On March 7, 2022, the Insurance and Safety Fire Commissioner issued Bulletin 22-EX-1 to insurers regarding ERISA preemption. The bulletin was apparently intended to address questions from state residents regarding why state laws were not enforceable against self-funded ERISA plans.
The bulletin explains that ERISA preempts all state and local laws that “relate to” employee benefit plans covered by ERISA. This broad preemption was designed to enable large employers to offer and administer uniform benefit plans across the nation without being subject to every local and state regulation.
Additionally, the bulletin notes that the recent Rutledge v. PCMA decision by the US Supreme Court is consistent with this preemption principle, i.e., the Rutledge decision found that an Arkansas law dealing with cost regulation was not preempted by ERISA (and thus was enforceable as applied to an ERISA plan). An article on the Rutledge case can be found in this article from the December 24, 2020, edition of Compliance Corner.
Employers may want to be aware of this bulletin, which serves as a reminder of the basic ERISA preemption principle.
Bulletin 22-EX-1 »
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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