Sixth Circuit: ERISA Preempts Tennessee Pharmacy Steering Laws
On April 7, 2026, the Sixth Circuit held that ERISA preempts Tennessee's pharmacy steering laws.
Why it matters: General counsel and compliance teams face clearer boundaries when designing employer health plans: federal ERISA rules override conflicting state pharmacy regulations. This helps employers maintain consistent pharmacy benefit management across states, reducing compliance risk and administrative complexity.
- On April 7, 2026, the Sixth Circuit held Tennessee's anti-steering and 'any willing provider' laws are preempted by federal ERISA rules.
- The ruling in McKee Foods v. BFP Inc. gives employers greater control over pharmacy benefit design for ERISA plans.
- Tennessee’s laws were found to unlawfully interfere with how self-insured employers select and manage pharmacy networks.
- The decision matches the Tenth Circuit’s 2023 PCMA v. Mulready decision rejecting Oklahoma's similar pharmacy benefit manager (PBM) restrictions.
The Sixth Circuit’s April 7, 2026 decision affirms that federal law—specifically the Employee Retirement Income Security Act (ERISA)—takes priority over Tennessee statutes that restrict how employers structure pharmacy networks for health plans.
- In McKee Foods v. BFP Inc., a major Tennessee employer challenged enforcement of the state’s anti-steering and 'any willing provider' rules against self-insured health plans governed by ERISA.
- The court concluded Tennessee’s requirements would force employers to alter how they select and contract with pharmacies, interfering with the core administration of federally regulated benefit plans.
- The ERISA preemption doctrine centralizes plan regulation and aims to prevent a patchwork of state laws from complicating multi-state employee benefit programs.
- This decision lines up with the Tenth Circuit’s 2023 PCMA v. Mulready opinion, which invalidated similar restrictions in Oklahoma and reinforced uniformity in employer health plan oversight.
Cory L. Andrews, general counsel at the Washington Legal Foundation, noted the ruling avoids undermining congressional protections for employees and helps ensure plan sponsors are not penalized by ‘conflicting regulatory schemes.’
For legal and compliance leads, this means more certainty regarding plan design and a reduction in legal risk from state-level pharmacy mandates. However, states may continue testing the bounds of permissible regulation around PBMs—potentially prompting further litigation or regulatory guidance on the ERISA preemption standard.
By the numbers:
- 2—Number of appellate circuits (Sixth and Tenth) confirming ERISA preemption over state PBM restrictions in the last two years.
- April 7, 2026—Date of the Sixth Circuit ruling affecting Tennessee and potentially beyond.
Yes, but: State lawmakers may still pursue new PBM regulations or enforcement actions that indirectly affect ERISA plans, which could lead to further legal challenges and uncertainty.
What's next: Employers should monitor for state legislative responses or appeals that could test the limits of ERISA preemption in the pharmacy benefit space.