ERIC moves forward with case to eliminate Seattle’s health care mandate
The following statement should be attributed to Annette Guarisco Fildes, President and CEO of The ERISA Industry Committee:
“ERIC remains steadfast in our belief that the City of Seattle is violating federal law by imposing benefit mandates on employers that already offer health coverage to their employees in compliance with federal law. We are reviewing yesterday’s filing by the City and will continue our fight to protect employers from state and local mandates on federally regulated benefit plans.
Employers must be allowed to provide the best benefits to their employees, no matter where they live or work, without states and localities dictating matters relating to employer health and retirement benefit plans.
The court’s decision on the matter will directly impact the ability of all large employers to administer the benefit plans they provide to their nationwide workforce uniformly.”
Background
ERIC member companies – the nation’s largest employers across all industries – provide health coverage and other benefits to their nationwide workforce. These employer plans are regulated at the federal level by the Employee Retirement Income Security Act (ERISA), which preempts state and local mandates on those benefit plans. To protect ERISA preemption, ERIC challenged the City’s initial health care mandate adopted as Part 3 of the Seattle Hotel Employees Health and Safety Initiative – SMC 14.25.
The initiative would have mandated large hotels to either offer a specific level of coverage in an employer-sponsored group health plan or to provide additional compensation based, in part, on the cost of health insurance coverage. SMC 14.25 was repealed after ERIC filed a brief raising ERISA preemption issues, and after the Washington state appellate court voided all aspects of the initiative on state constitutional grounds. The Seattle City Council then replaced it with SMC 14.28.
In January of this year, ERIC filed an amended complaint with the U.S. District Court for the Western District of Washington against the City in response to SMC 14.28. The initiative would require large hotel employers and employers of ancillary hotel businesses to make health care payments to or on behalf of their employees. ERIC argued that requiring businesses to provide what are essentially City-mandated specified levels of health benefits through federally regulated employer health plans is preempted by ERISA. The court later dismissed ERIC’s complaint.
ERIC then appealed to the United States Court of Appeals for the Ninth Circuit to overturn the district court’s decision. The appeal argued that the district court was wrong in dismissing the case because it mistakenly relied on the outdated Golden Gate Restaurant Association (546 F.3d 639 (9th Cir. 2008)) case, rather than looking to recent Supreme Court precedent which varies significantly with the prior Ninth Circuit Golden Gate decision.
Other Current ERISA Preemption State Litigation
ERIC is also in litigation with the state of New Jersey regarding ERISA preemption. In August 2020, ERIC filed a lawsuit in the United States District Court for the District of New Jersey, asking the court to uphold federal preemption under ERISA and seeking an injunction to stop recent amendments (S.B. 3170) to the Millville Dallas Airmotive Plant Job Loss Notification Act (New Jersey WARN Act), from being implemented. S.B. 3170 imposes a series of requirements that collectively force employers to create an ongoing administrative system that is considered an employee benefit plan under federal law, which Congress forbids states to create. Click here to learn more.