ERISA proposals do more harm than good

With congressional and presidential elections just weeks away, Americans are voicing their views about what issues are important to them and what they want from their elected representatives — and those who are seeking to represent them. Near the top of the list of most pressing matters for many Americans is access to affordable, quality healthcare. While we can all agree on the importance of providing this access to all Americans, for it to become a reality, we ultimately must choose between a system that enables patients and doctors to make decisions about care and the undesirable alternative of a government-run system that provides limited — if any — choice for individuals.

America is home to a sizeable number of uninsured and underinsured individuals. In addition, healthcare in this country is increasingly expensive, with annual increases that have historically exceeded the overall inflation rate and increases experienced in other developed countries. As the cost of providing healthcare increases, so does the cost of healthcare coverage and insurance. Private employers, who voluntarily provide coverage for a majority of Americans, are feeling the strain of providing health insurance, as are families who are purchasing coverage on their own. It is clear that our current healthcare system needs to change.

At the crossroads of the reforms necessary to address these flaws in our system stands the Employee Retirement Income Security Act (ERISA). ERISA was created in 1974 to provide uniform federal standards for employer-sponsored health and retirement benefit plans for employees. Today, the provisions of ERISA and other related laws allow and encourage employers to provide high quality, affordable benefits voluntarily to more than 160 million Americans.

ERISA was enacted in response to companies that failed to manage pension funds appropriately and terminated their benefit plans without sufficient assets to satisfy their workers. The act laid out minimum standards for pension plans and the related fiduciary responsibilities of the company to protect the interests of and benefits for private-sector employees. The current structure accommodates these goals, but it has become vastly more intricate.

A key component of the federal ERISA is the preemption of state and local laws that relate to health insurance and employer-sponsored benefit plans. Although many state and local laws are well-intentioned, in the aggregate, these laws comprise a costly patchwork of health coverage mandates, restrictions, and rules that vary from state to state. ERISA preemption helps promote the uniform administration of benefits under the federal ERISA law and lowers the cost of providing coverage. This is critical for employers who offer health benefits to employees, retirees, and their families across state lines. In fact, it is arguably the sole reason for our success in providing healthcare for the more than 160 million Americans who obtain healthcare coverage from their employers.

Because of my position as ranking member of the House Subcommittee on Health, Employment, Labor and Pensions, I often am cast in the role of defender of ERISA. While I firmly believe the structure has been successful in providing access to care, I will be the first to acknowledge it is not without flaws.

America needs a new paradigm to improve the cost of and access to health insurance, but the change must be intentional and comprehensive. Unfortunately, there have been repeated attempts in my subcommittee to begin to unravel ERISA one thread at a time — starting with state preemption. This is absolutely the wrong approach, and it could lead to significant reduction or elimination of coverage for those who rely on ERISA in its current form.

Other efforts have focused on adding coverage mandates within ERISA. In general, these well-intentioned mandates increase the cost of providing healthcare coverage and decrease flexibility in designing healthcare benefits. This has the potential to pose serious problems to the ERISA-based structure that is designed to encourage the private sector to provide coverage voluntarily.

These issues represent only two areas in which attempts are being made to weaken ERISA and the voluntary system of private employer-based coverage. If we are to increase efficiency and preserve coverage for millions of Americans while moving toward comprehensive reform, members of Congress must be vigilant in our efforts to resist incremental changes. Restrictive rules and administrative bureaucracy increase the cost of benefits, making healthcare less affordable for employees, retirees, and their dependents, which could ultimately decrease access to healthcare. This is exactly the wrong result.

Any reform to the current health and retirement benefits system must be comprehensive in nature and provide Americans with more and better health care choices. Americans deserve nothing less than expanded access to coverage, lower costs, and greater health and financial security — preserving our economy and our way of life.

Kline is a member of the House Education and Labor Committee.