The U.S. Supreme Court decided the case of Gobeille v. Liberty Mutual Insurance Co.1 last week, in which the Court invalidated a Vermont health care data collection law as being preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”). Gobeille is the latest ERISA case in what has been an extremely busy term for the Court in the ERISA arena.2
This case involves the State of Vermont enacting a statute requiring that self-insured and other health plans provide periodic disclosures to state regulators regarding payments relating to health care claims and other information relating to health care services. This information was to be used to develop an “all-payer claims database” intended to allow the continuous review of “health care utilization, expenditures, and performance in Vermont.” Approximately 20 states have similar statutes.
In 2011, Vermont issued a subpoena to Blue Cross Blue Shield of Massachusetts, Inc. (“Blue Cross”) as the third-party administrator of a self-insured ERISA health plan that was sponsored by Liberty Mutual Insurance Company (“Liberty”), directing Blue Cross to transmit certain claims data to the Vermont regulators. Concerned that such disclosure might be a breach of its ERISA fiduciary duties, Liberty directed Blue Cross not to comply with the subpoena, and filed an action seeking a declaratory judgment that ERISA pre-empted the application of the Vermont law.
Affirming the U.S. Court of Appeals for the Second Circuit, the Court, in a 6-2 decision, strongly reaffirmed ERISA’s preemptive reach and invalidated the Vermont statute. The Court focused on ERISA’s objective to provide for a uniform set of systems and procedures to properly secure the benefits promised by employers, and to minimize the administrative and financial burdens on plan administrators. According to the Court, ERISA’s reporting, disclosure and recordkeeping requirements are “central to, and an essential part of, the uniform system of plan administration contemplated by ERISA,” and are “fundamental” and “integral aspects of ERISA.” Rejecting the notion that data collection is not a substantive function that would justify preemption, the Court concluded that, because Vermont’s reporting regime “intrudes upon a central matter of plan administration and interferes with nationally uniform plan administration,” such laws must be preempted in order “to prevent the States from imposing novel inconsistent and burdensome reporting requirements on plans.” Indeed, Justice Breyer’s concurrence correctly alludes to the fact that, in the absence of preemption, there is the possibility not only of 50 different sets of rules, but, rather, of innumerable disparate rules, as various municipal and other local governments, in addition to the states themselves, may also seek to promulgate their own rules.
For those that continue to believe that data-collection of the type sought by Vermont has value, the Breyer concurrence suggests a way forward. Justice Breyer noted that ERISA pre-emption “does not necessarily prevent Vermont or other States from obtaining the self-insured, ERISA-based health-plan information that they need.” He suggested that States wishing to obtain such information could ask federal agencies to provide for such collection, raising the possibility that the U.S. Department of Labor could “develop reporting requirements that satisfy the States’ needs” and even “delegate to a particular State the authority to obtain data related to that State.”3
The Court in Gobeille seemed to have little difficulty concluding that the Vermont statute at issue was preempted by ERISA. Indeed, Gobeille may well have been a more significant decision regarding ERISA matters had it limited ERISA's preemptive reach and allowed Vermont's statute to be enforced. In any event, however, the case as it was actually decided may be expected to have a potentially adverse impact on efforts by other States to pursue data-collection efforts similar to Vermont. Thus, Gobeille's significance may ultimately be less in the ERISA arena, and more in the area of data collection relating to health care generally.