Supreme Court Weighs ERISA Preemption and Health Data Collection

Supreme Court Weighs ERISA Preemption and Health Data Collection


On Wednesday, the U.S. Supreme Court heard oral arguments in Gobeille v. Liberty Mutual Insurance Company, a case that centers around the “all-payer” healthcare database maintained by the state of Vermont. A Vermont state law requires that health insurers – including self-funded employer health plans like the one operated by Liberty Mutual – provide data on medical claims, pharmacy claims, member eligibility, etc. in order for the state to analyze the provision and costs of healthcare services in the state. Liberty Mutual refused to provide the information for the self-insured plan that covers the company’s employees on the grounds that the Vermont statute is preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”), the federal law that governs health and retirement plans. ERISA generally preempts, or supercedes, state laws applicable to non-insured plans in order to shield plan sponsors from conflicting and burdensome state laws.

In 2011, the third party administrator of Liberty Mutual’s plan was subpoenaed by the state of Vermont to provide the required data. Liberty Mutual responded by filing suit against the state in district court seeking a declaration that ERISA preempts the Vermont statute and regulation. When the district court ruled in favor of the state, Liberty Mutual appealed, and the Second Circuit reversed the district court. The state then asked the Supreme Court to review the case.

The case is important because of its potential impact on plan sponsors that could become subject to multiple state reporting requirements in addition to ERISA’s federal reporting requirements. Additionally, the Court’s decision could provide broader guidance on the boundaries of ERISA preemption. On the other hand, if the Supreme Court holds in Liberty Mutual’s favor, Vermont and other states could be stymied in their efforts to collect broad population health data that they believe would be helpful to “figure out ways to bend the cost curve and improve the provision of health care delivery to everyone in the country,” in the words of Vermont Solicitor General Bridget Asay who argued on behalf of the state.

The Supreme Court Justices noted during several times during oral arguments the potential burden on plan sponsors if 50 states imposed 50 different regimes of reporting health data.  Conversely, several Justices recognized the value of the data and that states already have laws of general applicability that happened to affect ERISA plans in the same way they affect other entities.  

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