:: Retail Industry Leaders Association Takes Out Another “Pay Or Play” Mandate Through ERISA Preemption Challenge
The United States District Court for the Eastern District of New York handed down another victory for the Retail Industry Leaders Association. In this decision, filed July 14, 2007, the district court ruled that ERISA preempted the Suffolk County, New York Fair Share Act. The reasoning of the opinion essentially follows that in Retail Industry Leaders Association v. Fielder, — F.3d —-, 2007 WL 102157, C.A.4 (Md.) (January 17, 2007)
From the RILA press release:
RILA News
News from the Retail Industry Leaders Association
The world’s leading alliance of retailers and suppliers
www.retail-leaders.orgSandra L. Kennedy, President
Contact Giorgia Marchini at giorgia.marchini@retail-leaders.orgRILA Applauds Ruling Striking Down Suffolk County, New York Health Plan Mandate
ARLINGTON, VA (July 16, 2007) – Today a federal court invalidated Suffolk County, New York ’s mandated health benefits law, issuing a decision that embraced arguments made in a legal challenge initiated by the Retail Industry Leaders Association (RILA) in February 2006.
“We’re gratified by the court’s decision holding that Suffolk County’s mandated health care law is preempted by ERISA,” said RILA President Sandy Kennedy. “This is the second mandated health care law to be invalidated as the result of a legal challenge initiated by RILA.â€
The first such decision was issued in July, 2006 by the United States District Court in Baltimore, Maryland, which invalidated a similar statute. The District Court’s decision was then upheld on appeal to the United States Court of Appeals for the Fourth Circuit in a decision handed down in January, 2007.
“This is an important decision,” said Stephen Cannon, outside General Counsel to RILA. “This Court relied in part on the trial and appellate Court decisions concerning Maryland’s law, as well as on long-standing Supreme Court precedent to determine that, despite some differences from the Maryland law, Suffolk County’s law is also preempted by ERISA.”
For the complete news release, go here.
For the opinion, go here.
For more information on the Fielder decision, see:
Wal-Mart Wins: Fourth Circuit Rules That ERISA Preempts Maryland’s “Fair Share†Legislation,
Maryland Bows To ERISA’s Preeminence (”absent Congressional intervention, odds are in favor of several more preemption decisions within the next year involving health initiatives contrived with little regard to ERISA’s preemptive force.”)
Note: The looming unresolved question in these cases will be the proper understanding of New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995). Most commentators view the case as a retrenchment of the broad preemption doctrine established in Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983). Based on Travelers, many commentators have predicted success of health care initiatives that involve some form of employer-based tax.
As previously noted on this site:
The idea appears to be that, so long as the tax is not imposed on ERISA plans and does not explicitly suggest a connection with such plans, some form of “pay or play†regime may be imposed on employers as a part of healthcare financing. After Retail Industry Leaders Association v. Fielder, — F.3d —-, 2007 WL 102157, C.A.4 (Md.) (January 17, 2007), however, these proposals deserve careful reconsideration.
While Travelers gives good reason to believe that lawmakers may impose surcharges on patients or providers, the Fourth Circuit opinion in the RILA decision interprets Travelers in a light that poses a substantial risk to any notion that States may look to employers to supply healthcare financing for State healthcare programs. To the extent Travelers abandons “literal textualism†and looks to the Congressional purpose of ERISA’s enactment, little can be gleaned that would suggest that ERISA will peacefully co-exist with a multiplicity of State-based employer tax regimes dedicated to the funding of multiple State healthcare programs.
