Question about ERISA

[TIMMAAYY]

What is the name of your state (only U.S. law)? Ohio

My state doesn't really matter here since I am talking about federal laws, not state laws.

Does anyone here have any experience ERISA opinions with regards to superseding state laws and insurance companies' rules for participation, etc. ?

[MellowCat]

Not really sure what your wanting, here. I'm no expert, but I'll give you my thoughts on ERISA.

When I worked insurance claims, ERISA rules seemed to be very insurance company friendly. ERISA laws only apply to self-funded plans. Patients' coverage in self-funded plans used to be a minority, but over the years, more and more patients' plans became self-funded and therefore subject to ERISA. All of the rules/laws the State would adopt to protect policyholders became more and more useless because ERISA always preempts State law. Virtually the only way to dispute a incorrect claim payment or whatnot would be in Federal court. Who is going to do that? Even when a court precendence was adopted in ERISA cases siding with the patient, no insurance company would recognize that precedence. Additionally, insurance companies started encouraging businesses to become self-funded to avoid the more-stringent state laws. The insurance company would only administer the benefits on behalf of the business, which absolved the insurance company of any financial responsibility or accountability to state claims-paying laws.

In my typically cynical estimation, ERISA was created to make some politicians look good and let the lawyers to get richer.

[TIMMAAYY]

Thanks for the response... not quite what I'm looking for, but an interesting point of view none the less.

For the record, I favor ERISA laws for the very fact that you mentioned, but with a different premise. They DO supersede state laws, but not just with self funded plans. And don't believe they are there just to make politicians look good.

From what I have seen, this big fight here in Ohio ( and every state ) is due to the fact that the insurance companies want to use the state laws to their advantage, but have no control over issues where ERISA overrides their authority. And that upsets their business model, using agents and brokers to distribute their products.

If you understand ERISA, Section 105 of the IRS tax code, and know the rules, the insurance companies are not going to like you. It's entirely possible to use an insurance product from a carrier and have a Section 105 plan at the same time, and that's what the insurance carriers and brokers here are screaming about, because they don't understand it and it upsets their distribution channel.

[MellowCat]

Originally Posted by TIMMAAYY

Thanks for the response... not quite what I'm looking for, but an interesting point of view none the less.

For the record, I favor ERISA laws for the very fact that you mentioned, but with a different premise. They DO supersede state laws, but not just with self funded plans. And don't believe they are there just to make politicians look good.

From what I have seen, this big fight here in Ohio ( and every state ) is due to the fact that the insurance companies want to use the state laws to their advantage, but have no control over issues where ERISA overrides their authority. And that upsets their business model, using agents and brokers to distribute their products.

If you understand ERISA, Section 105 of the IRS tax code, and know the rules, the insurance companies are not going to like you. It's entirely possible to use an insurance product from a carrier and have a Section 105 plan at the same time, and that's what the insurance carriers and brokers here are screaming about, because they don't understand it and it upsets their distribution channel.

Sorry my reply was worthless. LOL. Interesting topic, none-the-less. Who wants to talk ERISA at midnight on Saturday night? I guess I do. Guess I need to get a life.

I don't think many people understand ERISA which is why so many lawsuits get filed. Too vague for concrete interpretation. Of course insurance companies want to use any insurance laws to their advantage. The trouble is, they often "manipulate" them to their advantage, too. ERISA can be so complicated and vague that who's going to argue? Enter the high-priced lawyer.

Sorry I'm just babbling.

[TIMMAAYY]

They aren't vague... people just don't know about it because they've been swallowing the "group insurance is king" koolaid for so long, they don't know they have other options.

99.9% of all agents glaze over when I even mention Section 105 plans... unless of course they think it's just self funding...which is even more funny.