Argued November 18, 2013
Petition for certiorari filed at, 08/13/2014
Liberty Mutual Insurance Co. appeals fro a judgment entered in the United States District Court for the District of Vermont (Sessions, J.). The district court concluded that the Employee Retirement Income Security Act of 1974 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." For the following reasons, we reverse and remand with instructions to enter judgment for Liberty Mutual.
NANCY G. ROSS, McDermott Will & Emery LLP, Chicago, IL (John A. Litwinski, McDermott Will & Emery LLP, Chicago, IL; M. Miller Baker, McDermott Will & Emery LLP, Washington, DC, on the brief), for Appellant.
BRIDGET C. ASAY, Assistant Attorney General, Office of the Attorney General, Montpelier, VT for William H. Sorrell, Attorney General, State of Vermont, for Appellee.
KATHRYN COMERFORD TODD, National Chamber Litigation Center, Washington, DC (Jane E. Holman, National Chamber Litigation Center, Washington, DC; Carol Connor Cohen and Nancy S. Heermans, Arent Fox LLP, Washington, DC, on the brief), for amicus curiae Chamber of Commerce of the United States of America in support of Appellant.
MELISSA MOORE, U.S. Department of Labor, Washington, DC (M. Patricia Smith, Solicitor of Labor; Timothy D. Hauser, Associate Solicitor; Nathaniel I. Spiller, Counsel for Appellate and Special Litigation, on the brief), for amicus curiae Acting Secretary of the United States Department of Labor in support of Appellee.
Before: KEARSE, JACOBS, and STRAUB, Circuit Judges.
DENNIS JACOBS, Circuit Judge.
Liberty Mutual Insurance Co. operates a self-insured employee health plan. A Vermont statute requires all " health insurers" (including self-insured plans) to file with the State reports containing claims data and other " information relating to health care." A State regulation specifies how such information must be recorded and transmitted.
When Vermont subpoenaed claims data from the Liberty Mutual plan's third-party administrator, this suit was commenced in the United States District Court for the District of Vermont (Sessions, J.). Liberty
Mutual sought a declaration that the Employee Retirement Income Security Act of 1974 (" ERISA" ) preempts the Vermont statute and regulation. The district court granted summary judgment in favor of Vermont.
The ERISA preemption clause is not self-reading and ERISA preemption doctrine is not static. The early judicial consensus, based on the broad wording of the preemption clause (and legislative history), was to construe preemption broadly. More recent precedent has pulled back by setting a rebuttable presumption against preemption of state health care regulations. Two constants, 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 lead us to conclude that the Vermont law, as applied to compel the reporting of Liberty Mutual plan data, is preempted. We therefore reverse and remand for entry of judgment in favor of Liberty Mutual.
The Vermont statute establishes and provides for the maintenance of " a unified health care database." Vt. Stat. Ann. tit. 18, § 9410(a)(1). The database " enable[s]" the State's Department of Banking, Insurance, Securities and Health Care Administration (" Department" ) " to carry out [its] duties . . ., including" :
(A) determining the capacity and distribution of existing resources;
(B) identifying health care needs and informing health care policy;
(C) evaluating the effectiveness of intervention programs on improving patient outcomes;
(D) comparing costs between various treatment settings and approaches;
(E) providing information to consumers and purchasers of health care; and
(F) improving the quality and affordability of patient health care and health care coverage.
To populate the database, the statute requires " [h]ealth insurers, health care providers, health care facilities, and governmental agencies" to " file reports, data, schedules, statistics, or other information," as the Department deems necessary, at the time and place and in the manner the Department requires. Id. at § 9410(c)-(d). The statute authorizes the Department to require the filing of " health insurance claims and enrollment information used by health insurers" and " any other information relating to health care costs, prices, quality, utilization, or resources." Id. at § 9410(c).
Knowing and willful failure to comply is punishable by penalty of not more than $10,000 per violation.
See id. at § 9410(g).
In 2008, the Department promulgated a regulation to implement the statute and create the Vermont Healthcare Claims Uniform Reporting and Evaluation System (the " Reporting System" ). See Regulation H-2008-01, 21-040-021 Vt. Code R. § 1 (" Regulation H-2008-01" ). The regulation requires reporting of myriad categories of claims data. See infra 26-29. " Health Insurers" are required to " regularly submit medical claims data, pharmacy claims
data, member eligibility data, provider data, and other information relating to health care provided to Vermont residents and health care provided by Vermont health care providers and facilities to both Vermont residents and non-residents in specified electronic format to the Department for each health line of business . . . per the data submission requirements contained in" appendices to the regulation. Regulation H-2008-01 § 4(D).
A " [h]ealth insurer" is defined broadly to include " any health insurance company, . . . third party administrator, . . . and any entity conducting administrative services for business or possessing claims data, eligibility data, provider files, and other information relating to health care provided to Vermont residents or by Vermont health care providers and facilities." Id. § 3(X).
Begging the preemption question, the term " [h]ealth insurer" " may also include, to the extent permitted under federal law, any administrator of an insured, self-insured, or publicly funded health care benefit plan offered by public and private entities." Id. (emphasis added). A health insurer with 200 or more enrolled or covered members in each month during a calendar year is designated a " Mandated Reporter." Id. § 3(Ab). All other entities are " Voluntary Reporter[s]." Id. § 3(As).
The Department makes the collected data " available as a resource for insurers, employers, providers, purchasers of health care, and state agencies to continuously review health care utilization, expenditures, and performance in Vermont." Vt. Stat. Ann. tit. 18, § 9410(h)(3)(B). The Department decides " the extent" of such disclosure " allowed by HIPAA," the federal Health Insurance Portability and Accountability Act of 1996, id., and maintains the " confidentiality code" by which filed information " is handled in an ethical manner,"
id. § 9410(f). " [D]irect personal identifiers," such as ...