Self-Insurance Institute of America, Inc. v. Snyder
761 F.3d 631
6th Cir.2014Background
- Michigan enacted the Health Insurance Claims Assessment Act (2011) imposing a 1% tax on “paid claims” paid by carriers and third-party administrators for services to Michigan residents; carriers include sponsors of ERISA-governed group health plans.
- The Act requires quarterly tax returns, recordkeeping, and that carriers/TPAs develop a methodology to collect the assessment.
- Self-Insurance Institute of America (SIIA) sued Michigan officials seeking a declaratory judgment and injunction, arguing ERISA (29 U.S.C. § 1144(a)) preempts the Act.
- The district court granted defendants’ motion to dismiss under Rule 12(b)(6), concluding the Act does not “relate to” ERISA plans. SIIA appealed.
- The Sixth Circuit reviewed de novo whether ERISA preempts the state tax and affirmed dismissal, finding the Act is a generally applicable state tax scheme that does not impermissibly regulate ERISA plan administration or relationships among plan entities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Act "relates to" ERISA plans by interfering with plan administration | The Act’s definition of "paid claims" and reporting/recordkeeping impose duties that conflict with ERISA-administered plan procedures and uniform administration | The Act only affects carriers when computing a tax and does not change plan benefit terms or core claim-processing functions | Not preempted — Act does not alter plan administration as ERISA defines it |
| Whether the Act’s reporting/recordkeeping provisions are preempted as additional ERISA administrative burdens | Reporting and recordkeeping add burdens core to ERISA reporting and thus intrude on the ERISA field | The reporting obligations are typical tax enforcement measures of general applicability and do not concern plan solvency or mandatory plan-administration requirements | Not preempted — reporting tied to tax collection is permissible; ERISA does not bar all state-imposed paperwork |
| Whether the residency limitation (tax only on claims for Michigan residents) forces plan-administer relationships to change by requiring beneficiary inquiries | Residency rule forces administrators to solicit domicile information from beneficiaries, altering ERISA relationships | Michigan regulation creates a rebuttable presumption using existing business records, so no added beneficiary inquiry is required | Not preempted — residency is determined from existing records; relationships remain intact |
| Whether § 550.1733a(2) (methodology to collect assessment) compels carriers/TPAs to change plan documents or duties | The provision effectively forces carriers/TPAs to collect from plans, altering plan arrangements and documents | Michigan administrative interpretation deems collection by carriers/TPAs permissive, not mandatory, so no compelled change to plan documents | Not preempted — statutory interpretation renders collection permissive, avoiding conflict with ERISA |
Key Cases Cited
- Aetna Health Inc. v. Davila, 542 U.S. 200 (explains ERISA’s protective purposes and preemption framework)
- California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., 519 U.S. 316 (describes the breadth and interpretive difficulty of ERISA’s "relates to" language)
- New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (upholds state surcharge scheme on ERISA-covered hospitals; permits certain state taxation/reporting)
- De Buono v. NYSA-ILA Medical & Clinical Servs. Fund, 520 U.S. 806 (upholds state gross receipts tax on medical centers tied to ERISA funds)
- Egelhoff v. Egelhoff, 532 U.S. 141 (strikes state law that directly required benefits be paid contrary to plan documents)
- Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825 (addresses ERISA preemption and administrative burdens)
- Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (discusses displacement of state laws within ERISA’s sphere)
- Boggs v. Boggs, 520 U.S. 833 (ERISA’s goals include proper administration and financial security of plans)
- Fidelity Fed. Sav. & Loan Ass’n v. de la Cuesta, 458 U.S. 141 (field-preemption principles and when federal regulation displaces state law)
- Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (framework for inferring congressional intent to preempt)
- Firestone Tire & Rubber Co. v. Neusser, 810 F.2d 550 (6th Cir.) (states’ taxing authority and ERISA preemption analysis)
- Thiokol Corp. v. Roberts, 76 F.3d 751 (6th Cir.) (ERISA does not preempt traditional state laws that incidentally affect plans)
- NGS American, Inc. v. Barnes, 998 F.2d 296 (5th Cir.) (distinguished: Texas statute directly regulated plan terms and claims processes)
- Liberty Mut. Ins. Co. v. Donegan, 746 F.3d 497 (2d Cir.) (distinguished: Vermont statute required extensive claims-level data reporting affecting plan administration)