Overseen by the Department of Labor, the Employment Retirement Income Security Act (ERISA) clearly defines fiduciary standards required of the individuals that make decisions related to employer-sponsored health benefit plans. They must:

1. Act solely in the interests of plan participants and beneficiaries;
2. Carry out their duties prudently;
3. Follow the plan documents (unless inconsistent with ERISA);
4. Hold plan assets (if the plan has any) in trust; and
5. Pay only reasonable plan expenses.

Every ERISA plan must have at least one person identified and accountable for having decision-making power over the health plan’s fiduciary actions. The duty to act prudently, a central theme of ERISA oversight, focuses on the diligence exercised in the processes and evaluations leading to fiduciary decisions. It requires expertise in a variety of areas and the ability to seek the best value on behalf of plan participants. 

Accepting this responsibility, employers invest heavily in the education and training of their internal team and also enlist the expert guidance of an array of benefit consultants, actuaries, and clinicians. When selecting an administrative partner, such as a PBM, a number of vendors are thoroughly evaluated, extensive financial modeling occurs, and prices and contract terms aggressively negotiated. 

Benefit managers, HR professionals, executive leaders, and Boards of Directors fully appreciate the seriousness of their fiduciary responsibilities in administering a health benefit plan under ERISA and the potential liability that exists if they are found not to act in the best interest of plan enrollees. Some organizations name an administrative committee or their Board of Directors as their fiduciary, and most require the final approval of fiduciary benefit decisions to be reviewed and approved at the highest levels of the organization before enacted. 

So it is incredibly frustrating when legislative bodies bring forth bills that directly interfere with an employer's fiduciary responsibility to its plan participants. Yet, this is exactly what Missouri House Bill 1677 does. It places the financial interest of independent pharmacists over the financial interest of Missouri workers, their families, and the state’s employers. It disregards the commitment and effort undertaken by ERISA plan sponsors to act solely in the interest of plan participants and carry out their duties prudently. It is also hard to see how the legislature can enact legislation which would increase health benefit costs for workers, without some fiduciary responsibility. 

At the direction of the BHC Board and on behalf of members, small businesses, and all Missouri workers, the BHC has submitted a letter to the Health and Mental Health Policy Committee of the Missouri House of Representatives opposing House Bill 1677. The letter outlines BHC’s concern in three areas that we feel threaten to reduce pharmaceutical competition, increase costs, and constrain plan management strategies. We will continue to follow this and other legislation, some that more directly targets employers’ ability to overcome the significant mark-up on specialty medications administered in the medical benefit. We welcome your input and engagement after you review the legislation and BHC’s letter. Please reach out to share your thoughts and support. 

We recognize the difficult challenges faced by brick and mortar retailers and empathize with the small independent pharmacies. These are difficult times for most businesses and many families. But it is not the time to pass legislation which favors one business model over another, especially when consumer behavior trends clearly demonstrate a continued and accelerated preference for online and home delivery services. It is not the time to take programs demonstrated to be effective in reducing cost off the table.

Warm Regards,

Louise Y. Probst,

BHC Executive Director