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ERISA and health plans
P Schmidt1, J Mazo, K Ladenheim
1Arnold & Porter, USA.
EBRI Issue Brief
|October 5, 1995
Summary
The Employee Retirement Income Security Act of 1974 (ERISA) significantly impacts state health reforms due to its broad preemptive effect on insurance mandates and regulations. Understanding ERISA
Area of Science:
- Health Policy
- Law and Economics
- Employee Benefits
Background:
- The Employee Retirement Income Security Act of 1974 (ERISA) governs employee benefit plans.
- State health reforms face challenges due to federal preemption.
- Trends like self-insurance and managed care influence ERISA's impact.
Purpose of the Study:
- To explain the relationship between ERISA and health plans.
- To analyze ERISA's role in state health reform efforts.
- To illustrate ERISA's preemptive effect on state initiatives.
Main Methods:
- Review of legal interpretations of ERISA.
- Analysis of trends in the insurance market.
- Examination of state health policy experimentation.
Main Results:
- ERISA has a broad preemptive effect on state laws concerning employee health benefits.
- States can regulate insured plans but not self-funded plans.
- Federal court interpretations have expanded ERISA's reach.
Conclusions:
- ERISA's preemption limits states' ability to regulate self-funded health plans.
- State regulation of employee benefits can lead to increased costs and compliance burdens.
- Federal law significantly shapes the landscape of state health reform.