Self-Insurance Institute of America, Inc. v. Snyder
827 F.3d 549
6th Cir.2016Background
- Michigan enacted the Health Insurance Claims Assessment Act (Mich. Comp. Laws §§ 550.1731–1741) to fund Medicaid by assessing a 1% tax on "paid claims" by carriers and third-party administrators for services to Michigan residents.
- "Paid claims" includes payments made or reimbursements by carriers, TPAs, or stop-loss carriers; carriers include sponsors of ERISA-governed group health plans.
- The Act requires quarterly returns, recordkeeping, and that carriers/TPAs "develop and implement" a methodology to collect the assessment (subject to conditions).
- Self-Insurance Institute of America (SIIA) sued Michigan officials seeking a declaratory judgment and injunction, arguing ERISA preempts the Act. The district court dismissed; the Sixth Circuit affirmed, vacated by the Supreme Court for Gobeille consideration, and on remand again affirmed dismissal.
- The court analyzed preemption under ERISA § 514(a) (29 U.S.C. § 1144(a)) using the Supreme Court’s "reference to" and "connection with" framework, focusing on whether the Act (1) directly regulates ERISA plan administration or (2) only imposes incidental reporting burdens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Michigan Act is preempted because it has an impermissible "connection with" ERISA plans | The Act imposes additional reporting/recordkeeping and interferes with uniform plan administration and relations among ERISA entities | The Act is a state tax of general applicability whose reporting requirements are incidental to tax collection and do not directly regulate ERISA plan administration | Held: Not preempted — the Act imposes incidental reporting for tax collection and does not directly regulate core ERISA administrative functions (falls under De Buono/Travelers, not Gobeille) |
| Whether the Act’s residency-based scope unlawfully alters plan-beneficiary relationships | Residency rule forces administrators to solicit domicile information from beneficiaries, changing relationships and burdening administrators | Michigan regulation creates a rebuttable presumption using existing business address records, so administrators need not contact beneficiaries | Held: Not preempted — residency is determined from existing records, leaving relationships unaltered |
| Whether § 550.1733a(2) effectively mandates carriers/TPAs to collect the assessment, thus altering plan administration | Section requires carriers/TPAs to develop a methodology to collect the tax, effectively forcing changes to plan documents/practices | Michigan administrative rule interprets the provision as permissive; carriers/TPAs are not compelled to change plan terms | Held: Not preempted — state interpretation makes collection permissive, so no ERISA interference |
| Whether the Act "refers to" ERISA plans (as argued by amici) | Amici: statutory definitions and coverage expressly reference ERISA plans and plan entities | Defendants: primary party (SIIA) expressly waived the "reference to" argument on appeal | Held: Waived — SIIA conceded the "reference to" argument, so the court declined to consider amici’s separate assertion |
Key Cases Cited
- Aetna Health Inc. v. Davila, 542 U.S. 200 (ERISA’s goals and preemption framework)
- N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (defines "relate to" as connection with or reference to)
- Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (state laws directly regulating ERISA reporting/recordkeeping are preempted)
- De Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S. 806 (upholding state tax on ERISA-operated medical centers; incidental reporting compatible with ERISA)
- Egelhoff v. Egelhoff, 532 U.S. 141 (state law preempted when it governs central matters of plan administration)
- California Div. of Labor Standards Enforcement v. Dillingham Constr., 519 U.S. 316 (ERISA preemption is deliberately expansive but limited by federalism presumption)
- Penny/Ohlmann/Nieman, Inc. v. Miami Valley Pension Corp. (PONI), 399 F.3d 692 (6th Cir.) (preemption principles and state-law-of-general-applicability framework)
- Associated Builders & Contractors v. Michigan Dep’t of Labor & Economic Growth, 543 F.3d 275 (6th Cir.) (state laws of general applicability may escape ERISA preemption)