Mark Hall of the O’Neill Institute posted the other day to comment that the “health reform process is ignoring the hash that Congress and the courts have made of ERISA’s pre-emption of state tort suits against health insurers.” Mr. Hall, of course, is precisely correct about that, as he is when he adds “personal injuries caused by insurance claims denials cannot be adequately redressed either under state tort law or federal law, due to ERISA’s complete pre-emption of the former, and its stingy remedies for personal injury to the latter.” No fooling.
Mr. Hall’s larger point is that the health “reform” bill passed by the House of Representatives over the weekend, HR 3962, does nothing to address ERISA’s malignant effects. Section 251 of the bill expressly provides:
Nothing in paragraphs (1) or (2) shall be construed as affecting the application of section 514 of the Employee Retirement Income Security Act of 1974.
(You can find the full text of the bill here).
Section 514 of ERISA, in turn, is the provision which preempts state law and leaves insurance company victims to the tender mercies of the federal courts and the ridiculously stingy remedies ERISA itself has been interpreted to provide.
Now Section 251 in general is the part of HR 3962 which discusses how the bill would affect the applicability of other laws. It says:
In the case of health insurance coverage not offered through the Health Insurance Exchange (whether or not offered in connection with an employment-based health plan), and in the case of employment-based health plans, the requirements of this title do not supercede any requirements applicable under titles XXII and XXVII of the Public Health Service Act, parts 6 and 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, or State law, except insofar as such requirements prevent the application of a requirement of this division, as determined by the Commissioner.
OK that’s a bunch of legal mumbo jumbo, but it essentially talks about other laws which survive the enactment of HR 3962 (it designates other laws which are not to be “superceded”). And then comes the part about ERISA, which says essentially that, in the case of “employment-based health plans,“ don’t you dare think for one minute that the insurance industry will lose their licence to lie, cheat, steal and kill.
Mr. Hall discusses another part of HR 3962, which says that insurance purchased through the contemplated “Health Insurance Exchange” will not be subject to ERISA, or at least says “individual rights and remedies under State law shall apply.” Insurance purchased through the Exchange, however, won’t include the “employment-based health plans” which will continue to be subject to ERISA and its various malignancies. At section 100 HR 3962 defines “employment-based health plans” by referring the reader to (what else?) ERISA’s definition of “group health plans,” specifically ERISA section 733(a)(1), where we finally find the actual definition: it’s an “employee welfare benefit plan to the extent that the plan provides medical care.” Elswhere ERISA defines “employee welfare benefit plan” as any “plan, fund or program … established or maintained by an employer…”
Ah the hell with it. I’m a lawyer and I’m paid to wade through this stuff, and I won’t inflict any more of on the reader here. Suffice it to say that Mr. Hall’s concerns are well founded, and that ERISA’s crappy effects will easily survive the enactment of HR 3962 in its present form.
There may yet be time to impact this. The Senate still needs to pass something, and then there has to be reconciliation in a conference committee. So please don’t stop making noise.