1974 was a landmark year for employer-sponsored health benefits. In the early 1970s, general inflation and unchecked health care costs were a growing concern. In Washington, several senators, congressmen and the President were proposing a national health insurance program. Absent from the conversation were employers.
In August of 1974, Business Group on Health was established by a group of forward-thinking employers. Using the then-moniker Washington Business Group on Health, the Business Group and its five founding members quickly became a major force in Washington, ensuring that employers were playing an active role in federal health policy while fostering leading edge thinking about health and well-being.
Fifty years later, Business Group on Health has grown to include 450 member companies representing the largest and most progressive employers and industry constituents spanning virtually every aspect of the health and well-being industry, including health plans, providers/health systems, PBMs, consultants, manufacturers and a range of health tech-enabled solutions. The Business Group continues to be the preeminent unbiased and objective advocate for employer perspectives on optimizing workforce strategy through innovative health, benefits and well-being solutions as well as health policy issues. The Business Group keeps its membership informed of leading-edge thinking and action on health care cost and delivery, financing, affordability and experience with the health care system. By convening all stakeholders in thoughtful and practical dialogue, we drive change together.
At its founding, the Business Group recognized and acted on the urgency of the moment as landmark health care and pension legislation – the Employee Retirement Income Security Act (ERISA) -- was signed into law by President Gerald Ford on September 2, 1974. While the law’s title highlights its application to employer retirement programs, it also was designed to regulate and empower employer-sponsored health plans. Today nearly 165 million Americans rely on, and value, employer-sponsored health coverage underpinned by ERISA’s consistent and reliable statutory and regulatory structure for employer plan sponsors, as they have for 50 years.
Ninety percent of employers surveyed by Business Group on Health in the 2025 Employer Health Care Strategy Survey report that ERISA preemption is very important/important to their organization, and a majority report that protecting and affirming ERISA preemption should be the highest priority for the administration and Congress. This clear and urgent priority of protecting ERISA preemption recognizes its vital role as the foundation of uniform, efficient, tailored health and welfare benefits, empowering employers to design and provide health care and other plans that meet the needs of employees and their families.
Maintaining ERISA as the primary legal framework for employer-sponsored benefit plans supports efficient plan administration and allows plan sponsors to devote comprehensive and nationally consistent resources to employee benefits. ERISA creates a pathway for a multistate employer to offer a nationally consistent program. To help ensure stability and fairness, ERISA also gives employers a fiduciary responsibility to act with diligence and prudence, administering the plan in the best interest of the plan’s participants and beneficiaries.
As employers continue to work to address challenging health care costs while pushing the system for improved quality and a more compelling employee experience, some in the market are questioning how well employers are following through on or are able to meet that fiduciary responsibility given the scale and complexity of the system. It is worth noting that ERISA’s fiduciary duty is not a rigid standard, nor does it endorse any single method of managing plan benefits across all circumstances. The law allows employers flexibility to design and administer benefit plans that suit the specific needs of their workforce. In our August 2024 policy newsletter, we discuss the parameters under which employers are well served to operate.
Why is protection of ERISA and a balanced understanding of the employer’s fiduciary duties important for the American workforce? Today, a majority of Americans participate in health and well-being programs through their employer. Over the past five decades, employers have led the way to evolve and enhance those programs to meet ever more complex individual needs. Employers have leveraged the national consistency afforded by ERISA to create benefit programs that address prevention and primary care, reinforce the need for quality and cost efficiency and enable access to life-saving treatments and medications. In more recent years, employers have focused on telehealth and programs to address chronic and complex conditions, as well as addressing inequities in health care and supporting mental health. To avoid rigid, one-size-fits-all programs and continue to innovate and deliver meaningful benefits, employers need the scale, flexibility and appropriate guardrails furnished by ERISA’s preemption and fiduciary framework.
Without strong preemption protection under ERISA, employers will quickly experience increased administrative complexity and cost, as states (and perhaps counties and cities) craft benefit requirements and/or restrictions. Such a patchwork model for health and well-being hinders efforts to address inequities in health care, drives up costs for employers and participants and adds administrative bloat to a system that is already a challenge for employers to manage.
Business Group on Health supports maintaining plan sponsors' ability to design employee benefits 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; and preemption of state and local laws that interfere with or impose costs on the administration of employer-sponsored benefit plans.
For half a century, employers in the U.S. have been able to leverage ERISA to offer comprehensive and consistent benefit plans. For those same 50 years, Business Group on Health has been there to bring together all stakeholders for the difficult conversations that shine a light on best practices and challenging the status quo to drive transformative market and policy-based changes. Nearly 165 million Americans depend on the work their employers are doing to deliver these programs. As we begin our sixth decade at Business Group on Health, we remain focused on driving the insights, data and collaboration that empowers employers as they deliver health and well-being programs to meet the needs of their workforce and their organization.
