United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                     ___________

                                     No. 00-2788
                                     ___________

Express Scripts, Inc.; Associated         *
Industries of Missouri; Missouri          *
Chamber of Commerce; St. Louis            *
Area Business Health Coalition,           *
                                          *
             Plaintiffs - Appellants,     *
                                          * Appeal from the United States
      v.                                  * District Court for the Western
                                          * District of Missouri.
Keith Wenzel, Acting Director of          *
the Missouri Department of Insurance, *
                                          *
             Defendant - Appellee.        *
                                          *
______________________                    *
                                          *
Secretary of Labor,                       *
                                          *
             Amicus on Behalf             *
             of Appellee.                 *
                                     ___________

                            Submitted: April 11, 2001

                                    Filed: August 22, 2001
                                     ___________
Before WOLLMAN, Chief Judge, MURPHY, Circuit Judge, and GOLDBERG,
      Judge.1
                           ___________

MURPHY, Circuit Judge.

       At issue in this case is whether certain provisions of Missouri law are preempted
by the Employee's Retirement Income Security Act of 1974 (ERISA). The provisions
regulate some aspects of how Missouri health maintenance organizations (HMOs)
provide prescription drugs through network pharmacies. Express Scripts, Inc.
(Express), which has a mail order pharmacy, and several business groups brought this
action for injunctive and declaratory relief against Keith Wenzel, the acting director of
the Missouri Department of Insurance, arguing that the Missouri provisions could not
be enforced because they were preempted by ERISA. After the district court2 granted
Wenzel's motion for summary judgment, plaintiffs appealed and the United States
Secretary of Labor filed an amicus brief supporting one of Wenzel's theories for
affirmance. We conclude that the challenged provisions fall within ERISA's savings
clause and therefore affirm.

                                           I.

       The Missouri legislation which led to this lawsuit was enacted in 1997. Prior to
that time, some Missouri HMOs provided incentives to enrollees to fill maintenance
prescriptions at mail service pharmacies, rather than at local retail pharmacies. A
maintenance prescription is one providing medication to treat a medical condition for
a period of greater than 30 days, see Mo. Rev. Stats. § 354.535.5, and an enrollee


      1
       The Honorable Richard W. Goldberg, Judge, United States Court of
International Trade, sitting by designation.
      2
      The Honorable Nanette K. Laughrey, United States District Judge for the
Western District of Missouri.

                                          -2-
might prefer to obtain a large supply of such medication to avoid the nuisance of more
frequent purchase. Prior to the enactment of the Missouri statutes, an HMO could limit
the quantity enrollees could obtain from retail pharmacies to a 30 day supply while
allowing them to obtain up to a 90 day supply from a mail service pharmacy. An HMO
also could charge enrollees a higher copayment to fill a maintenance prescription at a
retail pharmacy than at a mail order pharmacy. Such a mail service pharmacy provider
would give discounts to the HMO in return for the benefit of becoming the preferred
provider of maintenance prescriptions and the exclusive provider in the network of 90
day prescriptions.

       The Missouri legislature enacted Mo. Rev. Stat. §§ 354.535.3 and 354.535.4 in
1997. Section 354.535.3 requires HMOs to charge the same copayment for
prescription drugs from any network pharmacy which meets the HMO product cost
determination:

      Every health maintenance organization shall apply the same coinsurance,
      co-payment and deductible factors to all drug prescriptions filled by a
      pharmacy provider who participates in the health maintenance
      organization's network if the provider meets the contract's explicit product
      cost determination. If any such contract is rejected by any pharmacy
      provider, the health maintenance organization may offer other contracts
      necessary to comply with any network adequacy provision of this act.
      However, nothing in this section shall be construed to prohibit the health
      maintenance organization from applying different coinsurance, copayment
      and deductible factors between generic and brand name drugs.

Mo. Rev. Stat. § 354.535.3 (emphasis added). Section 354.535.4 prevents HMOs from
limiting the quantity of drugs an enrollee can obtain at one time unless the limit applies
to all pharmacy providers:

      Health maintenance organizations shall not set a limit on the quantity of
      drugs which an enrollee may obtain at any one time with a prescription,

                                           -3-
      unless such limit is applied uniformly to all pharmacy providers in the
      health maintenance organization's network.

