Today, the Supreme Court issued one decision, described below, of interest to the business community.

ERISA—Preemption of State Health-Care Reporting Requirements

Gobeille v. Liberty Mutual Insurance Co., No. 14‑181

Today, the Supreme Court held in Gobeille v. Liberty Mutual Insurance Co., No. 14‑181, that ERISA preempts Vermont's health-care database law when applied to ERISA-governed plans.

ERISA establishes uniform national standards and obligations for the fiduciaries of employee benefit plans. With certain exceptions, it preempts "any and all State laws insofar as they . . . relate to any employee benefit plan" covered by the statute. 29 U.S.C. § 1144(a). Various provisions of ERISA impose mandatory reporting requirements on covered plans.

Like many states, Vermont maintains a health-care information database designed to assist the government in identifying health-care needs, comparing costs between various treatment approaches, and providing information to consumers of healthcare. Vermont requires "health insurers" and other entities to file, with a state agency, reports containing claims data and "other information relating to health care." Vt. Stat. Ann., tit. 18, § 9410(c)‑(d).

In a 6-2 decision affirming our victory before the Second Circuit, the Court held that ERISA preempted Vermont's database law as applied to self-funded employer benefit plans governed by ERISA. The majority held that the reporting requirements were preempted because they "intrude[] upon a central matter of plan administration"—reporting, disclosure, and recordkeeping about plan participants. It also noted that differing database laws in different states would have the potential to create burdensome costs for plans that operate in multiple states and expose them to substantial civil liability for failure to comply. Thus, preemption was also warranted to prevent plans from being subject to these inconsistent regulatory requirements. Critically, the majority held that it was unnecessary for the challenger of the Vermont law to show that it currently bore concrete economic costs as a result of state database laws; it was sufficient that the state database laws created the possibility of having to comply with "disuniform" regulations.

Justice Thomas joined the majority opinion, but wrote a separate concurring opinion expressing concern that ERISA's preemption provision may be unconstitutionally broad.

Justice Breyer also wrote a separate concurring opinion (citing an amicus curiae brief filed by Mayer Brown) noting that unless the Vermont law was preempted, plans would be subject to many conflicting regulatory requirements of different states.

Justice Ginsburg, joined by Justice Sotomayor, dissented. She was of the view that ERISA does not preempt the Vermont database law because the Vermont law does not serve the same purposes as ERISA's requirements and because she was not convinced that differing state database laws would impose extraordinary compliance costs on ERISA-governed plans.

This decision should be welcome news to the business community. A decision holding that ERISA does not preempt state databases would have potentially subjected plan administrators to a multiplicity of burdensome state reporting requirements—in addition to those imposed by ERISA itself. The decision today clarifies that states cannot impose these sorts of requirements.

Please visit us at www.appellate.net

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2016. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.