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Opinion analysis: Justices strike a blow against state health-care data collection

Justice Anthony Kennedy’s opinion for the Court in Gobeille v. Liberty Mutual Insurance Company barely even alludes to the backdrop of the case, which involves health-care databases that states use to help contain health-care costs under the Affordable Care Act. Specifically, the question before the Court is whether Vermont’s statute obligating all health insurers to provide data for their database violates the Employee Retirement Income Security Act, which preempts any state law that may “relate to” an ERISA plan.

Although the opinion spends several pages summarizing the terms of the statute and the Court’s prior ERISA cases, it offers only the most cursory analysis of the preemption question in dispute. On that point, the Court has three specific things to say. First, it spends several paragraphs cataloguing the various recordkeeping requirements ERISA and the Department of Labor have imposed on ERISA plans. Second, it characterizes those requirements as “plain[ly]” “central,” “essential,” and “integral aspects” of ERISA. Third, because “[d]iffering, or even parallel, regulations from multiple jurisdictions could create wasteful administrative costs,” the statute is preempted (my emphasis). The key point is that the regulations “could” create wasteful burdens, because in point of fact the Vermont regulation does not create such burdens: it calls for data in a standardized format the insurer already uses.

The Court does not mention it, but the federal government took the view that the statute was not preempted, emphasizing the importance of the state’s role in cost-containment under the Affordable Care Act. What the Court did mention, though, is that the Secretary of Labor “may” be authorized to require the production of this data, which would permit the state databases to continue. At the oral argument, Justice Antonin Scalia strenuously objected to that idea, asking how the agency could change the preemptive effect of the statute. Perhaps the guarded reference in the opinion produced an opinion satisfactory to Justice Scalia. Much more vocal on that point, as he had been at oral argument, Justice Stephen Breyer offered a concurring opinion strongly implying that the Department of Labor is responsible for Vermont’s conundrum: if it thinks this data is important to health-care administration it should adopt regulations calling for the data collection; it shouldn’t ask the courts to do the job for it. For him, the issue clearly was one of institutional competency. The Court can only say that state data collection is, or is not, preempted. The Department of Labor, by contrast, can define a standardized format that would obviate any concern about costs from inconsistent collection obligations.

The case, however cursory the analysis, will send ripples out in three different dimensions. First, in the ERISA realm, the case probably stands as a broadening – or broad statement – of ERISA’s vague preemption rule. Second, it has the potential for application in general preemption analysis of state regulation that would be burdensome only if it turns out to be non-uniform. Here, faced with a state rule that involves no present departure from uniformity, the Court relies heavily on the risk of future departures from uniformity, presumably by other states, to justify holding the existing statute preempted.

Third, probably of greatest practical importance, as a matter of health-care regulation, the opinion leaves the Department of Labor in something of a box. The department’s brief in the Supreme Court suggests that it is important to the practical success of the ACA for the States to collect and analyze the data that is shut down by this case. But if the department adopts the regulation that Justice Breyer suggests to permit the State databases to continue, insurers have a roadmap for challenging the regulation: the Court has held that ERISA preempts those databases, and some Justices probably share Justice Scalia’s view that yesterday’s holding necessarily bars any such regulation.

PLAIN LANGUAGE SUMMARY: Vermont requires all health insurers to send in information that describes all of the health-care procedures that occur in Vermont. Many of the insurers technically are plans subject to ERISA. The Court held that Vermont cannot force those plans to send in the data, because ERISA protects the ERISA plans from all but the most trivial state recordkeeping requirements.

Recommended Citation: Ronald Mann, Opinion analysis: Justices strike a blow against state health-care data collection, SCOTUSblog (Mar. 2, 2016, 11:02 AM),