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Insurance regulators might try to write something about the clash between the Employee Retirement Income Security Act and state efforts to rein in pharmacy benefit managers.
The ERISA Working Group, an arm of the National Association of Insurance Commissioners, is talking about setting up a "drafting group focused on ERISA preemption of state PBM laws."
The working group asked regulators who are interested in participating to email a drafting group contact person.
The working group discussed the ERISA preemption drafting group proposal Monday, during an in-person session at the NAIC's summer meeting in Minneapolis, according to a summary report posted on the working group's section of the NAIC's website.
What it means: State regulators could weigh in on the complicated relationship between ERISA and state PBM rule projects.
The PBM issue: PBMs help health insurers, employers' self-insured health plans and other "payers" run prescription drug plans and negotiate for lower prices from drug manufacturers and distributors.
Critics, including pharmacy groups, drug manufacturers and some employers, argue that the three biggest PBMs use their relationships with health insurers, benefit plan administrators and drug manufacturers to push employers' pharmacy benefits costs higher and keep much of the cash spent on prescription drugs.
The big PBMs contend that the critics are angry about the big PBMs' successful efforts to hold down drug cost inflation and squeeze other players' profit margins.
ERISA: ERISA includes a provision that "preempts," or blocks, state efforts to regulate big employee benefit plans and multistate employee benefit plans.
In effect, the ERISA preemption sharply limits states' ability to do anything about either self-insured health plans or the plans' vendors. Parties with concerns about self-insured plans and their vendors are supposed to get help from the federal Employee Benefits Security Administration.
ERISA litigation: In 2020, in a ruling on Rutledge v. Pharmaceutical Care Management Association, the U.S. Supreme Court seemed to create a way for states to impose some rules on PBMs, even when the PBMs serve employer-sponsored health plans.
The court found that Arkansas could set rules that affected all PBM activities without mentioning or relating directly to plans governed by ERISA.
This summer, however, the Supreme Court declined to take up a battle over a 10th U.S. Circuit Court of Appeals ruling that sided with the PBMs and against an Oklahoma PBM law.
Related: Supreme Court backs away from PBM case, rejecting state efforts to control drug prices in self-funded plans
The Supreme Court decision not to weigh in on the 10th Circuit ruling left PBMs and state regulators confused about the kinds of state PBM rules that can survive federal lawsuits.
The NAIC: Federal law leaves regulation of the business of insurance to the states.
The NAIC is a group that helps state insurance regulators share resources and learn from each other.
State policymakers often start with model laws, model regulations, handbooks and other resources from the NAIC when developing their own legislative and regulatory proposals.
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