Reconciling McCarran-Ferguson (Insurance) Case Law and ERISA Preemption: Kentucky Assn. of Health Plans, Inc. v. Miller

Publication Date: January 2005

Publisher: Library of Congress. Congressional Research Service

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Research Area: Law and ethics

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Abstract:

In Kentucky Ass'n of Health Plans, Inc. v. Miller, the Supreme Court ruled that Kentucky's "any willing provider" statutes, which mandate that health plans and health insurers may not exclude from their networks any health-care providers that agree to the plans' participation terms, are not preempted by ERISA; as statutes that regulate and are specifically directed toward the insurance industry they are exempted from such preemption by the "savings" clause in ERISA, which precludes preemption for state laws that "regulate ... insurance, banking, or securities."

Rejecting plaintiffs' arguments ­ grounded in case law interpreting the McCarran-Ferguson Act's antitrust exemption for the "business of insurance" ­ that the Kentucky laws, because they also reach health-care providers, are not `specifically directed toward' insurers, and do not regulate insurance practices, the Court reconsidered and rejected prior judicial reliance upon McCarran-Ferguson case law as a guide to interpreting ERISA's applicability to and preemption of state laws purporting to deal with insurance. The Court emphasizes the distinction between the conduct of private parties that is the focus of McCarranFerguson interpretation and the state laws that are the subject of the current litigation to conclude that "our use of the McCarran-Ferguson case law in the ERISA context has misdirected attention, failed to provide clear guidance to the lower federal courts, and ... added little to the relevant analysis."