The U.S. Supreme Court will hear a case next term on whether a self-funded employer should have to turn over certain information to the state of Vermont — a case that could have far-reaching implications.

The court announced Monday that it would hear Gobeille v. Liberty Mutual Insurance Co. In the case, the state of Vermont argues it needs certain data from Liberty, such as claims, member eligibility and other issues, to help it improve the cost and effectiveness of health care. Liberty Mutual, however, argues that the federal Employee Retirement Income Security Act, known as ERISA, protects it and its third-party administrator from having to hand over the information, which is otherwise required by the state.

The 2nd U.S. Circuit Court of Appeals already ruled that ERISA does take precedence over state law, meaning Liberty Mutual's third-party administrator shouldn't have to turn over the data. ERISA regulates traditional pensions and other employer-provided benefits.

The U.S. solicitor general's office said in a brief filed in May that the issue is one of national consequence.

“With the encouragement of the federal government, other states are establishing similar health care databases to help improve health outcomes for their citizens, and thus the question presented has national importance,” according to the solicitor's brief.

“If States are unable to acquire such data from self-insured ERISA health care plans, their databases will be significantly less comprehensive and thus not as useful in developing health policy at both the state and national levels,” according to the brief.

The solicitor general's office wrote in that brief that the 2nd Circuit's ruling was wrong, though he urged the Supreme Court not to take the case, saying it should first be addressed by additional lower courts of appeal.

At least 11 states have databases similar to Vermont's, and several more are implementing such programs, according to a June brief filed on behalf of Alfred Gobeille, chair of the Vermont Green Mountain Care Board. New York, Maryland, Massachusetts, New Hampshire, Oregon and Utah have also filed a brief in the case supporting Vermont.

“As health care costs continue to skyrocket and place enormous pressures on state budgets, the States have an urgent need to take advantage of the 'great potential' … offered by all-payer claims databases,” according to Gobeille's brief.

Vermont Solicitor General Bridget Asay said states may use such data in a number of ways, such as to create consumer-oriented websites, conduct research on health care outcomes or track access to specialists.

“We all know states are struggling to control health care costs and it's a major issue for many states, and having good data about a health care market in a state is a crucial tool for making regulatory decisions and deciding questions of health care policy,” Ms. Asay said.

Liberty Mutual, however, has argued in court documents that Vermont has “overstated” the implications of exempting self-funded payers from the database. Attorneys for Liberty Mutual wrote that the circuit court's decision “will not prevent states from obtaining an accurate picture of the health care services provided within their borders.”

They argue ERISA pre-empts state law when it comes to collecting data for good reason.

“In addition to protecting the interests of beneficiaries, Congress intended to protect plans and employers with self-funded plans (and, ultimately, employees and beneficiaries as well) from the burdens of complying with conflicting state laws by reserving the field of employee benefit plans for federal regulation,” lawyers for Liberty Mutual wrote.

A Liberty Mutual spokesman said Monday, “We look forward to the U.S. Supreme Court's review of this issue.”

The data should belong to the employer because the employer is the one on the hook financially, said Steve Wojcik, vice president for public policy with the National Business Group on Health, an association representing large employers on health care and health benefits.

But the case has “profound implications” beyond just that issue, Mr. Wojcik said.

For example, he said, some states have tried in the past to enact various types of taxes and assessments on employer plans without regard to ERISA — something they shouldn't have the power to do if ERISA pre-empts state law.

ERISA has also helped self-funded insurers in a number of ways, such as by allowing employers to administer plans uniformly across states and limiting legal challenges to plans to federal court. The law has helped self-funded insurers scale costs, offer better benefits and be more innovative, Mr. Wojcik said.

“This could set a bad precedent down the road … saying that ERISA doesn't protect against state law in this case,” he said.

The Supreme Court's current term will likely end this week, and the new term will begin in October. The case will likely be heard in November or December, Ms. Asay said.

Lisa Schencker writes for Modern Healthcare, a sister publication of Business Insurance.