<nobr>Aug 2, 2010</nobr>

ERIC Pleased with DoL Withdrawal of Proposed Regulation that Would Have Curtailed ERISA Preemption

ERIC News Release
For Immediate Release: August 2, 2010

Washington, D.C. -- The ERISA Industry Committee (ERIC) is pleased that the Department of Labor (DoL) decided to withdraw from consideration by the Office of Management and Budget (OMB) a proposed regulation that would permit states to set up conflicting health plans that threaten to interfere with the nationally uniform health arrangements of multistate employers that ERIC represents.

The proposed regulation would have permitted state government health plans, which are not preempted as long as they are limited to state government employees, to include any state residents in the plans. The regulation would have redefined in the Employee Retirement Income Security Act (ERISA) "employee welfare benefit plans" to include non-governmental employees.

ERIC strongly opposed the regulation in a letter to OMB, as well as in a face-to-face meeting with the Department of Labor, in addition to meeting with OMB and White House officials in which other employer groups participated.

DoL said their reason for withdrawing the proposal was that enactment of the Patient Protection and Affordable Care Act (PPACA) made the regulation unnecessary, although DoL reserved the right to "review whether and to what extent further regulation in this area is necessary or appropriate in light of a national health care reform program."

ERIC President Mark Ugoretz said, "We are quite pleased DoL formally announced its intention to withdraw the proposed regulation. Had the Department moved forward with implementing the draft regulation, it would have led to a confused and incoherent national health policy and undoubtedly would have been challenged in the courts. Moreover, it would have needlessly diverted the attention of the Administration, state and local governments, and the nation's largest employers from the numerous challenges and opportunities presented by the implementation of PPACA."

Ugoretz said that, "ERISA preemption, on which nationally uniform plans depend, is considered one the most important issues for major employers in the health reform debate and has been under attack since ERISA was enacted in 1974. As this draft regulation showed, ERISA preemption can no longer be taken for granted and employers need to increase their vigilance in preventing additional inroads." Ugoretz noted that the ERISA preemption provision is considered the "crown jewel" of ERISA since it is what makes the employer-based system feasible.

DoL's announcement can be accessed here:
http://www.dol.gov/opa/media/press/ebsa/EBSA20101080.htm

A copy of ERIC's letter can be accessed here:
http://www.eric.org/forms/documents/DocumentFormPublic/view?id=20B1800000006

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For more information:
Ted Godbout
Director, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: 202-789-1400
Fax: 202-789-1120
tgodbout@eric.org
www.eric.org

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The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers. ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families. ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.

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