By Elizabeth McCuskey
For the past 46 years, the Employee Retirement Income Security Act (ERISA) has preempted state regulation that “relates to” employer-sponsored health benefits.
Much has changed in health care and society over that time; but ERISA’s preemption abides — widely maligned, yet unaltered. An ERISA preemption waiver thus presents a long-overdue update to health care regulation with a lot to recommend it to the Biden Administration’s health care agenda: it enables states to “strengthen and build on the Affordable Care Act,” it offers a modest incremental step that could pave the way for bigger structural change, it prompts no federal spending, and it has bipartisan political support.
The preemption provision in 1974 was supposed to entice multistate employers to offer benefits by creating some federal uniformity in benefit regulation. For health benefits, however, that uniformity has been largely deregulatory.
ERISA preemption currently prevents states from fully enforcing a wide variety of health reforms, ranging from claims data collection to state-level employer mandates. And it casts a pall of private litigation challenges over even the ones that should be enforceable, like surprise billing regulation, prescription drug pricing measures, and state and local public option plans.