## United States Court of Appeals
FOR THE EIGHTH CIRCUIT

______________ No. 97-2221/2226/2229

______________ THE PRUDENTIAL INSURANCE * COMPANY OF AMERICA, * PRUDENTIAL HEALTH CARE * PLAN, INC., d/b/a PRUDENTIAL * HEALTH CARE PLAN OF * ARKANSAS, HMO PARTNERS, INC., * ARKANSAS AFL-CIO, TYSON * FOODS, INC., and UNITED PAPER- * WORKERS INTERNATIONAL * UNION AFL-CIO, CLC, * * Plaintiffs-Appellees, * Appeals from the United States Cross-Appellants, * District Court for the Eastern * District of Arkansas v. * * NATIONAL PARK MEDICAL * CENTER, INC., Y. Y. KING, M.D., * BRYAN W. RUSSELL, D.C., * GEORGE A. HAAS, O.D., and * BRYANT ASHLEY, O.D., * * Defendants-Appellants. * * STATE OF ARKANSAS, * * Intervenor Defendant - * Appellee. *The HONORABLE MARK W. BENNETT, United States District Judge for the

* Northern District of Iowa, sitting by designation. 2 ___________ Submitted: March 10, 1998 Filed: September 2, 1998

___________ Before MCMILLIAN and FAGG, Circuit Judges, and BENNETT, District Judge. *

___________ BENNETT, District Judge.

This case involves the question of whether the Employee Retirement Incom e Security Act (ERISA), 29 U.S.C. § 1001 et seq ., preempts Arkansas’ so-cal led “Patient Protection Act,” Acts 505 and 1193 passed by the Arkansas General Assembly in 1995 (the Arkansas PPA). The

Arkansas General Assembly’s goal in passing the PPA was to ensure “that pati ents . . . be given the opportunity to see the health care provider of their choice.” A

RK
. C ODE A

NN
. § 23-99-202. However, various “health care insurers” wi thinthe meaning of the Arkansas PPA brought this declaratory judgment actio n seeking a declaration that the Arkansas PPA is preempted by ERISA. The precise scope of ERISA preemption of state law has left courts, including the Supreme Court, deeply troubled. As a panel of this court recently explained,

The Supreme Court has decided sixteen ERIS A preemption cases since the statute was enacted in 1974. See California Div. of Labor Stds. Enforcement v. Dillingham Constr., N.A., Inc. , [519] U.S. [316], ___, 117 S. Ct. 832,3

842-43, 136 L. Ed. 2d 791 (1997) (Scalia, J., co ncurring). Most involved the proper scope of “relate to” preemption under § 1144 (a), and the Court has str uggled, particularly in its more recent decisions, with the inherent vaguen ess of that key statutory phrase. Compare New York State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. , 514 U.S. 645, 652-661, 115 S. Ct. 1671, 1676-80, 131 L. Ed. 2d 695 (1995), wit h Metro politan Life Ins. Co. v. Massachusetts , 471 U.S. 724, 739, 105 S. Ct. 2380, 2388, 85 L. Ed. 2d 728 (1985). Painter v. Golden Rule Ins. Co. , 121 F.3d 436, 438-39 (8th Cir. 1997), cert. denied , ___ U.S. ___, _

__ S. Ct. ___, 1998 WL 73018 (April 20, 1998). Since the Supreme Court’s decision in Dillingham , the Court has considered the scope of ERIS A preemption twice more. See Boggs v. Boggs , ___ U.S. ___, 117 S. Ct. 1754 (1997); De Buono v. NYSLA-ILA Med. & Clinical Servs. Fund , ___ U.S. ___, 117 S. Ct. 1747 (1997). The very question that has so ofte n and so deeply troubled the Supreme Court is now before this court. The parties asserting the validity of the Arkansas PPA, appellant healthcar e providers, contend that the result of the Supreme Court’s struggles with “relate to ” preemp tionin its recent ERISA cases has been a “sea change”—ushered in by th e Court’s decision in Travelers and clarified in Dillingham and De Buono —that ha s upend ed the Court’s prior precedent and has established in its place a whole ne w frame work

of presumptions and analysis for ERISA preemption cases. The partie s
asse rting preemption of the Arkansas PPA, appellees ERISA plan sponsors , administrators, insurers, and HMO service providers, contend that the Supreme Court’s most recent decisions have not worked a revolution in ERISA preemption analysis, but have instead helped clarify line-drawing at the peripheries, while leaving intact, even strengthening, the importance of the core concerns and inqui ries of preemption analysis4

articulated in prior precedent. Whether the Supreme Court’s recent opinions constitute

a “sea change” or instead command that we “stay the course” in ERISA preemptio n analysis, this court must strive to sail the course the Supreme Court has set.

I. BACKGROUND A. Factual Background In 1995, the Arkansas General Assembly passed two acts, Act 505 and Ac t 1193, that combined to form the so-called “Patient Protection Act,” codified at A RK
. C ODE A NN
. C H . 23-99. The Arkansas General Assembly’s goal was to ensure

tha t patients . . . be given the opportunity to see the health care provider of their cho ice. In order to assure the citizens of the State of Arkansas the right to choose the provider of their choice, it is the intent of the General Assembly t o provide the opp ortunity of providers to participate in health benefit plans. A RK
. C ODE A

NN
. § 23-99-202. Thus, the centerpiece of the legislati on was A RK
. C ODE A NN . § 23-99-204, which provides as follows:

(a) A health care insurer shall not, directly o r indirectly: (1)(A) Impose a monetary advantage or penalt y under a health benefit plan that would affect a bene ficiary’s choice among those health car e providers who participate in the health benefit pla n according to the terms offered. (B) “Monetary advantage or penalty” includes: (i) a higher co-payment; (i i) a reduction in reimbursement for services; and (i ii) promotion of one (1) health care provider over another by these methods; (2) Impose upon a beneficiary of he alth care services5 under a health benefit plan any co-payment, fee, o r condition that is not equally imposed upon all benefi ciaries in the same benefit category, class, or co

payment level under the health benefit plan when t h e beneficiary is receiving services from a participatin g health care provider pursuant to that healthbenefit plan ; or (3) Pro hibit or limit a health care provider that i s quali fied under § 23-99-203(d) and is willing t o accep t the health benefit plan’s operating terms an d condi tions, schedule of fees, covered expenses, an d utilization regulations a

nd quality standards, from the opportunity to participate in that plan. (b) Nothing in this subchapter shall prevent a health benefit plan fr om instituting measures designed to maintain quality and t o control costs, including, but not limited to, th e utilization of a gatekeeper s ystem, as long as such measures are imposed equally on all providers in the same class. A RK
. C ODE A NN . § 23-99-204. This section is known as the “Any Willing Provider” provision of the Arkansas PPA. The Arkansas PPA defines many, but not all, of its key terms. “Health car e providers” are defined to include twenty-seven categories of licensed or certifie d providers , including physicians and hospitals. A RK
. C ODE A NN . § 23-99-203(d). A “health benefit plan” is defined as “any entity or prog ram that provides reimbursement, includin g capitation, for health care services.” A RK
. C ODE A NN . § 23-99-203(c)

. “Health care insurer” is defined by the statute to include, but is not limited to, insurance companies, hospital and medical services corporations, health maintenanc e organizations, preferred provider organizations, physi cian hospital organizations, thirdparty administrators, and prescription benefit management companies authorized t o administer, offer, or provide health benefit plans. A RK
. C ODE A NN . § 23-99-203(f).The State of Arkansas also i ntervened as a party defendant. However, on appeal,

1 the State of Arkansas has proffered no separate argument in defense of the Arkansas PPA. The HON ORABLE JAMES M. MOODY, United States District Judge for th e 2 Eastern District of Arkansas. 6 The Arkansas PPA also includes a specific exclusion: The pro visions of the [Arkansas PPA] shall not apply t o self-f undedor other health benefit plans that are exemp t from state regulations by virtue of the federal Employe e Retirement Income Security Act of 1974, as amended. A RK
. C ODE A NN . § 23-99-209. The plai ntiffs below, appellees here, are “health care insurers” within th e meaning of the Arkansas PPA. They broug ht this declaratory judgment action seeking

a declarati on that the Arkansas PPA is preempted by ERISA and an injunctio n prohibiting enforcement of the PPA. The defendants below, appellants here, ar e “he althcare providers” within the meaning of the Arkansas PPA who sough t 1 admiss ionto the plaintiffs’ limited preferred provider panels, but were denie d admission on the basis of “no need” findings by the plaintiffs. They sought declaratory and injunctive relief to enforce the Arkansas PPA.

