ERISA
Who does ERISA apply to?
•  Employee pension, health, and other benefits
plans established by private sector employers
or labor unions
Who does ERISA not apply to?
•  Plans sponsored by federal, state, & local
governments and churches
•  Health insurance purchased by individuals
(including self-employed individuals)
•  Workers comp plans
U.S. Health Care Financing
Uninsured (14%)
Individual
Policies (8%)
Government
Employees (10%)
Medicare (13%)
Medicaid (10%)
Military (2%)
Private Employer
(44%)
ERISA Preemption
State law not applicable if:
(1) Preempted under section 514 (29
U.S.C. § 1144)
or
(2) Preempted under section 502 (29
U.S.C. § 1132)
ERISAPreemp,on:Sec,on514
IsPlananEmployeeBenefitPlan?
No
Yes
NoPreemp+on
DoesLaw“RelateTo”anEmployeeBenefitPlan?
No
Yes
NoPreemp+on
DoesLawRegulateInsurance?
No
Yes
Preempted
IsPlanaSelf-InsuredPlan?
Yes
Preempted
No
NoPreempted
Sec+on514Preemp+on
•  “Relatesto”(sec.514(a)):Statelaw
– SpecificallyreferencesanERISAplan
– Directlyregulatesoreffec+velymandates
someelementofthestructureor
administra+onofERISAplan
– Whetheremployermustofferhealthbenefits
*No“relatesto”ERISAplanifcreatesindirect
economicincen+ves/impact
Sec+on514Preemp+on(con’t)
•  “Regulatesinsurance”(sec.514(b)(2)(A)/savings
clause):Statelaw
–  Specificallydirectedtowarden++esengagedin
insurance,and
–  Substan+allyaffectsriskpoolingarrangementb/w
insurerandinsured
•  E.g.,affectstermsandcondi+onsunderplan
•  E.g.,narrowsscopeofarrangementsavailable
toemployersandtheiremployees
•  Deemerclause(sec.514(b)(2)(B)):
–  Exceptsfromsavingsclauseself-insuredplans
–  Insurerssellingplanstoemployersnotexcepted
Section 514 Preemption
Uninsured
Individual Policies
States can regulate
Plans for State/
Local Employees
Medicare
Medicaid
Military
States can regulate
Private Employer
Self-funded
States can’t regulate
Purchased by Private
Employer
States generally can
regulate
ERISASec+on502Preemp+on
Sec$on502(a)(1)(B):
Givesplanbeneficiaryrighttobring
ac+on“torecoverbenefitsduehim
underthetermsofhisplan,toenforce
hisrightsunderthetermsoftheplan,or
toclarifyhisrightstofuturebenefits”
ERISASec+on502Preemp+on
•  Jurisdic+onPreemp+on:Federalcourtshaveexclusive
jurisdic+onoverma^ersaddressedby§502
•  Substan+ve/ExclusivityPreemp+on:
–  Purposes:
•  Provideuniformschemeforenforcingrights/recoveringbenefits
•  Limitedremediesencouragesemployerstoofferbenefits
–  Rule:ERISA=exclusiveremedialschemeforma^ersaddressed
by§502
•  Statelawpreemptedifcreatesnewremediesoralterna+ve
enforcementregime(RushPruden$al)
*Statelawmanda+ngexternalreviewofcoveragedecisionsnot
preempted
•  Statelawpreemptedifcreatesnewcauseofac+onwithout
crea+ngnewlegaldutyindependentofdu+esarisingunder
plancontract(Davila)