Alaska Prompt Pay Law Preempted by Federal Benefit Laws

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jacklyn Wille

Aug. 17 — Alaska’s prompt pay statute—which requires insurers to pay benefit claims within 30 days of submission—is preempted by federal laws governing employer-provided benefits and benefits for government workers, a federal judge ruled ( Zipperer v. Premera Blue Cross & Blue Shield of Alaska , 2016 BL 265226, D. Alaska, No. 3:15-CV-00208 JWS, 8/16/16 ).

The judge’s Aug. 16 decision is the latest in a string of decisions striking down or scaling back state prompt pay laws as preempted by the Employee Retirement Income Security Act and the Federal Employees Health Benefits Act.

Earlier this year, a federal appeals court partly struck down Texas’s prompt pay law under the FEHBA and found it inapplicable to self-funded ERISA plans. Georgia’s prompt pay law was partly struck down as ERISA-preempted by a different appeals court in 2014. A district judge in Illinois reached a similar conclusion with respect to that state’s law in 2014.

In the most recent case, the judge dismissed portions of an Alaska doctor’s lawsuit against Premera Blue Cross Blue Shield of Alaska. The doctor had accused the insurer of prompt pay violations when it placed him on “pre-payment review” of all laboratory claims.

According to the judge, the FEHBA preempted the doctor’s prompt pay claims related to federal worker benefit plans, because the Alaska law had an impermissible connection with or reference to those plans. Further, ERISA preemption defeated his claims with respect to employer-sponsored plans, because the prompt pay law had “the requisite connection” with an ERISA-governed plan.

Despite rejecting the doctor’s prompt pay claims, the judge allowed him to advance a claim under the Health Insurance Portability and Accountability Act.

Senior Judge John W. Sedwick of the U.S. District Court for the District of Alaska wrote the decision.

Wachler & Associates PC and Ingaldson Fitzgerald PC represented the doctor. Lane Powell represented Premera.

To contact the reporter on this story: Jacklyn Wille in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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