Dr. Randall C. Markarian
Chair, ADA Special Committee on ERISA

Have you had the following experience?

You submit a claim for a patient and the response from the insurance carrier is one you were positive state law does not allow. It’s extremely frustrating and costly to find out that, because of a federal law called The Employee Retirement Income Security Act of 1974 (ERISA), self-funded plans covered by ERISA assert that state laws that should protect you and your patients don’t apply to them. To add to the confusion, many of the same insurance carriers that provide fully-insured coverage, where state laws do apply, also process claims on behalf of self-funded plans, and in such cases assert that state laws do not apply. As an American Dental Association (ADA) trustee, I know that this is happening more and more around the country. Approximately half of the dental coverage nationwide is now provided through plans that are self-funded, allowing carriers to use ERISA as a “get out of jail free” card.

In a nutshell, the ERISA preemption is applied too broadly by the carriers. In response, nearly two years ago the ADA House of Delegates formed a special committee on ERISA to look for innovative strategies to deal with the problem. We have identified a number of paths forward. Here’s a brief snapshot:

• Legal Activities. In a recent decision, the Supreme Court clarified that the scope of the preemption is narrower than carriers consider it to be. The case dealt with pharmacy benefit managers and a state law governing them. The ADA is working to have the Court’s analysis applied to other state laws such as those governing dental plans. To that end, on June 12, the ADA filed an amicus (friend of the court) brief in the United States Supreme Court asking it to accept a review of a decision from the United States Court of Appeals for the 10th Circuit concerning so-called ERISA preemption of state statutes. The brief argues that the Supreme Court should take up the case because the 10th Circuit decision is directly at odds with the Supreme Court’s holding in Rutledge v. Pharmaceutical Care Management Association that appropriately limits the reach of the federal ERISA statute’s preemption of state law.
• State Activities. A number of state dental societies have begun outreach to their departments of insurance and attorneys general, arguing that these offices have the authority now to limit the scope of the ERISA preemption. Additionally, some states – like Arizona – successfully lobbied for provisions in state laws that say the rules should apply to all carriers, whether they are acting as an insurance carrier or as an administrator of a self-funded plan.
• Federal Activities. It’s important to remember that ERISA has a lot of friends in Washington, D.C. Employers rely on ERISA to keep pensions, IRAs, 401(k) plans and benefit plans consistent across state lines. With that said, the ADA is spurring a conversation about limiting the scope of the ERISA preemption and has sent a number of recent letters to the Hill on the issue. We are also on the hunt for allies in this effort. The American Optometric Association has already joined with us in financing the amicus brief, as have American Association of Orthodontics, American Academy of Pediatric Dentists, The Association of Dental Support Organizations and American Association of Oral and Maxillofacial Surgeons. It was also supported by the American Academy of Oral & Maxillofacial Pathology, American Association of Endodontists, Academy of General Dentistry and American Academy of Periodontology.

ERISA has its benefits. But shining a light on how it can be interpreted in a better way, one that benefits us and our patients, is a high priority for the ADA. We need your help too. If you receive notification from a carrier about a state law not applying because of ERISA, let us know about it by contacting the ADA’s department of state government affairs at dsga@ada.org. Finally, and maybe most importantly, get as educated as you can about the issue. I’ve learned so much about this federal law in the two years I’ve led the special committee. I encourage you to do the same. To learn about ERISA and what the ADA is doing, visit www.ada.org/ERISA. Hopefully, together, we can take some of the needless frustration out of this process.

Randall C. Markarian, D.M.D., M.S., an orthodontist in Swansea, IL. He serves on the ADA Board of Trustees, Eighth District and is also a member of American Association of Orthodontists (AAO) and a past president of the Illinois State Dental Society.