Senate Appropriations adds ERISA preemption section to spending bill
Lawmakers suggest that some dental and vision plans are defying state consumer protection rules.
Members of the Senate Appropriations Committee voted Thursday to add a slap at the Employee Retirement Income Security Act section that preempts state employee benefits laws to a spending bill.
The dig at ERISA preemption was part of a package of amendments that went into the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2025.
The bill would provide $231 billion in funding to run the agencies that handle tasks such as running HealthCare.gov, fight pandemics and oversee employers’ self-funded benefit plans.
When Congress passed ERISA, in 1974, it included the state-law preemption section in an effort to make benefits laws as uniform throughout the United States as possibility, to reduce administrative costs for multistate employers’ benefit plans.
Related: Self-funded employer plan group asks Texas to respect ERISA
The ERISA amendment, which was introduced by Sen. Joe Manchin, a West Virginia independent who caucuses with the Democrats, addresses concerns about how ERISA preemption of state benefits laws applies to dental and vision plans.
“The committee is concerned that stand-alone vision and dental insurance plans may be using ERISA preemption authorities to avoid certain state laws that protect consumers and providers from abusive practices,” according to the amendment text.
“ERISA preemption authorities were not intended to preempt state laws to prevent market manipulation, including protections against price fixing and steering enrollees to plan-owned products and services,” according to the text. “The committee requests a briefing of any reported state law violations within 90 days of enactment.”
Senate Appropriations Committee members agreed to the manager’s amendment at a markup meeting without discussing the package.
Sen. Patty Murray, D-Wash., asked whether anyone wanted to object to the manager’s package, heard no objections and added the package to the spending bill.
The bill
A provision in the original bill text would increase funding for the Employee Benefits Security Administration, the U.S. Labor Department agency that overs health benefits, retirement plans and other employer-sponsored plans, to $206 million, from $191 million this year.
Some of the other amendments in the manager’s package would:
- Ask the Centers for Medicare and Medicaid Services to support expanded coverage for osteopathic manipulation and other drug-free methods for controlling pain.
- Speed up implementation of a new law that’s supposed to let patients count coupons from drug makers toward health plan cost-sharing requirements.
- Encourage the Health and Human Services secretary to speed up implementation of a new Parkinson’s Project, which was created by the Dr. Emmanuel Bilirakis and Honorable Jennifer Wexton National Plan to End Parkinson’s Act.
The spending bill is subject to approval by the full House.
If it or an amended version gets through the Senate, the Democratic leaders of the Senate will have to reconcile their bill with the equivalent bill passed by the House, which is controlled by the Republicans.
Because of the difficulty of getting legislation through the Senate and Manchin’s role as a Senate swing voter, he may have an unusually strong ability to persuade congressional leaders to keep his amendment in the HHS and Labor spending bill.
What it means:
For employers and brokers, the amendment could be one more sign that ERISA preemption has critics as well as defenders.
ERISA was one of the first major federal commercial health finance reform laws. In recent years, pharmacists, dentists and others have tried to find ways for states to get around ERISA preemption and create laws or regulations that would help them negotiate for better deals with insurers and health plans.