October 11, 2023
Litigation, state and local laws, and groups challenging ERISA preemption in federal policy-making threaten to undermine the foundation of the employer-sponsored system and the uniform, cost-effective administration of employer-sponsored plans.
ERISA and its preemption provisions have been instrumental in establishing a consistent and reliable statutory and regulatory structure for employer plan sponsors for nearly 50 years. Maintaining ERISA as the primary legal framework for employer-sponsored benefit plans will support efficient plan administration and allow plan sponsors to devote comprehensive and nationally consistent resources to employee compensation and benefits. Therefore, Business Group on Health supports:
- Preserving and strengthening ERISA as the primary law governing employer-sponsored benefit plans.
- ERISA preemption of state and local laws that directly or indirectly interfere with or impose costs on the administration of employer-sponsored benefit plans.
- Maintaining plan sponsors’ ability and flexibility to design employee benefit plans to suit the needs of their business and employee populations.
- Evidence-based standards for high-quality and cost-effective health care rather than benefit mandates.
- Uniform, evidence-based national standards for any legally-mandated benefits, health information technology, privacy protection, and provider licensure requirements that affect employer-sponsored benefit plans.
- Employer plan sponsors’ ability to preserve and expand access to medical services for marginalized groups and others within their workforce.
- Preserving federal jurisdiction over cases involving employer-sponsored benefit plans.
- Medical malpractice reform that reduces incentives for defensive medicine, curbs frivolous litigation, and places reasonable limits on damages.
WHY IT MATTERS
- According to the Congressional Budget Office (CBO), more than 155 million Americans rely on and value employer-sponsored health coverage.
- The vast majority of employers (93%) feel a level of urgency in preserving and enhancing ERISA preemption, according to Business Group on Health’s 2024 Large Employer Health Care Strategy Survey. Of employers surveyed by the Business Group who indicated they felt a level of urgency, 91% said the reason was to ensure employers had the flexibility to design plans that meet the needs of their employees. Among the other primary reasons given included the ability to avoid the complex patchwork of state pharmacy benefit manager (PBM) and formulary design laws and to ensure the ability to offer uniform medical plan designs to their employee populations.
- Employers’ health equity approaches continue to evolve and expand, with a focus on serving specific communities and populations within their workforce. Among respondents to our 2024 Large Employer Health Care Strategy Survey, 95% of employers will implement at least one strategy to address health inequities by 2024. These strategies include expanding fertility and family-forming benefits and expanding provider networks to include more diverse health care and mental health professionals. ERISA preemption enables employers to deliver on these approaches in a comprehensive and nationally consistent manner.
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