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Texas can regulate self-insured plans' PBMs, its attorney general rules

Ken Paxton's opinion puts Texas on a collision course with employer groups that say ERISA should shield the plans from the state rules.

By Allison Bell | February 11, 2025 at 12:21 AM
Ken Paxton. Credit: Texas attorney general’s office

Texas Attorney General Ken Paxton has explained why he thinks Texas can apply two new pharmacy benefit manager laws to PBMs working with self-insured health plans.

The federal Employee Retirement Income Security Act of 1974 normally cancels out, or “preempts,” state laws that affect self-insured benefit plans. Congress included the ERISA preemption provision in an effort to hold down benefit plan sponsors’ costs, by keeping states from imposing a “patchwork” of conflicting, potentially expensive requirements on the plans.

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