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ERISA Could Prevent State Efforts To Expand Health Care Access

Armen Hareyan's picture

The Christian Science Monitoron Thursday examined how the Employee Retirement Income Security Act --a federal law enacted in 1974 that exempts employer-sponsored pensionplans, as well as health insurance and other benefits provided byemployers, from state regulation -- could "invalidate many of thebudding efforts by states and cities to expand access to health care."

Courtsin recent months have used ERISA to strike down laws in Maryland andSuffolk County, N.Y., that would have required employers to offerhealth insurance to employees or pay into a government fund tosubsidize coverage. A court in the next few weeks will consider thevalidity of a similar law in San Francisco. A similar law recentlyenacted in Massachusetts and a proposal under consideration inCalifornia "have been crafted with an eye to previous ERISA rulings,and other states are watching to see if the innovations will hit upon alegally acceptable formula -- or hit another brick wall in court,"according to the Monitor.

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Joel Miller of the National Coalition on Health Care,said, "Many states are watching ... to see how this is panning out,"adding, "What a lot of ... people who follow this hope for is that thestates will try to thread this needle."

Richard Cauchi, a health program director for the National Conference of State Legislatures,said, "Massachusetts gave hope in the sense of not just ERISA, but theability to have bipartisan consensus," adding, "The insurers, employersand the providers all were saying positive things." Miller said, "Evenin Massachusetts, the ERISA preemption still hangs over the head of thepolicymakers trying to hammer out details of the plan." The Californiaproposal also could face a lawsuit related to ERISA.

Possibility for Reform?

According to the Monitor,in the event that the "California plans ultimately are rejected by thecourts, pressure could build on Congress to clarify the law or issuewaivers to states trying to expand health coverage, but experts "sayany changes to ERISA are unlikely." Miller said, "I've been looking atthis issue for the last 32 years, and any attempts have been thwartedby employers and other stakeholders." He added that legislation toexpand health insurance "has to happen at the federal level" to avoidviolations of ERISA (Arnoldy, Christian Science Monitor, 9/27).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.