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The U.S. Supreme Court on June 29, 2015, agreed to consider whether the federal Employee Retirement Income Security Act (ERISA) bars the state of Vermont from requiring self-insured health plans to turn over claims data, which would be added to a statewide unified health care database (Gobeille v. Liberty Mut. Ins. Co., No. 14-181).
The 2nd U.S. Circuit Court of Appeals, in a 2-1 decision issued in 2014, struck down the Vermont Health Care Uniform Reporting and Evaluation System (VHCURES), the health care database in question, ruling that it was pre-empted by ERISA. According to the two-judge majority, VHCURES placed a significant burden on reporting, which is a “core ERISA function.”
In seeking Supreme Court review, both the state and the U.S. solicitor general argued that VHCURES was not pre-empted by ERISA.
According to the solicitor, the purpose of the Vermont law's reporting requirement was to create a statewide database for assessing and improving patient care. This differed significantly from ERISA's reporting requirements, which are aimed at ensuring the financial and actuarial soundness of employee benefit plans, the solicitor said.
Although the solicitor left open the possibility that some state health care databases could impose reporting requirements broad enough to implicate ERISA, he said the Vermont program didn't cross that line.
Vermont argued that the 2nd Circuit's pre-emption decision “undermines the efforts” of at least 16 states to establish and use these types of health care databases.
Six other states with similar databases or plans to create a similar database— Maryland, Massachusetts, New Hampshire, New York, Oregon and Utah—filed a friend-of-the-court brief urging the Supreme Court to overturn the 2nd Circuit's pre-emption finding.
Vermont also defended its database by saying that it “collects critical information that informs the state's health care policy.”
Insurer Defends Pre-Emption Decision
Liberty Mutual Insurance Co., the insurer that initiated the challenge to Vermont’s requirements, defended the 2nd Circuit's decision finding VHCURES to be pre-empted by ERISA.
Liberty Mutual argued that the requirements imposed by VHCURES caused the database to “fall squarely within the realm” that Congress reserved for ERISA plans, because VHCURES required such plans to “account and report to the state what the plan has paid out to whom as part of the plan's operations.”
Liberty Mutual said Congress intended to protect plans “from the burdens of complying with conflicting state laws,” such as the differing rules that could be imposed by various states' health care databases.
The case will be heard in the 2015-16 Supreme Court term, which begins in October 2015.
Joanne Deschenaux, J.D., is SHRM’s senior legal editor.
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