ERISA at 50: The Value of Employer Health Benefits

The House of Committee of Workforce convened to evaluate the benefits and concerns of ERISA's employer sponsored healthcare.

By Marcus Emmanuel September 11, 2024

____________________________________________________________________________________________________________________________________

SUBJECT: ERISA's 50th Anniversary: The Value of Employer-Sponsored Health Benefits

DATE: September 10, 2024

OVERVIEW: The Subcommittee on Health, Employment, Labor, and Pensions of the Committee on Education and the Workforce convened to commemorate ERISA's 50th anniversary and to evaluate its ongoing role in ensuring the value and stability of employer-sponsored health benefits. The hearing explored how ERISA has shaped health benefit structures, supported economic stability, and maintained employer flexibility in offering health coverage. It also addressed emerging challenges, including regulatory burdens, rising healthcare costs, and affordability concerns for employees.

HEARING RECORDING LINK: https://www.congress.gov/event/118th-congress/house-event/LC73530/text

___________________________________________________________________________________________________________________________________

Witnesses

  • Ilyse Schuman, Senior Vice President, Health and Paid Leave Policy, American Benefits Council 
  • Holly Wade, Executive Director, National Federation of Independent Business Research Center 
  • Anthony Wright, Executive Director, Families USA
  • Dr. Paul Fronstin, Director, Health Benefits Research, Employee Benefit Research Institute

Key Themes & Highlights

  • Republican Concerns:
    • Preservation of ERISA Preemption: Emphasized the importance of maintaining ERISA’s preemption clause to ensure a uniform regulatory environment for employer-sponsored health benefits. Warned against efforts by states to erode ERISA protections.
    • Cost Control Measures: Highlighted the need for transparency in healthcare pricing and reforms to mitigate rising costs for employer-sponsored plans. Criticized burdensome federal regulations that increase administrative costs for employers.
    • Threats from Government-Run Healthcare Models: Opposed proposals like Medicare-for-All, arguing such initiatives would dismantle private employer-sponsored plans and lead to increased taxpayer burdens.
  • Democratic Concerns:
    • Affordability and Equity: Stressed the need for stronger consumer protections, particularly for employees in self-insured plans, and advocated for policies to address affordability and equity in health benefits.
    • Strengthening Regulatory Oversight: Supported enhanced funding for the Department of Labor to oversee ERISA plans and ensure compliance with consumer protection laws.
    • Expanding Coverage: Urged for innovative solutions to extend health benefits to small businesses and self-employed individuals while addressing systemic inefficiencies in the healthcare system.
  • Witness Testimonies:
    • Ilyse Schuman: Advocated for preserving ERISA’s preemption clause to maintain consistency and affordability in employer-sponsored plans. Called for federal action to increase transparency in healthcare pricing and competition to lower costs.
    • Holly Wade: Discussed the challenges small businesses face in offering health benefits, emphasizing cost barriers and limited coverage options. Supported expanding access to association health plans and other innovative solutions to improve affordability for small employers.
    • Anthony Wright: Highlighted affordability challenges faced by workers in employer-sponsored plans, noting rising premiums and deductibles. Recommended broadening consumer protections under ERISA and leveraging policies like the Inflation Reduction Act to control drug costs.
  • Contentious Points:
    • Republicans: Focused on preserving ERISA preemption and criticized proposals that would increase regulatory burdens on employers. Argued that government-run healthcare models would undermine the private health insurance market.
    • Democrats: Advocated for increased regulatory oversight and consumer protections within ERISA plans. Highlighted the need for systemic reforms to address affordability and ensure equitable access to health benefits.
  • Key Discussions:
    • ERISA’s Preemption Clause: Examined its role in creating uniformity across states and its significance in enabling employers to provide consistent health benefits nationwide.
    • Affordability Challenges: Addressed the financial strain of rising healthcare costs on employers and employees and explored potential policy solutions to alleviate these burdens.
    • Innovative Solutions: Discussed alternative funding models, association health plans, and other approaches to improve affordability and expand access to employer-sponsored coverage.
    • Regulatory Oversight: Evaluated the Department of Labor’s capacity to monitor compliance and enforce ERISA’s consumer protection standards effectively.

In-Depth Notes

  • Chairman Bob Good praised ERISA’s role in fostering economic stability and protecting employee benefits while criticizing Democratic proposals for government-run healthcare.
  • Ranking Member Mark DeSaulnier highlighted the importance of ERISA in safeguarding consumer protections and called for bipartisan collaboration to address affordability and systemic inefficiencies.
  • Ilyse Schuman stressed that federal preemption under ERISA is essential for maintaining employer flexibility and reducing costs in the healthcare market.
  • Anthony Wright called for extending prescription drug price negotiations to employer-sponsored plans to alleviate cost burdens for employers and employees alike.