Litigation

State-mandated health benefits vs. ERISA, Round 4

By John Walch

We previously alerted readers to San Francisco's attempt to force employers to provide a certain level of health benefits to employees, or to pay a tax to fund the city's public health programs.  A Unted States District Court has held that the city ordinance violates ERISA's preemption provision, following a similar outcome in the Fourth Circuit reviewing a Maryland statute. 

The Ninth Circuit recently stayed the district court's ruling, allowing the ordinance to become effective pending the Circuit Court's consideration of the appeal addressing the substantive issue of ERISA preemption.  It appears the panel thinks that ERISA does not preempt the ordinance; part of the standard for granting the stay is "likely success on the merits."  That outcome would create a direct conflict with the Fourth Circuit decision on a very similar statute, suggesting that the Supreme Court will eventually have to resolve conflicting circuit decisions addressing the relationship between ERISA and attempts by local government to fund health care for the uninsured. 

Full post as published by Northwest Business Litigation Blog on January 29, 2008 (boomark / email).