ERISA, the Employee Retirement Income Security Act of 1974, turns 50 this year. With an estimated 153 million employees and dependents covered by employer-sponsored ERISA plans, this golden anniversary raises the question – how golden is ERISA?

ERISA Pre-Emption Changed the Game

Most of the processes that employers with ERISA plans are required to follow today are based on the 1974 law.

But it’s ERISA’s ability to “pre-empt” state law that is a game-changer for employers. Pre-emption means any state or local law that relates to an employee benefit plan won’t apply to an ERISA plan. This benefits employers, enabling them to design their own benefit plans and administer those plans uniformly.

There is a recent trend at a state-level to pass laws aimed at “piercing the ERISA veil” – i.e., creating laws that relate to the design and administration of self-funded benefit plans, and seeing whether they can have courts agree that those laws are applicable to ERISA plans.

These changes are already causing confusion. Laws enacted in Oklahoma, Indiana, Tennessee, and Florida take aim at ERISA and seek to control network standards, cost-sharing practices, and reimbursement rates for PBMs. More of these laws are being filed annually in state legislatures.

Taking ERISA Into the Future

Earlier this year, Holmes Murphy had the opportunity to provide input to the House Education and Workforce Committee via the National Association of Business and Insurance Professionals (NABIP). The NABIP provided suggestions for the committee, which included:

• Creating a new category of ERISA responsibility: associate health and welfare plan fiduciaries. This includes anyone the plan directly engages with to make daily administrative decisions on behalf of the plan.
• Requiring associate health and welfare plan fiduciaries to address reporting that they control and oversee.
• Updating electronic distribution standards.

Will Changes Happen Before ERISA Hits 100?

While changes may not happen this year, there are many innovative ideas percolating in this space. Preserving ERISA benefits clients and their employees by allowing creation of consistent health and welfare benefits that are easy to administer.

If you’re ready to learn more about ERISA and how our team can help you create a benefits plan designed for your unique needs, reach out today and let’s get started!