of the state of michigan to regulate so funded rissa plans and union funds that provide benefits as the briefing makes clear the ability to regulate wasn't it just a tax no you sanctions if you do not do things the way the state wants you to do things or orders you to do mandate you to do things to use the universal language under the statute so the taxes is a starting place but it is not the end in place but even the tax  honor i would emphasize because i'm sure this comes up at some point the tax is not the type of tax that this court has considered in new sure thier call or the other kinds of taxes which are on non entities they are on the court said no and in thier call it was the michigan single business tax and neither of those cases was there any involvement by the aversive plan any obligation imp those two and they were supplant much less an attempt by the state to take mon supplant and that's why if even if it were merely a if it were merely a tax i would suggest in this case because it's directly imposed on the planet because it takes tant plan assets to satisf no i think well i but i don't think we have to get to where you're going but i think the question is always and i think we go back to a new survey clearly the legislative history makes very clear that the fact that the state laws  is interesting but not dispositive it's something to be considered the in the tax you have to then look at the tax and determine whether the tax has a connection with and impacts these c functions among the chorus of functions are reporting and record keeping if you go and one of the things that is is the court a legal issue of the scope of preemption that this case squarely puts before the court is if you look at judge cook's opinion at the end where he talks about the it didn't impact claims and benefits pain and therefore he admits the pain now as your eyes are well aware everybody starts today from travelers and travelers makes very clear at six fifty warm better risk controls the administration of benefit plans that's what section two of arista says not benefits benefit plans and then travelers looks at the statutory structure and says we look at report the first thing they talk about in travelers at six fifty one is reporting and disclosure mandates and that's sections one on one through one eleven rissa those reporting and disclosure mandates are core arista concerns if you go back to the beginning when  was passed one of the concerns was that pension funds and welfare funds were not adequately reporting the state of their affairs and their assets so reporting was actually the first thing that a risk with this case clearly impacts reporting and record keeping and it exposes plan administrators to liability under state law if they don't comply with state law which creates a core problem with the difference between their fiduciary responsibility under it riseth to manage to manage the plan in accordance with the plan documents and this obligation to review state law and decide under state law whether they've complied with state law and to subject themselves to audits and sanctions if the state disagrees with how they've complied with state law are you aware of any similar laws in other states that have been litigated or that we know anything about how they operate ye here well and the reason i ask that is that at least one concern would be possibility of conflicting regulations or conflicting demands for the type of record keeping i mis understood the scope of your question are pretty travelers case everybody wants to use travelers as this great bright line but it but anyway n g s versus barnes involved the texas statute that imposed a reporting requirements on administrators of a risk of fines and this and the fifth circuit and and to and of and to keep records and do things of that sort in this and the fifth circuit said that is precisely the type of state  aware of it now i said this to your second question and that's what i misunderstood your honor i am not aware of any state that has tried since barnes to do anything of this sort to directly regulate but because again maybe i wasn't clear i thought some of the briefs make emphasis on the fact that they have to determine who is a resident and where the service is performed because if i'm right this only applies to michigan service in in michigan it provided benefits in michigan providing benefits to me well but a form of service in michigan to my right that is if you if you live in michigan and you go to singapore to have your kidney removed it's not going to apply but you still have to determine who's a resident and at least for some types of things that might be whether the benefit you know if you if you have a prescription that can be filled in toledo one day and detroit the other i don't know but i was trying to say maybe some other state would have a regulation where you would be cross determine if suppose florida decides to tax somebody because they say they're a florida resident and michigan wants to tax a benefit because they say there's a michigan resident  that's why i was asking whether anybody else was but is that a potential horrible in your in your view first of all i don't think to use the term horrible that's the word they try to suggest that this is a kind of a creation figment of our mad for real but there are really horrible there but here's my point to your to your point i am not aware currently or some other state that has a similar statute i am of the opinion that if you can do this other states will do it why not why not tax it and the recent plan and why not impose them to record keeping now let's deal with let's deal with the i think the case that's pretty interesting in that regard to see go off and the reason i say it's interesting is because everybody wants to focus on the one hand because the washington statute in ego off gave you an opt out and so the state of washington said you're not burdened or you have to do is opt out no problem and the supreme court said no that opt out is itself a problem because if you have a state law