WASHINGTON, March 15, 2024 – The ERISA Industry Committee (ERIC) submitted public comments yesterday to the Kentucky Senate Standing Committee on Banking and Insurance expressing deep concerns with Kentucky Senate Bill 188, which attempts to control the network practices and plan options available to self-insured employer plans as well as the pharmacy benefit managers (PBMs) managing them.
In its letter, ERIC made clear that the legislation would stand in conflict with federal law governing the design and administration of employer-sponsored health plans nationwide and would raise health insurance and prescription drug costs across the state of Kentucky.
Specifically, ERIC’s comments highlighted problematic provisions that would:
- Define self-insured employer plans as an “insurer”, to which the bill’s requirements are applied
- Place network adequacy requirements on self-insured plans
- Place recordkeeping and reporting requirements on self-insured plans
- Restrict self-insured plans’ use of cost-saving mail-order pharmacy services
- Limit the ability of plans and PBMs to establish minimum network participation standards through an “any-willing pharmacist” requirement
- Require a $10.64 minimum dispensing fee for every prescription filled across the state
“SB 188 threatens to erode the ability of large-employer health benefit plans to effectively operate uniform benefits at scale, raise statewide health care costs, and potentially lead to litigation involving ERISA preemption concerns,” said ERIC Director of State Advocacy and Litigation, Dillon Clair. “On behalf of its member companies, ERIC respectfully urges the Senate Standing Committee on Banking and Insurance to amend this legislation and prevent its application to self-insured employer plans governed by ERISA.”
ERIC’s comment letter may be read here.