HR Policy Association urged the U.S. Supreme Court to take up a case in which the Ninth Circuit Court of Appeals ruled that the Employee Retirement Income Security Act (ERISA) does not preempt a Seattle ordinance imposing health care requirements on certain employers.
Background: Under the Seattle ordinance, hotels with 100 or more rooms and ancillary hotel businesses must provide full-time workers with health benefits equal to a gold-level policy on the Washington state health exchange or pay the equivalent directly to the employee. The ERISA Industry Committee (ERIC) is challenging the ordinance, supported by HR Policy and seven other employer groups who joined an amicus brief.
While the First and Fourth Circuits have ruled that laws similar to the Seattle ordinance are preempted, the Ninth Circuit’s opposing decision “risks a regulatory morass of local laws, unnecessary legal costs, [and] the need for prohibitively expensive compliance programs,” our amicus brief argues.
The Ninth Circuit decision provides “a roadmap for other localities to undermine Congressional intent, and impose significant risks to the core pillar of health coverage in this country, employer-sponsored health care.” Other large cities, including New York and Los Angeles, are also pursuing local healthcare reforms.
Outlook: If it takes effect, the Ninth Circuit decision means multi-state employers could be required to create separate plans or benefit arrangements for separate groups of employees depending on their residency or place of employment. A Supreme Court decision on whether to take up the case is expected before the end of June.
