Gobeille v. Liberty Mutual: Supreme Court justices question Vermont's self-insured plan data call

An ERISA plan does and should have to obey ordinary state business rules, such as minimum wage rules and workplace safety rules, but letting each state impose its own data collection system on a multi-state self-insured plan administrator, or multi-state self-insured plan sponsor, could expose administrators and self-insured plans to substantial new burdens, Waxman said.

Asay said she was unfamiliar with the details when Justice Sonia Sotomayor asked her how the health claim data collection process would work and why, from Vermont's perspective, letting each state have its own data collection process would not impose a substantial new burden.

The Blue Cross Blue Shield Association and other employer and benefits organizations sent the court a brief showing how weakening of ERISA preemption could affect the administrators of self-insured plans covering 93 million people, but Justice Elena Kagan said she wanted more information from Liberty Mutual.

"Mr. Waxman, why was it that you introduced absolutely no evidence of burden in the lower courts here?" Kagan asked.

Waxman said he thought the Blue Cross Blue Shield brief showed that the burden would be substantial, even though the brief did not provide a cost estimate.

Kagan later said "there's something very intuitive about the argument" that having 50 different data call requirements could add up to costing a lot of money.

Breyer asked John Bash, an assistant to the solicitor general who appeared on behalf of the Obama administration, which is supporting Gobeille, why the administration is supporting Gobeille.

"I was fine with you until I read a few of these amicus briefs, and then, suddenly, I saw 93 million people," Breyer said. "Conflict among states in requirements means money. A lot of money. That's what they say, and that's plausible."

If states want data from self-insured plans, they can get it from the U.S. Department of Labor, which already has the authority to put out a national data call, Breyer said.

Bash suggested, when talking to Justice Antonin Scalia, that the outcome of the case could have broader implications.

Kennedy mentioned the divide between conflict preemption and field preemption early on, and the issue came up several times later.

U.S. Circuit appeals courts have had differing views on how to reconcile the principle that ERISA was supposed to take over the entire field of benefits regulation and the principle that courts should resolve conflicts between ERISA and state rules on a conflict-by-conflict basis.

"I think if the court were to say what we've been doing all along is field preemption, and it makes more sense doctrinally to classify it that way, from the Department of Labor's perspective, that would be fine," Bash said. "I think we would be a little bit concerned if the court signaled to lower courts in its opinion that it was marking a big shift in its jurisprudence that could destabilize the law."

See also: Feds: ERISA plans must share their decision support tools