ERISA Preemption and Regulation of Managed Health Care: The Case for Managed Federalism

Abstract

The result ERISA compels us to reach means that the Corcorans [who lost their unborn child allegedly as a result of United Healthcare’s negligent determination that hospitalization was not medically necessary] have no remedy, state or federal, for what may have been a serious mistake. This is troubling....In the words of its sponsor, Senator Jacob Javits, the Employee Retirement Income Security Act (ERISA) was enacted in 1974 “to maintain the voluntary growth of private [pension and employee benefit] plans while at the same time making needed structural reforms in such areas as vesting, funding, termination, etc. so as to safeguard workers against loss of their earned or anticipated benefits....” Ironically, one of ERISA’s provisions—its indeterminate provision for the preemption of state law—has probably created more uncertainty about the adequacy and security of health care benefits than any other piece of legislation. Neither ERISA nor any other federal statute comprehensively regulates the content of employer provided health care plans, including benefits provided through managed care organizations (MCOs).