Unique state laws governing the administration of pharmacy benefits are proliferating across the country, establishing vastly different standards. These inconsistent and often conflicting state policies, if applied to employer health plans, eliminate flexibility for plans and create costly administrative inefficiencies.
The Employee Retirement Income Security Act (ERISA) has long enabled employers to provide uniform benefit plans to employees nationwide due to ERISA’s preemption of state laws. Federal preemption allows employers flexibility to administer innovative benefit plans in an environment of increasing health care costs. The Court’s decision in Rutledge versus PCMA will either uphold or threatenthese federal protections.
“As our brief states, what’s at stake in this case are efficient and consistent employer-provided health care benefits for employees and their families, no matter where they live. The Arkansas law at issue eliminates important tools that help employers — through PBMs — manage prescription drug costs and provide access to medications. These matters are central to plan administration, and protecting ERISA’s promise of uniformity is more critical than ever,” said JC Scott, president and CEO of PCMA. “We are confident in the merits of our arguments and look forward to making them before the Court.”
In 2015, PCMA sued Arkansas over the applicability of the state’s legislation to plans covered by ERISA. In 2018, the U.S. Court of Appeals for the 8th Circuit ruled in favor of PCMA, saying ERISA pre-empted the state law because it “both relates to and has a connection with employee benefit plans.”
Arguments in the case are set for April 27.