Statement for Hearing on
鈥淓RISA鈥橲 50th Anniversary: Value of Employer Sponsored Benefits鈥�
House Committee on Education and Workforce
Subcommittee on Health, Employment, Labor, and Pensions
September 10, 2024
As the bipartisan Employee Retirement Income Security Act (ERISA) turns 50, 熊猫视频appreciates the Committee鈥檚 continued support of employer provided health coverage. 熊猫视频is the national association that represents health insurance plans that provide coverage, services, and solutions for millions of Americans. Collectively, our member plans provide access to health care for over 205 million people covered by employer-sponsored insurance, the individual insurance market, and public programs such as Medicare and Medicaid.
Employer-provided coverage (EPC) is the leading source of affordable, comprehensive, and high-quality health coverage in the U.S. Approximately 180 million Americans count on health care coverage provided by an employer, including more than 150 million people whose plans are regulated under ERISA. The ERISA framework provides indispensable stability and security to consumers, providers, unions, employers, and the overall health care system.
熊猫视频greatly appreciates the Committee鈥檚 recognition of EPC as the 鈥渃ore of America鈥檚 health care system鈥� highlighting the innovative, market-driven approach to providing health benefits that creates both health and financial security for so many Americans. We also agree that many health care costs are increasingly becoming unaffordable and unsustainable, largely driven by prices set by drug manufacturers and hospital systems. 熊猫视频is committed to advancing bipartisan solutions at the federal and state levels to make health coverage more affordable. Preserving ERISA preemption is essential to those solutions and to expanding health coverage. A uniform national minimum benefit standard under ERISA is an essential foundation for health plans, employers, and labor unions to work together to make health care coverage more affordable and to increase quality and access to care.
ERISA was designed to incentivize employers to voluntarily offer robust coverage to employees across the country 鈥� and it has worked. Beyond the sheer scope, ERISA has resulted in employers and plan administrators providing coverage people value. Respondents to a 2024 熊猫视频survey reported a growing majority of consumers (75%) with EPC are satisfied with their current coverage and an overwhelming majority (74%) prefer to get their coverage through their employer rather than through the federal or state government. The growing majority (71%) believe the quality of their plan is "high."
熊猫视频recently conducted a nationwide survey of Americans enrolled in health coverage through an employer to understand consumers鈥� perceptions, priorities, and expectations toward their current coverage as well as benefits, employers, and public policy impacting their coverage. Key findings from the survey showed that Americans enrolled in EPC find value in their coverage, have comprehensive benefits and access to care through telehealth, feel more financially stable, and believe the federal government should protect access to EPC.
Americans Value and Are Satisfied with Their EPC
An overwhelming majority of consumers with EPC are satisfied with their current coverage and prefer to get their coverage through their employer rather than through the federal or state government. Most consumers also report that the health insurance their job provides was impactful in their decision to accept a job and even more consumers found it impactful in their decision to stay at their current job. Competition among employers to attract and retain quality talent fuels EPC that is comprehensive 鈥� often including robust coverage that goes beyond what is required by federal mandates for prescription drugs, behavioral health care, emergency services, laboratory services, preventive care, and maternity care.
EPC Offers Comprehensive Benefits and Access to Virtual Care
ERISA鈥檚 framework enables plan sponsors to keep administrative costs low by adhering to a uniform, national standard for regulation instead of attempting to provide health plans that meet the different, and at times conflicting, requirements of each state. This framework allows employers to create flexible plans with robust coverage without the added cost of compliance with a patchwork of differing, conflicting and costly state regulations. Consumers are not only satisfied with their coverage, but the overwhelming majority also believe that the quality of their plan is 鈥渉igh.鈥� This satisfaction is driven by the comprehensive coverage, affordability and choice of providers. The most important benefits delivered through EPC鈥檚 comprehensive coverage include emergency care, prescription drugs, and preventive care. Coverage for mental health care is also highly valued, especially for dependents, with a majority of consumers believing that EPC is effectively meeting their children's mental health needs. Most consumers consider it important for EPC to cover expanded access to care through telehealth services, with many likely to consider the option of being seen by a doctor or treated via telehealth.
EPC Provides Financial Security to Employees
ERISA plan sponsors owe a fiduciary duty to those covered by the health plan. Therefore, the employer or plan sponsor must run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and follow the terms of plan documents to the extent that the plan terms are consistent with ERISA.
The fiduciary duty of the plan sponsor translates into financial security for consumers. A growing majority of consumers with EPC report that what they currently pay for their coverage overall is reasonable. Once informed that the average company pays between 70-80% of the cost of coverage, a vast majority have a favorable impression of companies who provide their employees with health insurance benefits. In addition, most consumers find EPC gives them financial peace of mind because EPC covers preventive services and provides access to quality providers.
Federal Government Should Protect Access to EPC
Proposals have been floated to disrupt the current federal tax treatment of EPC and tax employee health benefits. The American decisively oppose taxing employee health benefits. Surveys show that a large majority of consumers oppose taxing employee health benefits and an even greater majority would be less likely to vote for a candidate who supports taxing them.
In addition to maintaining the current federal tax treatment of EPC, it is also crucial that lawmakers preserve ERISA鈥檚 federal preemption status. EPC is a model for other forms of health insurance coverage, due in large part to its regulatory structure under ERISA, including its preemption provisions. In recent years, some state legislatures and legal challenges have threatened federal ERISA preemption. Preserving broad ERISA preemption is essential for EPC to remain viable in an economy in which employers operate in many states and workers and their families are increasingly remote and mobile. Disrupting ERISA preemption would inevitably lead to higher costs and disruptive changes in coverage for workers and their dependents across the country.
We encourage Congress to focus on protecting and strengthening EPC to ensure health coverage remains affordable for millions of hardworking Americans. Whenever possible, Congress should publicly and officially articulate the breadth of ERISA preemption, including the applicability of existing law to direct or indirect regulation of group health plans or the administration of group health benefits.
Given ERISA is essential to the U.S. health care system, we need to preserve federal preemption, which ensures a framework in which EPC can offer high-quality, flexible and valuable benefits to employees. For fifty years, the law has included a broad and robust express preemption provision to protect against inconsistent and conflicting state laws and ensure uniform, equitable benefits to all employees of self-insured group health plans, regardless of where they live or work. Preserving ERISA protections for consumers for decades to come will prevent disparities and disruptions in coverage and benefits that would otherwise disadvantage employees and create serious and costly challenges for employers to continue to offer quality affordable coverage.
We appreciate the Committee鈥檚 interest in these issues and commitment to protecting and improving EPC by recognizing ERISA鈥檚 milestone 50th anniversary. We look forward to working with Members to ensure the American people can continue to count on employer-provided coverage for their health and financial security.