Gobeille v. Liberty Mutual Insurance Company
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| Gobeille v. Liberty Mutual Insurance Company | |
| Docket number: 14-181 | |
| Court: United States Supreme Court | |
| Court membership | |
| Chief Justice John G. Roberts Associate Justices Anthony Kennedy • Clarence Thomas Ruth Bader Ginsburg • Steven G. Breyer Samuel Alito • Sonia Sotomayor • Elena Kagan | |
Gobeille v. Liberty Mutual Insurance Company is a United States Supreme Court case regarding all-payer claims databases as they pertain to self-funded health insurance plans. At issue was whether the Employee Retirement Income Security Act preempts a Vermont law that requires health insurers to report claims data for inclusion in a statewide database.
The court limited oral arguments to the following question:
advanced by the United States as amicus -err in holding that ERISA preempts Vermont's health care database law as applied to the third-party administrator for a self-funded ERISA plan?"[1] |
In a 6-2 decision issued February 29, 2016, the court ruled that the Vermont law was preempted by the Employee Retirement Income Security Act (ERISA) due to ERISA's reporting requirements, finding that the additional reporting requirements of the Vermont law placed a substantial burden on self-insured employers.
Background
Liberty Mutual Insurance Company is a nationwide company with offices in all 50 states; it maintains a self-funded health insurance plan for its employees, meaning it assumes the risk for the plan and pays medical claims with its own funds. Liberty Mutual contracts with a third-party administrator in Massachusetts to process the claims.[2][3]
Vermont operates a statewide all-payer claims database (APCD) and requires all health insurers in the state to submit claims data for inclusion in the database. In August 2011, Vermont subpoenaed Liberty Mutual's third-party administrator to submit data to its APCD. Liberty Mutual directed the third-party administrator not to disclose the data and filed a lawsuit against the state challenging Vermont's APCD law. The lawsuit argued that the Employee Retirement Income Security Act of 1974 (ERISA) takes precedence over, or preempts, Vermont's law. ERISA is a federal law that requires self-funded employee health benefit plans to report financial data to the United States Department of Labor so the department can monitor the financial solvency of the plans.[2][3]
Liberty Mutual argued that because it operates nationwide, reporting requirements for both ERISA and state APCDs involving "a patchwork of ... state regulations," imposed a burden upon it, something ERISA was designed to avoid. Vermont argued that reporting claims data did not impose a burden on Liberty Mutual or its third-party administrator because insurers already collect such data.[2][3]
While the U.S. District Court for the District of Vermont found in favor of Vermont, the Second Circuit Court of Appeals reversed and found in favor of Liberty Mutual, ruling that Vermont's law "interfered with ERISA plan administration." Vermont appealed to the United States Supreme Court, which agreed to hear the case on June 28, 2015.[2][3]
Decision
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In a 6-2 decision issued on March 1, 2016, the Supreme Court ruled in favor of Liberty Mutual. The majority opinion was written by Justice Anthony M. Kennedy, who was joined by Chief Justice John Roberts and Justices Clarence Thomas, Stephen Breyer, Samuel Alito, and Elena Kagan.
In its opinion, the Supreme Court held that under ERISA, self-funded employee health plans are exempt from Vermont's reporting requirements. The court agreed with the Second Circuit that because "reporting, disclosure and record-keeping are central to, and an essential part" of ERISA, the federal law preempts the state's reporting requirements. This was in line with precedent that had interpreted broadly ERISA's preemption clause and established that preemption applies when state law interferes with nationally uniform administration of ERISA health plans, the opinion stated.[2][3]
In a separate concurring opinion, Justice Thomas wrote that interpretation of ERISA's preemption clause was possibly becoming too broad and would have to be addressed in the future. Justice Breyer also wrote a separate concurring opinion in which he suggested that if Vermont needed data not collected under ERISA, it could file a request with the U.S. Department of Labor.[4]
Dissent
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The dissent was written by Justice Ruth Bader Ginsburg, who was joined by Justice Sonia Sotomayor. Ginsberg argued that ERISA does not preempt Vermont's data collection law because Vermont's law serves a different purpose and does not collect the same information. ERISA involves health plan solvency, while Vermont's law is for the purpose of evaluating healthcare trends in the state. Vermont's law is not concerned with the administration of self-funded health plans, Ginsburg wrote, and therefore preemption does not apply in this case.[4]
Significance
Health policy analysts expected that the ruling would likely impact APCD laws in 17 other states. According to the American Benefits Council, as of October 2015, 93 million Americans nationwide were covered by self-funded health plans. Data on their health claims may no longer be required for submission into state APCDs. An analysis of the opinion by Ronald Mann on SCOTUSblog stated that the opinion also could have the effect of broadening "ERISA's vague preemption rule" and creating a path for self-funded plans to challenge future APCD reporting regulations issued by states or even by the Department of Labor.[5][6]
See also
External links
- Supreme Court of the United States, "Gobeille v. Liberty Mutual Insurance Company" (text of opinion)
- Oyez, "Gobeille v. Liberty Mutual Insurance Company"
- SCOTUSblog coverage of Gobeille v. Liberty Mutual Insurance Company
Footnotes
- ↑ Supreme Court of the United States, "Gobeille v. Liberty Mutual Insurance Company," accessed June 2, 2016
- ↑ 2.0 2.1 2.2 2.3 2.4 Business Insurance, "Supreme Court rules for Liberty Mutual over Vermont health care law," March 1, 2016
- ↑ 3.0 3.1 3.2 3.3 3.4 Supreme Court of the United States, "Gobeille v. Liberty Mutual Insurance Company," March 1, 2016
- ↑ 4.0 4.1 Oyez, "Gobeille v. Liberty Mutual Insurance Co," accessed June 2, 2016
- ↑ American Benefits Council, "Council (and others) Amicus Brief with U.S. Supreme Court in Gobielle v. Liberty Mutual," October 20, 2015
- ↑ SCOTUSblog, "Opinion analysis: Justices strike a blow against state health-care data collection," March 2, 2016
