Texas Attorney General Ken Paxton stated in an opinion that certain provisions of the Texas Insurance Code, which regulate certain contracts with pharmacists and pharmacies as well as certain referral and solicitation practices concerning affiliated providers, would likely be found not to be pre-empted by the Employee Retirement Income Security Act. The opinion states that the provisions in question, intended to restrict certain PBM practices, apply to PBMs that serve ERISA plans that would normally fall outside of the Texas Department of Insurance oversight.
Paxton said a court would likely conclude that ERISA doesn't preempt either chapter because neither subchapter has an impermissible connection with ERISA plans as they don't dictate plan choices or add requirements to beneficiary status. They also neither exclusively apply to ERISA plans nor are those plans essential to their functioning.
"In addition, nothing in the language of either subchapter limits their applicability to plans domiciled in Texas. Thus, a court would likely conclude that both subchapters are enforceable against an issuer or PBM that satisfy the statutory definitions and administer a plan covering Texas residents or contracting with Texas pharmacy providers regardless of where the plan is domiciled," he said.
