Texas Attorney General Issues Opinion Impacting ERISA-Governed Health Plans

Today, Texas Attorney General Ken Paxton has issued Opinion KP-0480, creating new uncertainty around the application of state health care mandates to self-funded employer health plans protected under the Employment Retirement Income Security Act (ERISA). This opinion raises concerns that mandates previously rejected by the Legislature could now be applied to ERISA plans, potentially increasing costs for Texas businesses and disrupting employer-sponsored health benefits.

Why This Matters to Texas Employers

• Cost Increases: Employers covering nearly 80% of employee health premiums could face higher costs if state-mandated benefits are imposed on ERISA self-funded plans.
• Regulatory Uncertainty: ERISA provides a uniform framework that enables businesses to offer competitive, affordable benefits. New state mandates could create compliance challenges and limit plan flexibility.
• Legislative Intent Ignored: During the 88th Legislative Session, efforts to extend these mandates to ERISA plans were explicitly rejected, and even state-funded health plans like ERS and TRS were exempted due to projected cost increases.

TAB has been at the forefront of efforts to preserve ERISA protections for Texas employers. Our recent advocacy efforts include:

• Submitting a letter to legislators signed by over 40 large employers and chambers of commerce statewide, emphasizing the importance of ERISA in enabling businesses to offer high-quality, affordable health benefits.
• Publishing an op-ed in the Dallas Morning News from TAB President & CEO Glenn Hamer discussing the importance of preserving ERISA protections on the occasion of the law’s 50^th anniversary.
• Meeting directly with key lawmakers and state officials during and after the 88th Legislative Session to oppose legislative attempts to impose costly mandates on ERISA-governed plans.
• Engaging with the Governor’s Office and the Texas Department of Insurance (TDI) to highlight the negative impacts of expanded state mandates on Texas employers and their workforce

What Happens Now?

TAB is urging state leaders to reject any attempt to expand state mandates onto ERISA-governed health plans. We must maintain Texas’ pro-business regulatory environment by ensuring that these costly mandates do not impact private employer health plans.

We will continue advocating for Texas employers and keeping you updated on any developments. If you are concerned about the impact of this opinion on your business, we encourage you to lend your logo to our efforts and reach out to your lawmakers.

For more information, contact fvillarreal@txbiz.org.