Today, the U.S. Supreme Court decided (6-2, with Kennedy writing for the majority and Ginsburg and Sotomayor dissenting) the case of Gobeille v. Liberty Mutual Insurance Co. The matter before the Court involved Vermont law requiring certain entities, including health insurers, to report 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.
In an important victory for pre-emption advocates, the Court held that this law was pre-empted by The Employee Retirement Income Security Act of 1974 (ERISA) which expressly pre-empts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." And that includes any state law that has an impermissible "connection with" ERISA plans, i.e., a law that governs, or interferes with the uniformity of, plan administration.
In the context of this case 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. ERISA's uniform rule design also makes clear that it is the Secretary of Labor, not the separate States, that is authorized to decide whether to exempt plans from ERISA reporting requirements or to require ERISA plans to report data such as that sought by Vermont. The Court went on to reject Vermont's arguments about the lack of economic loss by Liberty Mutual or its traditional power to regulate in the area of public health.
Finally, the Court held that ERISA's pre-existing reporting, disclosure, and recordkeeping provisions maintain their pre-emptive force regardless of whether the newer Affordable Care Act's reporting obligations also pre-empt state law.
- Member of the Firm