United States: Supreme Court: ERISA Pre-empts Law Requiring Reporting To State Healthcare Database

Louis Joseph is Senior Counsel in our Chicago office and Sepedeh "Sepi" Tofigh is an Associate in our Miami office.


  • In a 6-2 decision, the Supreme Court holds that a Vermont state law requiring Employment Retirement Income Security Act (ERISA)-covered health plans to submit detailed reporting to a state agency has an impermissible "connection with" ERISA plans and is therefore pre-empted by ERISA.
  • The state's traditional interest in regulating matters of public health is not sufficient to save from pre-emption a law that "intrudes upon a central matter of plan administration" and "interferes with nationally uniform plan administration" for ERISA-covered plans.
  • A plan subjected to such a state law has standing to challenge its enforceability in court without waiting until the plan is subjected to inconsistent federal and state reporting obligations, and forced to incur additional costs of compliance.

In Gobeille v. Liberty Mut. Ins. Co., the U.S. Supreme Court held that the Employee Retirement Income Security Act of 1974 (ERISA) pre-empts a Vermont law that requires healthcare providers, including health insurers and self-funded employer health plans, to report information related to healthcare claims and services for inclusion in a state healthcare database. In its broadly sweeping decision, released on March 1, 2016, the Supreme Court stated that the Vermont statute cannot be enforced against ERISA-covered plans.

The Vermont Healthcare Database

The Vermont law at issue requires health insurers, self-funded health plans, third-party administrators, healthcare providers, healthcare facilities and government agencies to report certain information relating to healthcare to Vermont state agencies. This information includes medical claims data, pharmacy claims dates, member eligibility and provider data among other information. Additionally, the law permits a state agency to determine the types of information to be filed and the time, place and manner of such filing. The State of Vermont compiles the information into an all-payer claims database, which can be used by state agencies in addition to insurers and employers, to review the overall cost and utilization of healthcare.


This case arose after an ERISA plan's third-party administrator was directed to report plan data to a Vermont agency. The employer/plan sponsor, Liberty Mutual Insurance Company, instructed the third-party administrator not to disclose the information, believing that the disclosure would violate its fiduciary duties under ERISA. The state then issued a subpoena to the third-party administrator ordering that the specified data be reported, and threatening a fine of up to $2,000 per day and an in-state suspension for up to six months.

Liberty Mutual filed suit in U.S. district court, seeking a declaration that the Vermont law was pre-empted by ERISA. The district court granted summary judgment for Vermont, finding that the Vermont law was too indirect to impermissibly interfere with an ERISA health plan. The U.S. Court of Appeals for the Second Circuit reversed the district court holding, concluding that reporting by ERISA plans was an ERISA function that should remain solely subject to a national standard. Thereafter, the U.S. Supreme Court granted certiorari to address ERISA pre-emption.

The Supreme Court Holding

Reviewing the existing case law addressing ERISA pre-emption, the Court stated that ERISA pre-empts two categories of state law:

  • those state laws that have a "reference to" ERISA plans
  • those state laws that have an impermissible "connection with" ERISA plans

Specifically, the Supreme Court stated that an "impermissible connection" is presented where a state law attempts to "govern a central matter of plan administration," or "interferes with nationally uniform plan administration."

The Supreme Court ultimately held its decision based on the following:

  1. Plan reporting, disclosure and recordkeeping are fundamental components of ERISA's regulation of plan administration. Differing reporting regimes from multiple jurisdictions potentially impose wasteful administrative costs and wide-ranging liabilities for ERISA-covered plans.
  2. The Vermont law represents a direct regulation of a fundamental ERISA function. The fact that Vermont's purposes in requiring data reporting from ERISA plans may be different than those motivating the ERISA reporting scheme is irrelevant, as is the fact that the state may be acting within its traditional sphere of interest in addressing health-related concerns. Neither factor can validate a state law that enters a fundamental area of ERISA regulation.
  3. State laws that require reporting by ERISA-covered plans, even though imposing no substantive requirements with respect to plan benefits or coverage, still interfere with the congressional goal of allowing nationally uniform plan administration.

Practical Impact and Moving Forward

In its decision, the Supreme Court noted that nearly 20 states have implemented or are implementing health databases similar to that in effect in Vermont. Sponsors of ERISA-covered health plans in these states will need to consider the impact of the Liberty Mutual decision and decide whether to pull back from compliance with any similar state-mandated reporting requirements.

Additionally, the Supreme Court's reaffirmation and broad construction of ERISA pre-emption has already led to the scrutiny of other state healthcare-related statutes. On March 7, the Supreme Court ordered the U.S. Court of Appeals for the Sixth Circuit to reconsider its decision in Self-Insurance Institute of America v. Snyder. The appellate court had upheld against a claim of ERISA pre-emption a Michigan law that taxes all medical claims paid in-state, including those paid by ERISA-covered health plans.

Although the imposition of a state tax is different than a healthcare database, and the Supreme Court has previously upheld state tax laws against claims of ERISA pre-emption, the remand of the Snyder case for reconsideration in light of the Liberty Mutual decision may signal that the Court is prepared to revisit, and perhaps broaden, the scope of ERISA pre-emption of state tax laws.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.