ERIC files ERISA preemption suit against City of Seattle

The ERISA Industry Committee (ERIC) has filed a complaint in the U.S. District Court for the Western District of Washington against the City of Seattle, claiming that ERISA supersedes and preempts the health coverage and payment mandates in Part 3 of the Seattle Hotel Employees Health and Safety Initiative – SMC 14.25 (the Initiative).

Under Part 3 of the Initiative, City hotels with at least 100 rooms must enroll employees (even if they have other coverage) in the equivalent of a gold-level medical policy on the Washington State insurance exchange at a cost of no more than five percent of their monthly gross taxable earnings or else provide additional compensation. ERIC seeks to halt enforcement of Part 3 of the Initiative because it requires, uniquely for Seattle, a specified level of health plan benefits. If that level of benefits is not provided, City hotels must pay additional compensation to hotel employees.

In its lawsuit, ERIC argues that the health benefit plans of large employers are regulated by ERISA, which contains a broad federal preemption provision that invalidates any state and local law that relates to employee benefit plans, including health benefit plans. This broad standard has consistently been upheld by the U.S. Supreme Court.

“ERISA provides the federal framework of national uniformity that enables employers to offer health benefits to employees and their families in communities across the country. ERIC opposes efforts by the City of Seattle, or any state or locality, that attempts to mandate or impose requirements on private health or retirement plans regulated by ERISA,” said Annette Guarisco Fildes, ERIC’s president and CEO. “Almost half of all Americans receive health coverage through their employer. Federal laws are in place so that multi-state employers can provide benefits to their employees no matter where they live or work; it is important that local governments respect these laws.”

ERIC hopes to work with the City and negotiate a temporary nonenforcement agreement, at least until a decision in the case is reached.


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