Florida’s Prescription Drug Reform Act is one of the most aggressive state-level PBM reform laws enacted in response to the Supreme Court’s decision in Rutledge v. PCMA (2020). In Rutledge, the Court ruled that an Arkansas law regulating PBM pharmacy reimbursement was not preempted by ERISA, giving states greater authority to impose rules on PBMs. However, many state legislatures—including Florida’s—misinterpreted the ruling as granting unrestricted authority to regulate self-funded employer health plans.

While ERISA still applies, and states cannot regulate self-funded plans at will, Florida’s new law attempts to do just that. A key provision of the law requires self-funded employers to attest annually to their compliance with Florida’s PBM regulations, a mandate that is now surfacing in PBM communications to plan sponsors.

What Does the Florida PBM Law Require?

Under the law, PBM contracts with plan sponsors must include:

• Pass-through pricing: PBMs cannot engage in spread pricing and must charge plans the same amount they pay to pharmacies.
• 100% rebate pass-through: PBMs must remit all manufacturer rebates to the plan sponsor.
• Restrictions on mandatory mail order: Employers cannot require mail order prescriptions unless the medication is unavailable at retail pharmacies within the network.
• Coverage scope: The law applies to PBM contracts executed, amended, or renewed on or after July 1, 2023, and purports to apply to any employer covering Florida-based employees, even if the company is headquartered elsewhere.

The most controversial requirement is that self-funded employer plan sponsors must attest to the Florida Office of Insurance Regulation (OIR) that their PBM contracts comply with the law—under penalty of perjury.

Challenges for Plan Sponsors in Verifying PBM Compliance

While the law places the burden on employers to certify compliance, PBMs are notoriously opaque, making it difficult for plan sponsors to verify whether PBMs are truly adhering to these requirements.

• Lack of audit rights: Many PBM contracts do not provide plan sponsors with meaningful audit rights, limiting their ability to confirm that PBMs have passed through 100% of rebates or refrained from spread pricing.
• Complex rebate structures: Even when PBMs claim to pass through rebates, the definition of "rebate" varies, and some PBMs use alternative revenue streams—such as administrative fees or price concessions—to sidestep full transparency. Also, PBM-owned rebate aggregators further complicate the rebate arrangement. 
• Claims data limitations: Employers often lack access to real-time claims-level data, making it difficult to track what PBMs are reimbursing pharmacies versus what they are charging the plan.
• PBM self-reporting risks: Many plan sponsors must rely on PBMs’ own self-reported attestations, which may not fully disclose hidden revenue streams or contractual loopholes.

The Challenge for Multistate Employers

For employers with employees in Florida but headquarters elsewhere, this requirement poses significant legal and operational challenges. It attempts to force compliance with Florida’s standards on non-Florida-based employers, despite clear ERISA preemption concerns.

Florida regulators may have overstepped, but for now, self-funded plan sponsors should be aware of these requirements, review their PBM agreements carefully, and seek legal guidance to navigate compliance risks.

Have you or your clients received a notice about Florida’s attestation requirement? Let’s discuss.