Self-funded employer plan group asks Texas to respect ERISA
ERIC told the state to stop trying to regulate self-funded plans' pharmacy benefit managers.
A group for employers with self-funded health plans says it wants the federal government to help the plans deal with any concerns about pharmacy benefit managers, or PBMs.
The group, the ERISA Industry Committee, told Texas officials that even well-intentioned efforts to rein in PBMs and hold down drug prices could backfire, by creating conflicts with federal law and disrupting ERISA plan administration.
Like some other states, Texas has tried to address what it sees as gaps in federal PBM oversight by imposing rules at the state-level that could affect self-insured ERISA plans as well as state-regulated health insurance policies.
Congress created ERISA in 1974 in an effort to encourage large, multistate employers to offer employee benefits by making benefits rules uniform throughout the country and decreasing plan administration costs.
“ERISA prohibits states from controlling self-funded ERISA plans, even if that control is exerted indirectly via regulation of the third-party administrators or PBMs that administer those ERISA plans,” Dillon Clair, ERIC’s director for state advocacy, writes in a comment letter on two state benefits bills. “While we share the goal of reducing health care costs, policies that stand to erode ERISA preemption and national uniformity threaten to do more harm than good.”
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Another concern, Clair says, is that some provisions in the Texas bills, such as provisions that would require plans to work with “any willing pharmacy,” could drive up drug costs and health benefits costs.
“These provisions would effectively strip plans of their ability to design or operate any kind of distinct provider network,” Clair adds.