Letter to Senate Committee on Health, Education, Labor and Pensions on ERISA Preemption

Subject: Protect ERISA Preemption and Preserve Uniform Benefits for Self‐insured Health and
Welfare Plans

Dear Chairman Sanders and Ranking Member Cassidy:

The undersigned members and allies of the National Coalition on Benefits (NCB) strongly
oppose any measures, provisions, commentary or other actions in legislation or during the
legislative process that would directly or indirectly curtail, restrict or otherwise diminish the
original intent of the ERISA preemption provisions. NCB is a group of businesses and
associations representing an employer community that provide extensive ERISA‐governed
employee benefit plans and programs, including health and welfare benefits, to millions of
American families. Among its fundamental aims, NCB is committed to protecting the ability of
employers to provide uniform, equitable, and affordable health benefits to employees and their
families across the country.

We are aware of efforts and requests to apply or imply a “carve out,” “status quo,” or other type
of statement or provision regarding ERISA preemption in the context of federal pharmacy
benefit manager (PBM)‐related legislation currently under consideration. We unequivocally
oppose these efforts, regardless of how innocuous or limited any such statement or provision is
characterized, because of the damage it would inflict on the U.S. system of private‐market
employer‐sponsored benefit programs. We strongly believe that adopting or expressing any
intention to allow otherwise preempted state policies to apply directly or indirectly to self‐
funded plans, or worse, to create an express carve out or “non‐preemption,” would be
catastrophic for ERISA‐governed self‐insured health plans and could potentially have
destructive impacts on ERISA‐governed retirement plans as well.

There has been an attempt to characterize certain current state‐law activity as protected by the
Supreme Court’s holding in Rutledge v. PCMA; however, such characterizations are incorrect and
misplaced. The Court’s decision in Rutledge was narrow in finding that ERISA does not preempt
a state law that results in indirect, non‐acute price regulation of an ERISA plan. While it is a case
that helps define the contours of preemption; it is not a sweeping change to long‐standing
ERISA preemption precedent and should not be read as such. It is essential that self‐insured
health and welfare plans retain the ability to design and provide uniform, valued benefits to
their employees without any encumbrances from state laws that are otherwise preempted by
ERISA. Such preemption is the underpinning of the country’s system of private, self‐insured,
employer‐provided health coverage.

ERISA and its preemption provisions have been instrumental in establishing a consistent and
reliable statutory and regulatory framework that enables plan sponsors to design and uniformly
administer health, welfare, and retirement benefits for employees located in multiple states.
Self‐insured ERISA health and welfare plans should remain able to solely follow federal statutes
and regulations as has been the case, successfully, under ERISA for nearly 50 years. While states
should have the freedom to adopt policies for insured coverage in their state (and other
permitted purposes), it is crucial to ensure that such state policies, statutes, and regulations do
not impede the ability of ERISA‐governed self‐insured health and welfare plans to function in a
uniform manner nationally. These employer‐sponsored self‐insured health plans must continue
to avoid the “patchwork” and quagmire of state‐by‐state laws or rules that directly or indirectly
implicate plan design and administration to be able to continue to offer comprehensive,
affordable, uniform health and welfare coverage to their employees equitably across their
entire workforce.

Employer‐sponsored self‐insured health plans offer numerous advantages to enable efficient,
equitable, and effective healthcare coverage for employees. These plans provide cost savings,
flexibility for generous plan designs, and the ability to offer consistent benefits to employees
and their families across the country. Preserving ERISA preemption empowers employers to
continue to focus on promoting the health and well‐being of their workforce, and attracting and
retaining employees. Preemption is fundamental to ERISA working as intended. Nearly 50 years
ago, one of ERISA’s authors, Representative John Dent, identified the preemption provision to
be the law’s “crowning achievement” because without it, the legislation would not have
enjoyed the support of both labor and management since it is so fundamental to the ability of
multi‐state employers to sponsor benefit plans to workers nationwide.

We understand that each state may seek to apply its own requirements that directly and
indirectly impact insured health coverage in varied and, across the states, even contradictory
ways. We acknowledge that individual state prerogatives are within their purview as they relate
to insured health plans. However, it is imperative not to misstep and undermine the long‐
standing principles of ERISA and the self‐insured employer health plans and employees it serves
to protect.

As a coalition, we urge you to protect ERISA preemption as the bedrock foundation for the
successful provision of private‐market self‐insured health coverage to employees and their
families. We further urge you to avoid and eschew any proposals that may directly or indirectly
undermine ERISA preemption. Even proposals that may seem innocuous, targeted, or well‐
intended would set a dangerous precedent and be devastating for self‐insured employer health
plans and employers’ ability to continue to offer comprehensive, uniform, affordable health
coverage to millions of American families.

Thank you for your attention to this matter. We would be happy to engage further, provide any
additional information that may be helpful, and otherwise support you in protecting the
viability and delivery of self‐insured health plan benefits.

Sincerely,

National Coalition on Benefits (NCB) Signing Members: 

American Benefits Council 

Business Group on Health 

Business Roundtable 

Corporate Health Care Coalition 

HR Policy Association 

The ERISA Industry Committee 

U.S. Chamber of Commerce 

Allies of NCB:

National Alliance of Healthcare Purchaser Coalitions 

Purchaser Business Group on Health 

National Association of Benefits and Insurance Professionals, (NABIP) 

Partnership for Employer‐Sponsored Coverage  

Self-Insurance Institute of America

The Alliance (Midwest)

The Council of Insurance Agents and Brokers

The Society of Professional Benefit Administrators 

cc:
Members of U.S. Senate Committee on Health, Education, Labor and Pensions
The Honorable Chuck Schumer, Majority Leader, United States Senate
The Honorable Mitch McConnell, Minority Leader, United States Senate