Opinion ID: 1123028
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Heading: ERISA and Its Effect On Oklahoma Law

Text: ERISA (the Employee Retirement Income Security Act of 1974, § 514(a), (b)(2)(A, B), as amended 29 U.S.C.A. § 1144(a), (b)(2)(A, B)) contains three provisions regarding preemption of state law. The first provision states that Congress intended ERISA to preempt state laws that relate to self funded employee benefit plans: Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.... 29 U.S.C. § 1144(a). The general preemptive effect on subsection (a) is specifically limited by subsection (b), commonly called the saving clause: Except as provided in subparagraph (B) nothing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities. 29 U.S.C. § 1144(b)(2)(a). The power that subsection (b) reserves to the states to regulate insurance, banking, and securities is expressly limited by subparagraph (2)(B) of that subsection, commonly called the deemer clause: Neither an employee benefit plan ... nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, trust company, or investment company or to be engaged in the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies, insurance contracts, banks, trust companies, or investment companies. 29 U.S.C. § 1144(b)(2)(B). In 1990 the United States Supreme Court decided FMC Corporation v. Holliday, 498 U.S. 52, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990). The court held that under ERISA, the subrogation clause in FMC Corporation's self-funded employee benefit plan was enforceable. The plan had paid the medical expenses of one of FMC's employee's daughter, whose injuries resulted from an automobile accident. The district court and the court of appeals had held that a Pennsylvania statute prohibiting subrogation or reimbursement in actions arising out of the maintenance or use of an automobile applied to the FMC plan. The Supreme Court observed that while ERISA returns to the states the power to regulate insurance, it expressly provides that a self funded plan shall not be deemed to be an insurance company. Employee Retirement Income Security Act of 1974, § 514(a), (b)(2)(A, B), as amended 29 USCA § 1144(a), (b)(2)(A, B). The court said that the reason ERISA limits state regulation of ERISA plans is Congress's desire to avoid `endless litigation over the validity of State action.' 498 U.S. at 65, 111 S.Ct. at 411, quoting Senator Javits's remarks in the Congressional Record. The terms of the FMC plan's subrogation and reimbursement provisions were not stated in the opinion. Neither did the court discuss the effect of whether the beneficiary of the payments made by FMC had been fully compensated for her injuries.