April 26, 1995 – The U.S. Supreme Court decides New York State Conference of Blue Cross & Blue Shield Plans et al. v. Travelers Insurance Co. et al., 514 U.S. 645 (1995). In this case, the Court addressed whether ERISA’s pre-emption clause pre-empts all state statutes having a connection with, or reference to, covered benefit plans, or whether ERISA’s pre-emption clause only pre-empts state statutes which “relate to” employee benefit plans within the meaning of ERISA section 514(a).
New York had enacted a statute which required hospitals to collect surcharges from patients covered by a commercial carrier. Patients insured with a Blue Cross/Blue Shield plan were not required to pay the same surcharge. The commercial insurers filed a lawsuit against New York state officials, claiming that ERISA section 514(a) pre-empts this state law because it imposes a surcharge on patients whose commercial insurance coverage is paid by an ERISA plan. The district court and the U.S. Court of Appeals for the 2nd Circuit both agree, and grant summary judgment in favor of the commercial carriers.
The Supreme Court reverses, holding that the provisions for surcharges do not “relate to” employee benefit plans within the meaning of ERISA’s preemption provision, section 514(a) (29 U.S.C. 1144(a)), and therefore does not suffer pre-emption. The Court remands the case back to the district court for further proceedings consistent with their opinion.