ERISA and Health Reform by Heleni Smith

ERISA and Health Reform by Heleni Smith

While the Employee Retirement Income Security Act (ERISA) was enacted in order to protect employee benefits, it has unwittingly hindered patient rights by restricting the legislation states can enact in relation to employer sponsored health plans. This becomes an even more critical side effect with the enactment of the Patient Protection and Affordable Care Act. Should Congress amend ERISA in order to allow for states to freely experiment with health care reform?


Introduction

ERISA was enacted in 1974 in order to protect pension plans and create a national set of standards for the administration of employee benefit plans. The uniformity of pension plans would eliminate the legislative variation between states, thus protecting employers and employees. ERISA’s authority over health benefits has been ambiguous, mostly because of Section 514 which includes the preemption clause and the deemer clause.

Due to this ambiguity, many state initiatives have been either stalled or completely derailed because of an ERISA challenge. Examples of this include Maryland’s “Fair Share Act” and California’s “Health Care Security and Cost Reduction Act”. With the Patient Protection and Affordable Care Act enactment, addressing the ERISA preemption problem becomes an even more critical issue in order to allow states to experiment with new programs. Steps need to be taken to either amend ERISA or have the Courts produce a comprehensive ruling.


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ERISA and Health Reform by Heleni Smith