Archive for January, 2008

New Twist In State Health Care Reform

January 31st, 2008

The maze that ERISA has posed for state health care reform just became more complex and uncertain.

In 2006, the Fourth Circuit issued their decision in RILA V. Fielder.  The Court affirmed the decision of a federal district court that found Maryland’s Fair Share Health Care Fund Act to be preempted by ERISA.  The Fair Share Act would have required for-profit employers with 10,000 or more employees in the state to either spend a certain percentage of their total payroll on employee health insurance costs or pay to the state the amount their spending fell short of that percentage.  In the final analysis, the Court held that the Fair Share Act “falls squarely under Shaw’s prohibition of state mandates on how employers structure their ERISA plans”. Therefore, since “the Fair Share Act effectively mandates that employers structure their employee healthcare plans to provide a certain level of benefits, the Act has an obvious ‘connection with’ employee benefit plans and so is preempted by ERISA.”

Up until this year, the Fourth Circuit had been the only jurisdiction that had decided on a state legislated “pay or play” statute.  It was assumed that the RILA decision would set the trend for future decisions.

However, on January 9, 2008, the Ninth Circuit Court of Appeals issued its decision in Golden Gate Restaurant Association v. City and County of San Francisco.  In this case, the Golden Gate Restaurant Association (“the Association”) challenged the San Francisco Health Care Security Ordinance (“the Ordinance”) on the basis of ERISA preemption, as the Ordinance mandated that employers which have an average of at least 20 employees during a quarter must make required health care expenditures to or on behalf of employees.  The district court granted a motion for summary judgment by the Association, which the City immediately appealed.  A three-judge panel from the Ninth Circuit heard the appeal and concluded that the Ordinance would not require either the establishment of or alteration to any existing ERISA plan, so the burden of any administrative requirements would be on an employer, not on a plan.  The Court therefore granted the stay requested by the City, and the Ordinance will go into effect on schedule.  The Ninth Circuit will hear the case again in the spring of this year when it will decide the case on its merits. 

Since the Ninth Circuit has yet to decide the Golden Gate Restaurant  case on its merits, there is not yet a true conflict between Circuits on the issue of “pay or play” state statutes and ERISA preemption.  However, based on the three-judge panel’s ruling on the stay, that conflict is looming on the horizon.  Combine this soon-to-be conflict and the current societal focus on health care reform, and you get a fast track to the Supreme Court for a “tie breaker”.  When that happens, the Supreme Court will almost certainly come down on the side of the Fourth Circuit, in favor of ERISA preemption. 

Historically, the Supreme Court has interpreted the preemption provisions very broadly.  Additionally, the Court has numerous times called on Congress to “fix” the problems ERISA has created.  Since Congress hasn’t seen fit to “answer” the Court’s suggestions, I’m really looking forward to reading this opinion when it comes down!

AIKEN & AIKEN OPENS

January 30th, 2008

AIKEN & AIKEN OPENS BOUTIQUE LAW FIRM IN MCHENRY COUNTY

Firm Specializes in Employment and Employee Benefits/ERISA Law

Algonquin (February 2, 2008) – The law firm of Aiken & Aiken announces the opening of its boutique law firm located in Algonquin, Illinois.

Sisters, Sheila and Michele Aiken, opened their firm locally to help businesses establish and grow their companies by providing advice and services in the areas of employment and employee benefits law.

“We are a local boutique firm committed to providing our clients with personalized service through timely communication, education in current developments, and superior legal representation,” Sheila said. “We partner with our clients to provide strategic, innovative and affordable employment and benefits solutions.”

Both Sheila and Michele received their J.D. from the John Marshall Law School. In addition, they both have their Masters of Law-Employee Benefits from the John Marshall Law School.

Both women came to law after pursuing other careers. Sheila spent over ten years working for Fortune 500 companies as a human resources manager with global responsibilities. She has an extensive background in corporate employment law and benefits including working through all types of employment matters and designing and working with benefits plans of all types.

Michele has worked in both benefits and risk management for both mid-size and Fortune 500 companies. These experiences are useful in their law practice, Michele said.

“I want to work in an area of law where I could work directly with my clients so that I can understand their business, help them understand the law and get the best possible results for them.  Rather than go to a big downtown law firm, now clients will have access to a local boutique firm.”

Welcome To Our “BLAWG”

January 30th, 2008

We are pleased to announce the beginnings of what we hope to be a regular “read” for all Benefits Professionals on the internet. If you ever have any questions on the services we can provide you, please make sure to check out out website aikenandaiken.com. We would also like to thank all the good folks at SoloSez for their encouragement and support.