E&W Blog

For the past 50 years, ERISA has served as the legislative bedrock for employer-sponsored benefits. Through key provisions such as ERISA preemption, the employer-sponsored benefits system continues to deliver health care value and outcomes for millions of American workers.

In his opening statement, Chairman Bob Good (R-VA) emphasized the importance of protecting and strengthening employer-sponsored benefits. He said, “For too long, Congress has allowed the Medicare-for-All mentality to dominate our health care conversations, ignoring the fact that the majority of Americans don’t have—and don’t want—government health care.”

Ahead of the hearing and ERISA’s 50th anniversary, the Committee sent a request for information (RFI) to the employee health benefits community to gather feedback and spark ideas for improving the law. With nearly 100 responses to the RFI and testimony from today’s expert witnesses, the Committee has a clear vision for ERISA’s next 50 years.

The witnesses included: Mr. Russell DuBose, Vice President of Human Resources at Phifer Inc.; Ms. Mairin Mancino, Senior Advisor at the Peterson Center on Healthcare; and Mr. Scott Behrens, Senior Vice President and Director of Government Relations at Lockton Companies.

Rep. Tim Walberg kicked off the question-and-answer session, asking, “What parts of the law are most crucial?”

“The most important one starts with ERISA preemption,” replied Mr. Behrens. He added, “The preemption provision as we see in the legislative history is considered its crowning achievement. One of the key reasons why ERISA was developed in the first place was the disparate rules and patchwork of state regulation.”

ERISA preemption of state law ensures multi-state employers can provide uniform and consistent benefits to their employees. However, recent efforts by states to regulate Pharmacy Benefit Managers (PBMs) threaten ERISA preemption.

Chairwoman Virginia Foxx (R-NC) discussed how these state laws seeking to regulate PBMs, while perhaps well intentioned, could spell disaster for the ERISA framework that provides health benefits to nearly 100 million American workers. “Congress must understand how these state laws are the camel’s nose under the tent,” stated Chairwoman Foxx.

One potential way to alleviate the pressure on ERISA preemption is by enacting the Committee’s Lower Costs, More Transparency Act. This bill would provide transparency to the black box negotiations between PBMs and drug manufacturers for exclusive drug rebates. These rebate savings are often opaque, and employers struggle to know whether they are getting a good deal from their PBMs.

In an exchange with Mr. Behrens, Rep. Aaron Bean (R-FL) asked, “Is there a PBM problem? And what should we do about it if there is?”