ERISA

ERISA, the Employee Retirement Income Security Act of 1974, set federal standards for employer-sponsored benefit plans and allowed large employers to self-fund their own health plans by paying claims directly. The law emerged from pension-plan scandals over the preceding decade—most visibly the 1963 closure of Studebaker's South Bend plant—and was signed into law by President Ford on September 2, 1974.

ERISA's preemption clause supersedes state laws relating to employee benefit plans, and its "deemer clause" closes the loophole that would otherwise let states declare a self-funded plan to be "insurance." This single piece of legislation is why self-funding now covers 67% of all covered workers nationally, why self-funded employers carry more direct financial flexibility than fully-insured employers, and why the CAA's disclosure requirements apply specifically to "ERISA plans."

That financial flexibility is exactly why self-funded employers are the priority segment for on-site care investment: they carry direct claims exposure, so a reduction in avoidable ED visits and unmanaged chronic conditions shows up immediately on their own balance sheet, not diffused across an insurer's risk pool.