354.535.4 (emphasis added).

       Appellants Express, Associated Industries of Missouri, Missouri Chamber of
Commerce, and St. Louis Area Business Health Coalition sued Keith Wenzel, the
acting director of the Missouri Department of Insurance. They sought an injunction
against enforcement of the statutes and a declaratory judgment that the statutes and
related regulation, 20 C.S.R. 400-7.400, are preempted by ERISA. After discovery
was complete, the parties filed cross motions for summary judgment. The district court
granted Wenzel's motion, and dismissed the case after concluding that the Missouri
statutes do not fall within the scope of ERISA preemption because they do not "relate
to" employee benefit plans. The court reasoned that the statutes do not act
"immediately and exclusively" on such plans, but only indirectly, and that the existence
of ERISA plans is not essential to their operation. It also concluded that the statutes
were saved from ERISA preemption because they regulate HMOs which are in the
business of insurance.

       Appellants argue that the district court erred in dismissing their claims. They say
that the statutes are within the scope of ERISA preemption because they relate to
employee benefit plans since they directly regulate health benefit plans and impact plan
structure, administration, and finances. They argue that the provisions are not saved
by the insurance exception because HMOs are not in the insurance business. Wenzel
responds that the statutes do not come within ERISA preemption because they affect
employee benefit plans only indirectly. He and amicus United States Secretary of
Labor both argue that the Missouri provisions are saved from preemption in any case
because they regulate HMOs which are in the business of insurance.




                                           -4-
                                          II.

        Employee benefit plans are comprehensively regulated by ERISA, 29 U.S.C. §§
1001 et seq. (the Act). Such plans are established by employers and typically include
retirement and health care benefits. At the time it enacted ERISA, Congress was
concerned primarily with protecting employees from losing their anticipated retirement
benefits. See 29 U.S.C. § 1001 (congressional findings and declaration of policy). The
Act establishes minimum requirements to protect employee benefits. See id.; H.R. REP.
NO. 93-533 (1973), reprinted in 1974 U.S.C.C.A.N. 4639, 4640,4643-46; SEN. REP.
NO. 93-127 (1973), reprinted in 1974 U.S.C.C.A.N 4639, 4844-47. The Act also
includes a broad preemption provision, declaring that ERISA "shall supersede any and
all State laws insofar as they may now or hereafter relate to any employee benefit plan
described in section 1003(a) of this title and not exempt under section 1003(b) of this
title." 29 U.S.C. § 1144(a). The preemption provision was included to prevent states
from interfering with the Act's intended protection of employees by inconsistent
legislation or regulation. See H.R. REP. NO. 93-533 (1973), reprinted in 1974
U.S.C.C.A.N. 4639, 4655; SEN. REP. NO. 93-127 (1973), reprinted in 1974
U.S.C.C.A.N 4639, 4871.

       The preemption provision has been construed broadly. A state law "relates to"
an ERISA plan and is preempted if it has "a connection with or a reference to such a
plan." New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins.
Co., 

, 656 (1995). A state law does not have to act directly on an ERISA
plan to be preempted. See Ingersoll-Rand Co. v. McClendon, 

, 139
(1990). State laws that are not targeted at ERISA plans, but which indirectly force a
plan administrator to make a particular decision or take a particular action may be held
to "relate to" employee benefit plans. See, e.g., Metropolitan Life Ins. Co. v.
Massachusetts, 

, 739 (1985) (Massachusetts law requiring insurance

                                          -5-
companies to provide minimum mental health care benefits to insureds is related to
ERISA plans); Moran v. Rush Prudential HMO, Inc., 

, 968-69 (7th Cir.
2000), cert. granted, 

, 3799, 3807 (U.S. June 29, 2001) (No. 00-
1021) (Illinois law requiring HMOs to submit disputes over whether a treatment is
medically necessary to independent review is related to ERISA plans).

       ERISA also contains a savings clause to prevent certain state laws from being
preempted: "nothing in this subchapter shall be construed to exempt or relieve any
person from any law of any State which regulates insurance, banking, or securities."
29 U.S.C. § 1144(b)(2)(A). ERISA's legislative history does not include a discussion
of either employee health plans or the Act's savings clause. See Metropolitan 

.

