By: TAHP | Friday, September 13, 2024

The Big Picture: This year marks the 50th anniversary of ERISA, the federal law that has provided a stable regulatory environment allowing businesses to offer high-quality, affordable health care and retirement benefits to employees.

Wait, what’s ERISA? That’s the acronym for the Employee Retirement Income Security Act of 1974, and it’s a pretty big deal for job-based health care benefits.

Why It Matters: As we celebrate this milestone, it’s more crucial than ever to protect ERISA from threats that would undermine employer-provided health coverage in Texas.

The Numbers Don’t Lie

•  14 Million Texans receive their coverage from Texas employers, making job-based coverage the backbone of the state’s health care system.
• More than half of those employees are in ERISA protected self-funded health plans.

Understanding Self-Funded Coverage: These employer plans are funded directly by the business, meaning they don’t use an insurance company to take on the risk of paying expensive health care claims. Instead, these typically very large companies use an insurer to act as an “administrator” for the plan but they pay for health care claims directly.

Who’s in charge?

• Under ERISA, the federal government sets basic guidelines for health coverage benefits (like from Obamacare) and states typically can’t add additional mandates or restrictions.
• This important law ensures that employers can design multi-state benefits that work for their employees.

Employer Coverage Under Threat: State lawmakers are increasingly pushing costly mandates on employer health plans, despite ERISA’s federal protections.

• Texas Challenge: Last session, SB 1137/HB 2021 aimed to apply expensive prescription drug mandates to self-funded and level-funded ERISA plans, which would have driven up employer costs by $464M in the first year and $5.4B over 10 years.

Texas Employers Fight Back: Texas employers and Chambers of Commerce successfully fought against these mandates, and the Legislature rejected these proposals, which ultimately died in committee.

• Their efforts underscored the importance of maintaining ERISA’s federal protections against costly state mandates.

The Bottom Line: ERISA ensures uniform rules across states, preventing a costly patchwork of regulations. Texas must protect ERISA to maintain affordable health care coverage for millions of Texans and ensure our state remains a competitive place to do business.

Go deeper:

• 🔗 TAHP’s Employer Coverage One Pager
• 🔗 TAB’s Op-Ed on ERISA
• 🔗 TAHP’s 101 on Employer Coverage