, and Federal Employees Health Benefits (FEHB) plans. These requirements do not apply to Medicare or Medicaid plans.
 
Who Is Responsible for Compliance?
Employers with fully insured health plans typically have little to no direct responsibility for compliance, as the insurance carrier owns the information and uses it to create and submit the required reports. However, some carriers require employer participation in the process by requesting survey responses for verification of employer/employee contribution amounts before finalizing reports. Employers that do not provide the requested information may be required to create and submit certain filings themselves, which can be a challenging burden and often requires legal support. Employers should ensure they respond to carrier surveys if their carrier requests them.
 
For self-funded health plans, the reporting obligation falls on the employer (plan sponsor), which must work with its Pharmacy Benefit Manager (PBM), and/or its Third Party Administrator (TPA) or Administrative Services Only (ASO) partners to ensure compliance.
 
Refer to the Word & Brown Wiki page for updates from carrier partners regarding RxDC reporting, including employer polling, submission procedures, and response deadlines.
 
CAA’s Pharmacy Data Collection (RxDC) Reporting Requirements
RxDC reporting must be submitted to CMS annually by June 1st. Each report covers the previous calendar year ("reference year") and is due six months after the end of that year.

• The 2024 reporting deadline (for 2023 data) was June 1, 2024.
• The 2025 reporting deadline (for 2024 data) is June 1, 2025.

 
Annual Reports Due for CAA RxDC Compliance
The following reports must be submitted by plans each year. While fully insured carriers prepare these filings in aggregate for their clients, employers may need to complete the P2 and D1 files if they do not respond to carrier surveys requested by their carrier, which helps facilitate accurate reporting by carriers for employers. Refer to the WB Compliance Wiki page for more information.
 
Data Files Detailing Plan Spending and More:

• D1 File – Lists aggregate premium amounts (gross premiums), including employer and employee contributions, and the number of members covered by the plan on December 31, 2024.
• D2 File – Breaks down total health care spending by category on health care expenses (hospital, primary care, prescription drugs, wellness, etc.). Insurance issuers produce these reports on an aggregate basis, correlated with the P2 filing information
• D3 File – Lists the top 50 most-dispensed brand-name drugs for the reference year.
• D4 File – Lists the top 50 most-costly drugs based on total plan spending.
• D5 File – Lists the top 50 drugs with the highest spending increase compared to the previous year.
• D6 File – Provides total annual prescription drug spending in aggregate (by state and market segment), including total plan spending by enrolled participants, the number of participants with a paid Rx claim, the dosage of Rx drug units dispensed, and the total number of paid claims.
• D7 File – Details Rx rebates, fees, etc., by therapeutic class.
• D8 File – Identifies the top 25 drugs with the highest rebate amounts for the reporting year.

 
Plan-Level Reports:

• P2 File – Identifies the employer sponsor(s), plan name, EIN(s), state of coverage, and total covered members.

 
Narrative Response Files:

• These optional files provide additional context on pricing trends, rebate impacts, and cost-sharing details as needed. Unlike the P and D files, which follow a structured template, narrative response files are submitted as free-text documents (Microsoft Word or PDF).

 
Where and How to File
All reporting is submitted through CMS’s Health Insurance and Oversight System (HIOS)

• Fully insured carriers handle filing for their plans, unless otherwise indicated by the carrier - especially due to missed survey responses.
• Self-funded employers and their PBMs, ASOs, and TPAs must register in HIOS and submit data.

 
As with many CMS electronic filing systems, new registrations can take several weeks, so self-funded employers should confirm their TPA’s reporting strategy well in advance of the June 1, 2025, deadline.
 
Compliance Enforcement & Penalties
While CMS manages RxDC data collection, enforcement responsibilities fall on the Department of Labor (DOL) and HHS. Plans that fail to meet reporting obligations may be subject to penalties of $100 per affected individual per day. The IRS is also authorized to impose penalties for non-compliance.
 
What This Means for Brokers
Health insurance brokers are not directly responsible for RxDC compliance, but they play a key role in helping employer clients stay informed. Brokers should be prepared to:

• Answer employer questions about carrier reporting responsibilities.
• Help clients understand survey requests from their insurance carrier.
• Direct self-funded employers to their TPA, PBM, or legal counsel for compliance support.

 
For additional details, refer to CMS’s official CAA RxDC reporting guidance webpage.