Update: Sixth Circuit Declines to Expand ERISA; State Assessments on Self-Funded Insurers Upheld

In a recent blog, NASHP highlighted a 6^th Circuit case that had the potential to jeopardize the future of state assessments on self-funded plans (Self-Insurance Institute of America Inc. v. Snyder et al.). In March, the Supreme Court instructed the 6^th Circuit to take a second look at a recent decision where the lower court held a one-percent tax used by Michigan on all paid carrier claims for health care services did not violate ERISA. The Supreme Court order asked the 6^th Circuit to consider whether the highest court’s decision in Gobeille, in which a requirement on Vermont’s self funded plans to submit claims data for state APCDs was blocked by ERISA, affected the Michigan assessment.
In a decision released earlier this month, the 6^th Circuit held that the Michigan tax was not preempted by ERISA. The court said that unlike the Gobeille case, the Michigan assessment does not impose additional burdens or interfere with uniform plan administration. In deciding not to overturn the assessment, the 6^th Circuit noted that, unlike the APCD laws, Michigan’s self insured plan assessment did not relate to a direct regulation of a fundamental ERISA function and plans would have to perform minimal, incidental reporting in order to meet the requirements of the Act. The 6^th Circuit also highlighted several cases where the Court rejected ERISA challenges to hospital and provider taxes.
Although the assessment has survived two rounds of challenges at the 6^th Circuit, Michigan’s legislature has been discussing alternatives to the tax and will likely sunset its use. Representatives from the self-insured plans have not indicated whether they will appeal the 6^th Circuit’s decision. However given the court’s recent consideration of ERISA in Gobeille and the potential repeal of the Michigan assessment, it is unlikely the Supreme Court will take the case at this time.