The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that governs employee benefit plans, including most employer-sponsored health insurance plans. ERISA preempts state laws that “relate to” employee benefit plans, which means that even if a state law or regulation establishes requirements for an employee benefit plan, the plan only has to follow federal requirements under ERISA and its regulations. In interpreting ERISA over the years, courts have recognized that regulation of health and safety are traditionally state matters and therefore, there is a presumption against preempting state health care laws and regulations.
In the 2012 case Liberty Mutual Insurance v. Donegan, a federal trial court held that a Vermont regulation requiring health insurers to “regularly submit...information relating to health care provided to Vermont residents and health care provided by Vermont health care providers and facilities” was not preempted because it did not apply only to ERISA plans, did not require any particular health plan selection, benefit structure, or enforcement mechanism, and did not interfere with the operation of an ERISA plan. On February 4, 2014, the U.S. Court of Appeals for the Second Circuit reversed that decision, finding that the Vermont law was preempted.
To learn more about ERISA, the Donegan case, and the implications of the February 4 decision, read our Fast Facts below.
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