ERISA Preemption and State Variation in Benefits

HR Policy Association strongly supports the comprehensive preemption provision under the Employee Retirement Income Security Act (ERISA) which prohibits state regulation of self-insured health care plans and we oppose any attempts to undermine this important protection.  ERISA preemption protects an employer’s ability to maintain national uniformity in benefit design and administration.  This is extremely important because it promotes substantial efficiencies and significantly reduces the complexities and costs to employers, employees, and dependents.  ERISA preemption has formed the foundation for the growth and sustainability of employer-sponsored health care and has been a relative success in the otherwise flawed health care system in the United States. 

While Congress imposed new federal mandates on employer-sponsored plans under PPACA, it expressly retained ERISA’s preemption of state and local laws that interfere with such plans.  Even so, one of the chief concerns since the enactment of PPACA is that the states, in establishing the health insurance exchanges, may undermine the ability of multistate employers to uniformly design and administer health benefits.  Such a change would be administratively burdensome and costly, and may make it unworkable for these employers to continue providing employer-sponsored benefits.