Employers Fear Loss of ERISA Shield; Health Care Reforms Threaten to Weaken Law
Byline: Gregory Lopes, THE WASHINGTON TIMES
The chorus of calls for health care reform from the campaign trail is reaching a fever pitch, raising concern among business leaders about increases in already crippling medical costs.
Business leaders stir nervously when talk turns to undoing ERISA, a type of health plan that shields businesses from state and local regulation. Courts have struck down state efforts to mandate employer health care benefits in Maryland, New York and, in a ruling Wednesday, San Francisco.
"The No. 1 fear among business, when it comes to health care reform, is that they'll lose their ERISA protections," said Helen Darling, president of the National Business Group on Health.
The Employee Retirement Income Security Act (ERISA) was enacted in 1974 as a pension-protection law, but Congress expanded its reach into employer health care plans.
In 1985, an amendment to the law added the Consolidated Omnibus Budget Reconciliation Act (COBRA), to provide workers with health insurance coverage for a limited time after a job loss.
About 55 percent of U.S. workers are covered by an ERISA-qualified health plan, according to the Kaiser Family Foundation, a nonprofit health care research organization in California.
But ERISA also protects employers from state mandates for specific health insurance benefits.
The law covers employer-sponsored health plans that are approved by the U.S. Labor Department. Most of these involve larger companies that are able to establish coverage voluntarily.
Deseret Mutual Benefits Administrators of Salt Lake City manages benefit plans for employers in all 50 states that cover more than 48,000 workers and retirees.
"If ERISA is undone, companies like ours will have to deal with insurance codes for 50 different states," said Vic Gibb, general counsel for Deseret Mutual. "There would have to be legal expertise and compliance advisers on an ongoing basis. We would have to double or triple the legal department."
Maryland and New York have attempted to weaken the law, but courts have sided with businesses. Now, business groups are turning their attention to the health care reform plans of Democratic presidential candidates. …