Opinion ID: 1636952
Heading Depth: 1
Heading Rank: 2

Heading: Do federal ERISA regulations preempt Iowa's statutory regulation of contracts with WEAIT?

Text: From the outset of this litigation, the district has maintained that WEAIT readily disclaims any status as an insurance company licensed, chartered or holding a certificate of authority to do business in Iowa. As a welfare benefit plan, however, WEAIT has consistently represented that it was organized pursuant to federal ERISA regulations and thus not subject to state laws or regulations applicable to insurance companies because all such laws are preempted by 29 U.S.C. section 1144 (1982). The BPI declined to rule on this preemption question. The issue, however, was preserved by the district for judicial review. The district court concluded that Iowa Code section 509A.6 is not preempted by federal law. It reasoned that while the Employee Retirement Security Income Act may place sole regulation of ERISA trusts in the federal government, the act does not thereby give ERISA trusts a right to do business with the State in contravention of the State's own laws governing its relations with its own employees. We need not decide here whether the district court's interpretation of the applicable federal statutes was correct. The United States Court of Appeals for the Eighth Circuit has recently decided that WEAIT is not an employee welfare benefit plan under section 3(1) of ERISA. ERISA does not exempt WEAIT from regulation by the Iowa Insurance Department. 29 U.S.C. § 1141. See Wisconsin Education Association Insurance Trust v. Iowa State Board of Public Instruction, 804 F.2d 1059, 1065 (8th Cir.1986). We can conceive of no reason to quarrel with the federal appellate court's reasoned assessment of WEAIT's status as a non-ERISA entity. Because WEAIT's ERISA status was the linchpin of the district's preemption argument, the failure of this integral component is fatal to the alternate theory of recovery urged by the district before this court.