        In Metropolitan Life, the Supreme Court turned to the McCarran-Ferguson Act,
15 U.S.C. § 1011 et seq., to inform its understanding of the ERISA savings clause. See

The McCarran-Ferguson Act predates ERISA, and it also protects state
insurance laws from federal preemption. See 

n.21. The purpose of the
McCarran-Ferguson Act was explained in a policy statement in its legislative history:

      Congress hereby declares that the continued regulation and taxation by
      the several States of the business of insurance is in the public interest, and
      that silence on the part of the Congress shall not be construed to impose
      any barrier to the regulation or taxation of such business by the several
      States.

15 U.S.C. § 1011. Congress thus chose to ensure that regulation of the insurance
industry continue to be left to state governments. See Metropolitan 

, n. 21; S. REP. NO. 20 at 1 (1945); H.R. REP. NO. 143 (1945), reprinted in 1945
U.S.C.C.A.N. 670.




                                           -6-
       Under the McCarran-Ferguson Act, state laws regulating the business of
insurance are not preempted by a federal statute unless Congress clearly communicates
a specific intent to preempt. See 15 U.S.C. § 1012(b)3; COUCH ON INS. 3D § 2:4 at 12.
Since the ERISA preemption provision is broad enough to encompass state laws
regulating insurance, it could have been interpreted to preempt them if Congress had
not added the savings clause. See COUCH § 2:4 at 13-14. The Supreme Court
concluded in Metropolitan Life that the ERISA savings clause was enacted "to preserve
the McCarran-Ferguson Act's reservation of the business of insurance to the 

n.21, and that it is therefore appropriate to use the older statute as a
guide to interpret the ERISA savings clause. See 

        A two step inquiry is used to determine whether a state law is saved from ERISA
preemption. See UNUM Life Ins. Co. of Am. v. Ward, 

, 367 (1999). The
first question is whether the law regulates insurance under a "common-sense view of
the matter." 

Life Ins. 

). The second step
involves consideration of three factors used to determine if a law regulates the
"business of insurance" within the meaning of the McCarran-Ferguson Act: does the
law transfer or spread an insured's risk, does it deal with "an integral part of the policy
relationship between the insurer and the insured," and is it "limited to entities within the
insurance industry[?]" 

).

       3
           Section 1012(b) provides that:

       No Act of Congress shall be construed to invalidate, impair, or supersede
       any law enacted by any State for the purpose of regulating the business
       of insurance, or which imposes a fee or tax upon such business, unless
       such Act specifically relates to the business of insurance: Provided, That
       . . . the Sherman Act, . . . the Clayton Act, and . . . the Federal Trade
       Commission Act . . . shall be applicable to the business of insurance to the
       extent that such business is not regulated by State law.

15 U.S.C. § 1012 (b) (italics in the original).

                                            -7-
       Courts are to start with the "presumption that Congress does not intend to
supplant state law." Travelers Ins. 

. This is particularly true in the
case of general health care regulation, where a clear and manifest purpose of Congress
is required to overcome the presumption. See 

661.

                                           III.

       If the Missouri laws in question regulate insurance, they will be saved from
preemption even if they relate to ERISA plans. Appellants argue that common sense
dictates that the statutes do not regulate insurance. They say that Missouri HMOs are
not insurers because they provide health care on a prepaid basis rather than by
indemnifying their customers and because they are licensed and regulated under
different statutory provisions than insurance companies. They argue that the statutes
in question regulate pharmacies, rather than insurance. Wenzel responds that HMOs
spread and shift risk just like insurance and that the statutes were directed at the
insurance industry because they were designed to benefit HMO enrollees who are in
the position of insureds. The Secretary of Labor says that HMOs are an innovative
form of insurance and that Missouri regulates them and traditional insurance companies
in similar ways.

                                           A.

