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Vermont’s health care reporting regime, which compels plans to report detailed information about claims and plan members, both intrudes upon a central matter of plan administration and interferes with nationally uniform plan administration. The State’s law and regulation govern plan reporting, disclosure, and — by necessary implication — recordkeeping. These matters are fundamental components of the Employee Retirement Income Security Act of 1974's, 29 U.S.C.S. § 1001 et seq., regulation of plan administration. Differing, or even parallel, regulations from multiple jurisdictions could create wasteful administrative costs and threaten to subject plans to wide-ranging liability. 18 Vt. Stat. Ann. § 9410(g) supplies penalties for violation of Vermont’s reporting rules; 21-040-021 Vt. Code R. § 10 does the same. Preemption is necessary to prevent the States from imposing novel, inconsistent, and burdensome reporting requirements on plans.
Vermont law required certain entities, including health insurers, to report payments relating to health care claims and other information relating to health care services to a state agency for compilation in an all-inclusive health care database. Respondent Liberty Mutual Insurance Company's health plan (Plan), which provided benefits in all 50 States, was an “employee welfare benefit plan” under the Employee Retirement Income Security Act of 1974 (ERISA). The Plan's third-party administrator, Blue Cross Blue Shield of Massachusetts, Inc. (Blue Cross), which was subject to Vermont's disclosure statute, was ordered to transmit its files on eligibility, medical claims, and pharmacy claims for the Plan's Vermont members. Respondent, concerned that the disclosure of such confidential information might violate its fiduciary duties, instructed Blue Cross not to comply and filed suit, seeking a declaration that ERISA pre-empted application of Vermont's statute and regulation to the Plan and an injunction prohibiting Vermont from trying to acquire data about the Plan or its members. The District Court granted summary judgment to Vermont, but the Second Circuit reversed, concluding that Vermont's reporting scheme was pre-empted by ERISA.
Was Vermont’s reporting scheme under Vt. Stat. Ann. tit. 18, § 9410 preempted by ERISA?
The court held that ERISA preempted Vermont’s statute as applied to ERISA plans. According to the court, ERISA expressly pre-empted “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” As relevant here, the clause pre-empted a state law that has an impermissible “connection with” ERISA plans, i.e., a law that governed, or interfered with the uniformity of, plan administration. Preemption was necessary to prevent the imposition of novel, inconsistent, and burdensome reporting requirements on plans.