ERISA Reform Discussion Missing the Point

When you talk to a politician about ERISA reform, they’re most likely to think about the movement to defang federal preemption and permit states to impose mandatory benefits requirements.   Consider, for example, this op-ed at Risk & Insurance:

A short-lived law in Maryland, for example, would have required employers with 10,000 or more employees to spend at least 8 percent of payroll for their health plans. Firms spending less would have had to make up the difference by paying into a state fund. Vigorously opposed by employers in the retail industry, the law was struck down by a federal appeals court last year. The court ruled the state law was preempted by ERISA.[...]

As courts block some state initiatives that violate ERISA, some policymakers have responded by launching campaigns to water down ERISA preemption language. Rep. Robert Andrews, D-N.J., chair of the Health, Education, Labor and Pensions subcommittee of the House Education and Labor Committee, was quoted in hearings and interviews classifying ERISA as a “barrier” to state reforms.

Some legislators are studying an exception (or waivers) to ERISA preemption for individual states. Others would totally eliminate ERISA protection for self-insured plans.

I’m encouraged that some politicians are taking another look at ERISA…but I wish that the powers-that-be would take a look at some of the other problems with ERISA — the lack of incentive for plan administrators to act in good faith, for example.

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