B. The Decision Below The part ies appeal from a decision of the United States District Court for th e Eas tern District of Arkansas, Western Division, as amended, on cross-motions fo r 2

su mmary judgment. See Prudential Ins. Co. of Am. v. National Park Medical Ctr. , Inc. , 96 4 F. Supp. 1285 (E.D. Ark. 1997). In its original decision, filed January 31 , 1997, the district court considered whether the Arkansas PPA “relate[s] to” ERISA,7

such that it is preempted pursuant to ERISA § 514(a), 29 U.S.C. § 1144(a), using the two-prong analysis employed by the Supreme Court in Shaw v. Delta Air Lines, Inc. , 463 U.S. 85 (1983), and subsequent decis ions. The district court concluded, first, that the st ate law contains a “reference to” ERISA plans by singling out such plans fo r spe cial treatment, in this case, an exemption from the burdens of the Arkansas PPA

. In reac hing this conclusion, the district court expressly relied on Mackey v. Lanie r Collec tion Agency & Serv. , 486 U.S. 825 (1988), rather than District of Columbia v. Greater Wash. Bd. of Trade , 506 U.S. 125 (1992). The district court also concluded that the Arkansas PPA had a “co nnection with” ERISA plans such that it was also preempted on this ground. In so doing, the court
em ployed the seven factors used by this court in Arkansas Blue Cross & Blue Shield

v. St. Mary’s Hosp., Inc. , 947 F.2d 1341 (8th Cir. 1991), cert. denied , 504 U.S. 957 (199 2). The district court found that the Arkansas PPA negated ERISA pla n provisions; had a significant impact on primary ERISA entities; had a s ignificant impact on plan structure; had a significant impact on plan administration; and the state law was inconsistent with ERISA p rovisions in various respects, although the district court did not find these inconsistencie s particularly significant. One factor on which the district court found that the Ark ansas PPA had insufficient impact to favor preemption was in direct or acute indirect economic impact. The court also found that the State o f Arkansas had a legitimate interest in regulating health care for its citizens, such tha t consideration of whether the state law was an exercise of traditional state power di d not favor preemption. Considering all of these factors, the district court concluded that the Arkansas PPA “re lates to” ERISA plans by virtue of making a reference to and having a connection with ERISA plans, and was therefore preempted. The court concluded8

furthert hat the Arkansas PPA was not “saved” from preemption by the ERIS A “savings” clause, § 514(b)(2)(A), 29 U.S.C. § 1144(b)(2)(A), applying another twoprong test employed by the Supreme Court. See Pilot Life Ins. Co. v. Dedeaux , 481 U.S. 4 1 (1987); Metropolitan Life Ins. Co. v. Massachusetts , 471 U.S. 724 (1985)

. First, the court concluded that, as a matter of “common sense,” the Arkansas PPA was not directed specificallyat the insurance industry. Furthermore, relying on factors the Suprem e Court has drawn from cases considering the meaning of the “business o f in surance” under the McCarran-Ferguson Act, the district court concluded that th e Arkansas PPA does not regulate the bus iness of insurance by transferring or spreading

a policyholder’s risk; affects only indirectly the relationship between the insured and the insurer, by affecting the relationship between the insurer and health care providers; and was not limited solely to entities within the insurance industry. Thus, the Arkansas PPA did not fulfi ll either of the prongs of the ERISA “savings” clause test, and hence was indeed preempted. The dist rict court also found that the Arkansas PPA was preempted by th e Federal Health Maintenance Organization Act, 42 U.S.C. § 300e-10. In light of these conclusions, the court found that the remaining issues—whether the Arkansas PPA was preempted by the Federal Employment Health Ben efit Act, 5 U.S.C. § 8901-8914, and the pl aintiffs’ claims pursuant to 42 U.S.C. § 1983—were moot. The court therefore grant ed summary judgment in favor of the plaintiffs, permanently enjoined th e defendants from enforcing the PPA, and denied the defe ndants’ and intervenors’ crossmotions for summary judgment. Inan amended order dated March 14, 1997, and filed on March 17, 1997, the distric t court held that the Arkansas PPA is preempted by ERISA only “‘insofar a s [it] . . . relate[s] to any employee benefit plan described in section 1003(a). . . .’”9

Amended Order of March 14, 1997 (quoting 29 U.S.C. § 1144(a)). Si milarly, the court ordered that the defendants are permanently enjoined from enforci ng the Arkansas PPA only “‘insofar as [it] . . . relate[s] to any employee benefit plan described in sectio n 1003(a). . . .’” Id. (quoting 29 U.S.C. § 1144(a)). The appellant health care providers have appealed the district court’s concl usions that the Arkansas PPA is preempted by ERISA and not “saved” from preemption as a law that regulates insurance. Prudential Insurance Company of America cross

appeale d the district court’s amendment of the original order granting summary judgment.

II. LEGAL ANALYSIS

A. Standards For Summary Judgment This cou rt has often stated that it will review the grant or denial of summary jud gment de novo , applying the same standards used by the district court. See, e.g. , Union Pac. R. R. Co. v. Beckham , 138 F.3d 325, 329 (8th Cir. 1998); Kneibert v

. Thomson N

ewspapers, Mich., Inc. , 129 F.3d 444, 451 (8th Cir. 1997); Snow v

. Ridgeview Med. Ctr. , 128 F.3d 1201, 1205 (8th Cir. 1997). Summary judgment i s appropriate only if, after viewing the facts and the inferences to be drawn from them in th e light most favorable to the nonmoving party, the record shows that there is n o genuine iss ue of material fact and that the moving party is entitled to judgment as a matter of law. F

ED
. R. C IV
. P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radi o Corp ., 475 U.S. 574, 587 (1986); Beckham , 138 F.3d at 329; Kneibert , 129 F.3d a t 451; Sno w , 128 F.3d at 1205. More specifically, “‘[w]e review the District Court’ s decisio n on ERISA preemption de novo because it is a question of federal la w involving statutory interpretation.’” Wilson v. Zoellner , 114 F.3d 713, 715 (8th Cir.Gordius, King of Phrygia, tied his chariot to a hitching post before the temple of

3 an oracle with a

n intricate knot, which, it was prophesied, none but the future ruler of all Asia could untie. See, e.g., Funk and Wagnalls Standard Dictionary of Folklore, M y thology, and Legend

460 (Maria Leach, ed., Funk & Wagnalls, 1972); Bulfinch’s My thology 44 (Richard P. Martin, ed., 1991). In the course of his conquests , Alexander the Great c ame to Phrygia, and, frustrated with his inability to untangle the “Gordian knot,” simply sliced through it with his sword . His subsequent success in his Asian campaign has been taken to mean that his solution to the “G ordian knot” fulfilled the prophesy. See, e.g., Funk and Wagnalls Standard Dictionary of Folklore , M y thology, and Legend

460 (Maria Leach, ed., Funk & Wagnalls, 1972); Bulfinch’s Myth ology 44 (Richard P. Martin, ed., 1991). However, this court does not have the lu xury of applying a sword to the problem of interpretation of the scope of ERIS A preemption, no matter how troubled this and other courts may be by the question. In Painter , this court noted that, in addition to or instead of “relate to” preemption, 4

so me ERISA cases involve the distinct question of conflict pr eemption—whether

a state law is preempted because i t confl icts with a specific portion of the complex ERIS A stat ute. If there is a conflict, state law is preempted , wh ether or not “the statutory phrase ‘relate to’ provide s (continued...) 10 1997) (quoting In Home Health, Inc., v. Prudential Ins. Co. , 101 F.3d 600, 604 (8th Cir. 1996)).
B. ERISA Preemption The court must now attempt to unrave l the Gordian knot of the scope of ERISA “relate to” preemption, the question tha t has so troubled the courts of appeals and the 3 Supreme Court. See Painter v. Golden Rule Ins. Co. , 121 F.3d 436, 438-39 (8th Cir. 1997) (noting the Supreme Court’s struggles with the scope of “relate to” preemption under § 1144(a)), cert. de nied , ___ U.S. ___, ___ S. Ct. ___, 1998 WL 73018 (April 20, 1998). Pursuant to the express preemption provision of ERISA, section 514(a),

4(...continued)

4 furth er

and additional support for the pre-emption claim. ” Boggs v. Boggs , ___ U. S. ___, ___, 117 S. Ct. 1754, 1761, 138 L. Ed. 2d 45 (1997). Painter , 121 F.3d at 439 (emphasis in the original). In Painter , in the court’s view, the case before it was one of “conflict preemption.” Id. However, neither the parties nor the district court in the case presently be fore this court ever suggested the applicability of “conflict preemption.” Thus, we will consider only the “rela te to” species of ERISA preemption here. This provision of ERISA states, in its entirety, as follows: 5 Except

as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of thi s chapt er shall supersede any and all State laws insofar a s they ma y now or hereafter relate to any employee benefi t plan described in section 1003(a) of this title and not exempt unde r section 1003(b) of this title. This section shall tak e effect on January 1, 1975. 29 U.S.C. § 1144(a). 11 codified at 29 U.S.C. § 1144(a), the Arkansas PPA, like any other state law, i s preempted “ insofar as [it] may now or hereafter relate to any [ERISA] employe e benefit plan.” But does the Arkansas PPA “relate to” ERISA in a prohibited way?

