Supreme Court Backs Self-Funded Plans

supreme-courtIn a 6-2 decision on a case involving Liberty Mutual Insurance Company, the Supreme Court, in early March, held that ERISA pre-emption blocks the state of Vermont from requiring self-funded health plans to put claims data into a statewide health claims database.

This decision appeared to be consistent with the original intention of Congress to place ERISA plans under the jurisdiction of the U.S. Department of Labor rather than state insurance departments. In describing the decision as a victory for employer-sponsored health benefit plans that would avoid complications with plan administration, the CEO of the National Business Group on Health stated “while employers support the intentions behind Vermont’s law, we believe that a national approach to rules for all payer claims databases will be more productive and less costly.”

Dissenters, led by Justice Ruth Bader Ginsburg argued that the decision could hamper efforts to provide cost transparency by creating gaps in the data that employers, insurers, consumers, providers and state policymakers need to understand the effects of benefit plans and payment models.

ebso-self-funding-works