WASHINGTON, June 22, 2023 – The ERISA Industry Committee (ERIC) today submitted written testimony in opposition to New Jersey Assembly Bill 536/2841, asserting the legislation under consideration by the New Jersey Assembly Appropriations Committee oversteps state authority and seeks to control self-insured employer health care plans governed by the federal Employee Retirement Income Security Act of 1974 (ERISA). ERIC believes that the legislation would raise health insurance and prescription drug costs for New Jersey employers and employees.
“ERIC urges the Committee to vote ‘no’ on A536/2841, unless it is amended to remove reference and application to self-insured employer plans established under federal ERISA law,” said James Gelfand, ERIC President and CEO. “As written, this bill would mandate aspects of the design and administration of self-insured plans, and would erode critical ERISA preemption protections and disadvantage the state’s economic climate.”
ERIC’s written testimony in opposition to A536/2841 cited a number of particularly troublesome provisions:
- Inconsistent treatment of self-insured plans in definitions of “carrier” and “health benefits plan” throughout the bill.
- Placement of administrative and recordkeeping requirements directly on self-insured employer plans, though states do not have the authority to do so under ERISA.
- Restriction of mail order pharmacy use by PBM networks to meet adequate coverage requirements, though states do not have the authority to place these requirements on ERISA plans, regardless of whether a PBM manages the network.
“If enacted, A536/2841 would erode the ability of large-employer health benefit plans to effectively operate national, uniform benefits. It would violate federal law, and likely lead to litigation involving ERISA preemption concerns,” Gelfand added.
The text of ERIC’s written testimony against A536/2841 can be found here.