5 Congress included the express preemption clause of § 1144(a) in ERISA t o provide fo r “‘the displacement of State action in the field of private employee benefit programs.’ ” Wilson , 114 F.3d at 716 (quoting Morstein v. National Ins. Servs., Inc. , 93 F.3d 715, 719 n.6 (11th Cir. 1996) (en banc), cert. denied , ___ U.S. ___, 117 S. Ct. 769 (1997), which in turn quotes 120 Cong. Rec. 29,942 (1974) (comments of Senator Javits)). Yet, Congress did not define what it meant by state laws that “relate to” an ERISA benefit plan anywhere in the statute. As this court noted in Wilson ,12 In analyzing this clause, the Supreme Court has “lon g acknowledged that ERISA’s pre-emption provision i s clearly expansive.” California Division o f Labor Standards Enforcement v. Di llingham Constr. , [519] U.S. [316], ___, 117 S. Ct. 832, 837, 136 L. Ed. 2d 791 (1997) (quotations an d citations omitted). The Supreme Court has variousl y described the ERISA

preemption clause as having “a broad scop e, and an expansive sweep, and [as being] broadl y word ed, deliberately expansive, and conspicuous for it s breadth.” Id. (quotations and citations omitted). Wilson , 114 F.3d at 716. However, the Supreme Court has also made clear , part icularly in its most recent decisions, that the ERISA preemption clause cannot be read “to ‘extend to the furthest stretch of its indeterminacy.’” De Buono , ___ U.S. at ___, 117 S. Ct. at 1751 (quoting Travelers , 514 U.S. at 655). In addition to recognizing these general principles, the Supreme Court has also provided more concrete guidance on the scope of “relate to” preempti on by formulating a two-part inquiry to de termine whether a state law “relate[s] to” an employee benefit plan covered by ERISA. See Dillingham , 519 U.S. at ___, 117 S. Ct. at 837; Wilson , 114 F.3d at 716.

A “law ‘relate[s] to’ a covered employee benefit plan fo r purposes o f § 514(a) ‘if it [1] has a connection with o r [2] reference to such a plan.’” District of Columbia v

. Greate r Washington Bd. of Trade , 506 U.S. 125, 129, 113 S. Ct. 580, 583, 121 L . Ed. 2d 513 (1992) (quoting Shaw v. Delta Air Li nes, Inc. , 463 U.S. 85, 96-97, 103 S. Ct. 2890, 2899-2900, 77 L. Ed. 2d 490 (1983)). Dillingham , 519 U.S. at ___, 117 S. Ct. at 837; accord Travelers , 514 U.S. at 656 ; Wilson , 114 F. 3d at 716. The nature of this two-prong inquiry must be explored i n more detail.13

1. The effect of Travelers The critical question put by the parties in this case is the effect of the Supreme Court’s deci sion in New York State Conf. of Blue Cross & Blue Shield Plans v

. Tra velers Ins. Co. , 514 U.S. 645 (1995), upon this two-prong ERISA preemptio n analysis. The appellants suggest that Travelers largely suppla nted the entire two-prong inquiry, replacing it with a “starting presumption” that state laws will not be preempted, and re lying on determinations of congressional intent to preempt only those laws that are of the type C ongress intended ERISA to preempt. This inquiry, appellants assert, depen ds upon the purpose and effects of the state statute. The appellees counter that Travelers an d its progeny have only put limits on the broadest scope of ERIS A preemption without altering the essential inquiries stated in prior precedent. In T ravelers , the Supreme Court considered whether ERISA preempted “[a ] New York statute [that] require[d] hospitals to collect surcharges from patients covered by a commercial insurer but not from patients insured by a Blue Cross/Blue Shield plan, and[that also] subject[ed] certain health maintenance organizations (HMOs) t o
sur charges that var[ied] with the number of Medicaid recipients each enroll[ed]. ” Travelers , 514 U.S. at 649. As appellants contend, the Court did begin its discussion of the preemption issue by noting that “we have never assumed lightly that Congress has derogated state regulation, but instead have addressed claims of pre-emption with th e starting presumption that Congress does not intend to supplant state law.” Id . a t 654. The Court also reiterated the assumption that C ongress did not intend to bar state action i n fields of traditional state regulation or historic police powers. Id. at 655

. Appellants focus particularly on the following passage:

Since pre-emption claims turn on Congress’s intent , Cipollone [v. Liggett Group, Inc. , 505 U.S. 504], ___, 112 S. Ct., at 2617-18; Shaw , supra , at 95, 103 S. Ct., at 2898,14

we begin as we d o in any exercise of statutory construction with the text of the provision in question, and move on, as need b e, to the structure and purpose of the Act in which it occurs. See, e.g., Ingersoll-Rand , 49 8 U.S., at 13 8, 111 S. Ct., at 482. The governing text of ERISA is clearly expansive. Sec tion 514(a) [29 U.S.C. § 1144(a)] marks for pre-emption “all st ate laws insofar as they . . . relate to any employee benefit plan ” cov ered by ERISA, and one might be excused for wondering, at firs t bl ush, whether the words of limitation (“insofar as they . . . relate”) d o much limiting. If “relate to” were taken to extend to the furthest stretch of indeterminacy, then for all practical purp oses pre-emption would never runits course, for “[r]eally, universally, relations stop nowhere,” H

. James, Roderick Hudson xli (New York ed., World’s Classics 1980) . But that, of course , would be to read Congress’s words of limitation as mere sham, and to read the presumption against pre-emption out of the la w whenever Congress speaks to the matter with generality. That said, we have t o recognize that our prior attempt to construe the phrase “relate to” does not give us much help drawing the line here. Tr avelers , 514 U.S. at 655 (emphasis added). The appellants contend that th e highlighted statement shows that the Supreme Court’s decision in Travelers constituted a “sea change” in ERISA preemption analysis. Howev er, we do not read Travelers to reject all of its prior precedent on th e
sco pe of ERISA preemption or as a wholesale rejection of the mode of analysi s employed in the Court’s prior precedent. Although in Travelers the Court found it s prior attempts to cons true the phrase “relate to” did not give it much help drawing the line in that particular case , id. (“[W]e have to recognize that our prior attempt t o
con strue the phrase ‘relate to’ does not give us much help drawing the line here ” ; emphasis added), the Court’s analysis in Travelers nonetheless began with precisely15

the two-prong inquiry established years before in Shaw v. Delta Air Lines, Inc. , 463 U.S. 85 (1983). Travelers , 514 U.S. at 656 (“In Shaw , we explained that ‘[a] la w “relates to” an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.’ 463 U.S., at 96-97, 103 S. Ct., a t 2900.”). The Court quickly dispensed with the applicability of the “reference to” prong of the inquiry in the case before it, however:

The l atter alternative, at least, can be ruled out. Th e surcharges are imposed upon patients and HMOs, re gardless of whether the commercial coverage or membership , respectively, is ultimately secured by an ERISA plan , privat e purchase, or otherwise, with the consequence tha t the surcharge statutes cannot be s aid to make “reference to” ERISA plans in any manner. Cf. Greater Wash. Bd. o f Tr ade , 506 U.S., at ___, 113 S. Ct., at 583 (striking dow n District of Columbi a law that “specifically refers to welfare benefit plans regul ated by ERISA and on that basis alone is pre-empted”). Travelers , 514 U.S. at 656. Thus, the “reference to” inquiry was unhelpful in tha t

case , because that alternative could be so completely “ruled out.” Id. This c onclusion, however, still left the Court with the second prong of th e inquiry, the “ connection with” prong. Id. It was with respect to this prong of th e inquiry that the decision in Travel ers arguably changed the direction of or emphasis in ERISA preemption analysis, because the Court found that as to the “connection with” prong,
an uncrit ical literalism is no more help than in trying t o

construe “relate to.” For the same reasons that infinit e relations canno t be the measure of pre-emption, neither can infinite connections. We simply must go beyond the16

unh elpful text and the frustrating difficulty of defining its key term, an d look instead to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive. Id. Thus, where there was no “reference to” ERISA in the state law , the court’s further preemption inquiry was governed by the objectives of the ERISA statute as a guide to what state laws Congress intended to preempt. The Court’s subsequent decisions also do not indicate a wholesale abandonment of prior precedent concerning the “ reference to” prong of the inquiry. For example, in Dillin gham , the Court again stated the two-part inquiry for ERISA “relate to ” preemption cases. Dillingham , ___ U.S. at ___, 117 S. Ct. at 837. The Court’ s explanation of the “reference to” prong of the analysis relied entirely on pre- Travelers precedent: Under the [“reference to”] inquiry, we have hel d pre-empted

a law that “impos[ed] requirements by reference to [ERISA] cov ered programs,” Greater Washington Bd. of Trade , supra , at 130-31, 113 S. Ct., at 584; a law that specifically ex emptedERISA plans from an otherwise generall y ap plicable garnishment provision, Mackey v. Lanie r Collection Ag ency & Service, Inc. , 486 U.S. 825, 828, n.2, 829-830, 108 S. Ct. 2182, 2184, n.2, 2185- 2186, 100 L. Ed. 2d 836 (1988); and a common-law cau se of action premised on t he existence of an ERISA plan, Ingersoll-Rand Co. , supra , at 140 , 111 S. Ct., at 483-484. Where a State’s law acts immediately and exclusively upon ERISA plans, as i n Mackey , or where the exi stence of ERISA plans is essential to the law’s operation, as in Greater Washington Bd. o f Trade and Ingersoll-Rand , that “reference” will result i n pre-emption. Dillingham , 117 S. Ct. at 837-3 8. Without once referring to the decision in Travelers or to a presumption against preemption, the Court in Dillingham concluded that the17

