Chapter 9.C (or 3.C) -- ERISA Pre-emption; Mandated Benefits

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See generally James A Wooten, The Employee Retirement Income Security Act of 1974: A Political History (2004).

In a major decision, the 9^th Circuit upheld the City of San Francisco’s ordinance that requires local employers with more than 20 workers who do not provide health insurance to pay a tax that funds a public health care program that covers lower-income uninsured people. Golden Gate Restaurant Ass'n v. City and County of San Francisco, 512 F.3d 1112 (9^th Cir. 2008). The court distinguished Fielder (4^th Cir.) by noting that the law was more broad-based (covering most employers), and that not purchasing insurance was a realistic economic option. Also of note is how the court characterized employers’ contributions either to the city program or to employees’ health care benefits. It held that simply paying money to the city on behalf of uninsured employees does not constitute an ERISA “plan” because this does not involve substantial administrative discretion. Could this thinking lead other courts to revisit the definition of “plan” along the lines suggested in note 3 in the casebook?

For more on the ERISA pre-emption issues raised by play-or-pay laws such as the one in Massachusetts, see Symposium, 33 Am. J.L. & Med. 663 (2007); Edward A. Zelinsky, The new Massachusetts health law: preemption and experimentation, 49 Wm. & Mary L. Rev. 229-287 (2007).

Monahan, Amy B. Pay or play laws, ERISA preemption, and potential lessons from Massachusetts. 55 U. Kan. L. Rev. 1203-1232 (2007). 

Analyzing the federalism implications of mandated benefit laws and their pre-emption, see Amy B. Monahan, Federalism, federal regulation, or free market? An examination of mandated health benefit reform, 2007 U. Ill. L. Rev. 1361-1416 (2007).

The following article addresses yet one more new wrinkle in this regulatory landscape:  if a business acquisition results in maintaining separate insurance plans under common ownership, the owner may inadvertently have created what is known as a MEWA -- a Multiple Employer Welfare Arrangement -- which creates special regulatory obligations under ERISA. Comment,  24 J. Contemp. Health L. & Pol'y 118-148 (2007).

Yet another wrinkle is whether ERISA and HIPAA apply to arrangements where employers allow employees to pay for individual insurance through payroll deduction, using what are known as section 125 cafeteria plans._ For analysis, see Amy B. Monahan & Mark A. Hall, Section 125 Plans For Individual Insurance and HIPAA’s Group Insurance Provisions (Oct. 2008).

In 2008, Congress moved closer to full mental health parity (as part of one of the financial “bail-out” bills) by prohibiting insurers and employers from imposing on mental health benefits any greater cost-sharing, treatment limits, or out-of-network restrictions than on regular health care.

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