ERISA: Rock of Gibraltar or rock in the road to reform?

The efforts of states, and even some cities, to reform health care coverage in their regions have seen mixed results. One of the reasons for such results is the operation of a federal law, the Employee Retirement Income Security Act (ERISA). This law is the cornerstone of employee benefits. One of ERISA’s purposes is to ensure uniform nationwide administration of employer-sponsored health insurance plans. This prevents multi-state employers from potentially having to meet 50 different sets of health plan laws. To this end, ERISA preempts or supersedes state laws that “relate to” employee benefit plans.

Figuring out the meaning of “relate to” has been a long and winding road. Courts don’t necessarily agree on the meaning, so their seemingly conflicting rulings on whether ERISA preempts a certain state law have produced mixed results. For example, the Fourth Circuit Court of Appeals struck down the Maryland Fair Share Health Care Fund Act, while the Ninth Circuit Court of Appeals upheld the San Francisco Health Care Security Ordinance (although this latter case appears to be on its way to the Supreme Court). The Massachusetts Health Care Reform Act has not been challenged yet and has been in effect for a few years.

As we ponder the roadblocks to health care reform, it’s hard to see around the one called ERISA. Are state reforms a viable option? What are some possible solutions to this problem? This legal issue, among others, is addressed in the Legal Solutions in Health Reform project. The study on the ERISA preemption issue examines the law’s role in health reform, specifically “what opportunities exist to facilitate health care initiatives given the constraints of ERISA preemption.” The study also suggests some ways the federal government can act to solve the preemption problem. Because, if the federal government’s efforts to reform health care don’t travel far this year, perhaps it can at least clear the road for states to address the issue on their own in the future.