Califo rnia

apprentice wage law at issue in that case did not make a prohibite d “reference to” ERISA, becauseapproved apprenticeship programs did not necessarily need to be ERISA plans. Id. at 838. Apparently, nowhere did the California act make an express reference to ERISA. Furthermore,

[The California apprentice wage law] “functions irrespective of . . . the exi stence of an ERISA plan.” An apprenticeship prog ram meeting the substantive standards set forth in th e FitzgeraldAct regulations can be approved whether or not its funding apparatus is of a kind as to bring it under ERISA. [The Ca lifornia law] is indifferent to the funding, an d at tendant ERISA coverage, of apprenticeship programs

. Accordingly, California’s prevailing wage statute does no t make reference to ERISA plans. Dillingham , ___ U.S. at ___, 117 S. Ct. at 839. It was w hen the Court turned to analysis of the “connection with” prong of the inquir y that the standards stated in Travelers , and specific citation of that authority , figured prominently. Id. at 839-42. Indeed, it was only when the Court turned from the “reference to” prong of the inquiry to the “conne ction with” prong that it noted that Travelers had refocused the inquiry:

A law that does not refer to ERISA plans may yet be pre

empted if it has a “connection with” ERISA plans. Tw o terms ago, we recognized that an “uncritical literalism” i n applying this standard offered scant utility in determinin g Congress ’ intent as to the extent of § [1144(a)]’s reach. ” Tra velers , 514 U.S., at [656], 115 S. Ct., at 1677. Rather, to determine whether a state law has the forbidde n connection, we look both to “the objectives of the ERIS A statute as a guide to the scope of thestate law that Congress understood would survive,” i bid ., as well as to the nature of th e effect of the state law on ERISA plans, id. , at ___, 115 S. Ct., at 1677.18

Dillingham , ___

U.S. at ___, 117 S. Ct. at 838. Thus, while the Court in Dillingham

reco gnizeda significant change in the mode of analysis under the “connection with ” prong of the inquiry in Travelers , it saw no such change in the analysis under th e “reference to” prong. Furt hermore, in De Buono , although the Court explained that the decision i n Tr avelers had “unequivocally concluded” that the “relate to” language was no t “intended to modify ‘the starting presumption that Congress does not intend to supplant state law, ’” De Buono , ___ U.S. at ___, 117 S. Ct. at 1751 (quoting Travelers , 51 4 U.S. at 654), the Court still identified as among the types of state laws that Congress intended to supersede “one[s] in which the state statute contains provisions tha t expressly refer to ERISA or ERISA plans.” Id. at 1752 & n.15 (citing Mackey , 48 6 U.S. at 828-30, and Greater Wash. Bd. of Trade , 506 U.S. at 130-31, and finding the law in que stion in that case was not one that “contains provisions that expressly refer to ERISA or ERISA plans”). Thus, we conclude that al though Travelers certainly reaffirmed—in the context of ERISA preemption—the importance of the presumption that Congr ess did not intend to supplant state law unl ess that intention was clear, that refocusing of the preemption inquiry was specifically in the context of the “connection with” prong of the inquiry. Nothing in Travelers or its recent progeny supplants the “reference to” prong of th e ERISA preemption analys is as stated in pre- Travelers precedent, specifically Mackey and Greater Washington Board of Trade . To put it another way, we believe that the presumption that Congress does not intend to supplant state law is necessaril y
overcom e when the state law has an inappropriate “reference to” ERISA or ERIS A plans, as such an improper reference is defined in pre- Travelers precedent. See19

Travelers , 514 U.S. at 655-56; accord De Buono , _ __ U.S. at ___, 117 S. Ct. at 1752 & n.1 5; Dillingham , ___ U.S. at ___, 117 S. Ct. at 839. Therefore, we turn to th e questi on of whether the Arkansas PPA has a prohibited “reference to” ERISA o r ERISA plans. 2. “Reference to” ERISA in the Arkansas PPA Astate law has a prohibited “reference to” ERISA or ERISA plans when tha t law (1 ) “‘impos[es] requirements by reference to [ERISA] covered programs,’ ” Dillingham , ___ U.S. at ___, 117 S. Ct. at 837 (quoting Greater Wash. Bd. of Trade , 506 U. S. at 130-31); (2) “specifically exempt[s] ERISA plans from an otherwis e generally applicable [statute],” id. (citing Mackey , 486 U.S. at 828 n. 2); or (3) premises

a c ause of action on the existence of an ERISA plan, id. (citing Ingersoll-Rand , 49 8 U.S. at 140). Thus, “[w]here a State’s law acts immediately and exclusively upo n ERISA plans, as in Mack

ey , or where the existence of ERISA plans is essential to the law’s operation, as in Greater Washington Board of Trade and Ingersoll-Rand , that “reference” will result in pre-emption.” Id. at 837-38; accord W ilson , 114 F.3d at 716- 17. The appellants contend that the Arkansas PPA makes no forbidden “reference to” ERISA, although it expressly states that its provisions “shall not apply to self

funded or other health benefit plans that are exempt from state regulation by virtue of the f ederal Employee Retirement Income Security Act of 1974, as amended.” A RK
. C ODE A NN
. § 23-99-209. First, they contend that the Arkansa s PPA exempts only selffunded ERISA plans, not insured ERISA plans, and hence merely restates ERISA’s socalled “deemer clause.” The “deemer clause” states that no self-funded ERISA plan “shall be deemed to be an

insurance company or other insurer . . . for purposes of any law of any State purporting to regulate insurance companies, insurance contracts,20

banks, trust companies, or i nvestment companies.” 29 U.S.C. § 1144(b)(2)(B). They contendfurther that the Arkansas PPA does not single out any plans, ERISA or nonERISA, because the PPA does not regulate plans at all, but only insurers. App ellees counter that the express exemption for plans regulated by ERISA in the Ar kansas PPA is not limited solely to self-funded ERISA plans, because it als o specifically encompasses “other health benefit plan s.” Further, they contend that A RK
. C ODE A NN . § 23-99-209 does not parallel ERISA’s “deemer clause,” because it plainly is not li mited to insurance companies or insured relationships. In any event, the y contend that the Arkansas PPA has a forbidden “reference to” ERISA, b ecause in § 23- 99-209, the Arkansas PPA singles out ERISA plans for special treatment. Finally, they contend that throughout the Arkansas PPA, statutory provisions belie the assertion that the act only regulates insurers, not plans. In Wilson , this court applied the considerations identified in Dillingham to the question of whether the Missouri common-law tort of negligent misrepresentatio n
co ntaineda forbidden “reference to” ERISA, revisiting its prior holding in In Hom e Health, Inc. v. Prudential Ins. Co. , 101 F.3d 600 (8th Cir. 1996):

Upon considering th[e] elements of the tort, we conclude d “that the state common law on negligent misrepresentation is of ge neral application. It does not actually or implicitl y refer t o ERISA plans. The state law o n misr epresentation . . . is of general application as it make s no reference to and functions irrespectiv e of the existence of an ERISA plan.” [ In Home Health , 101 F.3d] at 605 n. 6 (quotations and citations omitted). Because “the existence of ERISA plans is not esse ntial to the operation of Missouri stat e common-law tort of negligent misrepresentation , Dillingham , ___ U.S. at ___, 117 S. Ct. at 8 38, and because the tort of negligent misrepresentation does not “impos[e ] requirements by reference to ERISA covered programs,” id.21

at _ __, 117 S. Ct. at 837 (quotations, citations, and alterations omitted), nor “ac ts immediately and exclusively upon ERISA plans,” id. at ___ , 117 S. Ct. at 838, Wilson’s tort action for negligent misrepresentatio n against Zoellner is not preempted by ERISA on th e basis of any reference to ERISA. Wilson , 114 F.3d at 717. Unlike the common-law tort action at issue in Wilson , however, the Arkansa s PPA does, both actually and implicitly, refer to ERISA plans. Id. Again, the Arkansas PPA expressly states that its provisions “shall not apply to self-funded or other health benefit plans that are exempt from state regulation by virtue of the federal Employee Retirement Income Security Act of 1974, as amended.” A RK
. C ODE A

