AGO 1989-030.

• Case Date: March 09, 1989
• Court: Kansas

Kansas Attorney General Opinions 1989. AGO 1989-030. March 9, 1989ATTORNEY GENERAL OPINION NO. 89-30The Honorable Edward F. Reilly , Jr.State Senator Third District State Capitol Room 255-E Topeka, Kansas 66612 Re: Labor--Employee Retirement Income Security Program; Protection of Employee Benefit Rights--General Provisions Synopsis: Proposed state legislation that relates to a welfare benefit plan and is not otherwise excepted is preempted by Section 514 of the Employee Retirement Income Security Act of 1974 (ERISA). Cited herein: 29 U.S.C. § 1001 et seq.; U.S. Const., Art. VI, cl. 2. * * * Dear Senator Reilly: As Senator for the Third District you inquire whether the language of certain proposed legislation violates the Employee Retirement Income Security Act of 1974 (ERISA). You indicate that the proposed Utah legislation in question involves limitations on third party payors for pharmaceutical services and requires employers who contract with an out-of-state pharmacy for provision of medication to their employees to also reimburse employees who choose to purchase medication locally. You state that the bill further requires that those reimbursements be made at the same ratio as the cost of medication from the out-of-state pharmacy. We understand that your interest in having a bill with similar provisions proposed in Kansas prompts your inquiry. The proposed legislation states:

"Third Party Payor for Pharmaceutical--Limitations.

"(1) Any third party payor for pharmaceutical services within the state of Utah may not require any pharmacy patient to obtain prescription drugs from an out of state pharmacy as a condition of obtaining third party for such prescription drugs.

"(2) This section does not prohibit any third party payor of pharmaceutical services, who provides for reimbursement to the pharmacy patient or payment on his behalf, from exercising the right to limit the amount reimbursed for the cost of prescription drugs based upon the cost of identical prescription drugs available through a designated out of state pharmacy. This third party payor shall offer the same amount of payment for the cost of prescription drugs purchased in Utah. For the purposes of this subsection each third party payor of pharmaceutical services shall identify as a party of the third party agreement or contract the designated out of state

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