For 180 million American workers and their families who depend on personalized coverage for their health and financial security, the Employee Retirement Security Act of 1974 (ERISA) is the cornerstone of their insurance. When Congress passed ERISA more than four decades ago, policymakers included a broad and robust express preemption clause to protect against inconsistent state laws and ensure uniform, equitable and affordable benefits regardless of where Americans live or work. Importantly, ERISA also establishes standards of conduct for plan sponsors and employers, including transparency and safeguards around benefits, even in the case of a company facing bankruptcy.
As the American workforce becomes increasingly diverse, today’s employees need and benefit from ERISA’s preemption of inconsistent and overlapping state laws more than ever. By mitigating the harmful cost and health consequences of a patchwork of state regulation, ERISA preemption prevents disparities in coverage and benefits that would otherwise disadvantage employees in certain states.
Yet, recent legal challenges to ERISA, including the case of Rutledge v. PCMA pending in front of the U.S. Supreme Court, threaten to upend the backbone of the employer-sponsored insurance program and the coverage that American workers have come to rely on during the latest public health emergency. By allowing individual states to chip away at these vital federal ERISA protections, plan sponsors and employers would be faced with myriad conflicting state laws that would add far greater costs to employees’ health benefits and coverage. The result? Employees who work at multi-state companies would not have equal coverage or benefits relative to their colleagues—for example, some may pay more for their prescription drugs, face significant increases in their health insurance premiums or a reduction in benefits altogether because of state laws or local mandates.
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