NN
. § 23-99-209. In keeping with post- Travelers precedent, and the p re- Travelers precedent specifically embraced in Travelers and its progeny, this reference to ERISA is sufficient to preempt the Arkansas PPA. In Mackey , the Supreme Court held that a Georgia garnishment statute tha t “singles out ERISA employe e welfare benefit plans for different treatment under state garnishment procedures, is p re-empted under § [1144(a)].” Mackey , 486 U.S. at 830. The Court stated, “The state statute’s express reference to ERISA plans suffices t o bring it within the federal law’s pre-emptive reach.” Id. Next, in Ingersoll-Rand , the Supreme Court considered whether ERISA preempted a Te xas law authorizing a cause of action for wrongful discharge to avoid making contributions to an employee’ s pension fund

. Ingersoll-Rand , 498 U.S. at 135. In that case, the Court reaffirme d Mackey ’s recognition that “‘we have virtually taken it for granted that state laws which

are “specifically designed to affect employee benefit plans” are pre-empted unde r § [1144(a)].’” Ingersoll-Rand , 498 U.S. at 140 (quoting Mackey , 486 U.S. at 829).22

The Court explained, “In Mackey the statute’s express reference to ERISA plan s established that it w as so designed; consequently, it was pre-empted.” Id. The Court then h eld that the Texas common-law cause of action it was asked to consider wa s pree mpted, because “there simply is no cause of action if there is no plan.” Id. I n Greater Washington Board of Trade , the Court took the “reference to” analysis on e step further, finding that a District of Columbia law that specifically referred to benefit plans that were regulated by ERISA was preempted “on that basis alone.” Greate r Wash. Bd. of Trade , 506 U.S. at 130. The Court reasoned thus:

The health insurance coverage that [the Dis trict of Columbia law] requires employers to provid e for eligible employees is measu red by reference to “the existing health insuranc e covera ge” provided by the employer and “shall be at th e same bene fit level.” D.C. Code Ann. § (a-1)(1) and (3 ) (Sup p. 1992). The employee’s “existing health insuranc e co verage,” in turn, is a welfare benefit plan under ERIS A § 3(a), because it invo lves a fund or program maintained by an employer for the purpos e of providing health benefits for the employee “through the purchase of insurance o r otherwise.” § 3(a), 29 U.S.C. § 1002(1). Such employersponsored health insurance programs are subject to ERISA regulation, see § 4(a), 29 U.S.C. § 1003(a), and any stat e law imposing requirements by reference to such covere d programs must yield to ERISA. Id. at 130-31. These precedents require the conclusion that the Arkansas PPA i s preempted. First, § 23-99-209 of the Arkans as PPA undeniably makes an express reference to ERISA and attempts to exclude from coverage of the PPA at least some ERISAWe find it unnecessary to address the appella nts’ argument that the Arkansas PPA 6 attempts to exclude from its covera ge only self-funded ERISA plans; it suffices, as we read Supreme Court precedent, that the Arkansas PPA attempts to exempt any ERISA plans. 23 plans. Thus, it “singles out ERISA employee welfare benefit plans for differen t 6 treatment under state [law], [and therefore] is pre-empted un der § [1144(a)].” Mackey , 486 U.S. at 830. As in Mackey , “[t]he state statute’s express refere nce to ERISA plans suffices to bring it within the federal law’s pre-emptive re ach.” Id. The Arkansas PPA is “‘”spe cifically designed to affect employee benefit plans,”’” even if the effect is to

exc lude them from coverage of the PPA, and thus the PPA “‘[is] pre-empted unde r § [114 4(a)].’” Ingersoll-Rand , 498 U.S. at 140 (quoting Mackey , 486 U.S. at 829)

. To put it another way, the Arkansas PPA “specifically exempt[s] ERISA plans from an otherwise generally applicable [statute],” and it is consequently preempted

. Dillin gham , ___ U.S. at ___, 117 S. Ct. at 837 (citing Mackey , 486 U.S. at 828 n.2). Even if it w ere true that § 23-99-209 of the Arkansas PPA merely reflect s ERISA’s “deemer clause,” an assertion we find unpersuasive, that would be immaterial to our co nclusion that § 23-99-209’s express reference to ERISA plans “bring[s] i t within t he federal law’s pre-emptive reach.” Mackey , 486 U.S. at 830. The fact that

a state la w is enacted to help effectuate ERISA’s provisions or is in accord with ERISA’s di ctates “is not enough to save the state law from pre-emption.” Id. at 829. “‘The pre -emption provision [of ERISA] . . . displace[s] all state laws that fall within its sphere, even including state laws that are consistent with ERISA’s substantiv e requirem ents.’” Id. (quoting Metropolitan Life Ins. Co. v. Massachusetts , 471 U.S

. 724, 7 39 (1985)); accord Greater Wash. Bd. of Trade , 506 U.S. at 130 (also citin g Metropol itan Life Ins. Co. , 471 U.S. at 739); Ingersoll-Rand , 498 U.S. at 139 (“Pre-24

emptionis also not precluded simply because a state law is consistent with ERISA’s substantive requirements,” also citing Metro politan Life Ins. Co. , 471 U.S. at 739). In short, “legislative ‘good intentions’ do not save a state law within the broad pre

emptive scope of § [1144(a)].” Id. at 830. Second, appellants’ contentions no twithstanding, the Arkansas PPA has several provis ions that make implicit reference to ERISA, see Wilson , 114 F.3d at 71 7 (considering both actual and implicit reference to ERISA or ERISA plans), throug h regulationof “health benefit plans” that are necessarily subject to ERISA regulation. Cf. Greater Wash. Bd. of Trade , 506 U.S. at 130-31. For example, the Arkansas PPA provide s that “[i]t is a violation of this subchapter for any health care insurer or other person or entity to provide any health benefit plan providing for health care services that does not conform to this chapter.” A RK
. C ODE A NN
. § 23-99-206 (emphasi s added)

. Similarly, the Arkansas PPA was intended “to provide the opportunity o f providers to participate in health benefit plans ,” A RK
. C ODE A NN
. § 23-99-20 2 (emphasis added), a

nd the Act states that “[n]othing in this subchapter shall prevent a health be nefit plan from instituting measures designed to maintain quality and t o control costs . . . so l ong as such measures are imposed equally on all providers in the same cla ss.” A RK
. C ODE A NN
. § 23-99-204(b) (emphasis added). Thus, it cannot be said that the Arkansas PPA “functions irrespective of . . . the existence of an ERISA plan.” Dillingham , ___ U.S. at ___, 117 S. Ct. at 839; Wilson , 114 F.3d at 717; I n Home Health , 101 F.3d at 605 n.6. Rather, the Arkansas PPA is “speci fically designed to affect employee be nefit plans,” Ingersoll-Rand , 498 U.S. at 140 (quoting Mackey , 486 U .S. at 829), it “‘impos[es] requirements by reference to [ERISA] covere d programs,’” Dillingham , ___ U.S. at ___, 117 S. Ct. at 837 (quoting Greater Wash.25

Bd. of Trade , 506 U.S. at 130-31), and “the existence of ERISA plans is essential to the law’s operation.” Id. at 837-38; accord Wilson , 114 F.3d at 716-17. Finally, by letter pursuant to F ED
. R. A PP
. P. 28(j), the appellants recentl y brought to the court’s attention the decision of the Ninth Circuit Court of Appeals in Washington Physicians Serv. Ass’n v. Gr egoire , ___ F.3d ___, 1998 WL 318759 (9th Cir. Jun e 18, 1998), which they assert directly relates to their argument that th e Arkansas PPA regulates health care insurers, not health benefit plans. In Gregoire , the Ni nthCircuit Court of Appeals concluded that Washington’s so-called “Alternativ e Provider Statute” was not preempted by ERISA. Gregoire , ___ F.3d at ___, 1998 WL 318759 at *1. The court found that the Washington statute did not “relate to” ERISA plans in the most obvious way by referring to or acting directly upon such plans. Id. at ___, 1998 WL 318759 at *3. However, unlike the Arkansas statute, which is not so restricted, as explained above, the Washing ton statute made clear that the term “health plans” referred only to plans offered by a “health c arrier,” not a benefit plan offered by an employer, and defined “health carrier” to include only a disability insurer, a health

car e service contractor, or an HMO, and excluded employer-sponsored, self-funde d health plans. Id. Nor did the Washington act make the kind of express attempt t o exclude ERISA-regulate d plans found in the Arkansas PPA in A RK
. C ODE A NN
. § 23- 99-209, because it simply identified the very narrow “health plans” to which it referred, which were not ERISA-regu lated plans, even though the way the Washington act was drawn was “quite obviously intended to save the Act from ERISA preemption.” Id

