What’s at Stake for States? The Lines are Drawn in Gobeille v. Liberty Mutual
On December 2nd, the US Supreme Court will take up Gobeille v. Liberty Mutual, a case which could limit states’ ability to collect essential data to advance payment reforms, address cost and quality and assure consumers have information and access to care. At issue is whether or not a state can compel a self-insured employer to submit health care claims – data that shows how much was paid for health care services – to the state’s all-payer claims data system (APCD). Eighteen states have enacted laws to create all-payer claims data systems and 20 more are considering doing so.
Regulation of health insurance is bifurcated – states regulate coverage that is fully insured – where an insurance company accepts all the risk for covered lives; the federal government, under the Employee Retirement Income Security Act of 1974 (ERISA), regulates self insured plans where the employer bears some or all of the risk for providing benefits. Importantly, three out of five workers covered by employer-sponsored insurance are in self-funded plans. Vermont, the petitioner in this case, is engaged in health reform designed to change how care is delivered and paid for, to rein in costs, and to improve quality for all Vermonters. Vermont’s APCD system provides critical information to support these reform efforts by requiring claims data from payers in the state, a state with a large proportion of self-funded plans.
Liberty Mutual is a self –funded employer plan in Vermont. Arguing that the federal government regulates it, not Vermont, the company objects to providing claims data to the state, maintaining the requirement violates federal ERISA law. ERISA pre-empts any state law if compliance with the state law would conflict with it or if a state law imposed a burden on ERISA plans regarding plan design, operation, functions or benefits.
A Second Circuit decision, upon which this case is based, ruled that all reporting, not just that related to plan benefits and administration, is a core ERISA function and supported Liberty Mutual’s refusal to submit claims to Vermont’s APCD.