The U.S. Supreme Court has ruled that the Employee Retirement Income Security Act (ERISA) protects self-insured benefit plans against new state reporting requirements.
In a 6-2 decision on Gobeille v. Liberty Mutual Insurance Company (Supreme Court Case Number 14-181), the majority held that the ERISA preemption provision, which puts the U.S. Labor secretary in charge of ERISA plan regulation, blocks Vermont from requiring ERISA health plans to feed claims data into a statewide health claims database.
See also: Gobeille v. Liberty Mutual: Supreme Court justices question Vermont’s self-insured plan data call
When Congress passed ERISA in 1974, one of its goals was to reduce employers’ benefits plan costs by making benefit plan regulation more uniform by putting ERISA benefit plans under the jurisdiction of the Labor secretary. Federal courts usually classify large self-insured health plans and other types of large self-insured plans as ERISA plans.
In an opinion for the Gobeille majority, Justice Anthony Kennedy writes that benefit plan recordkeeping and reporting are “fundamental components of ERISA’s regulation of plan administration,” and that state efforts to impose new reporting requirements on self-insured plans “could create wasteful administrative costs and threaten to subject plans to wide-ranging liability.”
“Pre-emption is necessary to prevent the states from imposing novel, inconsistent, and burdensome reporting requirements on plans,” Kennedy writes.
Kennedy says states could get the data they want within the ERISA framework by asking the Labor secretary to add health plan reporting requirements.
Chief Justice John Roberts and justices Samuel Alito Jr., Stephen Breyer, Elena Kagan and Clarence Thomas all sided with Kennedy.
Justices Ruth Bader Ginsburg and Sonia Sotomayor were the dissenters.
In a concurring opinion, Thomas says that the new decision fits with past Supreme Court ERISA rulings, but he questions whether Congress has the authority under the U.S. Constitution to keep states from applying civil laws to ERISA plans.