that allows you to opt out the plan administrator is have to be on guard all the time surveying state law to figure out whether the opt out changed or didn't change whether some other state now has it doesn't have it and that was the same thing if you look at the four circuits opinion which we in the retail trade case which was the wal mart where they tried to impose a mandated benefit were two parts of that decision one related to the mandated benefit but the other related to the fear that the that the that the state statutes would impose a duty to monitor and test and examine state law now let's deal with the residency issue  any source of money every dollar they spend is already forgot it's not like they can go back to an employer do something that's separate to a collective bargain so union fund now has an obligation under the affordable care act to insure a student up mean a person up to age twenty six that student moves to florida you get a bill from florida ok that's easy it's a service rendered for now the person comes back to michigan gets a service in michigan is he a florida person is he a michigan person the tax only applies if he's a michigan resident getting services in michigan so do i have to call up the student and say sir you know me full time resident of the state of florida know i'm going to school in for ok that kind of administrative burden is precisely what we have to worry about your honor and i think that answers your question because it's the threat of that type of continued monitoring th imposes such a big burden on this and so the way the state gets out of it and the way candidly judge a cookout out of it is by saying well that doesn't impact players administration well first of all it does i mean or a small part or a large part i don't know the specific breakdown but it comes from insurers and h m o's in the recent plan so it comes from a mix of the music it it basically applies broadly to everyone who is in that entities this is a tax on entities of which arrests a plan is or a significant amount of it's in that that core area they are a significant amount but like a sale like a general gross revenue tax or something of that  correct it is a significant amount but we we don't know from the record whether it's the majority or thirty percent or ten percent we don't know and you know that in the in the new england decision we say in their brief was a sitting by the second circuit they upheld a tax anyway even though we're supplants provided seventy percent of the revenue hundred so that fact is not something that would be absolute me and let me ask you my lease for this judge my core concern i'm not so concerned about the money of the tax but travelers in other cases say that one of the big concerns of the preemption was to avoid a multiplicity of regulations to permit nationally uniform administration so talk about this state limitation the residency the benefit we know florida has funny residency rules if florida and acts a similar law and you've got either a direct conflict of people that both states claim as residence so that they different ones want to tax them twice or that simply the different plans in the different states have to be worrying  and apparently deciding all the time who is a residence and who is not doesn't that impact the the multiplicity of regulation part it doesn't because what the regulation is concerned about is the things that are within the scope of what arisia is about the objectives of or is this court is done if i had three years or kind of inside the box of what address what a risk is preempting and you know the administration is one of those bits the administration of the plan and ministration of this tax this tax it happens after all decisions that are in the box that are risk coverings have occurred so exam for example here is a box covers what choices the planes can provide minded to cut it off at the point that they pay the benefit and any other burdens are outside that box that's kind of right i'm saying that's a black box in michigan look inside to help you with this because the you know the citation the law some of them say well it's not preempted if it's remote tangential and peripheral and to me this is a lot closer than that and then you've got that you're kind of black box and then there are other cases that use words like significant effect yes or what what's the strength of the different cases that use those tests in other words what's the strength of your best case that says no no it only if it affects  the check between them and the and the recipient is there any arrests that preemption like where you're getting that one i think that point which ties into the black box now gee comes from mackey where it talks about even significant administrative burdens could like every other employer has to garnish wages that's true but travelers was specifically health care focuses about surcharges in hospitals in the travelers decision itself the scream court talked about mackey and reiterated this point about significant burdens and said even though they're relying on significant burdens i think link from mackie's hopeful traveler said we took no issue with the argument the maquis play interest ease the garnishment would impose a ministry of costs and burdens on benefit plans they still conclude there was no preemption because the tax structure and that's true here is well the tax the structure of a risk wasn't intended to preclude states from addressing taxes generally and th generally applicable tax i'd like to answer your question about residency if they could because residency is a term nation that is a question of what how the act applies it's not a question about how the plan lies so it's when interest a plan is trying to decide whether it wants to pay a claim in the first place it can do it's own residency determination all that matters is once it's paid that residency it's made that determination under whatever standard it's applying his determine the person's covered their beneficiary the right amount is being paid then they pay the claim