One approach has been to enact fair share laws, also referred to as "pay or play" statutes, which generally require employers to choose between paying a certain amount for health expenditures or coverage for their employees, or contributing to the state or locality to offset the cost of medical expenses for their uninsured residents. Recently, questions have been raised as to whether the Employee Retirement Income Security Act's (ERISA's) express preemption provision, Section 514, prevents the application of fair share laws. This report provides an overview of ERISA preemption, discusses legal challenges that have been brought against fair share laws, and discusses the fair share requirements of the Massachusetts Health Care Reform Act.
In the absence of comprehensive federal health care reform, states and localities have undertaken certain initiatives in an effort to expand the provision of health care to residents. One type of measure has been the fair share law, which generally requires employers to choose between paying a certain amount towards health expenditures or coverage for their employees, or contributing to a state or locality to offset the cost of medical expenses for uninsured residents. Questions have been raised as to whether fair share laws can be preempted by the Employee Retirement Income Security Act (ERISA). This report provides an overview of ERISA preemption, discusses legal challenges to fair share laws, and analyzes the fair share requirements included as part of the Massachusetts Health Care Reform Act.