Regulating Employment-Based Anything
72 Pages Posted: 21 Mar 2015
Date Written: March 19, 2015
Benefit regulation has been called “the most consequential subject to which no one pays enough attention.” It exhausts judges, intimidates legislators, and scares off theorists. That need not be so. Reality is less complicated than advertised.
Governments often consider intervention if markets fail to make some socially desirable Good X — such as education, health care, home mortgages, or pensions, for example — sufficiently available. One obvious fix is for the government to provide the good itself. A less obvious intervention is for the government to regulate employment-based (EB) arrangements that provide Good X as a benefit to employees and their families. In the United States, such employment-based interventions are massive: they affect trillions of dollars, billions in tax breaks, and millions of people. They have been written into federal law for decades and generate constant litigation before the United States Supreme Court.
Yet, while other regulatory interventions are well-theorized, employment-based interventions are not. There is no coherent account of employment-based interventions as a concept independent from the peculiarities of Good X or the relevant implementing statutes. This is a significant failure, and one that has obscured clear thinking — by legislators, courts, scholars, and the public — on the subject for decades. This Article offers a simple theory of employment-based interventions that (1) explains the common conceit of all such interventions and (2) provides a non-technical framework for evaluating any particular intervention, regardless of Good X. In so doing, it makes the relative appeal (or insufficiency) of employment-based interventions vastly easier to understand.
Keywords: regulation, social welfare, employee benefits, ERISA, ACA, Affordable Care Act
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