In its March 1, 2016 opinion in Gobeille v. Liberty Mutual Ins. Co., the U.S. Supreme Court held that Vermont cannot compel health insurers to disclose data on the amount paid on medical claims, concluding that ERISA preempts application of Vermont’s 2005 disclosure statute and regulations.
In an effort to keep health care costs under control and improve the quality of care, the Vermont law mandated that insurers provide the state data on the types of health care services they paid for and how much they paid. Liberty Mutual runs a self-funded plan administered by Blue Cross Blue Shield of Massachusetts and challenged Vermont’s request for disclosure of data under the law. Liberty Mutual argued that such disclosure requirements were a particular problem for companies operating nationally because they must meet the mandates of multiple different jurisdictions. ERISA, they argued, is intended to protect employers from a patchwork of burdensome state regulations.
The Supreme Court agreed. In a 6-2 decision, the Court found that the Vermont data collection law did not apply to self-funded insurance plans, which are most commonly used by large companies, and ran afoul of ERISA. Writing for the court’s majority, Justice Anthony Kennedy said that “reporting, disclosure and record-keeping are central to, and an essential part” of the federal law.”
“The fact that reporting is a principal and essential feature of ERISA demonstrates that Congress intended to pre-empt state reporting laws like Vermont’s,” Justice Kennedy added. Justices Ginsberg and Sotomayor dissented.
Seventeen other states have similar disclosure laws that will be limited by this decision.