The ERISA Industry Committee Urges the Texas AG to Recognize the Limits of Texas State Authority

Washington, D.C., June 18, 2024 – The ERISA Industry Committee (“ERIC”) yesterday submitted comments in response to a request for opinion sent to Texas Attorney General Ken Paxton by Senator Charles Schwertner regarding the applicability and enforceability of two Texas state laws, HB 1763 and HB 1919, to self-funded health benefit plans governed by the federal Employee Retirement Income Security Act of 1974 (“ERISA”). ERIC’s comments outline the critical importance of ERISA preemption and caution that these laws could overstep state authority by directly impacting the design and administration of ERISA plans, which could lead to costly litigation if enforced.

“ERIC recognizes the need to address rising health care costs and acknowledges the growing interest among state lawmakers in regulating the practices of pharmacy benefit managers (PBMs),” said Dillon Clair, Director of State Advocacy, ERIC. “Unfortunately, many of these well-intentioned state laws have resulted in two unintended consequences. First, the laws often have the effect of increasing, rather than reducing, prescription drug and health care costs across the state. Second, applying new state mandates to self-funded ERISA plans creates conflicts with federal law and could disrupt the health care of countless workers and families served by these plans.”

Both state laws at the center of Senator Schwertner’s request feature provisions that would limit the design and administrative options available to plan issuers and PBMs should they be applied to self-funded ERISA plans. In the case of PCMA v. Mulready, No. 22-6074 (10th Cir. 2023), the United States Court of Appeals for the Tenth Circuit ruled that several aspects of an expansive Oklahoma law seeking to regulate a broad range of PBM network practices were preempted by ERISA because those requirements overstepped state authority and impermissibly controlled the design and administration of self-funded ERISA plans. Provisions and requirements adopted by HB 1763 and HB 1919 resemble the Oklahoma law at issue in Mulready.

ERIC is a national advocacy organization exclusively representing the largest employers in the United States in their capacity as sponsors of employee benefit plans for their nationwide workforces. With member companies that are leaders in every economic sector, ERIC is the voice of large employer plan sponsors on federal, state, and local public policies impacting their ability to sponsor benefit plans. ERIC member companies offer benefits to tens of millions of employees and their families, located in every state and city across the country.

The full text of ERIC’s comments can be found here.


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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.