Did the Supreme Court's Gobeille decision force Tennessee to stop collecting health-claims data under its All-Payer Claims Database statute?

Plain-English summary

Tennessee, like roughly twenty other states at the time, had built an all-payer claims database (APCD) under § 56-2-125 to collect health-care claims data from insurers and self-funded employer health plans. The data was supposed to support transparency, cost analysis, public health research, and similar policy work. In Gobeille v. Liberty Mutual Insurance Co., 136 S.Ct. 936 (2016), the U.S. Supreme Court struck down Vermont's nearly identical APCD law as applied to ERISA-governed self-funded health plans, holding that ERISA's broad preemption of state laws that "relate to" employee benefit plans swept in state-imposed reporting and disclosure duties on those plans.

The state asked what Tennessee should do. The AG's answer was straightforward at the core: stop enforcing § 56-2-125 against ERISA-governed self-funded plans that use insurers to administer benefits, because Gobeille controls that fact pattern. Application of the statute to insurers selling policies to ERISA plans is murkier; ERISA contains a "savings clause" that preserves state laws regulating insurance, and under the two-prong test from Kentucky Ass'n of Health Plans v. Miller, an APCD might be saved if it (1) is specifically directed at entities engaged in insurance and (2) substantially affects the risk-pooling arrangement between insurer and insured. The AG concluded prong one was satisfied but prong two was doubtful.

Because § 56-2-125 contains no severability clause and there is no "fairly clear" basis to conclude the General Assembly would have enacted it without ERISA-plan coverage, the doctrine of elision does not save the statute. The AG concluded the whole statute was unconstitutional after Gobeille, and the departments could stop enforcing it without waiting for the legislature to repeal it.

Currency note

This opinion was issued in 2016. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What is an "All-Payer Claims Database"?
A: A state-mandated repository where health insurers, self-funded plans, third-party administrators, and other payers submit standardized claims and enrollment data, so the state can study utilization, prices, quality, and public health. Around twenty states have built APCDs.

Q: What did Gobeille actually decide?
A: The Supreme Court held that ERISA preempts Vermont's APCD statute as applied to ERISA-governed plans. The reasoning: ERISA already imposes extensive reporting, disclosure, and recordkeeping duties on plans, and those uniform federal duties are central to ERISA's design. State APCD laws that pile parallel reporting duties on plans intrude on a "fundamental component" of ERISA's regulatory framework and are preempted under 29 U.S.C. § 1144(a).

Q: Why does Tennessee's APCD statute fall under the same logic?
A: Tennessee's statute, like Vermont's, expressly defines "group health plan" by reference to ERISA's "employee welfare benefit plan" (29 U.S.C. § 1002(1)) and requires those plans, when they use insurers to administer benefits, to report claims data. That is the exact factual pattern in Gobeille.

Q: What about insurers selling policies to ERISA plans? Are they preempted too?
A: That is the harder question. ERISA's "savings clause" (29 U.S.C. § 1144(b)) preserves state laws that "regulate insurance." Under Miller, a state law regulates insurance if it (1) is "specifically directed toward entities engaged in insurance" and (2) "substantially affect[s] the risk pooling arrangement between the insurer and the insured." The AG concluded Tennessee's APCD statute satisfies prong one (it explicitly targets "health insurance issuers") but the statute may not satisfy prong two, because data reporting does not obviously alter the scope of permissible bargains or otherwise change risk-pooling.

Q: Why can the departments stop enforcing the whole statute, not just part of it?
A: Tennessee's doctrine of elision lets courts excise unconstitutional portions and save the rest, but only when (1) the statute has a severability clause or (2) it is "fairly clear of doubt" the legislature would have enacted the constitutional portions on their own. § 56-2-125 has no severability clause. And because the whole point of the statute was to gather data from "all payers," including ERISA plans, the AG concluded the legislature would not have enacted a stripped-down version. Without elision, the entire statute falls.

