The Supreme Court held 6/21/04 that Section 502(a) of the Employee Retirement Income Security Act of 1974 ('ERISA"), 29 U.S.C. § 1132(a), completely preempts a state tort claim seeking damages for an allegedly erroneous determination of entitlement to a benefit under an ERISA-governed health benefit plan. The Court reemphasized its long-standing rule that “any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore preempted.” The Texas statute at issue, which imposed a duty to “exercise ordinary care when making health care treatment decisions,” requires “interpretation of the terms of . . . benefit plans” as an “essential part” of the claim. Accordingly, suits under it are in fact designed “to rectify a wrongful denial of benefits promised under ERISA-regulated plans” and therefore preempted.The NAM joined with the American Assn. of Health Plans, the Chamber of Commerce and the American Benefits Council in a brief 8/22/03 urging the Supreme Court to rule this way. State suits threaten to expand liability, increase health care costs, compromise routine plan administration decisions, and undermine the decisions of Congress. Without a nationally uniform ERISA system, employees will face higher co-pays, higher deductibles, higher premiums and fewer drug and treatment options under employer-sponsored plans.
The cases are important to all employers maintaining an ERISA benefits plan. The NAM will continue to work to insure that Congress does not upset the balance between encouraging employer-provided health benefits and the rights of employees and their families to prompt and accurate decisions on whether certain medical services are covered by their benefit plans. See also case # 03-83, CIGNA Healthcare of Texas, Inc. v. Calad.