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91_HR0156
LRB9105767KBkbA
1 HOUSE RESOLUTION
2 WHEREAS, The McCarran-Ferguson Act, passed by the U.S.
3 Congress in 1945, established a statutory framework whereby
4 responsibility for regulating insurance and the insurance
5 industry was left largely to the states; and
6 WHEREAS, The Employee Retirement Income Security Act
7 (ERISA) of 1974 significantly altered this concept by
8 creating a federal framework for regulating employer-based
9 pension and welfare benefit plans, including health plans;
10 and
11 WHEREAS, The provisions of ERISA preempt states from
12 directly regulating most employer-based health plans that are
13 not deemed to be "insurance" for purposes of federal laws;
14 and
15 WHEREAS, Over the past twenty-four years, state
16 governments have gradually come to realize that ERISA is an
17 impediment to ensuring adequate consumer protections for all
18 individuals with employer-based health care coverage and to
19 enacting administrative simplification and cost-reduction
20 reforms that could improve the efficiency and and equity of
21 their health care markets; and
22 WHEREAS, Available data suggests that self-funding of
23 employer-based health plans is increasing at a significant
24 rate, both among larger and smaller businesses; and
25 WHEREAS, The General Accounting Office estimates that
26 between 1989 and 1993 the number of self-funded plan
27 enrollees increased by about six million individuals; and
28 WHEREAS, Approximately 40 to 50 percent of employer-based
29 health plans are presently self-funded by employers, who
30 retain most or all of the financial risk for their respective
31 health plans; and
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1 WHEREAS, As self-funding of health plans has grown,
2 states have lost regulatory oversight over this growing
3 portion of the health market; and
4 WHEREAS, Given the improbability of federal reforms many
5 state legislatures are seeking an active role in controlling
6 health care costs, and regulating abuses; and
7 WHEREAS, The preemption provisions of ERISA are an
8 obstacle to the states adopting a wide range of health care
9 reform strategies; and
10 WHEREAS, Employers are increasingly adopting funding
11 methods for their health plans that blur the distinction
12 between self-funded and fully insured, including more
13 extensive use of stop-loss coverage and risk-sharing
14 arrangements with managed care organizations; and
15 WHEREAS, These innovative funding methods have so blurred
16 the distinction between self-funded and fully insured health
17 plans that many experts argue that there is no real
18 distinction at all; and
19 WHEREAS, The states' inability to protect consumers
20 enrolled in self-funded health plans from employers or plans
21 that fail to provide the consumers' anticipated level of
22 health care is gradually eroding the public's confidence in
23 government, even as self-funded plans are afforded an unfair
24 advantage over traditional health insurance providers because
25 of a lack of state or federal accountability, regulation, or
26 remedy for the individual members of ERISA plans confronting
27 benefit denials; and
28 WHEREAS, Courts have narrowly interpreted ERISA's remedy
29 provisions and broadly interpreted ERISA's preemption
30 provisions, creating a substantial, economic incentive for
31 plan administrators legitimately covered under ERISA plans;
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1 and
2 WHEREAS, The time has now come for the several states to
3 aggressively seek changes in ERISA to give them more
4 flexibility in regulating health plans at the state level and
5 to increase access to health care and to lower health costs;
6 therefore, be it
7 RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
8 NINETY-FIRST GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, That
9 we urge the Congress of the United States to amend the
10 Employment Retirement Income Security Act (ERISA) of 1974 to
11 grant authority to all individual states to monitor and
12 regulate self-funded employer-based health plans in the
13 interest of providing greater consumer protection and
14 effecting significant health care reforms at the state level
15 through the office of the Department of Insurance; to permit
16 recovery of benefits due plan participants, including
17 recovery of compensatory damages caused by the failure to pay
18 benefits due under the plan; and be it further
19 RESOLVED, That there should be a cooperative receipt of
20 referral of complaints from the United States Department of
21 Labor to the Department of Insurance for regulation and
22 timely enforcement; and be it further
23 RESOLVED, That ERISA plans be regulated in direct
24 accordance with the plan benefit language, that corporations
25 with employees in several states would have their health
26 plans regulated by the Department of Insurance in cooperation
27 with the Department of Labor in the state in which the home
28 office of the corporation resides, and that employers shall
29 be immune from prosecution with an ERISA claim and shall have
30 the right to remain self-funded without risk of liability
31 through ERISA plans; and, be it further
32 RESOLVED, That this House most fervently urges and
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1 encourages each state legislative body of the United States
2 of America to enact this resolution, or one similar in
3 context and form, as a show of solidarity in petitioning the
4 federal government for greater state authority in regulating
5 self-funded employer-based health plans; and, be it further
6 RESOLVED, That suitable copies of this resolution be
7 presented to the President of the United States, the
8 Secretary of the United States Department of Labor, the
9 Speaker of the United States House of Representatives, the
10 President of the United States Senate, each member of the
11 Illinois Congressional Delegation, and to the presiding
12 officer of each house of each state legislative body in the
13 United States of America.