ERISA Pre-empts State Requirements for Health Plans

The U.S. Supreme Court ruled that a Vermont disclosure requirement couldn’t be imposed on a self-funded ERISA plan.

By Rebecca Moore | March 03, 2016
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In a case regarding whether Liberty Mutual Insurance Company’s health plan for employees must be compelled to comply with a Vermont law requiring reporting of payments relating to health care claims and other information relating to health care services to a state agency for compilation in an all-inclusive health care database, the U.S. Supreme Court held that the Employee Retirement Income Security Act (ERISA) pre-empts Vermont’s statute as applied to ERISA plans.

The high court noted that the Vermont law governed or interfered with the uniformity of plan administration. In its opinion, it said ERISA seeks to make the benefits promised by an employer more secure by mandating certain oversight systems and other standard procedures, and those systems and procedures are intended to be uniform. “ERISA’s extensive reporting, disclosure, and recordkeeping requirements are central to, and an essential part of, this uniform plan administration system,” the court wrote. “Pre-emption is necessary in order to prevent multiple jurisdictions from imposing differing, or even parallel, regulations, creating wasteful administrative costs and threatening to subject plans to wide-ranging liability.”

Howard Shapiro, partner in the Employee Benefits, Executive Compensation & ERISA Litigation Practice Center at law firm Proskauer, says, “The Gobeille opinion is a forward step in preemption for self-funded plans. It permits self-funded plans to enjoy uniform reporting and disclosure responsibilities nationwide.  Almost 20 states are implementing similar all-payer claims data bases, so this is a helpful step.”

He says it is uncertain what the impact would be for fully insured plans. “Preemption for fully insured plans would turn on whether these laws are state laws regulating insurance.”

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