Is ERISA Preemption Superfluous in the New Age of Health Care Reform?

Abstract

In June 2010, the Department of Justice (DOJ) submitted a brief to the United States Supreme Court opposing the grant of certiorari in litigation over the legality of San Francisco’s recent health reform law. The claim in the case was that ERISA, which had long preempted a variety of state health reform efforts, also preempted the San Francisco reform. The DOJ, however, recommended against Supreme Court review in large part because of the new federal health care reform law, the Affordable Care Act (“ACA”), had recently been enacted, and even the government was unprepared to predict with confidence its effect on previously settled areas of law like the one at issue in San Francisco. Because the federal reform was so new, the DOJ argued, it was premature for the Court to hear the case.

But the ACA is no longer so new, and though Supreme Court review of the question arising from the San Francisco reform may not have been advisable, it is critical to obtain more clarity now about the ACA’s interaction with other major laws. In particular, one of the principal sources of uncertainty is the ACA’s relationship to ERISA. ERISA preempts any state laws that “relate to” employer-provided health benefits. Although the ACA is a federal law and thus not preempted by ERISA itself, the states must implement much of it. Yet despite ERISA’s reputation as a state reform-killer, Congress did not address whether it would have any preemptive effect once the ACA rolled out. Can the states implement reforms mandated with the ACA without running afoul of ERISA? What about ERISA’s effects on states’ non-ACA reforms going forward? And then there is the middle ground: state reform plans that receive waivers through the ACA. These have recently received much publicity, but will state reforms that get an ACA waiver be able to avoid ERISA preemption?