Let ERISA prevail in employer self-funded health plans, benefits group rep tells House panel
The 1974 law left the business of insurance to the states but preempted state efforts to govern employers’ own self-funded benefit plans, in an effort to hold down multistate employers’ benefits administration costs and regulatory complexity.
“ERISA preemption is under assault as states seek to impose their own requirements on self-funded group health plans,” Ilyse Schuman, a vice president at the council, testified Tuesday at a hearing on ERISA’s 50th birthday anniversary that was organized by the House Education and the Workforce Committee.
“Without ERISA uniformity, these plans would be extraordinarily difficult to administer, forcing employers to offer different benefits to their employees based on their location,” Schuman added.
Schuman also spoke up in defense of the current group health tax rules, which let employers deduct health insurance premiums from taxable income. The U.S. Treasury has estimated the exclusion costs the federal government about $345 billion in tax revenue per year.