In the same way, states can impede local jurisdictions from enacting ordinances or regulations (i.e., tobacco control).Google Scholar

Subcommittee on Labor of the Committee on Labor and Public Welfare, United States Senate, Legislative History of the Employee Retirement Income Security Act of 1974 (Washington, D.C.: U.S. Government Print Office, 1976): at 3456.Google Scholar

ERISA covers self-funded (or self-insured plans where the employer provides health benefits directly to employees (plan participants). It does not cover health insurance that an individual employee purchases in the commercial market. Generally, small employers (with under 100 employees) do not offer self-funded plans. See, e.g., Stayman, J., “Regulation of Health Benefits Under ERISA: An Outline,” Congressional Research Service, Order Code RS22643, April 12, 2007, available at <http://opencrs.com/document/RS22643> (last visited June 19, 2009).+(last+visited+June+19,+2009).>Google Scholar

Nealy v. U.S. Healthcare, 711 N.E.2d 621 (N.Y. 1999). In deciding ERISA preemption cases, courts interpret two sections of the law: 514 and 502(a). A case could be preempted under either section. Section 514 has been labeled as field preemption in the judicial opinions. Basically, it amounts to the interaction between the “relates to,” savings, and deemer clauses. If the state law conflicts with these provisions, it will be preempted. Section 502(a) is called complete preemption. This section allows an insurer to remove the case to federal court even if the plaintiff has not mentioned ERISA in the complaint. Section 502(a) also limits the available remedies to the amount of the benefit. No punitive or consequential damages can be recovered.Google Scholar

Jordan, K. A., “Travelers Insurance: New Support for the Argument to Restrain ERISA Preemption,” Yale Journal on Regulation 13 (1996): 255–336.Google Scholar

Jacobson, P. D. and Pomfret, S. D., “Form, Function, and Managed Care Torts: Achieving fairness and equity in ERISA jurisprudence,” Houston Law Review, 35 no. 4 (1998): 985–1078.Google Scholar

Moreno v. Health Partners Health Plan, 4 F. Supp.2d 888 (D.Ariz. 1998).Google Scholar

29 U.S.C. Art. 1132 (2008).Google Scholar

McEvoy v. Group Health Cooperative of Eau Claire, 570 N.W.2d 397 (Wis. 1997).Google Scholar

29 U.S.C. § 1104 (a)(1) (2008).CrossRefGoogle Scholar

Kyle Railways, Inc. v. Pacific Administration Services, 990 F.2d 513 (9th Cir. 1993).Google Scholar

Reilly v. Blue Cross and Blue Shield United of Wisconsin, 846 F.2d 416 (7th Cir. 1988).Google Scholar

Curtiss-Wright Corp. v. Schoonejongen, 115 S.Ct. 1223, 1228 (1995); Maltz v. Aetna Health Plans of New York, 114 F.3d 9, 12 (2d Cir. 1997).Google Scholar

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989). See also Pegram v. Herdrich 530 U.S. 211 (2000) and Metropolitan Life Insurance Co. v. Glenn, 128 S.Ct. 2343 (2008).Google Scholar

McGraw v. Prudential Insurance Co., 1998 WL 96849 (10th Cir. 1998); Morreim, E. H., “Benefits Decisions in ERISA plans: Diminishing Deference to Fiduciaries and an Emerging Problem for Provider-Sponsored Organizations,” Tennessee Law Review 65 (1998): 511–553.Google Scholar

England v. John Alden Life Ins. Co., 846 F.Supp. 798, 801 (W.D. Missouri 1994).Google Scholar

Metropolitan Life Insurance Co. v. Glenn, 128 S.Ct. 2343 (2008). After reconfirming the four factors to balance from the Firestone case, the Court stated that “[t]he conflict of interest …should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, including, but not limited to, cases where an insurance company administrator has a history of biased claims administration,” at 2352.Google Scholar

This is not to suggest that the cases are necessarily mutually reinforcing. Instead, as Elizabeth Weeks notes, Art. 514 (the three preemption provisions) operates separately from Art. 502 (the limited remedies section), but they both may apply or overlap in some cases. Personal communication from Elizabeth Weeks to author, November 12, 2008.Google Scholar

Compare, for instance, Edward Zelinsky's analysis that ERISA would preempt most of the provisions of the Massachusetts health reform program with Patricia Butler's more optimistic assessment that properly designed state reforms could surmount an ERISA preemption challenge. Zelinsky, E. A., “The New Massachusetts Health Law: Preemption and Experimentation,” William & Mary Law Review 49 (2007): 229–287; Zelinsky, E. A., “Employer Mandates and ERISA Preemption: A Critique of Golden Gate Restaurant Association v. San Francisco,” Cardozo School of Law, Working Paper No. 246, November 2008; Butler, P. A., ERISA Implications for State Health Care Access Initiatives: Impact of the Maryland “Fair Share Act” Court Decision, National Academy for State Health Policy, 2006, available at <http://www.nashp.org/Files/ERISA_Implications.pdf> (last visited June 19, 2009). See also, Polvino, K. B., Antia, M. K., and Burnette, J. P., “ERISA as an Obstacle to Fair Share Legislation and Other State Initiatives to Expand Coverage to the Uninsured and Underinsured,” Journal of Health & Life Sciences Law 1 (2007): 99–126; Shimabukuro, J. O. and Staman, J., “Legal Issues Relating to State Health Care Regulation: ERISA Preemption and Fair Share Laws,” Congressional Research Service, Order Code RL34637, August 28, 2008, available at <http://opencrs.com/document/RL34637> (last visited June 19, 2009).Google Scholar

