Understanding the ABCs of Pharmacy Benefit Companies
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Do Taft-Hartley "carve out" work to protect plans
In some instances, state legislatures attempt to expressly “carve out” ERISA plans, thus implying that if legislation doesn’t contain the “carve out” language ERISA plans are included. We believe that such efforts, if implemented, would serve to dangerously erode the scope of ERISA preemption with devastating consequences to unions and other ERISA plan sponsors of self-insured health and retirement plans.
How can we better protect health and retirement plans from being regulated by individual states?
About Preserve Union Benefits
Protecting health and retirement plans—especially those governed by ERISA (the Employee Retirement Income Security Act of 1974)—from being regulated by individual states requires a multi-pronged strategy rooted in legal authority, federal advocacy, and coalition-building. Below is a comprehensive strategy broken down into actionable components:
1. Assert and Reinforce ERISA Preemption
A. Legal Challenges
- Litigation is a critical tool. When states pass laws attempting to regulate ERISA-covered plans (e.g., PBM mandates, pricing controls, or claims reporting requirements), stakeholders should file preemption lawsuits.
- Leverage precedents such as:
- Rutledge v. PCMA (2020): Upheld Arkansas's PBM law, but drew a fine line that still preserves ERISA preemption where state law directly affects plan design or administration.
- Mulready v. PCMA (2023–2024): Affirmed that federal ERISA law preempts state regulation attempting to govern self-funded health plans.
- Rutledge v. PCMA (2020): Upheld Arkansas's PBM law, but drew a fine line that still preserves ERISA preemption where state law directly affects plan design or administration.
B. Amicus Support and Legal Coordination
- Coordinate amicus briefs from employers, labor trusts, and national ERISA advocacy groups.
- Support national ERISA litigation networks to ensure rapid response to harmful laws.
2. Federal Policy and Congressional Engagement
A. Educate Lawmakers
- Proactively brief members of Congress and staff on:
- The importance of uniform regulation for multi-state employers and union trust funds.
- The cost and complexity of complying with conflicting state laws.
- The importance of uniform regulation for multi-state employers and union trust funds.
- Emphasize how state laws undermine the original intent of ERISA.
B. Advance Protective Federal Legislation
- Explore legislative options such as:
- A clarifying amendment to ERISA reinforcing preemption against state regulation of self-insured plans and PBMs servicing those plans.
- Congressional Review Act (CRA) resolutions to overturn overreaching federal agency rules that enable state encroachment.
- A clarifying amendment to ERISA reinforcing preemption against state regulation of self-insured plans and PBMs servicing those plans.
3. State-Level Legislative and Regulatory Defense
A. Lobby Against Harmful State Laws
- Mobilize employer coalitions, unions, and trustees to:
- Oppose state bills affecting plan design, pricing mandates, or disclosure requirements.
- Testify to state legislatures about the impact on plan affordability and autonomy.
- Oppose state bills affecting plan design, pricing mandates, or disclosure requirements.
B. Carve-Outs and Exemptions
- Where full defeat isn't possible, secure exemptions for ERISA-regulated plans or multiemployer plans (Taft-Hartley trusts) during legislative negotiations.
4. Strategic Communications and Coalition Building
A. Labor and Employer Messaging
- Frame the issue around:
- Member impacts: higher premiums, less flexibility, longer wait times for prescriptions.
- Administrative chaos: one plan, 20 different state mandates.
- Member impacts: higher premiums, less flexibility, longer wait times for prescriptions.
- Highlight labor-management unity on this issue. Use trust fund administrators, union leaders, and benefits attorneys to make the case.
B. Build Strategic Coalitions
- Expand alliances with:
- National labor unions and health plan coalitions (e.g., NCCMP, CII).
- Business groups (e.g., ERIC, NAM, SHRM) and public sector plan sponsors.
- National labor unions and health plan coalitions (e.g., NCCMP, CII).
5. Administrative and Enforcement Strategy
Coordinate with the U.S. Department of Labor (DOL)
Urge DOL to issue advisory opinions or bulletins reinforcing ERISA preemption against specific types of state regulation (e.g., PBM transparency, prior authorization requirements).
Monitor and Report State Activity
- Maintain a real-time legislative and regulatory tracking system to:
- Flag early versions of bills that may affect ERISA plans.
- Assess national patterns of “copycat” legislation and prepare preemption arguments accordingly.
If you'd like, I can help craft specific talking points, draft coalition letters, or pull together legislative summaries that highlight areas of overreach into ERISA space. Let me know your preferred format or target audience (e.g., union leaders, trustees, legislators).
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