SB 3 creates a new chapter in the Indiana Code establishing fiduciary duties for entities that administer employer or group health coverage. The bill defines “fiduciary duty” to include acting with loyalty and care in the plan sponsor’s best interest, fully and reasonably disclosing fees and commissions, avoiding self-dealing and conflicts of interest, and maintaining transparency in financial and contractual arrangements tied to health insurance coverage, including prescription drug benefits.
The bill applies to health insurance coverage offered through group policies, group contracts for basic health care services, and other group health plans limited to a specific group, including dependent coverage. It defines key terms such as insurer, pharmacy benefit manager, plan sponsor, and third-party administrator, and provides that any third-party administrator or pharmacy benefit manager acting on behalf of a plan sponsor owes that sponsor a fiduciary duty. The measure is effective July 1, 2025.
Impact
SB 3 amends Indiana insurance law by adding IC 27-1-25.5, creating a new statutory framework governing the conduct of third-party administrators and pharmacy benefit managers in relation to plan sponsors. It expands legal obligations in the administration of group health plans and may affect employer-sponsored coverage, self-funded health benefit plans, insurers, PBMs, and TPAs by requiring greater disclosure, transparency, and loyalty in plan administration and prescription drug benefit arrangements.
Sentiment
The bill appears to have broad bipartisan support overall, passing the Senate and House with large majorities and ultimately receiving Senate concurrence after House amendments. The only recorded opposition was to a House amendment, which failed 28-61, suggesting that while the underlying bill was broadly acceptable, there was some disagreement over specific changes proposed during House consideration.
Contention
The main area of contention appears to have been the scope or wording of House Amendment #1, which failed despite the bill’s strong support. Based on the bill text, likely points of debate include how far fiduciary obligations should extend, whether pharmacy benefit managers and third-party administrators should be held to heightened duties, and the practical impact of disclosure and conflict-of-interest requirements on health plan administration and prescription drug pricing arrangements.