Facts
- Kentucky enacted two “any willing provider” statutes restricting health insurers and HMOs from excluding providers willing to meet plan terms, including a law requiring inclusion of willing licensed chiropractors for plans offering chiropractic benefits.
- Health plans and HMOs operating in Kentucky used selective provider networks and alleged the statutes limited their ability to offer exclusive networks.
- Petitioners sued the Kentucky Insurance Commissioner, seeking a declaration that ERISA preempted the statutes.
- The district court held the statutes related to ERISA plans but were saved from preemption as laws regulating insurance.
- The Sixth Circuit affirmed.
Issues
- Whether Kentucky’s any-willing-provider statutes are preempted by ERISA because they “relate to” employee benefit plans.
- Whether the statutes are “law[s] … which regulate insurance” within ERISA’s saving clause and thus are not preempted.
- What standard governs whether a state law “regulates insurance” for ERISA saving-clause purposes.
Decision
- The Supreme Court unanimously affirmed.
- The Court held the Kentucky statutes are saved from ERISA preemption because they “regulate insurance” within ERISA’s saving clause.
- The Court articulated a two-part test for saving-clause coverage and applied it to uphold both statutes.
Legal Principles
-
A state law is saved from ERISA preemption as a law that “regulates insurance” if it:
- is specifically directed toward entities engaged in insurance; and
- substantially affects the risk-pooling arrangement between insurer and insured.
-
Laws of general application that merely affect insurers incidentally are not saved; regulation must target insurance entities with respect to insurance practices.
-
Any-willing-provider requirements can substantially affect risk pooling by changing the permissible terms of coverage (including network structure) offered to insureds, thereby regulating insurance rather than only provider contracting.
Conclusion
The Court held Kentucky’s any-willing-provider statutes, though related to ERISA plans, regulate insurance under ERISA’s saving clause because they are directed at insurers and materially alter permissible risk-pooling arrangements by expanding covered access to providers.