:: State Health Care Reform Versus ERISA Preemption
Mr. Chairman, I understand that one of your specific aims in holding today’s hearing is to examine the Employee Retirement Income Security Act (ERISA), its potential impact on the ability of states to implement initiatives to expand health insurance coverage, and whether some form of ERISA waivers may be appropriate in this regard.
This is indeed a timely point of interest given the recent legal challenge to Maryland’s “Fair Share Health Care Fund Act†based on ERISA preemption and the growing momentum in many states to engage in similar efforts. In that vein, I want to note that our bill specifically allows for state plans approved by Congress under the Act to seek “exceptions to otherwise applicable federal statutes, regulations, and policies,†such as and including ERISA. Testimony of U.S. Rep. John F. Tierney (MA-06) before the House Education and Labor Committee, Subcommittee on Health, Employment, Labor, and Pensions May 22, 2007
In counterpoint, Amy Moore of Covington and Burling, makes the case that granting ERISA waivers for state health care reform will frustrate a fundamental ERISA policy of facilitating the sponsorship and administration of employer-based benefit plans on a national level. She notes, among other things, the prevalence of employment-based health coverage under ERISA, and that ERISA waivers will impede the provision of that coverage.
One of her more telling points is that health care reform need not involve employers at all. If states wish to implement these programs leaving employers out of the equation, then ERISA poses no obstacle to reform. For the complete record, including a webcast, you can visit the Congressional site. The webcast presents the easiest access to the information before the Committee and is accessible at the link below this post.
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Health, Employment, Labor, and Pensions Subcommittee Hearing: “Health Care Reform: Recommendations to Improve Coordination of Federal and State Initiatives”
Tuesday, May 22, 2007
Click here to watch archived hearing webcast »
Chairman Andrews’ Opening Statement »
Witness Testimony:
Congressman John Tierney »
Sixth District of MassachusettsCongressman Tom Price »
Sixth District of GeorgiaCongresswoman Tammy Baldwin »
Second District of WisconsinMila Kofman, J.D. »
Associate Research Professor
Health Policy Institute
Georgetown University
Washington, D.C.John Colmers »
Secretary
Department of Health and Mental Hygiene (MDHMH)
State of Maryland
Baltimore, MarylandSteven Goldman »
Commissioner
Department of Banking and Insurance
State of New Jersey
Trenton, New JerseyJohn Morrison »
Auditor and Commissioner
of Insurance and Securities
State of MontanaAmy Moore »
Partner
Covington & Burling, LLP
Washington, DCKevin Covert »
Vice President and Deputy General
Counsel for Human Resources
Honeywell International, Inc.
Note: For additional context, see :: Reluctant Massachusetts Tax Collector Has Good Reasons ; :: Maryland Bows To ERISA’s Preeminence
Comments
One Response to “:: State Health Care Reform Versus ERISA Preemption”
Roy:
Thanks for posting this.
It seemed like the deck was stacked for providing ERISA exemptions with all but Amy Moore and Kevin Covert testifying for the status quo.
States already have the prerogative to reform insurance. Federal law provides that states are, primarily, responsible for doing so.
Only, secondarily, when Congress provides explicit federal legislation, will the states not have primary regulatory authority.
The problem, supposedly, comes in when the employer is located in more than one state, and does not self insure.
From the insurer’s standpoint, this should not be a large obstacle, if they are already licensed in the states the employer is in.
If the employer is large enough, he self insures, so he is not subject to state regulation.
The bigger problem is when small employers wish to self insure, say through a multiple employer VEBA.
Here, many states have chosen to license these entities as if they were commercial insurers.
Of course, federal law provides that a VEBA is a non commercial insurer, in that its products are not available to the public.
In addition, part of the reason for its tax exempt status is to offer plans not commercially available.
It is ironic that states were given the ERISA exemptions they desired in this area back in 1983. How much good came from it?
Don Levit