Statement of Administration Policy: H.R. 2782 - ERISA Preemption of State Laws

(House)
(Berman (D) CA and 165 others)

If H.R. 2782 were presented to the President, the Secretaries of Labor and Health and Human Services would recommend a veto.

H.R. 2782 would greatly restrict the preemption provision of Section 514 of the Employee Retirement Income Security Act of 1974 (ERISA). Under this bill, ERISA would no longer preempt any state laws (1) establishing prevailing wage (and employee benefit) requirements , (2) imposing requirements for apprenticeship and other training programs, or (3) expanding the means multiemployer benefit plans can use to collect contributions.

The effect of this bill would be to subject employee benefit plans to substantial and conflicting burdens on a state-by-state basis, making it more difficult for employers to maintain plans. By discouraging employers from establishing or maintaining employee benefit plans, H.R. 2782 would work to the detriment of employees throughout the Nation.

In addition, the language of H.R. 2782 has been drafted far more broadly than is necessary to achieve its purported objectives. The bill would not only overturn the specific court decisions that prompted the legislation, but it would also allow State regulators license to impose new requirements on employee benefit plans so long as they did so under the guise of apprenticeship standards, prevailing wage laws or collection remedies. This approach would severely undermine ERISA's preemption provision and encourage other interest groups to seek additional exceptions for their concerns.

We understand that an amendment may be offered that would add to H.R. 2782 provisions reflecting the ERISA preemption language in H.R. 1602, as amended, which was reported out by the House Education and Labor Committee. H.R. 1602 would expose employers that sponsor health insurance plans, and providers of health insurance, to excessive and unnecessary damages. Such a change in ERISA preemption would exacerbate the national problem of skyrocketing health care costs, discourage coordinated health care measures, and reduce access to affordable health care. The Administration has already expressed — and reaffirms — its strong opposition to H.R. 1602 and any similar provisions.

The issue presented by H.R. 2782 is not one of prevailing wages, apprenticeship training or delinquent contributions. Rather, the issue in this bill is whether Congress should preserve the preemption cornerstone of ERISA in order to maintain, and encourage the future growth of, employee benefit plans.