District of Columbia v. Greater Washington Board of Trade
Headline: Court blocks a D.C. law forcing employers to maintain equivalent health insurance for injured workers, ruling federal ERISA law preempts the local mandate and limits local control over employer benefit rules.
Holding: The District of Columbia law requiring employers to provide equivalent health coverage to workers on workers’ compensation is preempted by ERISA, so ERISA governs employer-sponsored health plans rather than the local rule.
- Stops D.C. from forcing employers to match ERISA-covered health plans for injured workers.
- Leaves employers with ERISA plans free from local mandates tied to plan benefit levels.
- Exempt plans (government or church) may still be governed by local rules.
Summary
Background
The District of Columbia passed a law requiring any employer who provides employee health insurance to keep that coverage "equivalent" for employees who receive or are eligible for workers’ compensation, for up to 52 weeks. A nonprofit employer that sponsors health insurance challenged the law, saying it conflicted with ERISA, the federal law that governs most private employer benefit plans. Lower courts split, and the case reached the Supreme Court.
Reasoning
The Court asked whether the D.C. rule "relates to" an ERISA-covered plan in the sense that ERISA makes federal rules exclusive. The majority said yes: the D.C. law measures required benefits by reference to an employer’s existing health plan, and those employer-sponsored plans are covered by ERISA. Because ERISA’s preemption clause displaces state laws that refer to or affect covered plans, the Court held the local requirement could not stand. The opinion rejects a two-step escape based on workers’ compensation exemptions and notes certain plans expressly exempted from ERISA remain unaffected.
Real world impact
As a result, employers who sponsor ERISA-covered health plans in D.C. will not be forced by this local law to match plan benefits for injured workers when those benefits are measured by ERISA plans. The ruling preserves federal control over the content and administration of most private employer benefit plans and leaves only exempt plans (for example, some government or church plans) outside that preemption.
Dissents or concurrances
Justice Stevens dissented, arguing the decision lets federal law displace ordinary state workers’ compensation rules that try to replace an injured worker’s full pay package, including fringe benefits like health insurance.
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