You asked if an employer offering health insurance to its employees is required to offer the insurance to all its employees receiving a W-2 form.

SUMMARY

There is no federal or state requirement that employers offering health insurance to some employees must offer it to all employees receiving a W-2 form.

ERISA

The federal Employment Retirement Income Security Act (ERISA), which applies to most private sector employer-sponsored benefit plans, does not require employers to provide health care benefits to employees. If an employer chooses to offer a health benefit plan, it must comply with ERISA requirements, which relate to fiduciary standards, plan description documents, reporting, and benefits.

ERISA permits states to “regulate the business of insurance,” meaning they can enact laws affecting insurers and insurance practices. Under ERISA, self-funded benefit plans are not insurers and therefore are not subject to such state laws. This is why, for example, when states impose benefit requirements on insurance policies issued by insurers, the requirements do not also apply to self-funded plans arranged and offered by employers.

The goal of ERISA is to minimize administration burdens for employers who may offer plans covering employees in multiple states. The U. S. Supreme Court has ruled on numerous lawsuits interpreting ERISA and has been consistent in its position that state laws that impose administrative burdens on employer-sponsored benefit plans are preempted by ERISA.

As a result, a state cannot require an employer to offer health insurance or dictate the benefit or eligibility terms of a benefit plan. Employers decide whether they will offer a benefit plan and, if so, to which classes of employees (e. g. , full-time employees, union employees, management, clerical employees, construction employees).

JLK: ro