       Under Missouri statutes HMOs are included within the definition of "insurer"
and are treated similarly to insurance companies. "'Insurance company' or 'insurer'" is
defined, in part, as "any other legal entity engaged in the business of insurance,
including . . . health maintenance organizations . . . unless their exclusion from this
definition can be clearly ascertained from the context of the particular statutory section
under consideration." Mo. Rev. Stat. § 375.012.5 (emphasis added). Missouri HMOs
and insurance companies are regulated similarly in degree and substance. HMOs and
traditional insurance companies are all supervised by the Missouri Department of

                                           -8-
Insurance. See 

354.485, 374.010. They all are highly regulated. They all are
subject to minimum standards for customer contracts, financial reporting requirements,
maintenance of a minimum statutory net worth, periodic examination by the Missouri
Department of Insurance, and use of actuarial analysis to determine health care rates.
See Appendix at 509 (Wenzel Affidavit). In the event of financial failure, both HMOs
and insurance companies are rehabilitated, liquidated, or conserved by the Missouri
Department of Insurance. See 

not shown any substantive
differences between the laws regulating HMOs and those regulating insurance
companies, and we conclude that the fact that separate statutory sections govern their
regulation is not dispositive of the issue of whether they should be considered insurers.

        The distinguishing feature of insurance is the "spreading and underwriting of a
policyholder's risk." Group Life & Health Ins. Co. v. Royal Drug Co., 

,
211 (1979). An insurance company performs this function by assuming the risk that
its customers' health care costs might exceed the premiums they pay. See Arizona v.
Maricopa County Med. Soc'y, 

, 339 n.7 (1982). HMOs differ from
traditional insurance companies in that they contract to provide specified health care
for a fixed fee and they make arrangements for that care by entering into a contractual
arrangement with a group of physicians or other health care providers. See Pegram v.
Herdrich, 

, 218-19 (2000). Just as an insured is protected from risk by
a traditional insurance contract, an enrollee in an HMO is protected from the risk of
higher health care expenses by placing the risk on either the HMO or the health care
providers. See 

by HMOs); Maricopa County Med. 

n.7 (1982) (risk borne by health care providers).

        In this way HMOs both spread and underwrite risk, and we agree with other
circuit courts which have concluded that HMOs are insurers. See Kentucky Ass'n of
Health Plans, Inc. v. Nichols, 

, 364-65 (6th Cir. 2000), petition for cert.
filed, 

(U.S. Mar. 22, 2001) (No. 00-1471); Corporate Health Ins.,
Inc. v. Texas Dep't of Ins., 

, 538 (5th Cir. 2000) petition for cert. filed, 69

                                           -9-
U.S.L.W. 3317 (U.S. Oct. 24, 2000) (No. 00-665); Washington Physicians Serv. Ass'n
v. Gregoire, 

, 1045-46 (9th Cir. 1998), cert. denied, 

(1999); Anderson v. Humana, Inc., 

, 892 (7th Cir. 1994). But see O'Reilly
v. Ceuleers, 

, 1389 (11th Cir. 1990).

                                          B.

       Appellants argue that even if HMOs are insurers, the challenged Missouri
provisions do not regulate insurance. They claim the Missouri statutes are directed at
pharmacies rather than the insurance industry and that they should be preempted like
the Arkansas law in Prudential Ins. Co. v. Nat'l Park Med. Ctr., 

(8th Cir.
1998). Wenzel counters that the Missouri legislature was concerned for consumers and
that the Missouri statutes are very different from the one in National Park.

       A law regulates insurance under a common sense approach when it is
"specifically directed toward that industry." Pilot Life Ins. Co. v. Dedeaux, 

, 50 (1987). "Statutes aimed at protecting or regulating [the relationship between an
insurer and insured], directly or indirectly, are laws regulating the 'business of
insurance.'" Metropolitan 

(citation omitted). A law thus regulates
insurance under a common sense approach if it benefits insureds by affecting their
relationship with their insurers. See 

; 

.

       The way in which Mo. Rev. Stat. §§ 354.535.3 and 354.535.4 are written shows
that they are directed at HMOs, not any other industry. The former begins with these
words: "Every health maintenance organization shall apply the same coinsurance . .
." Mo. Rev. Stat. § 354.535.3 (emphasis added), and the other with: "Health
maintenance organizations shall not set a limit . . . ." 

354.535.4 (emphasis
added). The statutes then go on to prohibit contractual barriers previously used by


                                         -10-
HMOs to limit choice and convenience for enrollees needing maintenance
prescriptions.