that output from the bet from the black box they very meet all the choices and that they're supposed to be protected that they're supposed to be able to make will they have the will they have made the decision that the person is in michigan resident when they pay the claim or don't they pay the claims of everybody who's covered so that we can use the hypo of the twenty five year old kid on the parents plan well they're going to be deciding when to play and covers this person right or going to play whatever residency requirements they have and then once they have played well then actually no it wasn't they wouldn't have a resident or the requirement for the kid on the parents plane with them but probably not and it goes to show that it's a separate question the plan can have whatever rules wants about residency the question is when they pay in michigan that's a transaction that occurs in michigan the cutest things are there may be a multiplicity of regulations but you don't think of them as a as a risk to me the way i'm thinking about it is right they say hey michigan we're not going to pay you any tax because this guy's moved to florida and florida is making us pay a tax and you say no no we think he's still a michigan resident so we want you to pay our tax on top of the florida tax and we want least in my hypo's the plan say nothing about residents i mean you're a union member you know if you're covered because you're a troll trade worker we don't you know the plan doesn't care where you are you can move to singapore and i'm still going to agree with you the point i'm trying to about reporting requirements that's the hook for this is that imposes lots of reporting requirements for taxes but the reporting requirements that are is actually talks about her parents to good two things one is providing information to the beneficiary about what their rights are so that's why there's a summary plan ascription they get that's why they get a benefit right statement the second set of requirements is about the funding of the plan and the concerns of a risk it was making sure that these plans are being properly funded that's why some of the reporting requirements including notice failure to meet minimum funding for the plans and to be able to meet its minimum funding that's notified perma labor and other people there's also annual financial reports what would be your best case just to make this distinction between reporting  requirements of the risk and reporting requirements of the tax act i think that the tax cases and bono for example in that case is a gross receipts case that would have or involve the same types of tax steps i'm sure new york when it imposes the gross receipts tax would have had audit procedures that would have looked into that tax and the entities tax would have to produce information about their gross receipts and compensation that they if states start wanting to regulate the summary plan descriptions let's everything from they have to be printed by union labor or they have to be printed on recycled stock or they have to be written in good english and we want them to all be set that we can ever remarry and look at them those are all ok also no those are not ok because that that's the difference what i'm saying is not making them change any of them we're just making them report and we're going to audit we're to but those go to the issues that are risk as a chorus of function right reporting on what the benefits provided are it's not a chorus function when a claim has actually been paid it another way to look at is we're not mandating that they do anything different is not providing any different coverage the plan still gets me about who's covered about what coverage should be provided for example we're not saying you have to provide mental benefit mental health benefits which was a metropolitan life case or that you can only cover people that you can't impose restrictions on divorce which is that of all those cases are about what benefits are provided and whose benefits who benefits go to the amount and this is after all those decisions are made so if you look at the language  pony which is one of the scores leading question cases here it talks about things that mandate specific choices or mandate particular structures and we're not mandating any particular structures or choices here they can make all these choices it's only after they've made those choices and this is how it comes out from the black box of areas that are presented it's only at that point that the assessment kicks in so this residency is a question under state law it doesn't affect decisions plan can make the records that are being required are all decisions that are all only after all of those decisions about state law excuse me about to receive me so it's not interfering with the decisions or the reporting arguments that i think if a state were to impose additional funding requirements that type of thing that would be preempted so if  state were saying you need to report to us about the financial stability of the plan that's the type of thing that would be preempted because that goes to the course a question of is this plan fully funded that's not what's going on here to even if the reporting that you call it there didn't impose any regulation i mean for example you say we were concerned that we just like to get some reports that we've got some forms we'd like you to fill out some forms here right that's as if you went broke it would hurt state citizens just the same way if you don't pay your money it's going to hurt our state and that's in the case my colleague cited from the fifth circuit that's why it was preempted because texas was imposing additional requirements on reporting about funding levels that's completely different from missions doing missions saying we're not looking funding levels or saying once you've paid a claim you made all this is your internal to make and at that point all the rescissions have been made and we're just imposing a tax on that transaction if in a recipient bought some computers and then there