Via SCOTUSBlog, and in turn via Workplace Prof Blog, I have learned that The Golden Gate Restaurant Association has asked the U.S. Supreme Court to stop the City of San Francisco from implementing a universal health care law. Whew — that was a loaded sentence. More is yet to come, my friends. To explain succinctly: The restaurant association is trying to stop the San Francisco city and county government from making health care universal for all workers in the city. The proposed system would force employers to either provide health care to their employees or pay into a fund that covers the uninsured. This is what they call an employer mandate, backed up by a public insurance fund. The restaurant association doesn’t want to give health coverage to a bunch of part-timers with high turnover, so it sued. The trial court issued an injunction (which stops the law from taking effect), but the Ninth Circuit lifted it.
Notice I didn’t say what the legal issue is here. That’s because it needs its own separate paragraph. The restaurant association argued that the city’s health care plan is preempted by the federal Employee Retirement Income Security Act, or ERISA to its friends. In short, it regulates employee benefit plans. According to the Ninth Circuit’s opinion, ERISA’s text outright says that it trumps state laws as far as they relate to benefits plans, which is why the experts were surprised by the court’s decision. In fact, when I looked into it, I found out that other state employer mandates have been struck down under ERISA, and still others (maybe just Massachusetts) are only functioning because nobody’s annoyed enough to sue.
I’m interested both in the legal theory and the effect here. Almost everyone agrees that the health care system is broken in the United States. It’s a personal issue, a business issue, a public health issue and to some extent an immigration issue. Some kind of local mandate seems to be the politically palatable solution thus far — but even people who want the mandates seem to think they’re illegal under ERISA. Meanwhile, ERISA itself isn’t really intended to relate to state mandates, according to the Ninth; the point of the preemption is to ensure that everyone in the United States gets the same regulatory system. In the language of computing, ERISA preemption is a bug, not a feature. (And mandates are kind of a hack.) So we have an unintended consequence of a well-intentioned law that nonetheless ties judges’ hands.
That’s why it’s probably for the best that this case may be going to SCOTUS. It’s going to take decisive national action to get around or tweak ERISA, and I think we know Congress won’t do much across party lines this year. Quoth the Golden Gate Restaurant Association:
This matter lies at the center of a national debate over universal healthcare: may various local governments require employers to pay different minimum amounts toward employee health benefits, or is that authority reserved to the federal government? More than half the states have considered this type of legislation in the past three years, setting up an inevitable collision with more than three decades of uniform benefit regulation under ERISA.