       Prior to the enactment of the Missouri statutes, enrollees of some HMOs were
required to obtain maintenance prescriptions from mail order pharmacies if they wished
to receive a 90 day supply. Those who obtained drugs through mail service were
required to make their orders well in advance of when they were needed. See
Appendix at 173 (an Express pamphlet warning subscribers to allow ten to fourteen
business days for their prescriptions to be filled). The record contains the testimony
of several Missouri pharmacists who reported that enrollees complained that mail order
houses did not fill their prescriptions in the time promised and they were forced either
to obtain higher priced emergency supplies from retail pharmacies or to forgo taking
needed medication during the interim. See 

(Forrester, Keener, Mitchell,
Taylor, and Hartwig affidavits). Some enrollees also disliked having to ask strangers
about their medications over the phone.4 See 

benefited enrollees by
removing contractual restrictions imposed by Missouri HMOs that impeded timely and


       4
        It is not clear whether the enactment of the 1997 statutes was induced by any
such complaints, for the Missouri legislature does not record debates or publish
committee reports. See Roosevelt Fed. Sav. & Loan Ass'n v. Crider, 

,
328 n.3 (Mo. Ct. App. 1986). Wenzel submitted affidavits from Missouri State
Representative Timothy Harlan, the bill's sponsor, and George Oestreich, the chief
executive officer of the Missouri Pharmacy Association and lobbyist for the Missouri
statutes. See Appendix at 519, 526. Both testified that the statutes were intended to
benefit enrollees by giving them the flexibility to fill maintenance prescriptions at retail
pharmacies and to "level the playing field" for retail pharmacies who wished to fill such
prescriptions. Neither affidavit conclusively demonstrates the legislature's intent,
because Oestreich is not a legislator and post-enactment statements of even a bill's
sponsor are not entitled to much weight. See Western Air Lines, Inc. v. Bd. of
Equalization of S.D., 

, 130-31 n.* (1987); Chrysler Corp. v. Brown, 

, 311 (1979); Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 

, 118 n.13 (1980).

                                           -11-
convenient access to prescription drugs and to personal contact with local pharmacists.5
The language of the statutes was specifically directed at HMOs and we conclude that
the provisions regulate insurance under the common sense test. They are unlike the
Arkansas statute in National Park which applied broadly to other types of entities
beyond the insurance industry. See National 

. They protect
and regulate the relationship of enrollees and their HMOs and are specifically targeted
at this type of insurance. See Metropolitan 

.

                                           C.

      Not any one of the McCarran-Ferguson factors is dispositive, for each is only a
"guidepost," and not all three have to be satisfied to save a state law from preemption.6


      5
        Appellants assert that the statutes were enacted to benefit retail pharmacies, but
documents which they cite contain no comment on the legislature's intent. The cited
press release and fiscal impact statement are not evidence of legislative intent because
they were issued by the Missouri Department of Insurance, not a legislative body. See
Mo. Rev. Stat. § 374.010 (Department of Insurance is created by statute and has only
enforcement powers). Similarly, the Missouri House of Representatives bill summaries
are not statements of legislative intent, but are only summaries of the contents of the
bill.     See Missouri State Senate Glossary of Legislative Terms, at
http//:www.senate.state.mo.us/glossary.htm (last visited August 1, 2001).
      6
        Much of appellants' briefs are devoted to the argument that the Missouri statutes
are like "any willing provider" laws which may not meet the three factor test. Such a
law requires an HMO to allow any area provider willing to meet contract terms to be
included in its network. See, e.g., National 

. The category itself
is not determinative, however. Whether a state law falls within the ERISA savings
clause depends on the facts of the case, and several any willing provider laws have
been found have to been saved. See, e.g., 

; Texas Pharm.
Ass'n v. Prudential Ins. Co. of Am., 

, 1040-42 (5th Cir. 1997), cert.
denied, 

(1997) (unamended statute saved); Stuart Circle Hosp. Corp. v.
Aetna Health Mgmt., 

, 504 (4th Cir. 1993), cert. denied, 

(1993); Blue Cross & Blue Shield of Kansas City v. Bell, 

, 1334-36 (10th

                                          -12-


. The Supreme Court has understood both the McCarran-
Ferguson Act and the ERISA savings clause to be consumer protection laws, concerned
with "[t]he relationship between insurer and insured, the type of policy which could be
issued, its reliability, its interpretation, and enforcement – these were the core of the
'business of insurance' . . . . [T]he focus [of the statutory term] was on the relationship
between the insurance company and the policyholder." Metropolitan 

-44 (quoting Sec. & Exch. Comm'n v. Nat'l Sec. Inc., 

, 460 (1969),
emphasis and alterations in the original). State laws that control the terms of insurance
contracts are generally seen to regulate insurance under either the McCarran-Ferguson
Act or the ERISA savings clause. See 

.

