ERISA Preemption Basics
ERISA Section 514 preempts state laws that "relate to" employee benefit plans. This broad preemption exempts self-funded plans from most state insurance mandates — including state-mandated benefits, state insurance regulations, and state continuation coverage laws. Fully insured plans are subject to state insurance mandates because ERISA's "savings clause" preserves state laws that regulate insurance.
Self-Funded vs. Fully Insured
| State Law Type | Self-Funded Plan | Fully Insured Plan |
|---|---|---|
| State insurance mandates (e.g., infertility coverage) | Generally exempt (ERISA preemption) | Subject to mandate |
| State continuation coverage (mini-COBRA) | Generally exempt | Subject to state law |
| State paid leave laws | Generally subject (employment law, not insurance) | Subject to state law |
| State anti-discrimination laws | Generally subject | Subject to state law |
| State prompt payment laws | Generally exempt | Subject to state law |
ERISA Preemption Exceptions
Compliance Note
ERISA preemption has exceptions. State laws that regulate insurance (not the plan itself) may apply to fully insured plans under ERISA's savings clause. State laws that are "generally applicable" (not specifically targeting benefit plans) may apply to self-funded plans. State paid leave laws, anti-discrimination laws, and wage payment laws generally apply to self-funded plans. Consult with ERISA counsel for guidance on specific state laws.