Weekly BNA Insights: State Tax Laws Withstand Most ERISA Preemption Challenges after ‘Gobeille' and ‘Self-Insurance Institute of America'

From the 9/30/16 edition of the Weekly State Tax Report:

On March 1, 2016, the Supreme Court held in Gobeille v. Liberty Mut. Ins. Co., that the Employee Retirement Income Security Act of 1974, as amended (ERISA) preempted a Vermont law to the extent the Vermont law requires an ERISA plan, its third-party administrator, or its insurer to report benefit payments and other information relating to healthcare services to a state agency so that Vermont could compile an all-inclusive healthcare database. On March 6, 2016, the Supreme Court, in Self-Insurance Institute of America v. Snyder, vacated a Sixth Circuit decision that ERISA preempted neither a Michigan state tax of one-percent of the benefits paid by a group health plan, its third-party administrator or its insurer, nor the law's reporting and record-keeping compliance requirements, and remanded the case back to the Sixth Circuit for further consideration in light of its Gobeille decision. On July 1, 2016, the Sixth Circuit reaffirmed its approval of the state law. Gobeille and the Sixth Circuit reaffirmance suggest that ERISA permits a wide variety of state tax laws to be applied to ERISA plans, their third-party administrators and other service providers, including the reporting and record-keeping requirements used to enforce those laws.

Albert Feuer, principal at the Law Offices of Albert Feuer, discusses the predictability of ERISA preemption and the implications of recent case law on state taxation of ERISA plans in this week’s BNA Insights article, available here. Or sign up for a free trial to the Weekly State Tax Report.

Compiled by Chreasea Dickerson