. Indeed, the Ninth Circuit Court of Appeals recognized that the narrow language of the Washington act distinguished the case “from the numerous cases that have found a ‘reference’ to ERISA plans in a state’s regulation of health plans,” in which “the state laws . . . all included ERISA plans in the definition of ‘health plan’ or otherwise26

expre ssly referred to ERISA plans.” Id. at ___, 1998 WL 318759 at *4. Thus , “[b]ecause the [Washington] Act is different from these other state laws in that it does not expressly refer to ERISA plans and does not operate directly on them,” the Ninth Circuit Court of Appeals did “not find this stringof precedent relevant,” and held “that the [Washington] Act does not have a ‘reference’ to ERISA plans.” Id. Again, thi s court holds that the Arkansas PPA does have both express and implicit references to ERISA plans. Thus, the Arkansas PPA makes impermissible “reference to” ERISA or ERISA plans, and as such is preempted by 29 U.S.C. § 1144(a). Dillingham , ___ U.S. at ___, 117 S. Ct . at 837-38; accord Wilson , 114 F.3d at 716-17. Because the PPA i s preempted under th e “reference to” prong of the ERISA preemption analysis, we find it unnecessary to reach the question of whether it is also preempted under th e “con nection with” prong. However, having concluded that the Arkansas PPA i s preempted, we turn to the question of whether it is nonetheless “saved” from ERISA preemption as a state law that regulates insurance.
C. The “Savings” Clause Although the Arkansas PPA would otherwise be preempted, it will escape the ef fects of that preemption if it falls within ERISA’s so-called “savings” clause , § 514(b)(2)(A), codified at 29 U.S.C. § 1144(b)(2)(A). See, e.g., Pilot Life Ins. Co. v. Dedeaux , 481 U .S. 41, 45 (1987) (“To summarize the pure mechanics of [§ 514(a)

an d § 514(b)]: If a state law ‘relate[s] to . . . employee benefit plan[s],’ it is pre

empted. § 514(a). The saving clause excepts from the pre-emption clause laws that ‘regulat[e] insurance.’ § 514( b)(2)(A).”); Metropolitan Life Ins. Co. , 471 U.S. at 733 (“While § 514(a) of ERISA broadly pre-empts state laws that relate to an employee-27

benefi t plan, that pre-emption is substantially qualified by an ‘insurance saving s claus e,’ § 514(b)(2)(A), 29 U.S.C. § 1144(b)(2)(A). . . .”); United of Omaha v

. Business Men’s Assur. Co. , 104 F.3d 1034, 1039 (8th Cir. 1997). The “savings ” clause prov ides that “[n]othing in this subchapter shall be construed to exempt o r relieve any person from any law of any State which regulates insurance . . . .” 2 9 U.S.C. § 1144(b)(2)(A); see also Metropolitan Life Ins. Co. , 471 U.S. at 733; United of Om aha , 104 F.3d at 1039 (“The savings clause excepts from preemption certai n categories of state law, including state law that regulates insurance.”). The appellants contend that the district court erred when it held that the Arkansas PP Awas not “saved” from ERISA preemption, because the PPA did not “regulat e insurance.” They contend that t he court’s error arose from its failure to follow United St ates Dep’t of Treasury v. Fabe , 508 U.S. 491 (1993), which they assert is th e Supreme Court’s most recent decision addressing the manner in which courts are t o determine whether a state law regulates insurance. They argue that Fabe departed from rigid application of the tests found in Group Life & H ealth Ins. Co. v. Royal Drug Co. , 440 U.S. 20 5 (1979), Union Labor Life Ins. Co. v. Pireno , 458 U.S. 119 (1982), and Metropolitan Life Ins. Co . v. Massachusetts , 471 U.S. 724 (1985), instead applying a broad interpretation of which state laws regulate the “business of insurance” outsid e of the ant itrust arena. They assert that under this broad interpretation, the Arkansa s PPA is unequivocally a law affecting the “business of insurance,” and as such is saved from ERISA preemption. The appellees once again disagree with the appellants’ assertion that the rule s have changed. They argue that Fabe is f actually unrelated and legally irrelevant to the question of th e scope of the ERISA savings clause. They point out that the definition of “health care insurer” under the A rkansas PPA is definitely not limited to “insurance28

compa nies” and that as a matter of both common sense and application of the factors cited in Royal Drug , Pireno , and Metropolitan Life Insurance , the Arkansa s PPA is not a law regulating i nsurance. Therefore, they argue that the district court correctly held that the Arkansas PPA is not “saved” from preemption. Whatever its import for the present cas e, Fabe is not a case directly considering the scope of the ERISA “savings” clause; rather, it was a case considering whether an Ohio law establishing priority of claims for an insolvent insurance company wa s exempt b y virtue of the McCarran-Ferguson Act from preemption by the federa l priority statute, 31 U.S.C. § 37 13. Fabe , 508 U.S. at 493. Therefore, we look first to Supre meCourt decisions specifically interpreting the scope of the ERISA “savings ” clause. 1. Scope of the ERISA “savings” clause The Supreme Court first considered the sc ope of the ERISA “savings” clause in Metropolitan Life : [T]he sphere in which § 514(a) operates [to preempt

state law] was explicitly limited by § 514(b)(2). Th e insurance saving clause preserves any state law “whic h regulates insurance, banking, or securities.” The two pre

emption sections, while clear enough on their faces, perhaps are not a model of legislative drafting, for while the general pre-em ption clause broadly pre-empts state law, the saving claus e appears broadly to preserve the States’ lawmakin g power over much of the same regulation. While Congres s occasionally decides to return to the States what it ha s pr eviously taken away, it does not normally do both at th e same time. Metropolitan Life Ins. Co. , 471 U.S. at 739-40. In determining the proper scope of the

sav ings clause, the Court began by taking a “common-sense” view of the question of whether a state law was one “which regulates insurance.” Id. at 740. The Court then29

drew upon cases interpreting the scope of the McCarran-Ferguson Act, which ha d identified three criteria relevant to determining whether a parti cular practice falls within that Ac t’s reference to the “business of insurance.” Id. at 743. The three criteri a suggested by those cases were the following:

“ first , whether the practice has the effect of transferring or spreading a policyholder’s risk; second , whether the practice is an integral part of the policy relationship between th e insure r and the insured; and third , whether the practice i s limited to entities within the insurance industry.” Unio n Labor Life Ins. Co. v. Pireno , 458 U.S. 119 , 129, 102 S. Ct. 3002, 3008, 73 L. Ed. 2d 647 (1982) (emphasis in th e original). See also Group Life & Health Ins. Co. v. Roya l Drug Co. , 440 U.S. 205 (1979). Metropolitan Life Ins. Co. , 471 U. S. at 743. The Court noted further that the focus of the statutory term under the McCarran-Ferguson Act was “‘the relationship between the insuran ce company and the policyholder.’” Id. at 744 (quoting SEC v. Nationa l Sec., Inc. , 393 U.S. 453, 460 (1969)). These pr inciples were reaffirmed two years later in Pilot Life Ins. Co. v

. Dedeaux , 481 U.S. 41, 48-49 (1987) (citing Metropolitan Life Ins. Co. , 471 U.S. a t 740 ). In that case, the Court explained further that “[a] common-sense view of th e word ‘regulates’ would lead to the conclusion that in order to regulate insurance, a law must not just have an impact on the insurance industry, but must be specific ally directed toward th at industry.” Id. at 50. Even though the Mississippi Supreme Court ha d identifie d the state law in question in that case, the Mississippi common law of ba d faith, with the insurance industry, “the roots of this law are firml y planted in the general principles of Mississippi tort and contract law.” Id. at 50. Turning to the McCarranFerguson factors, the Court concluded that the Mississippi law did not “effect a30

spreading of policyholder risk. ” Id. Although the state common law did concern “the policy rel ationship between the insurer and the insured,” the Court found that “[t]h e connection to the insur

er-insured relationship is attenuated at best,” because it did not “define the terms of the relationship between the insurer and the insured,” and hence

was “no more ‘integral’ to the insurer-insured relationship than any State’s genera l contract law is integral to a contract made in that State.” Id. at 50-51. Finally, because the state common-law had developed from general principles of tort and contract law available in any breach-of-contract case, it was not limited to entities within th e insurance industry. Id. at 51. In addition to the factors stated in Metropolitan Life , the Court also consi dered the role of the savings clause in ERISA as a whole, concluding that, b ecause the common-law cause of action addressed remedies for imprope r proces sing of a claim for benefits, the understanding of the savings clause “must b e inform ed by the legislative intent concerning” comparable portions of the ERIS A statute, its enforcement provisions. Id. at 51-52. The Court concluded that it was not the int ent of Congress to “save” from preemption conflicting remedies provisions o f state law. Id. at 53-56. The appellants assert that United States Dep’t of Treasury v. Fabe , 508 U .S. 491 (1993) , chan ged this analysis, because it changed the way in which courts are t o determine which state laws regulate insurance under the McCarran-Ferguson Act. In Fabe , the Court noted that Royal Drug and Pireno —the cases from which the Court in Metropolitan Life had drawn the three factors for determining what is the “business of i nsurance” within the meaning of the ERISA savings clause—both involved th e scope of the “antitrust immunity” located in the second clause of § 2(b) of th e McCarran-F erguson Act, 15 U.S.C. § 1012(b), rather than the first clause, whic h commits to the states laws “enacted . . . for the purpose of regulating the business ofThe two clau ses of the McCarran-Ferguson Act to which the Court referred state

