ERISA Becomes Focal Point in State Health Reform Efforts

Article excerpt

SEATTLE _ Gregory Vestal had never heard of ERISA, an obscure federal law that will likely determine the success or failure of efforts by states to enact health care reforms.

Vestal, who works for Sears in Tacoma, Wash., only knew that his employer has refused to cover him on the company health benefits plan because he was judged to be overweight.

"I made the mistake of canceling my insurance before I got the company insurance," said Vestal, who is 5 feet, 10 inches tall and weighs 275 pounds.

The Washington state Insurance Commissioner's office couldn't help him, he was told, because Sears "self-insures" on health benefits. ERISA, the Employee Retirement Income Security Act of 1974, gives self-insuring companies immunity from state health care regulations.

Vestal's experience is one reason why ERISA has become a focal point in Congress. With federal-level health care reform all but declared dead, the question of granting states greater flexibility to pursue their own reform has taken on new urgency.

Washington, Oregon and more than a dozen other states are pressing Congress to grant them waivers from ERISA in order to implement state health care reform.

"Washington isn't the only state that's going to be in there pushing hard for ERISA waivers," said Rep. Mike Kreidler, D-Wash.

An organized delegation of waiver-seeking state officials, dubbed "States That Can't Wait," also include representatives from Minnesota, New York, Vermont, Idaho, Connecticut, Delaware, Florida, Maine, Maryland, Tennessee, Massachusetts, Kansas, North Dakota, Montana, South Dakota and Pennsylvania.

Opponents, including leading business organizations and elected officials from some of the same waiver-seeking states (such as Minnesota Republican Sen. David Durenberger), say waivers will complicate employee benefits management and allow the states to pass along public costs to private companies.

Still, without an ERISA waiver, reform advocates and opponents agree, more employers will be inclined to use the federal law to avoid any new state requirements on health benefits.

Enacted in 1974, ERISA wasn't supposed to have much to do with health care. …

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