Shaw v. Delta Airlines, Inc., 463 U.S. 85 (1983); Metropolitan Life Insurance Co. v. Massachusetts, 471 U.S. 724 (1985); Pilot Life v. Dedeaux, 481 U.S. 41 (1987).Google Scholar

Shaw v. Delta Airlines, Inc., 463 U.S. 85 (1983).CrossRefGoogle Scholar

Along with many others, I have been harshly critical of how these cases were resolved. Now is not the time to revisit those arguments, but the reader can review the arguments in Jacobson, P. D. and Pomfret, S. D., “Form, Function, and Managed Care Torts: Achieving Fairness and Equity in ERISA Jurisprudence,” Houston Law Review 35 (1998): 985–1078. Among similar analyses cited in that article, see Butler, K. L., “Securing Health Benefits through ERISA and the ADA,” Emory Law Journal 43 no. 4, (1993): 1197-1243; Fisk, C. L., “The Last Articles About the Language of ERISA Preemption? A Case Study of the Failure of Textualism,” Harvard Journal on Legislation 33 (1996): 35-104; Farrell, M. G., “ERISA Preemption and Regulation of Managed Health Care: The Case for Managed Federalism,” American Journal of Law & Medicine 23 (1997): 251-290.Google Scholar

See Jacobson, and Pomfret, , supra note 6, at 1010–1011.Google Scholar

Id. It is fair to say that not everyone agrees with this interpretation of the legislative history. Two reviewers note that three floor statements mention the preemption clause as applying to EBPs, along with congressional concern about a Missouri proposal to tax self-insured employer health care and the CA Knox-Keene law that would have applied extensive managed care standards to self-insured employer plans. Nevertheless, the floor debate was overwhelmingly devoted to the pension aspects and did not contemplate the ways in which health care was transformed in the 1980s and 1990s.Google Scholar

California Division of Labor Standards Enforcement v. Dillingham Construction, Inc., 519 U.S. 316 (1997), at 335 (Scalia, J., concurring). In Aetna Health, Inc. v. Davila, 542 U.S. 200, 222 (2004), Justice Ginsburg went much further, stating that “I also join the ‘rising judicial chorus urging that Congress and [theis] Court revisit what is an unjust and increasingly tangled ERISA regime’” (citing DiFelice v. Aetna U.S. Healthcare, 346 F.3d 442, 453, 3d Cir. 2003).Google Scholar

514 U.S. 645 (1995).Google Scholar

536 U.S. 355 (2002).Google Scholar

538 U.S. 329 (2003).Google Scholar

Physicians have supported AWP laws because they limit health plans' ability to exclude physicians from their patient population. Plans have opposed them on the grounds that these laws inhibit valuable quality of care controls.Google Scholar

57 F.3d 350 (3d Cir. 1995). This case is also notable because it fails to grapple with the meaning of important ERISA terms such as benefit and plan, despite the plaintiff's direct attempt to distinguish between the plan (EBP) and the MCO. For more detail, see Jacobson and Pomfret, supra note 6, at 1031; Korobkin, R., “The Failed Jurisprudence of Managed Care, and How to Fix It: Reinterpreting ERISA Preemption,” UCLA Law Review 51 no. 2 (2003): 457–538.Google Scholar

530 U.S. 211 (2000).Google Scholar

Bloche, M. G. and Jacobson, P. D., “The Supreme Court and Bedside Rationing,” JAMA 284 (2000): 2776–2779.CrossRefGoogle Scholar

Aetna Health, Inc. v. Davila, 542 U.S. 200 (2004). In this case, the Court takes a broad reading of Art. 502's exclusive remedy to preempt even a state law that appears to be consistent with ERISA.Google Scholar

In Metropolitan Life Insurance Co. v. Glenn, supra note 17, the Court ruled that a plan's conflict of interest in resolving a participant's challenge to a coverage denial is one factor to be considered in determining whether the plan met its fiduciary duty.Google Scholar

Quality Infusion Care, Inc. v. Humana Health Plan of Texas Inc., No. 07-20703, 2008 WL 3471861 (5th Cir. August 13, 2008).Google Scholar

See, e.g., Barber v. Unum Life Insurance Co. of America, 383 F. 3d 134 (3rd Cir. 2004).Google Scholar

