San Francisco Claims Solution to ERISA Preemption of Health Care Law

July 26, 2007 ( - Lawyers for the San Francisco City Attorney's Office claim they have found a way to overcome federal pre-emption of the city's new universal health care mandate.

A deputy city attorney defending San Francisco’s law in federal court says recent laws in Maryland and New York were defeated in court because they required businesses to pay the government without the government directly giving them anything in return, according to The Recorder. The San Francisco law requires employers who do not offer private insurance to pay an amount to the government and in exchange the city would provide their employees discounted health benefits.

A district court and the 4 th U.S. Circuit Court of Appeals struck down a universal health care law in Maryland, ruling that the Employee Retirement Income Security Act (ERISA) prohibits states from regulating employer benefits (See MD Abandons ‘Wal-Mart’ Health Care Bill Fight). A district court in New York struck down the Suffolk County Fair Share Health Act for the same reason (See ERISA Preempts New York Health Care Law Targeting Wal-Mart).

In November, a restaurant association filed a lawsuit against the city of San Francisco, claiming it too is preempted by ERISA (SeeSan Francisco Restaurants Rally Against New City Health Plan). The Recorder reports that an attorney for the Golden Gate Restaurant Association said he does not think there’s any “functional difference” between San Francisco’s plan and the “pay-or-play” policies that came before.

The plan “does what other pay-or-play laws already did, which is require employers to pay a certain amount or a certain percentage in order to fund employee health benefits. As noble as the city’s goals are, it’s an area that Congress intended was going to be regulated on a national basis,” said Richard Rybicki, according to the newspaper.

The city claims the difference between the San Francisco ordinance and those that have come before is that employers are allowed in the city’s plan to comply however they want, rather than having a method of compliance imposed or them or facing a fine.