What Employers Should Watch in the 2026 Legislative Session

As the Tennessee General Assembly returned to Nashville, TEBA members gathered for an exclusive member-only call to discuss the legislative landscape ahead. The discussion provided critical insight into proposed legislation that could disrupt pharmacy access, employer-sponsored benefit plans and the hardworking employees who depend on them. 

TEBA's 2026 Legislative Priorities 

TEBA is dedicated to monitoring and opposing all legislation that impacts employer-sponsored benefit plans. While specific legislation proposals have already come to light, our commitment is to protect employers' right to design self-funded health plans for their workforce without government overreach. 

Two legislative priorities dominated our members-only call: 

Forced Pharmacy Closure: A Threat to Employee Access  

Senator Bobby Harshbarger has filed SB2040, a bill that will decimate pharmacy access in all 95 counties of Tennessee.  While TEBA is still reviewing language with other aligned groups, our initial read indicates this would strip thousands of veterans of their access to life-saving medication, remove potentially 80% of pharmacies currently being utilized by hardworking Tennesseans, and decimate plans’ ability to realize critical cost savings. Without these pharmacies online, Tennesseans will go without medication and plans will spend millions more on already skyrocketing coverage.  Specifically, this legislation would result in major pharmacy chains like CVS, Walgreens, Kroger, and Costco being forced to choose between their retail pharmacy operations and maintaining their prescription benefit services. When Arkansas passed similar legislation, CVS publicly stated they would have to close all pharmacy locations in the state overnight. 

During our call, employers expressed deep concern about the financial impacts of forced pharmacy closure legislation on their workforce and business operations. The implications extend beyond pharmacy access: 

• Veteran Access to Mail Order: Tennessee veterans will immediately lose access to their mail order pharmacy costing Tricare millions and causing veterans to scramble to find new pharmacy relationships overnight and burden them with higher costs once they do locate a new pharmacy.   

• Workforce Disruption: Employees would need to leave work early or arrive late to travel farther for medications, impacting productivity and attendance. 

• Health and Wellness Decline: Barriers to prescription access create stress that affects workplace performance and long-term employee health outcomes. 

• Increased Costs: Limiting pharmacy options impacts negotiated discounts and mail-order benefits. Reduced competition weakens employers' negotiating power, driving up prescription costs for employer-sponsored health plans. 

• Retention and Recruitment Challenges: In rural and underserved areas, the loss of accessible, competitively priced pharmacies undermines employers’ ability to offer strong prescription benefits. Without reliable local pharmacy access, benefit packages become less competitive, making it harder for employers to attract new employees and retain existing employees. 

ERISA Preemption Under Attack: A Threat to Employer Flexibility 

Additionally, TEBA will actively oppose any policy proposals that undermine ERISA preemption. The Employee Retirement Income Security Act (ERISA) protects employers' right to design benefit plans that meet their workforce's specific needs without a patchwork of state level interference. 

ERISA preemption allows employers to create unique benefit plans, negotiate better rates, and maintain flexibility to adapt as workforce needs change. When states pass laws that conflict with ERISA, employers face increased costs, administrative complications, and reduced ability to provide competitive benefits. The McKee Foods lawsuit underscores this fight, challenging Tennessee laws that interfere with employer plan design and unfairly force pharmacies into their employer-sponsored network. TEBA will be providing updates on this ongoing suit as they become available.  

What TEBA Members Can Do to Prepare 

1. Stay Informed: Watch for bills and other legislative developments. TEBA members can track specific legislation and bill proposals in real time at the Tennessee General Assembly's official legislative tracking website: https://wapp.capitol.tn.gov/apps/subjectindex/default.aspx. 

You can also subscribe to TEBA’s monthly newsletter to receive timely updates on TEBA events, legislative developments, policy priorities, and advocacy efforts impacting employer-sponsored benefit plans. Go to tneba.com to sign up. 

2. Amplify Our Message: Share TEBA newsletters, blog posts, and op-eds with your networks and on social media. Legislators are already hearing from independent pharmacists and their special interests. They value employers and employees' voices that cut through the noise. 

3. Show Up: Join us at Biscuits and Benefits (February 5) and Day on the Hill (March 3). Direct conversations with your legislators are the most powerful tool we have. As we learned during our roundtables in Memphis, Chattanooga, and Knoxville, legislators value hearing from employers about real world impacts of their policy. 

4. Recruit Members: Encourage other business leaders to join TEBA. Our strength is in numbers, and our membership continues to grow exponentially.