There's “Private” and Then There's “Private”: ERISA, Its Impact, and Options for Reform

Author:

Borzi Phyllis C.

Abstract

For most of the first two decades after the enactment of the Employee Retirement Income Security Act of 1974 (ERISA), health policymakers did not seem to recognize the full impact that ERISA would have on regulation of health insurance and health care coverage. Perhaps the early court decisions in which the courts clarified that states could regulate insurance companies and the products they sold to ERISA plan sponsors gave them false comfort that because Congress appeared to recognize the role of the states in regulating insurance, ERISA might have only a tangential impact on health care reform efforts.

Publisher

Cambridge University Press (CUP)

Subject

Health Policy,General Medicine,Issues, ethics and legal aspects

Reference65 articles.

1. 25. 29 U.S.C. § 1003(b). This subsection exempts the following plans: Governmental plans; church plans that have not elected under section 410 of the Internal Revenue Code to be covered under the vesting; participation and funding rules; plans maintained solely to comply with applicable workers compensation; unemployment compensation or disability insurance laws; plans maintained outside the U.S. primarily for the benefit of persons substantially all of whom are non-resident aliens; or unfunded excess benefit plans. The subsection also excludes health insurance issuers from ERISA's part 7 requirements (relating to health insurance requirements) if the group health plans to which the issuer provides services are excluded from Title I of ERISA.

2. 16. A new Part 7 was added to Title I of ERISA that defined “pre-existing condition” and limited the ability of plan sponsors and health insurance issuers to design group health plans to use waiting periods or preexisting condition limitations to deny or delay coverage for more than 12 months (or in the case of late enrollees, for 18 months) to individuals who had been continuously covered under a variety of health plans arrangements in the past. Any plan waiting periods or pre-existing condition exclusions had to be offset on a day-by-day basis for an individual's prior health plan coverage unless the individual had experienced a break in continuous coverage for 63 or more days. ERISA §§701–07, 29 U.S.C. §§1181–87.

3. 38. See, e.g., FMC Corp. v. Holliday, 498 U.S. 52, 12 EB Cases (BNA) 2689 (1990) (state anti-subrogation law, which interfered with plan design and calculation of benefit levels relates to a plan and is preempted)

4. Ingersoll-Rand v. McClendon, 498 U.S. 133, 12 EB Cases (BNA) 2737 (1990) (state wrongful discharge claim based on allegation that employer wrongfully discharged employee to avoid contributions under pension plan was preempted because it relates to a plan)

5. Alessi v. Raybestos Manhattan, Inc., 451 U.S. 504, 2 EB Cases (BNA) 1297 (1981) (N.J. law that prohibited workers' compensation benefits from being used to offset pension benefits relates to ERISA-covered pension plans and is preempted).

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