was a sales tax on that it's exactly in thing we look at the receipt we say ok they paid it we're looking beyond the receipt to see if it was a good choice if they paid the right amount for accepting that any question seems to be the residency aspect if the sales tax idea maybe i'm just sort of wondering really you know that the item is purchased in michigan we've got the internet problem which is another problem where is the problem with our mobile society is we have people who who may get one point one of your requirements is that the services are performed in michigan right health care services services for a resident and the other one is the resident and so that it's really it's not going to be hard to decide if services are performed in michigan probably but this residency thing is that imposing and and the band bird no because it's not saying you can't provide a benefit to this person because of the residency it's not saying the amount you have to provide in the recent benefits of this person saying whatever there is a plan says about you can be totally different where the person lives the resupplying might impose a requirement where the person lives all that is irrelevant to whether michigan tax other matters is when the transaction occurs in michigan after the plan has decided we are going to cover this person we're of the act are not looking at any of those core functions they're just looking at the transaction happens and in this sense michigan by limiting it to michigan residence is giving a benefit to the arista plan that they're not go have to pay the tax on non michigan residents even though this service was performed in michigan you might see it that way it's probably also a limitation on earth or he did it with other connections to michigan for tech something but it's certainly not a harm to the state and whether factual question you asked earlier on or three any other states had the sort of thing maine is the only one that we're aware of that has the sort of thing as an aside and i'm talking about where a service is performed at resume that cover many plans cover drug benefits so if yes or no if a if a michigan resident has three homes and orders drugs over the internet where does it depend on where they're giving me an answer in the sense that you're saying it may be very complicated i don't know the answer but it doesn't matter what i do know the answer and there's a what is it if the thing is delivered into michigan there's a regulations can probably get on this and it's considered to have happened in michigan dispositive but you asked a question about benefits i think you can assume based on the fact that union trust funds and self funded plans pay more than fifty to sixty by any survey they're in that fifty to sixty percent is taxes going to be paid boxes questions that if you can start doing these things then as an administrator you start having to survey all of the state laws all the time and find out so in this case maybe it's residency in the next case maybe it's something else to use judge boxes why report the problem the flaw in the argument is that because wrists only says some things we can say more things and that's why the reporting if you look at the cases that have existed on reporting it's not texas was asking people to report on more then a researcher required them to report that it was on things that are risks that required reporting on right now not just that big words risk reporting requirements are different there no risk to recording requirements on report on how many claims you paid to residence or here or even to happen none of those things are required by ever so these are in addition to and in the quote here's the here's the here's the here's the problem with the argument that's why i say you have to go back to travelers i'm a bigger traveler's advocates and they are because that page of proud on says risk their controls the administration of benefit plans and then it goes do exactly what a receipt does we can do something else it's that we're entitled to uniformly administer our plan now the reason residency is such a is such an obvious issue is because of all the problems it creates if you really look at what they said in their brief about residency he said well what we meant by residency is domicile what is domicile it's a question of intention so do i have to pull all my people every day kids are college students are you moving to florida permanently or are you in michigan resident term in michigan yeah and so what are we supposed to do payroll every day and it is not a sense with all due respect to say well you make this benefit determination here and you do all this other stuff here because in reality if you're keeping records you're looking at things realistically if you're paying one requirement is that the benefit be received in michigan right yes and the state using as a proxy for residency and mailing address of the  person why is that right and what and why and why does that have anything that isn't what they in fact say they say we're using domicile and oh by the way where where where to the mailing address can change all over the place where they say as we're using dahmus up now i will suggest to you that probably until this gets sorted out there are probably all kinds of people trying to figure out shortcut ways to do this besides having to call a guy up every day but it's not just it's not just the where the benefit is used you hit on it in terms of the pharmacy benefit manager billing here's it here's another thing see this is why it is so easy to say it's different but it's so hard to do it in prayer in practice st john's hospital detroit michigan big hospital sanction health care multifamily they have a billing agency let's just say in ohio so the bill comes from why do i have to call up and say you set me a bill for a guy that i think lives in part is true but the difference is not a risk of plans don't have a preemption i mean we've we've had this back forever john and i dealt with the case on the on the on the court nation of benefits cases that