Removes exception of self-insured health benefits plans from law concerning pharmacy benefits managers.
Impact
If enacted, S788 would significantly impact how pharmacy benefits are managed by subjecting self-insured plans to state law provisions applicable to PBMs. This could lead to increased protections for consumers by ensuring that all plans must adhere to regulations governing pricing, access to medications, and other essential pharmacy benefits. Proponents of this bill argue that it will create a more equitable playing field for small employers who rely on self-insured plans, thereby helping to mitigate inflated drug prices caused by disparities in regulation between different insurance schemes. Additionally, the legislation seeks to address public concerns raised in recent legal contexts regarding the fair treatment of consumers regarding prescription drug access and pricing.
Summary
Senate Bill 788 is a legislative proposal that seeks to amend existing laws concerning pharmacy benefits managers (PBMs) by removing the current exemption afforded to self-insured health benefits plans as stipulated under the federal Employee Retirement Income Security Act of 1974 (ERISA). The bill aims to enhance regulatory oversight of PBMs within the state by ensuring that all health benefits plans, including self-insured plans, adhere to the same legal standards concerning pharmacy benefits management. The primary motivation behind this legislative change is to standardize the application of pharmacy regulations across various types of health benefit plans, thus promoting greater fairness and transparency in the pharmaceutical marketplace.
Contention
However, the bill is not without controversy. Detractors have expressed concerns that imposing these regulations on self-insured health plans may lead to increased costs for employers and impact their decision-making regarding health benefits for employees. Some argue that the additional regulatory burden might dissuade some companies from offering health benefits entirely, resulting in reduced coverage options in the marketplace. Critics also point out potential unintended consequences that might arise from the alteration of regulations governing pharmacy benefits management, which could affect the operational capacity of PBMs and ultimately influence the availability or pricing of essential medications.
To Regulate Pharmacy Benefits Managers; To Amend The Law Concerning The State And Public School Life And Health Insurance Program; And To Amend The Law Concerning Certain Health Benefit Plans.
A bill for an act relating to pharmacy benefits managers, pharmacies, prescription drugs, and pharmacy services administrative organizations, and including applicability provisions. (Formerly SSB 1074.) Effective date: 07/01/2025. Applicability date: 07/01/2025.