Employer-Based Health Plans: Issues, Trends, and Challenges Posed by
ERISA (Testimony, 07/25/95, GAO/T-HEHS-95-223).

As the movement for comprehensive federal health care reform has lost
steam, the focus of reform has shifted to the states and private market.
States remain concerned about the growing number of persons lacking
health coverage and about financing health plans for poor persons.
Employers have become increasingly aggressive in managing their health
plans and have adopted various managed care plans and innovative funding
arrangements.  However, the Employee Retirement Income Security Act of
1974 (ERISA) effectively blocks states from directly regulating most
employer-based health plans, although it allows states to regulate
health insurers.  GAO found that nearly 40 percent of enrollees in
employer-based health plans- -44 million people--are in self-funded
plans.  The divided federal and state framework for regulating health
plans produces a complex set of trade-offs for regulating health plans
produces a complex set of trade-offs.  Self-funded plans, which are
exempt from state regulation under ERISA, provide employers greater
flexibility to design a health benefits package that may have been less
feasible to provide under state regulation.  At the same time, however,
state are unable to extend regulations, such as solvency standards,
preexisting condition clause limits, and guaranteed issue and renewal
requirements, even indirectly, to enrollees in these self- funded plans.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-HEHS-95-223
     TITLE:  Employer-Based Health Plans: Issues, Trends, and Challenges 
             Posed by ERISA
      DATE:  07/25/95
   SUBJECT:  Employee medical benefits
             Health insurance
             Insurance regulation
             Proposed legislation
             State taxes
             State law
             Health insurance cost control
             Federal/state relations
IDENTIFIER:  Medicare Program
             Medicaid Program
             CHAMPUS
             Civilian Health and Medical Program of the Department of 
             Veterans Affairs
             Civilian Health and Medical Program of the Uniformed 
             Services
             
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