Posted by David Hyman:
Health Reform: ERISA and Pay or Play
http://volokh.com/archives/archive_2009_03_15-2009_03_21.shtml#1237309020
A majority of Americans obtain health insurance through their place of
employment, or the place of employment of an immediate family member.
The Census Bureau provides more detail in Figure 7, [1]here. However,
small employers, and employers in certain sectors of the economy
(e.g., retail and agriculture) are much less likely to offer coverage.
In the view of many, employers that fail to offer coverage to their
employees (leaving aside, for the moment, the affordability of that
coverage), are morally blameworthy free-riders. A popular policy
response is a �pay or play� initiative. Employers can either offer
health insurance to their employees ("play") or pay a tax/penalty to
the state ("pay"). These initiatives may be subject to ERISA
preemption, depending on how they are designed and implemented.
Last week, the 9th Circuit [2]denied en banc review of the [3]panel
decision in Golden Gate Restaurant Association v. City and County of
San Francisco. The case turned on whether ERISA preempted San
Francisco�s attempt to impose a mandate on employers to provide health
insurance to their employees, or make payments to the city, with the
precise amount to be paid tied to the number of employees, hours
worked, and whether the employer was non-profit or for-profit. The
panel upheld the law, overturning the district court�s decision. Eight
judges dissented from the denial of en banc review. The summary
paragraph of the dissent is as follows:
Our decision in this case creates a circuit split with the Fourth
Circuit Court of Appeals [in Retail Industry Leaders Association v.
Fiedler, 475 F.3d 180 (4th Cir. 2007)], renders meaningless the
tests the Supreme Court set out in Shaw v. Delta Air Lines, Inc.,
463 U.S. 85 (1983), conflicts with other Supreme Court cases
establishing ERISA preemption guidelines, and, most importantly,
flouts the mandate of national uniformity in the area of
employer-provided healthcare that underlies the enactment of ERISA.
Judge Fletcher, who wrote the original panel disputed these claims �
mostly by repeating the arguments he had made in the panel opinion.
Professor Ed Zelinsky of Cardozo has written a detailed critique of
the panel�s decision [4]here. The plaintiff has vowed to seek Supreme
Court review. A detailed chronology of all the filings in the case may
be found [5]here.
References
1. http://www.census.gov/prod/2008pubs/p60-235.pdf
2.
http://www.ggra.org/pdfs/9th%20Circuit%20En%20Banc%20Decision%20and%20Dissent.pdf
3. http://www.ggra.org/pdfs/9th%20Circuit%20Appeal%20Decision.pdf
4. http://ssrn.com/abstract=1299128
5. http://www.ggra.org/Information.aspx?ID=60
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