Rising health care costs have brought renewed attention to the Employee Retirement Income Security Act of 1974 (ERISA) – a key law governing private employee benefits in the United States – as policymakers and advocates look for new ways to address increasingly expensive employer-sponsored coverage. In a new insight, Director of Health Care Policy Michael Baker explains ERISA’s purpose and its limitations as a health savings reform.

Key points:

• Leveraging requirements under ERISA appears attractive because other cost-containment efforts have had limited success, making the statute seem like a potential avenue for influencing a large share of private health coverage.
• Yet ERISA is predominately a benefit-plan governance statute, not a price-control law; it is fundamentally concerned with disclosure, fiduciary conduct, claims administration, plan oversight, and federal uniformity.
• Pursuing broader cost-containment agendas using ERISA authority would not address hospital prices, physician payment, prescription drug prices, or the broader structural forces that drive health care spending.

Read the analysis.