ERISA-Second Circuit Rules That ERISA Preempts State Law Requiring A Report From A Self Insured Health Plan

ERISA-Second Circuit Rules That ERISA Preempts State Law Requiring A Report From A Self Insured Health Plan
In Liberty Mutual Insurance Co. v. Donegan, No. 12-4881-cv (2nd Cir. 2014), the plaintiff, Liberty Mutual Insurance Co. (“Liberty Mutual”), was appealing a judgment by the district court, concluding that ERISA does not preempt a Vermont statute and regulation requiring self-insured employee health plans to report to the state, in specified format, claims data and “other information relating to health care.”

In analyzing the case, the Second Circuit Court of Appeals (the “Court”) said, as to ERISA preemption, that recent court precedent has set a rebuttable presumption against preemption of state health care regulations. Two constants in the cases, however, remain: (1) recognition that ERISA’s preemption clause is intended to avoid a multiplicity of burdensome state requirements for ERISA plan administration and (2) acknowledgment that “reporting” is a core ERISA administrative function. These two considerations, for a statute and regulation that clearly has a connection to ERISA plans, led the Court to conclude that the Vermont law, as applied to compel the reporting of Liberty Mutual plan data, is preempted. The Court therefore reversed the district court’s decision and remanded the case for entry of judgment in favor of Liberty Mutual.

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