Term: 2002
Docket: 00-1471
Kentucky Association Of Health Plans, Inc., Et Al. v. Janie A. Miller, Commissioner, Kentucky Department Of Insurance
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00-1471KENTUCKY ASSOCIATION OF HEALTH PLANS v. MILLER, KENTUCKY COMMISSIONER OF INSURANCE Ruling below: CA 6, 227 F.3d 352. QUESTION PRESENTED ERISA preempts any state law that "relates to" ERISA-covered employee benefit plans, unless the law is within the statute's insurance "saving" clause, which saves from preemption any state law "which regulates insurance." Petitioners include health maintenance organizations ("HMOs") that make limited-size networks of health care providers available to ERISA health benefit plans. Kentucky's "Any Willing Provider" ("AWP") statutes, however, require HMOs to open their networks to any provider in the geographical area willing to meet the network contract terms. The Sixth Circuit below unanimously held that Kentucky's AWP statutes relate to ERISA-covered benefit plans, but by a 2-1 decision joined the Fourth Circuit in holding that AWP statutes are not preempted by ERISA because they are laws "which regulate[] insurance," rejecting contrary decisions of the Eighth and Fifth Circuits. The following question is presented: Are state " Any Willing Provider" statutes preempted by ERISA, or are they saved from preemption because they are laws "which regulate insurance"? CERT. GRANTED: 6/28/02
The U.S. Supreme Court case Kentucky Association of Health Plans, Inc., et al. v. Janie A. Miller, Commissioner, Kentucky Department of Insurance (2002) revolved around the issue of whether certain provisions in the Kentucky Any Willing Provider laws were pre-empted by the Employee Retirement Income Security Act (ERISA). The laws required health insurers to accept any qualified provider willing to meet their terms and conditions into their networks. The petitioners argued that these state laws interfered with nationally uniform plan administration under ERISA and thus should be invalidated due to federal preemption. However, the Supreme Court ruled against this argument in a unanimous decision stating that ERISA did not preempt such state regulations because they only had an indirect economic impact on insurance plans rather than directly regulating them or dictating specific administrative practices for benefit claims processing or appeals procedures as prohibited by ERISA's "connection with" clause.
In the dissenting opinion for Kentucky Association of Health Plans, Inc., et al. v. Janie A. Miller, Commissioner, Kentucky Department of Insurance (2002), Justice Antonin Scalia disagreed with the majority's decision that upheld a state law requiring health insurance companies to cover any healthcare provider willing to meet their terms and conditions (the "Any Willing Provider" laws). He argued that this regulation interfered with the ability of insurers to negotiate favorable contracts and manage risk effectively - key aspects of their business model which are protected under federal law by ERISA (Employee Retirement Income Security Act). In his view, such interference constituted an impermissible connection with or reference to ERISA plans; hence he believed it should be preempted by federal law. Furthermore, he criticized the majority’s interpretation as inconsistent and overly narrow in its understanding of what constitutes an “indirect economic influence”.
