HIGH COURT TO CONSIDER ERISA IMPLICATIONS OF VERMONT HEALTH-CARE CLAIMS DATABASE

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The U.S. Supreme Court will hear a case next term asking whether Vermont's attempt to collect health insurance claims data runs afoul of federal employee benefits law (Gobeille v. Liberty Mut. Ins. Co., U.S., No. 14-181, cert. granted 6/29/15).

This move granting review June 29 may surprise court watchers, as the justices previously asked the U.S. solicitor general whether this dispute merited Supreme Court review. Last month, the solicitor advised the high court to wait until other federal courts have considered similar databases before wading into the dispute.

The case asks whether the Employee Retirement Income Security Act preempts the Vermont Health Care Uniform Reporting and Evaluation System (VHCURES), which requires self-insured health plans to submit claims data to a statewide unified health-care database.

Vermont argued that these types of databases—which several states use to collect information from medical providers and insurance companies—are useful in shaping health-care policy, evaluating existing health-care programs and improving the quality and affordability of patient care.

VHCURES hit a roadblock in 2014, when the U.S. Court of Appeals for the Second Circuit issued a split ruling striking the program down as preempted by ERISA. According to the two-judge majority, VHCURES placed a significant burden on reporting, which the majority called a “core ERISA function.”

The Vermont case is the second ERISA dispute the justices have added to next term's docket. In March, the court announced that it will hear a case involving the scope of ERISA's equitable remedies provision and the extent to which ERISA-governed plans can seek reimbursement for overpaid benefits or benefits paid in error (Montanile v. Bd. of Trs. of Nat'l Elevator Indus. Health Benefit Plan, U.S., No. 14-723, cert. granted 3/30/15).

Solicitor's Advice Rejected

The court's decision to reject the solicitor's recommendation after specifically asking for his advice is a departure from the court's recent practice in ERISA cases.

In general, the court has appeared increasingly willing to seek the solicitor's view in ERISA cases, doing so three times this past term. The court has typically followed the solicitor's advice in each case.

This was true in both of the court's most recent high-profile ERISA decisions, Tibble v. Edison Int'l, 135 S.Ct. 1823 (U.S. 2015), and Fifth Third Bancorp v. Dudenhoeffer, 134 S.Ct. 2459, (U.S. 2014).

In both Tibble and Dudenhoeffer, the justices took the solicitor's advice to grant review of one question presented and deny review of another.

Similarly, the court's decision granting review in Montanile came two years after the solicitor advised the court not to hear a different case presenting similar issues—advice the court took to heart (Thurber v. Aetna Life Ins. Co., U.S., No. 13-130, cert. denied 6/9/14).

Most recently—on the same day the court agreed to hear the Vermont case—it also declined to review a case asking how ERISA plan participants can demonstrate that a fiduciary's alleged misconduct caused losses to the relevant plan (RJR Pension Inv. Comm. v. Tatum, U.S., No. 14-656, cert. denied 6/29/15)(see related story in this issue). That decision followed the express advice of the solicitor general.

The court also is waiting to hear from the solicitor on a pending case asking whether an ERISA plan sponsor can limit the courts in which a participant or beneficiary can file suit by including a venue selection clause in the terms of its plan (Smith v. Aegon Cos. Pension Plan, U.S., No. 14-1168, invitation to file brief 6/1/15).

Excerpted from a story that ran in Pension & Benefits Daily (06/30/2015).