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October 24, 2023 – The Self-Insurance Institute of America, Inc. (SIIA) has released a comprehensive white paper providing an overview of how ERISA is structured and enforced; an explanation of ERISA’s requirements applicable to self-insured group health plans; and a detailed discussion of ERISA’s preemption provision and how the Supreme Court determines whether and when a State law is preempted by ERISA. This white paper also highlights why ERISA preemption is so important for self-insured plan sponsors.
Access the SIIA ERISA Preemption White Paper here.
With ERISA preemption issues coming to the forefront at the State and Federal levels, SIIA’s white paper is both an ongoing member resource, as well as an important tool in education and advocacy activities before Federal policymakers and State regulators. This ERISA preemption primer will be used to supplement SIIA’s ongoing and active advocacy on ERISA preemption issues.
The Employee Retirement Income Security Act (ERISA) is the key Federal law that governs the provision of employee benefits offered to workers employed by private-sector companies, non-profit institutions, and labor unions. As the 50th anniversary of the enactment of ERISA nears, it is more important than ever that policymakers adhere to the original intent of the law: Ensuring that self-insured health plans are subject to a uniform Federal system of regulation, instead of a “patchwork” set of requirements established by different States. SIIA – just like the original drafters of ERISA and even the U.S. Supreme Court – believes that any weakening of ERISA’s preemption powers will increase the cost and complexity of offering self-insured health benefits, and stymie important innovations intended to improve quality and health outcomes.
The most recent effort to erode ERISA has come from States attempting to lower drug costs by regulating Pharmacy Benefit Managers (PBMs). Emboldened by the Supreme Court decision in Rutledge v. Pharmaceutical Care Management Association, there have been well over 100 bills introduced across 43 States that sought to regulate PBMs. However, many of these proposals go further than targeting PBM-related practices and the cost of prescription drugs by mandating that a self-insured plan change their plan structure, design, and/or administration, which has a direct impact on an ERISA-covered plan. In these instances, the Supreme Court has traditionally found that these types of State laws are preempted by ERISA.
Despite the ebbs and flows of States attempting to erode ERISA and court rulings interpreting ERISA’s preemption provision, ERISA’s preemption powers have withstood the test of time. However, with the continued assault on ERISA, the self-insurance industry must remain vigilant in our defense of ERISA preemption and its ability to maintain a uniform set of regulations for self-insured plans.
For more information on ERISA preemption, or to learn more about SIIA’s advocacy efforts, please contact Ryan Work at rwork@siia.org or Chris Condeluci at ccondeluci@siia.org.
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