Legal Issues Relating to State Health Care Regulation: ERISA Preemption and Fair Share Laws

Source: Jon O. Shimabukuro and Jennifer Staman, Legislative Attorneys, American Law Division, Congressional Research Service (CRS), Order Code RL34637, August 26, 2008

In the absence of comprehensive federal health care reform, states and localities have undertaken certain initiatives in an effort to expand the provision of health care to residents. One type of measure has been the fair share law, which generally requires employers to choose between paying a certain amount towards health expenditures or coverage for their employees, or contributing to a state or locality to offset the cost of medical expenses for uninsured residents. Questions have been raised as to whether fair share laws can be preempted by the Employee Retirement Income Security Act (ERISA). This report provides an overview of ERISA preemption, discusses legal challenges to fair share laws, and analyzes the fair share requirements included as part of the Massachusetts Health Care Reform Act.

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