Q: Does this mean Tennessee can never build an APCD?
A: It can, but the design has to change. Federal options include voluntary data submission by ERISA plans, alternative data sources, or aligning with whatever federal APCD-related guidance emerges. A legislative redo with a severability clause and tighter focus on insurance regulation could survive Gobeille in part.

Background and statutory framework

ERISA, the federal Employee Retirement Income Security Act of 1974, regulates employer-sponsored benefit plans. Its preemption clause (§ 1144(a)) is broad: state laws are preempted to the extent they "relate to" any employee benefit plan. The savings clause (§ 1144(b)) carves back to preserve state regulation of insurance, banking, and securities. The deemer clause (§ 1144(b)(2)(B)) closes a loophole by saying that ERISA plans cannot be "deemed" to be insurance companies for state-law purposes. The net effect: states may indirectly regulate insured ERISA plans by regulating the insurers that sell to them, but cannot directly regulate self-funded ERISA plans through insurance laws.

Gobeille extended this framework to claim-data reporting. Reporting and disclosure are not just insurance-style restrictions; they are core ERISA functions. State-imposed parallel reporting duties on ERISA plans interfere with national uniformity and are preempted, full stop.

Tennessee's statute was enacted in 2009 (Public Chapter 611). It required the Department of Commerce and Insurance to maintain an APCD and to collect data from "all group health plans and health insurance issuers," with the Department of Finance and Administration using the data for cost, quality, and policy work.

Citations

• 29 U.S.C. § 1144(a) (ERISA preemption)
• 29 U.S.C. § 1144(b) (savings clause)
• 29 U.S.C. § 1144(b)(2)(B) (deemer clause)
• 29 U.S.C. § 1002(1) (employee welfare benefit plan definition)
• Tenn. Code Ann. § 56-2-125 (Tennessee APCD statute)
• Gobeille v. Liberty Mutual Ins. Co., 136 S.Ct. 936 (2016)
• Kentucky Ass'n of Health Plans, Inc. v. Miller, 538 U.S. 329 (2003) (two-prong "regulates insurance" test)
• Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985); FMC Corp. v. Holliday, 498 U.S. 52 (1990) (insured vs. self-funded plan disparity)
• Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) (mechanics of ERISA preemption clauses)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2016/op16-042.pdf

Original opinion text

Full opinion text unavailable from the official source. See the linked PDF or landing page above for the complete text.

The opinion concludes:

Opinion 1. The Gobeille decision undoubtedly leads to the conclusion that ERISA preempts Tennessee Code Annotated § 56-2-125 to the extent it imposes claims data reporting requirements upon ERISA-governed self-funded group health plans that use health insurance issuers to administer benefits. With respect to ERISA-governed group health plans that purchase insurance policies from health insurance issuers, the departments' collection of health claims data for the "all payer claims database" created by Tennessee Code Annotated § 56-2-125 would be constitutionally defensible if the database is utilized in a manner that "regulates insurance" under the test set forth in the United States Supreme Court's decision of Kentucky Association of Health Plans, Inc. v. Miller. If the statute's use does not satisfy the Miller test, however, then the collection of data from health insurance issuers that sell insurance policies to ERISA-governed group health plans would be preempted by ERISA under the reasoning set forth in the Gobeille decision.

Opinion 2. Because Tennessee Code Annotated § 56-2-125 does not contain a severability clause and it is not "fairly clear of doubt" that the General Assembly would have enacted Tennessee Code Annotated § 56-2-125 without being able to have health claims data reporting requirements imposed upon ERISA-governed group health plans, the doctrine of elision does not apply. Accordingly, it is our opinion that Tennessee Code Annotated § 56-2-125 is unconstitutional following the Gobeille decision. Consequently, for the reasons set forth herein, the Department of Commerce and Insurance and the Department of Finance and Administration are allowed to stop the enforcement of Tennessee Code Annotated § 56-2-125.

HERBERT H. SLATERY III
Attorney General and Reporter

ANDRÉE SOPHIA BLUMSTEIN
Solicitor General

Requested by:
Department of Commerce and Insurance
Department of Finance and Administration