You know there has been a court trend toward narrowing ERISA preemption.
But…that trend was brushed back today by the U.S. Supreme Court.
Here’s today’s case: Gobeille v. Liberty Mutual Insurance Com., __ U.S. __ (March 1, 2016) (State regulations that impinge upon ERISA’s core functions, like reporting, are preempted by ERISA) [PDF].
FACTS: Vermont subpoenaed claims data from Liberty Mutual’s third-party administrator. Liberty Mutual then sued, seeking a declaration that ERISA preempted Vermont’s law and regulation requiring health insurers, including self-funded plans, to file reports with the state, like claims data and other information for a health care database. Liberty Mutual contended that having to submit data to fifty (50) states would be expensive, especially given the lack of uniformity. This, Liberty Mutual argued, runs contrary to ERISA. Vermont said the information was already available and the state had the right to use it to ensure the safety and health of its residents.
United States Supreme Court Held: (6-2 decision)
- “ERISA’s reporting, disclosure, and recordkeeping requirements for welfare plans are extensive. “ Op. at 7.
- “Vermont’s reporting regime, which compels plans to report detailed information about claims and plan members, both intrudes upon ‘a central matter of plan administration’ and ‘interferes with nationally uniform plan administration.’” Op. at 9-10.
- “Vermont orders health insurers, including ERISA plans, to report detailed information….This is a direct regulation of a fundamental ERISA function.” Op. 11.
- ERISA’s pre-existing reporting, disclosure, and recordkeeping provisions…maintain their pre-emptive force whether or not the new [Affordable Care Act] reporting obligations also pre-empt state law.” Op. at 13.
This decision presents very good news to ERISA plans administrators, including self-funded plans. State regulatory frameworks that impinge upon core ERISA functions are preempted.