The American Benefits Council reports that 93 million Americans get their insurance from self-funded plans. These plans serve as an alternative to employers contracting with insurance companies that assume the risk.
On March 1, the U.S. Supreme Court ruled that Vermont data collection law violates the U.S. Employee Retirement Security Act (ERISA). In a 6-2 decision, the high court decided that it does not apply to self-funded insurance plans used by large companies.
The state argued that requiring insurers to provide this type of data helps control the costs of healthcare and provide improvements to the overall quality of care.
The decision affirms a ruling by a federal appeals court that backed Liberty Mutual Insurance, a company that operates a self-funded plan administered by Blue Cross Blue Shield of Massachusetts. The insurer challenged a data request by the state, claiming that releasing information on medical claims, including specific amounts paid, violates exemptions provided by ERISA law.
Liberty Mutual also asserted that the variations in mandates state-to-state present operational problems, a protection for employers provided by federal ERISA laws.
Writing for the majority, Justice Anthony Kennedy agreed. “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.”.
The ruling has far-reaching implications beyond Vermont, placing limitations on similar data collection laws in 17 other states. It also affects other states’ efforts to implement pending legislation similar to Vermont’s data collection law.
ERISA-related legal matters require the help of an attorney experienced in and knowledgeable of this complex federal law.