Proposed Michigan Legislation Allows Government to Interfere with Employer Health Benefits

ERIC testifies against Michigan Senate Bill 612

Washington, DC – The ERISA Industry Committee (ERIC)’s James Gelfand testified virtually before the Michigan Senate Health Policy and Health and Human Services Committee, speaking in opposition to Senate Bill 612 (SB 612) yesterday. The bill would impose numerous government mandates on the design of health benefits offered by private employers, specifically as they relate to medical management.

SB 612 is concerning to ERIC member companies – the nation’s largest employers – as employer health plans use medical management techniques like prior authorization and step therapy to protect patient safety, prevent unnecessary, inappropriate and potentially harmful care, and to lower health care costs for employees. The bill would mandate whether and how medical management techniques can be used.

ERIC’s testimony called the legislation “a direct overreach of government that would stifle competition in the free market.” The legislation includes measures that are unduly burdensome to medical management, such as requiring prior authorization denials to be given by board-certified physicians who do not work for the plan sponsor. These requirements essentially make step therapy impossible or untenable for fully-insured plans in the state.

“This bill provides a vehicle for the government to interfere in private contracts and employers’ benefits design decisions. It stifles competition within the health care marketplace, ultimately hurting patients, raising costs, reducing competition, and interfering with the ability of employers to design benefits that best meet the needs of their employees. Employers cannot support such legislation,” said James Gelfand, Senior Vice President of Health Policy, ERIC.

While ERIC does not support SB 612, Gelfand’s testimony did acknowledge the transparency measures included in the bill may help patients. “ERIC support efforts to help beneficiaries understand their benefits, and employers want transparency throughout the health care system,” said Gelfand.

In addition to testifying before the Committee, ERIC also provided written comments that echoed our stance that the legislation is deeply flawed and would not be supported by the large employer community.

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All media inquiries to The ERISA Industry Committee should be directed to:

Kelly Broadway, 202.627.1918, kbroadway@eric.org

About the ERISA Industry Committee
ERIC is a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave, and other benefits to their nationwide workforces. With member companies that are leaders in every sector of the economy, ERIC advocates on the federal, state, and local levels for policies that promote flexibility and uniformity in the administration of their employee benefit plans.