The chairman of a House subcommittee says Congress should consider permitting states to apply some laws and regulations to self-funded employer health plans.

The federal Employee Retirement Income Security Act now tries to create a uniform national regulatory environment for multistate employer benefit plans by preempting state regulation of benefit plans.

Rep. Rob Andrews, D-.N.J., who leads the House Education and Labor Committee’s health, employee, labor and pensions subcommittee, convened a hearing Tuesday to give promoters of state-based health insurance regulatory initiatives a chance to talk about the possibility of granting ERISA preemption waivers.

“Although ERISA’s original intent was to establish minimum funding and vesting standard for pension plans, its effect has created an unintended consequence that prohibits states from regulating employer-sponsored health plans,” Andrews said in his opening statement, according to a written version of his testimony.

Kevin Covert, who testified on behalf of the American Benefits Council, Washington, an employer group, defended the need for ERISA preemption.

“Simply put, ERISA preemption is vital to the voluntary sponsorship of health plans,” Covert said. “Employers depend on ERISA preemption to ensure that coverage can be offered uniformly across the country while attempting to keep costs as low as possible for workers.”

If Congress pokes holes in ERISA preemption and creates even modest variations in the way multistate benefit plans must operate in different states, that will impose significant costs, Covert said.

John Morrison, the Montana insurance commissioner, argued that ERISA preemption can keep states from organizing successful state-based health care reform efforts, such as efforts to require health plans to define “dependent” to include children up to the age of 25 and efforts to use health plan assessments to fund a risk pool for state residents with health problems.

“Because of ERISA preemptions, self-funded employer plans do not contribute to the funding for this program, even though their employees are able to take advantage of the portability pool when they lose their employer coverage,” Morrison said.

Links to the witnesses’ testimony are on the Web