State Health Reform Efforts

As states work to reform health coverage offered within their borders, they often seek to mandate the level of health care coverage employers must provide — a clear violation of ERISA when applied to self-insured plans. States are primarily doing this in two ways: levying assessments on payers, and including new mandates in ACA Section 1332 state innovation waivers.

Assessments on Payers

Some states are passing legislation to impose new taxes on the self-insured health plans sponsored by large employers, and use the funds collected to pay state-based insurance exchanges or other health-related activities.

State Innovation Waivers

Under the Affordable Care Act, states may pursue what is known as a State Innovation Waiver (also known as a 1332 Waiver) that permits increased flexibility in a state’s health care laws and regulations. While the scope of 1332 waivers is likely to vary greatly, in some instances a waiver can have a significant impact on employers that operate within a given state, including those offering self-insured health coverage for their employees.

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