Employee Retirement Income Security Act of 1974 (ERISA)

 The term ERISA refers to the Employee Retirement Income Security Act of 1974, which established federal regulations for certain employer provided benefits, mainly pensions and health insurance coverage. The federal legislation preempts the ability of states to directly regulate employer provided benefits covered by ERISA. One of the goals of the legislation was to provide national regulation for employer plans to ensure the plans would be administered consistently, without interference from various state regulations. 

State insurance regulation does not apply to employer-sponsored health plans. The provisions of ERISA supersede any and all state laws relating to employee benefit plans. Generally the courts have broadly interpreted the preemption clause to provide national uniformity in rules for employee benefit plans. This protection has been extend to prohibit state efforts to directly regulate employer plans, such as mandating benefit coverage, and indirectly such as attempts to regulate provider networks offered through ERISA plans. 

States retain the ability to regulate the "business of insurance" as it relates to insurers providing insurance coverage to ERISA plans. The Supreme Court recognizes two types of ERISA plans: 

• Plans providing coverage through insurers, and
• Self insured plans.

Last Revised: August 21, 2006