HB 2021 Would Drive Up the Cost of Employer Drug Coverage
March 21, 2023
Today, the House Insurance Committee will hear HB 2021 which would apply state regulation of prescription drugs to large employers, public school teachers, and unions.
👋 TAHP take: We are opposing this bill which would drive up the cost of prescription drug coverage and undermine the system that allows large employers to provide health coverage.
⁉️ Why does it matter? Self-funded plans are regulated by federal legislation, often referred to as ERISA. The federal rules preempt state regulation and allow large employers to cover employees from multiple states without managing a patchwork of multi-state rules and regulations.
💰 HB 2021 expands Texas’ costly prescription drug and pharmacy mandates.
🗣️ What they’re saying:
- “If this bill were to become law, it would increase prescription drug costs for millions of Texas employees. This would be costly for Texas employers, who would be forced to comply with a range of different state laws and regulations.” — Texas Association of Business CEO, Glenn Hamer
- “Ending or eroding ERISA preemption will adversely impact labor markets, disadvantage employees based on where they live or work, cause employers to cut back on benefit coverage and raise the cost of health insurance and retirement plans.” —Article in Texans For Lawsuit Reform newsletter
💼 Big employers benefits:
- 98% of large employers offer health benefits, and 3 out of 4 employees cite health benefits as their reason for accepting a job.
- 86% of employees report they are happy with their health coverage.
⛔ How bad are these mandates?
– Disrupting employer coverage across state lines is an administrative nightmare.
– Texas mandates are expensive.
- Force employers to wait a full year before switching out high-cost drugs for new, lower-cost generic options.
- Limit mail-order pharmacy incentives and options.
- Force employers to have contracts with higher-cost pharmacies.
🙋 Who pays?
- Employers will pay for these expensive mandates.
- Employees bear the increased cost of coverage through limited benefits, reduced compensation, and increased cost-sharing.
👉 Bottom line: HB 2021 is unnecessary and hurts the health benefits of Texas’ largest employers.
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