7 the following: No Act of Congress shall be construed to invalidate, im pair, or supersede any law enacted by any State for th e purpose of regulating the business of insurance , or whic h imposes a fee or tax upon such business, unless such Ac t s p ecifically relates to the business of insurance: Provided , That after June 30, 1948 the [antitrust acts], shall b e appli cable to the business of insurance to the extent tha t such business is not regulated by State law. 15 U.S.C. § 1012(b) (emphasis added). 31 ins urance.” Fabe , 508 U.S. at 504. The Court concluded that the first clause wa s

7
“not so narrowly circumscribed,” because the Court refused to equate “law s ‘enacted . . . for the purpose of regulating the business of insurance’ with the ‘business of insurance’ itself.” Id. The Court concluded further that laws “enacted . . . for the purpose of regu lating the business of insurance” “necessarily encompasses more than just the ‘business of insurance.’” Id. at 505. While it is not for us to quibble with the Supreme Court’s interpretation of the McCarran-Ferguson Act in Fabe , we can observe that that decision’s interpretation of laws “enacted . . . for the purpose of regulating the business of insurance” in th e McCarran-Ferguson Act, 15 U.S.C. § 1012(b), does not supplant that Court’s ow n interpr etation of the meaning of “business of insurance” or “law of any State whic h regulates i nsurance” in the ERISA savings clause. 29 U.S.C. § 1144(b)(2)(A). W e decline to adopt Fabe ’s interpretation of laws “enacted . . . for the purpose o f regulating the business of insurance” in the McCarran-Ferguson Act, 15 U.S.C

. § 1012(b), as necessarily the interpretation the Supreme Court would adopt for th e ERISA savings clause if it were now given the opportunity to rethink MetropolitanThe Supreme Court did not address the interpretation of the savings clause in its

8 recent ERISA decisions interpreting the preemption clause. 32 Lif e . The Supreme Court has already expressly interpreted the meaning of th e 8 pertinent terms of the ERISA sa vings clause, and it is that interpretation we will apply here. As this court explained in its most recent decision addressing the scope of th e ERISA “savings” clause,

The Supreme Court has explained that a state law “regulates insurance” if (1) it is directed specifically toward th e insurance industry and (2) it applies to the “business o f insurance” within the meaning of the McCarran-Ferguso n Act, which gives to the states the authority to regulate th e busi ness of insurance, see 15 U.S.C. §§ 1011-1015. Pilo t Life , 481 U.S. at 48, 107 S. Ct. at 1553; Metropolitan Life , 471 U.S. at 742-43, 105 S. Ct. at 2390-91; Baxter v. Lynn , 886 F.2d 1 82, 185 (8th Cir. 1989). A law applies to th e business of insurance under the McCarran-Ferguson Act if it(1) has the effect of transferring or spreading th e po licyholder’s risk; (2) is an integral part of the polic y relationship between the insurer and the insured; and (3) is limit ed to entities within the insurance industry

. Metropolitan Life , 471 U.S. at 743, 105 S. Ct. at 2391. Un ited of Omaha , 104 F.3d at 1039-40. Thus, several years after Fabe , this cour t appliedprecisely the same test to the scope of the “savings” clause as it had applie d before Fabe . Indeed, we can find no decisions of our sister Circuit Courts of Appeals aband oning Metropolitan Life in favor of an analysis of the meaning of “business o f insurance” under Fabe in E RISA “savings” clause cases in the four years, and myriad ERISA preemption cases, since Fabe was decided.33

2. Applicability of the ERISA “savings” clause to the Arkansas PPA Contrar y to appellants’ assertions, we conclude that the district court correctly heldthat the Arkansas PPA is not “saved” from preemption by the ERISA saving s clause. First, the Arkansas PPA is not a state law that “regulates insurance” under a common-sense approach, Metropolitan Life Ins. Co. , 471 U .S. at 740, because it is not a law that is “specifically direc ted toward that industry.” Pilot Life Ins. Co. , 481 U.S. at 50; U nited of Omaha , 104 F.3d at 1039. Rather, as the district court found, it was the intent of the Arkansas General Assembly in enacting the Arkansas PPA “to provide the opportunity of providers to participate in health benefit plans.” A RK
. C ODE A NN
. § 23-99-202. Furthermore, the statutory term “health benefit plans” includes far more than just insurance or the insurance industry, because the Arkansas PPA defines that ter m to include “any entity or program that provides reimbursement, includin g capi tation, for health care services.” A RK
. C ODE A NN
. § 23-99-203(c). An act tha t purports to regulate “health benefit plans” defined so broadly as to include employers

a n d administrators of self-insured plans, as well as traditional insurance, simply does not fit within a common-sense view of a law directed specifically toward the insurance industry. Pilot Life Ins. Co. , 481 U.S. at 50; United of Omaha , 104 F.3d at 1039

. Even if we were to accept appellants’ argument that the Arkansas PPA regulate s “health care insurers ,” as defined, rather than “he alth benefit plans ,” it is clear that the statutory term “health ca

re insurers” also goes well beyond the scope of the insurance industry, because it is defined by the statu te to include, but not be limited to, insurance companies, hospital and medical services corporations, health maintenanc e organizations, preferred provider organizations, physi cian hospital organizations, thirdparty administrators, and prescription benefit management companies authorized t o administer, offer, or provide health benefit plans. A RK
. C ODE A NN
. § 23-99-203(f).34

Again, this scope of the Arkansas PPA must be contrasted with the narrowly drawn act at issue in Gregoire upon which the appellants rely. Compare Gregoire , ___ F.3d at ___, 1998 WL 318759 at *5 (the Washington law was “specifically directed” toward the ins urance industry, “because it operates directly on HMOs and [Health Car e Service Contractors], entities engaged in the business of health insurance”). Appellant s’ argument that the Arkansas PPA has been codified as part of th e Arkansas insurance code is unpersuasive, because the law reaches so far beyond the insurance industry. Cf. Pilot Life Ins. Co. , 481 U.S. at 50 (even though the Mississippi Supreme Court had identified the state law in question with the insurance industry, “the roots of this law are firmly planted in the general principles of Mississippi tort an d contract l aw.”). Furthermore, the Arkansas PPA is not simply an “innovative ” insurance law, as appellants contend, citing Metropolitan Life , 471 U.S. at 741 (nothing in the “deemer clau se” purports to distinguish between “traditional” and “innovative” insur ance laws); it is not a law directed at the insurance industry at all, but a la w directed a t regulation of broadly defined health benefit plans, only some of which fall within the insurance industry. No r does the Arkansas PPA satisfy any of the McCarran-Ferguson factor s identified in Metropolitan Life . Fir st, it plainly does not have the effect of transferring

or spr eading the policyholder’s risk. Metropolitan Life , 471 U.S. at 743; United o f Omaha , 104 F.3d at 1040; and compare Gregoire , ___ F.3d at ___, 1998 WL 318759 at *6-*7 (concluding th at the Washington act did transfer or spread the policyholder’s risk by mandating coverage of additional treatments or conditions). Appellants do notargue to the contrary, asserting instead that failure to meet any one of the McCarranFerguson factors is not dispositive. However, the Arkansas PPA also is not an integral part of the policy relationship between the insurer and the insured. Id. ; United of35

Omaha , 104 F.3 d at 1040. If not preempted, it might be an integral part of th e rel ationship between the insurer and a third-party to the insured-insurer relationship , the health care provider. See A RK
. C ODE A NN
. § 23-99-206 (making it a violation of the PPA for any provider participation provisions of health bene fit plans not to conform to t he PPA). As with the Mississippi law in Pilot Life , the Arkansas PPA’ s “connection to the insurer-insured relationship is attenuated at best,” because it does not “define the terms of the relationship between the insurer and the insured,” but only the terms of the relationship between the insurer and a third party, and hence is “n o more ‘integral’ to the insurer-insured relationship” than any contract an insurer might make with any other third party. Pilot Life , 481 U.S. at 50 -51; and compare Gregoire , ___ F.3 d at ___, 1998 WL 318759 at *6 (rejecting the argument that the Washington act reg ulated only the relationship between the carrier and provider, rather than th e relationship between the ca rrier and the insured, because the Washington act “confers a benefit on insureds by expanding the treatments that their health carriers must provide or pay for,” and contrasting this act with “any willing pro vider” statutes, which “do not expa ndthe conditions covered by the policy, nor . . . expand the types of treatment s
ava ilable under the policy,” but only “require[] a health carrier to allow an insured to see any doctor willing to abide by the terms of the insurance plan and w illing to provide only those treatments specified in the plan.”). Finally, the Arkansas PPA is not limited to entities within the insurance industry. Metropolitan Life , 471 U.S. at 743, 105 S. Ct. at 2391. As noted above, the Arkansas PPA defines “he alth benefit plans,” the terms of which must comply with the PPA, to inclu de “any entity or program that provides reimbursement, including capitation, for health car e services.” A RK
. C ODE A NN
. § 23-99-203(c). It defines “health car e insurers” as including, but not being limited to, insurance companies, hospital and36

medical services corporations, health maintenance organizations, preferred provide r
or ganizations, physician hospital organizations, third-party administrators, an d prescription benefit management companies authorized to administer, offer, or provide health benefit plans. A RK
. C ODE A

