iLoveBenefits: Industry News Blog

ERISA Pre-Emption Under Attack by DOL

This from the HR Policy Association:

DOL Proposed Regulation Would Create ERISA Preemption Carveout

February 26, 2010

With the U.S. Supreme Court yet to decide the fate of the San Francisco pay or play law, DOL is in the process of issuing a proposed regulation that would seek to exempt such laws from ERISA preemption.  Under the San Francisco ordinance, companies must either provide a certain minimum level of health care benefits or help cover the cost of a city-funded health care program to provide universal coverage.  Employers contend that the law relates to ERISA “welfare benefit plans” and therefore is preempted.  The DOL proposal would redefine the phrase “welfare benefit plan” within the regulations to exclude from the definition practices complying with state and local pay or play laws.  Whether such a regulation could itself survive a legal challenge is an obvious question.  The proposed regulation was submitted this week to the Office of Management and Budget for a 90 day review.  Following OMB’s review, it is anticipated that the DOL will issue and try to finalize theproposed regulation in time to influence the Supreme Court decision in the San Francisco case.  If successful, states would then be free to impose taxes and coverage mandates on employers for numerous existing state programs, thus undermining the fundamental purposes of ERISA preemption.

March 2, 2010 | Categories: ERISA,Federal Government,healthcare | Tags: , | Comments (0)