See, e.g., American Council of Life Insurers v. Watters, 536 F. Supp. 2d 811 (W.D. Mich. 2008); Standard Insurance Co. v. Morrison, 537 F. Supp. 2d 1142 (D. Mont. 2008).Google Scholar

A third issue of potential interest is whether ERISA preemption would affect laws permitting the purchase of health insurance across state lines. Stephanie Kanwit is addressing these issues in another “Legal Solutions in Health Reform” paper in “Purchasing Insurance Across State Lines in the Individual Market.”Google Scholar

475 F.3d 180 (4th Cir. 2007). In this case, the court preempted Pennsylvania's bad faith insurance law because it provided a remedy outside of Section 502 and did not affect the risk-pooling arrangement that Miller requires.Google Scholar

497 F. Supp. 2d 403 (E.D.N.Y. 2007).Google Scholar

546 F.3d 639 (9th Cir. 2008).Google Scholar

Id., at 646–647.Google Scholar

In rejecting the argument that the ordinance makes reference to an EBP, the court cited cases refusing to preempt statutes requiring employers to provide workers' compensation benefits or prevailing wages. See, e.g., California Division of Labor Standards Enforcement v. Dillingham Construction, Inc., 519 U.S. 316 (1997); WSB Elec., Inc. v. Curry, 88 F.3d 788 (9th Cir. 1996); and District of Columbia v. Greater Washington Board of Trade, 506 U.S. 125 (1992).Google Scholar

Golden Gate Restaurant Ass'n v. City and County of San Francisco, 546 F.3d 639, 660 (9th Circuit 2008).Google Scholar

See also, Fisk, C. L. and Oswalt, M. M., “Preemption and Civic democracy in the Battle Over Wal-Mart,” Minnesota Law Review 92 (2008): 1502–1538. Fisk and Oswalt agree with Butler's analysis and argue that ERISA preemption undermines the democratic debate over appropriate health reform legislation; Butler, P. A., ERISA Implications for State Health Care Access Initiatives: Impact of the Maryland “Fair Share Act” Court Decision, National Academy for State Health Policy, 2006, available at <http://www.nashp.org/Files/ERISA_Implications.pdf> (last visited June 19, 2009).Google Scholar

Zelinsky, E. A., “The New Massachusetts Health Law: Preemption and Experimentation,” William & Mary Law Review 49 (2007): 229–287, at 276.Google Scholar

Id., with Zelinky citing Egelhoff case.Google Scholar

Personal communication from Pat Butler to author, September 25, 2008.Google Scholar

See, e.g., Grimo v. Blue Cross/Blue Shield of Vermont, 34 F.3d 148, 151 (2nd Cir. 1994); International Resources Inc. v. New York Life Ins. Co., 950 F.2d 294, 297 (6th Cir. 1991). As Polvino et al. note in a different context, the ERISA plans remain the purchasers of services, not the individuals subject to the mandate (at p. 113). See also, Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1 (1987); and Massachusetts v. Morash, 490 U.S. 107 (1989).Google Scholar

Personal communication from Pat Butler to author, September 25, 2008.Google Scholar

29 C.F.R. Art. 2510.3–1(j) (2007).Google Scholar

For more elaboration of these themes, see Jacobson, P. D. and Selvin, E., “Health, Inequality, and the Courts,” in Morone, J. A., Jacobs, L. R., eds., Healthy, Wealthy & Fair: Health Care and the Good Society (Oxford University Press, 2005): 235–264.Google Scholar

For a broad normative argument against preemption based on principles of civic democracy and local control, see Fisk and Oswalt, supra note 45, at 1533–1538.Google Scholar

See, e.g., Butler, S. M., “Think Small,” Campaign Stops Blog, New York Times, available at <http://campaignstops.blogs.nytimes.com/11/16/think-small/> (last visited June 19, 2009).+(last+visited+June+19,+2009).>Google Scholar

See, e.g., Rice v. Panchal, 65 F.3d 637 (7th Cir. 1995).Google Scholar

See, e.g., Jacobson, and Pomfret, , supra note 6; and Korobkin, supra note 30.Google Scholar

Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1 (1987).Google Scholar

My hypothesis is that this is a major cause of current physician liability exposure and hence rising physician medical insurance liability premiums.Google Scholar

29 U.S.C. Art. 1002(1) (2008).Google Scholar

Professor Korobkin proposes that the Supreme Court reverse its decision to include MCOs as plan benefits and rule instead that ERISA was not intended to “govern the relationships between employees and third parties, such as MCOs.” See Korobkin, supra note 30, at 60.Google Scholar

For instance, Elizabeth Weeks argues that a better way to analyze the cases is to distinguish whether the case raises Art. 514 or Art. 502 issues (or both). Professor Weeks argues that the consistency in the litigation is that 502 always trumps 514. Even if, therefore, a state law would be saved from preemption under 514, it is still preempted if 502 applies. One problem with this analysis is the inherent subjectivity of when 502 should apply. Personal Communication from Elizabeth Weeks to author, November 12, 2008.Google Scholar