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)

  1. “ERISA’s reporting, disclosure, and recordkeeping requirements for welfare plans are extensive. “ Op. at 7.
  2. “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.
  3. “Vermont orders health insurers, including ERISA plans, to report detailed information….This is a direct regulation of a fundamental ERISA function.” Op. 11.
  4. 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.

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Photo of Mike Reilly Mike Reilly

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment…

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment advice, and has represented clients in more than 75 jury trials, arbitrations, bench trials and claims before the EEOC and Washington State Human Rights Commission.

Small and large employers retain Mike for his strategic advice and decades of experience in employment issues and litigation, business decisions and litigation avoidance. Mike provides advice in claims involving discrimination, retaliation, wrongful discharge, disability accommodation, ERISA and non-ERISA employee benefit claims, and wage/hour claims. He served as lead counsel in an employee raiding/trade secret case as reported in the Wall Street Journal, and defends employers in class action claims.

Mike’s remarks on employment issues have been quoted in NewsweekCorporate Legal TimesSeattle TimesEmployee Relations Law JournalPuget Sound Business JournalCFO.com, and other professional journals and management publications. Chambers USA’s Guide to America’s Leading Lawyers for Businessrates Mike in the top ranking (band one) for his work in labor and employment law, and has described him as “one of Seattle’s top-rate attorneys” who is “truly phenomenal [with] superb legal instincts” and “an amazingly assertive litigator.” His clients include Nordstrom, Seattle Seahawks, Home Depot, KeyBank, Starbucks, Fred Hutchinson Cancer Research Center, Red Robin and Seattle Chamber of Commerce, among others.