Supreme Court Win For Self-Insured Health Plans

Larry Beebe, CPA

On March 4, the Supreme Court ruled self-insured health plans do not have to comply with a Vermont law that required them to submit to the state “information relative to health care costs, prices, quality, utilization, or resources required.” The third party administration of a self-insured health plan was issued a subpoena by Vermont to gain this information and threatened severe penalties for non-compliance. The plan refused to provide the information and argued the reporting requirements were preempted by ERISA.

A Federal District Court granted summary judgment to Vermont, the Second Circuit reversed and Vermont appealed to the Supreme Court. In its G-2 decision affirming the Second Circuit’s decision, the Supreme Court said that ERISA imposes significant reporting requirements on covered entities and that regulations from states would create wasteful administrative costs.

Other states are in the process of implementing such laws and may have to reconsider. The decision only invalidates this particular law. Plans still might have to comply with other state reporting laws. The case is Gobeille V. Liberty Mutual Insurance Company.

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