       Appellants contend that Group Life & Health Ins. Co. v. Royal Drug Co., 

(1979), leads to the conclusion that the Missouri statutes do not satisfy any
of the McCarran-Ferguson factors. In Royal Drug a number of pharmacists brought an
antitrust action against an insurance company that required all pharmacies servicing its
policyholders to enter into contracts to sell prescription drugs for two dollars above
cost. 

, 209. Policyholders could purchase drugs from these
pharmacies for $2, but they were required to pay higher prices if they filled
prescriptions at pharmacies without company contracts. See 

The price
fixing agreements between the insurance company and the pharmacies were held not
to be the business of insurance. See 

      Royal Drug is not on point, however, because it was concerned only with an
arrangement between the pharmacies and the insurance company which the Court
looked at skeptically because exemptions from antitrust law are narrowly construed.
See 

The Court did not address the question of whether the contractual
arrangements between the insurance company and its policyholders might be
considered the business of insurance. See 

n.37. Here, the Missouri laws in


Cir. 1986).

                                           -13-
question have direct effects on the contractual arrangements between HMOs and
enrollees, and the presumption is against preemption. See Metropolitan 

.

       The first McCarran-Ferguson question is whether the Missouri statutes shift or
transfer risk. See 

. Prior to the enactment of the Missouri
statutes, enrollees were required to make higher copayments if they obtained their
maintenance prescriptions from retail pharmacies. They thus bore the risk of higher
drug costs if there were a delay in obtaining their prescriptions from a mail order
pharmacy. Because the Missouri statutes no longer allow HMOs to make mail order
pharmacies the exclusive providers of 90 day prescriptions, HMOs are no longer able
to obtain the previous discounts on mail order contracts. See Appendix at 99-100 (Low
Affidavit). This increases the cost of prescriptions, which HMOs must either absorb
or pass along. The statutes therefore transfer or spread the risk of higher prescription
costs.

       The second question is whether the state law alters an integral part of the policy
relationship between the insurer and the insured. See 

. Laws
that affect the type of policy an insurer may issue or that mandate that a contract term
be included within an insurance contract satisfy this factor. See 

The
Missouri statutes alter the type of policy an HMO may offer because they require that
enrollees be allowed to obtain maintenance prescriptions at retail pharmacies without
being penalized. The second McCarran-Ferguson factor is easily satisfied.

      The third question is whether the regulation is limited to entities within the
insurance industry. See 

Common law breach of contract and bad faith
claims such as those in Pilot Life are not limited to the insurance industry because they
stem from general principles of tort and contract law. 

. Unlike
general common law claims which are applicable to any industry, the Missouri statutes
regulate only HMOs. Appellants argue that the drug provisions are not limited to the

                                          -14-
insurance industry because they also regulate pharmacies. While pharmacies are
affected by the law, they are not regulated by it. They are not penalized for not
complying with the statutes or prevented from entering into these arrangements with
anyone other than HMOs. The McCarran-Ferguson test does not require that the
regulation have no indirect affects on other entities. See 

n.3;

; 

. The third factor is thus satisfied,
and we conclude that under the McCarran-Ferguson tests, the challenged Missouri
provisions regulate the business of insurance.

                                          IV.

       Since Missouri HMOs are insurers and the challenged Missouri statutes regulate
insurance under a common sense test and under the McCarran-Ferguson factors, the
statutes fall within the ERISA savings clause and are not preempted. The district court
thus did not err in granting summary judgment to Wenzel, and we need not reach the
question of whether the statutes relate to any employee benefit plan. The judgment is
affirmed.

A true copy.

  ATTEST:

               CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




                                         -15-