Vermont is appealing a federal court ruling from last month that exempts self-insured companies from reporting health care claims data to the state.
The 2nd Circuit Court of Appeals in New York ruled that Liberty Mutual, which offers self-insured health benefit plans to its employees, should not have to report its data to Vermont, citing a provision of the Employee Retirement Income Security Act (ERISA).
About 100,000 Vermonters working for self-insured companies, or roughly one-sixth of the state’s population.
That ruling reversed a district court ruling that directed Liberty Mutual to submit its data or pay a penalty of up to $10,000 per infraction.
The case was heard by a three-judge panel, which ruled 2-1 in Liberty Mutual’s favor. If the court decides to hear the case, it will go before the full panel of 15 justices.
In the appeal filed last week, the state argues that “The panel decision departs from Supreme Court and circuit precedent and improperly expands the scope of ERISA preemption.”
ERISA is a federal law that regulates employee benefit plans, sets minimum standards for those plans and allows employees to sue for those benefits. It also protects companies that offer benefits in multiple states from a patchwork of state regulations through what is known as the ERISA preemption clause.
The ERISA preemption formed the basis for Liberty Mutual’s argument that the state couldn’t impose its own reporting requirements on them.
Vermont law requires that all health insurers report claims data. That information goes into a database called VHCURES, which the state uses to inform policy and track capacity and costs.
The circuit court judges ruled that the claims data reporting requirement placed an undue administrative burden on companies.
The dissenting justice wrote that Liberty Mutual did not show that the reporting mandate was an undue burden and Congress did not intend to preempt the state law in question. In addition, he said claims reporting is different from the annual reports required by ERISA.
Craig Jones, director of Vermont’s Blueprint for Health — an initiative designed to help providers rein in the cost and improve the treatment of chronic conditions — said the loss of that data would hurt the project’s ability to track its progress.
Robin Lunge, commissioner of Health Care Reform, said just after the ruling was handed down that she hopes “self-insured entities in Vermont will continue to voluntarily submit claims data to VHCURES as it assists our efforts to curb the growth in health care costs and ensure Vermonters get better health outcomes.”
Vermont won’t have to wait long to find out how the ruling will affect its data collection. Companies with more than 2,000 employees are required to file their claims at the end of each month.
That means by next week Vermont should have a sense whether the state’s largest employers are still interested in participating.
There is an expectation among legislators and policy makers that, however Vermont decides to handle self-insured employers under the financing plan universal health care, the ERISA preemption could be invoked to bring suit against the new laws.
However, Lunge said the Liberty Mutual case is unrelated because it deals with reporting requirements, not how self-insured companies are taxed.
