JOHN BRONSTEEN, Loyola University Chicago School of Law
Email: jbronst@luc.edu
BRENDAN S. MAHER, Affiliation Unknown
PETER K. STRIS, Whittier College - Whittier Law School, Stris & Maher LLP
Email: pstris@law.whittier.edu

Because so many Americans receive health insurance through their employers, the Employee Retirement Income Security Act of 1974 (ERISA) plays a dominant role in the delivery of healthcare in the United States. The ERISA system enables employers and insurers to save money by providing inadequate healthcare to employees, thereby creating incentives for these agents to act contrary to the interests of their principals. Such agency costs play a significant role in the current healthcare crisis and require attention when considering reform. We evaluate the two major healthcare reform movements by exploring the extent to which each reduces agency costs. We find that agency cost analysis clarifies the benefits, limits, and uncertainties of each approach.

EDWARD A. ZELINSKY, Benjamin N. Cardozo School of Law
Email: ZELINSKY@PRODIGY.NET

The author takes a critical look at San Francisco's new law requiring employers that don't provide health insurance for their employees to pay a fee to the city to provide health care coverage.

CANDACE BUDY, Northern Kentucky University - Salmon P. Chase College of Law
Email: rt4cbb@zoomtown.com
RICHARD A. BALES, Northern Kentucky University - Salmon P. Chase College of Law
Email: balesr@nku.edu

When an employee participating in an ERISA benefit plan files a claim, someone must determine whether the assets of the plan will be used to pay the claim or whether the claim will be denied. Sometimes the employer makes this decision; sometimes the employer delegates the decision to a plan administrator. If the claim is denied, ERISA permits the employee to sue, but does not specify who may be named a defendant. The federal circuit courts are split three ways on the issue, some holding that only the plan itself may be sued, others holding that both the plan and the plan administrator may be sued, and still others holding that both the plan and the employer may be sued. This article argues that courts should permit suit against any entity that played a role in denying the claim. This approach (1) is consistent with the plain language of ERISA, (2) is consistent with the legislative intent behind ERISA which was to protect employees from underfunded plans and from erroneous benefit denials, (3) is consistent with Supreme Court precedent permitting fiduciaries to be sued under ERISA, and (4) creates an incentive for entities making benefits determinations to make those determinations correctly.

WILLIAM L. PIERRON, Employee Benefit Research Institute (EBRI)
Email: pierronwl@comcast.net
PAUL FRONSTIN, Employee Benefit Research Institute (EBRI)
Email: FRONSTIN@EBRI.ORG

The primary federal law governing employment-based retirement and health benefits in the private sector is the Employee Retirement Income Security Act of 1974, known as ERISA. Under ERISA, the regulation of employment-based health benefit plans has evolved into a system in which both the federal and state laws play important roles. As a result of a series of Supreme Court decisions, health benefit plans that purchase coverage from insurance companies are subject to regulation directly at the federal level and indirectly at the state level, while self-insured plans are regulated exclusively at the federal level. This paper provides an overview of the issues relating to ERISA and state and local attempts at comprehensive health insurance reform. It reviews the statute and its history, major case law relating to the interaction of ERISA and state law, and the implications of ERISA's pre-emption of state laws governing health insurance. It also presents the latest data on the number of health plan participants in both insured and self-insured ERISA-governed plans, and the trends related to self-insurance.

BROOKS HAMILTON, Brooks Hamilton & Partners
Email: bhamilton@brookshamilton.com

Before the February 20th, 2008 LaRue decision by the United States Supreme Court, employee benefit plan participants who sued plan fiduciaries for investment losses faced near insurmountable legal hurdles. In LaRue the Court removed most of these hurdles, and may have opened floodgates releasing a tsunami of new 401(k) lawsuits! As fiduciaries of employee benefit plans governed by ERISA are personally liable for losses, this single decision represents the most significant expansion of potential liability faced by fiduciaries since ERISA became law in 1974.

Mark Twain famously said: It ain't what you don't know that gets you into trouble; it's what you know for sure that just ain't so! That piece of wisdom explains far better than I the fiduciary's basic quandary. Now add Voltaire's Le mieux est l'ennemi du bien which translated means The best is the enemy of the good and we see the insidious snare that has trapped most fiduciaries. That is, as fiduciaries begin to see the light and realize that much of what they have been told and thus have absolutely known, for sure, just ain't so, they too often strive, too fast, to fashion a solution with best positioned as the keystone. As the light dawns, they overreact. And in short order, simple ignorance gives way to a complex folly! This Paper sets forth a 6-Step Program intended to help a fiduciary meet his/her responsibilities.