HEARING ALERT: Oppose SB 1122 in Senate Health & Human Services 8:00a on Wednesday, March 5, 2025

by Carol Sims | Mar 4, 2025

Please attend the hearing or send a representative to sign a card AGAINST SB 1122

SB 1122
Texas Senate Health & Human Services Committee
8:00, Wednesday, March 5, 2025
Senate Chamber
Hearing agenda
Video Link

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. When ERISA was passed by Congress in 1974, it preempted states from passing laws affecting the administration or design of employer health plans. SB 1122 by Schwertner (R-Georgetown) applies to ERISA plans and would cost employers hundreds of millions of dollars, potentially impacting employee benefits. In Texas, nearly 15 million people rely on employer-provided health insurance, and more than half of that population is covered under ERISA-regulated self-funded health plans. These plans are the backbone of our state’s health care coverage.

Why you should oppose SB 1122:

Passage of SB 1122 could cost Texas employers hundreds of millions of dollars in higher health care costs. It could also impair the ability of employers and business owners to obtain affordable health care coverage for their employees. While this bill has been portrayed as targeting pharmacy benefit managers, it actually has very little effect on them. PBMs don’t design employer-sponsored health insurance plans and don’t pay for them. Employers do, and ERISA allows them to design uniform plans to cover their employees wherever they are located. If the Legislature takes action to pierce ERISA pre-emption and make those plans more expensive, fewer businesses will be able to provide coverage for their employees.
The U.S. Tenth Circuit Court of Appeals ruled that ERISA pre-empted an Oklahoma statute substantially similar to SB 1122, and this case is now before the Supreme Court of the United States. While we do not know what the Court will do or when it will do it, we do know is that it makes sense to see what SCOTUS thinks before we try to pass a nearly identical statute over the universal opposition of the Texas business community.

Benefits of ERISA plans:

ERISA protects the state of Texas and taxpayers by encouraging private employers to offer benefit plans for their employees rather than relying on public resources.
ERISA protects employees by establishing consistent guidelines for retirement and health plans offered by multi-state private employers.
ERISA protects employers by supporting a uniform benefit program for all employees and by avoiding complications of a patchwork system between states.

Extensive background on ERISA legislation is available here: https://tcjl.com/erisa/

TCJL testimony against SB 1122: