State edits to employer-provided healthcare get struck down under ERISA.

The Patient Protection and Affordable Care Act (ACA) was signed into law in 2010. 1 The aims of the ACA are to reduce the number of uninsured individuals in the United States, to reign in rising healthcare costs, and to improve healthcare quality' In 2017, the ACA's State Innovation Waiver (5 1332) will enable states to waive many of the ACA's provisions and to create their own Innovative solutions to control healthcare spending. However, the Employee Retirement Income Security Act of 1974 (ERISA)4 presents a number of significant legal hurdles to true innovation in healthcare. ERISA's original purpose was to encourage employers to sponsor benefit plans and minimize potential conflicts with existing state laws. Because of ERISA, the regulation of employee benefit plans, including health plans, falls primarily under federal jurisdiction for the forty-eight percent of the U.S. population insured through their employers. State laws cannot directly refer to ERISA, nor influence the benefits, administration, or structure of an ERISA plan. Also, if a state law limits employer choices too much, it will likely violate ERISA. 8

The most aggressive innovation in combating high healthcare costs is the implementation of a single-payer health insurance system. However, in order to comply with ERISA, states would need to leave the employer-based health insurance market intact, which stymies true healthcare reform. Any innovation that is too coercive and leaves employers with little choice but to modify their plans, or requires that an ERISA plan be administered in a specific way or through a single processor, would likely violate ERISA. II Additionally, under 1332, state statutes will be required to provide that employers offer coverage that is as "comprehensive" as is offered under the ACA. These mandated benefits would also violate ERISA. This Note explores the ways in which ERISA is a significant legal roadblock to meaningful state-level healthcare reform under the ACA's 2017 State Innovation Waiver. In order for states to truly innovate and reform their healthcare systems under 1332, ERISA needs to be waived, amended, or repealed by Congress, or overridden by executive order.