ERISA pre-emption: implications for health reform and coverage.

The primary federal law governing employment-based retirement and health benefits in the private sector is the Employee Retirement Income Security Act of 1974, known as ERISA. Under ERISA, the regulation of employment-based health benefit plans has evolved into a system in which both the federal and state laws play important roles. As a result of a series of Supreme Court decisions, health benefit plans that purchase coverage from insurance companies are subject to regulation directly at the federal level and indirectly at the state level, while self-insured plans are regulated exclusively at the federal level. This paper provides an overview of the issues relating to ERISA and state and local attempts at comprehensive health insurance reform. It reviews the statute and its history, major case law relating to the interaction of ERISA and state law, and the implications of ERISA's pre-emption of state laws governing health insurance. It also presents the latest data on the number of health plan participants in both insured and self-insured ERISA-governed plans, and the trends related to self-insurance.