The Supreme Court 'Gobeille' Filings on Whether Vermont May Compel an ERISA Plan to File Health-Care Claims Data

Abstract

The Supreme Court heard oral argument in Gobeille v. Liberty Mutual Life Ins. Co. on December 2, 2015. The Court is considering whether ERISA preempts Vermont's health-care database law as applied to a third-party administrator for a self-funded ERISA plan. The party filings and thirteen of the sixteen amici filings did not challenge any of the Court’s three incoherent and uncertain ERISA preemption principles: (1) ERISA is presumed not to preempt state laws, (2) state laws may not impinge upon ERISA core concerns; and (3) state laws may impose administrative burdens on ERISA plans.

Thus, the Court decision is likely to increase the confusion about which state-law tax reporting mandates, health-care record keeping mandates and domestic relations disclosure mandates ERISA preempts, and which it permits. The determination is likely to obfuscate which state laws ERISA preempts, and which laws it permits.

There is broad agreement that health care data bases are valuable and the more complete a data base the greater its value. The dispute before the Court is a consequence of an underlying dispute about who should bear the cost of providing the requisite data, third-party payors, such as ERISA plans, or health care providers, such as hospitals. In this dispute, Vermont and its supporters claim the compliance costs of its law on health-care claim payers is minimal, but Liberty Mutual and its supporters claim the compliance costs are substantial. However, the parties have not presented the Court with the costs and benefits of the two approaches. Instead, the parties are asking the Court to resolve the issue by deciding whether ERISA preempts state attempts to compel health-care claims payers to provide the data at issue.

This article analyzes the legal arguments presented by filings about why ERISA permits or prohibits the burden of complying with the Vermont statute, and how this resembles or differs from other state-law administrative burdens. The article presents additional arguments that have not yet been presented to the Court, but would help the Court to better decide the question before it. If the Court and the parties continue on the Court’s current preemption path, the Court is likely to increase the incoherence of the Court’s preemption principles and their discrepancy from the ERISA statute. The resulting uncertainty about which state laws are preempted by ERISA will hurt each of the three parties whose interests are balanced in ERISA and its preemption provisions: (1) ERISA plan sponsors and fiduciaries, (2) the state governments and their constituents, and (3) the ERISA plan participants and beneficiaries.

Keywords: ERISA, disclosure, reporting, record keeping, Supreme Court, healthcare, healthcare databases, healthcare claims, preemption

JEL Classification: G22, G23, G28, I18, J32, J33, K29, K32