NN
. § 23-99-203(f). An act that purports to regulate “he althbenefit plans” and “health care insurers” defined so broadly as to includ e entities well outside the insurance industry plainly is not limited to entities within the insurance industry. Compar e Gregoire , ___ F.3d at ___, 1998 WL 318759 at *8 (the Washington Act did not reach entities beyond those in the insurance industry). Thus , the district court correctly held that the Arkansas PPA is preempted b y ERISA u nder 29 U.S.C. § 1144(a), and is not saved from that preemption under 2 9 U.S.C. § 1144(b)(2)(A), the ERISA “saving s” clause. We believe that this conclusion is compelled by applicable precedent. Althoug h we recognize that various courts have expr essed concern about the scope of ERISA preemption, it is for Congress, not th e
cou rts, to reassess ERISA in light of modern insurance practices and the nationa l debate over health ca

re. See, e.g., Kuhl v. Lincoln Nat’l Health Plan of Kansas City, Inc. , 999 F.2d 298, 304 (8th Cir. 1993) (Judge Beam observed that although it ma y well be true that Congress had not foreseen certain scenarios “when it enacted a pr eemption clause so broad that it relieves ERISA-regulated plans of most tor t liability . . . modification of ERISA in light of questionable modern insurance practices mustbe the job of Congress, not the courts”); accord Bast v. Prudential Ins. Co. o f Am. , ___ F.3d ___, ___, 1998 WL 279217, *9 (9th Cir. June 2, 1998) (Judg e Thom pson held that the district court properly concluded that state law claims wer e preempte d by ERISA, remarking, “The Basts’ state law claims are preempted b y ERISA, and ERISA prov ides no remedy. Unfortunately, without action by Congress, there is nothing we can do to help the Basts and others who may find themselves in this37

same unf ortunate situation.”); Texas Pharmacy Ass’n v. The Prudential Ins. Co. o f Am. , 105 F.3d 1035, 1039-40 (5th Cir. 1997) (Judge Reavley wrote, “There is room to doubt if ERISA’s drafters intended that it would preempt any-willing-provide r statutes. We nevertheless conclude that the result in this case is compelled by th e unmistakable breadth of ERISA preemption recognized by the Supreme Court. A different result

will require further guidance from the Supreme Court or further action fro m Congress.”); Cannon v. Group Health Serv. of Okla., Inc. , 77 F.3d 1270, 127 1 (10th Cir. 1996) (Judge Porfilio held that claims against an insurer were preempted by ER ISA, stating, “Although moved by the tragic circumstances of this case and th e seemingly needless loss of life that resulted, we conclude the law gives us no choice but to affirm.”); Tolton v. American Biodyne, Inc. , 48 F.3d 937, 943 (6th Cir. 1995 ) (Judge Kennedy noted that “[o]ne consequence of ERISA preemption, therefore, is that plan be neficiaries or participants bringing certain types of state actions—such a s wrongful death—may be left without a meaningful remedy”); Turner v. Fallo n Community Health Pl

an, Inc. , 953 F. Supp. 419, 424 (D. Mass. 1997) (Judge Gorton observ ed that “[p]laintiff’s state common law claims are preempted by the broadl y sweepi ng arm of ERISA. Plaintiff is left without any meaningful remedy even if h e
w e re to establish that Fallon wrongfully refused to provide the . . . treatment his wife urgently sought. Notwithsta nding the merits of plaintiff’s argument, this Court cannot legislate by judicial decree nor apply a statute, such as ERISA, other than as drafted by Cong ress.”); Pomeroy v. Johns Hopkins Med. Servs., Inc. , 868 F. Supp. 110, 116 (D. Md. 1994) (Judge Garbis stated, “Ultimately, whether the ERISA ci vil enforcement provisions must be reexamined and reformed in light of modern health care is an issue which must be addressed and resolved by the legislature rather than the courts.”).38

D. The Extent To Which The Arkansas PPA Is Preempted Beca use we conclude that the Arkansas PPA is preempted by ERISA and no t saved by the “savings” clause, we must address the cross-appeal of Prudentia l Insu rance Company of America that the district court erred by amending its grant o f

sum mary judgment in favor of appellees to state that the Arkansas PPA i s unenforceable only “insofar as” it relates to ERISA p lans. Prudential contends that the amendmentcreates a state statute that was never enacted or considered by th e Arkansas legislature. Prudential argues that the “savings” clause requirement that the statute be limited to entities within the insurance industry would be meaningless if the

co urt could simply sever out portions of the statute that applied to non-insuranc e entities. They contend instead that the Arkansas PPA is preempted in its entirety. The appellants initially agreed that the district court’s amended judgment is inadequate , because it begs the question of the extent to which the Arkansas PPA is preempted and does not consider the preemptive effect of other statutes. However, in their reply brief, they contend that the district court properly amended its order in light of severability clauses in both of the acts that became the Arkansas PPA. As Prudential has asserted, in Texas Pharmacy Ass’n v. Prudenti al Ins. Co. , 105 F.3d 1035 (5th Cir . 1997), cert. denied , ___ U.S. ___, 118 S. Ct. 75 (1997), the Fifth Circui t Court of Appeals held that a Texas law containing an “any willing provider ” provision wa s preempted in its entirety by ERISA. Texas Pharmacy Ass’n , 105 F.3d at 1039. That court wrote,

The TPA [Texas Pharmacy Association], in the final footnote of its brief, suggest s that if the statute is preempted because it does not apply exclusively to insurers, then w e should find preemption only insofar as the statute regulates non-insurers. Stated another way, the TPA suggests that the preempted portions of the statute are severable. We reject39 this argu ment for three reasons. First, [ CIGNA Healthplan of Louisiana v. Louisiana , 82 F.3d 642 (5th Cir.), cert
. de nied , ___ U.S. ___, 117 S. Ct. 387 (1996),] implicitl y rejected this argument. It did not hold the statute valid as to PPOs offered by or affiliated with insurers. Second, ou r court has recognized as an independent requirement for the applicability of the savings clause that the state statute “be limi ted to entities within the insurance industry.” Thi s req uirement

would be meaningless if a court could simpl y sever ou t those portions of the statute which applied t o noninsurance entities. Third, the Texas statute is not severable because it so states. Texas Pharmacy Ass’n , 105 F.3d at 1039 (footnote citations omitted). They urge us to fol low the Fifth Circuit Court of Appeals and hold that the Arkansas PPA i s preemp ted in its entirety, rather than to engage in the process of determining whether PPOs offered by or affiliated with insurers may still be controlled by the Arkansas PPA. However, as appellants have noted, also citing Texas Pharmacy Ass’n , 105 F.3d at 1039, se verability is a matter of state law. Appellants point out that, unlike th e Texas ac t in Texas Pharmacy —which specifically stated that it was not severable , Texas Pharmacy Ass’n , 105 F.3d at 1039—the two legislative acts that combined to form the Ar

kansas PPA do contain severability clauses. Those clauses state “[i]n the event any portion of this act is found to be in violation of federal law or in conflic t therewi th, or held to be unconstitutional, that portion shall hereby be repealed and all other p ortions of this act shall remain in force.” Act 1193 of 1995, § 9; Act 505 o f 199 5, § 12. Furthermore, these acts provide that “[i]f any provision of this act or the application hereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or a pplications of the act which can be given effect without40

the invalid provision or application, and to this end the provisions of this act ar e declared to be severable.” Act 1193 of 1995, § 7; Act 505 of 1995, § 10. We conclude that, even recognizing the Arkansas General Assembly’s intention that the Arkansas PPA be severable, because of the grounds on which we hav e concluded that the act is preempted by ERISA, it is preempted in its entirety. Th e Arkansas PPA is not preempted because some discrete portion of it is i n “conflict” with federal lawor “unconstitutional.” See Act 1193 of 1995, § 9; Act 505 of 1995, § 12. Nor is pree mption here a question of “any provision of this act or any applicatio n hereof to any person or circumstance” being “invalid.” Act 1193 of 1995, § 7; Act 505 of 1995, § 10. Rather, as explained above, the Arkansas PPA is invalid because the act mak es improper references to ERISA. Those references—notably the imprope r reference that attempts to exclude fro m the Arkansas PPA “self-funded or other health benefit plans that are exempt from state regulation by virtue of the federal Employee Retirement

Income Security Act of 1974, as amended,” A RK
. C ODE A NN
. § 23-99

- 209—permeate and are fundamental to each and every provision of the Arkansas PPA. Thus, there is no severable portio n of the Arkansas PPA that can be removed from the act, while other portions are given effect, and the Arkansas PPA is preempted in it s entirety. The district court erred in holding to the contrary.

III. CONCLUSION Like the district court, we conclude that the Arkansas PPA is preempted , because this state law has an improper “reference to” ERISA or ERISA plans, and the state l aw is not “saved” from preemption, because it is not a state law that “regulates insuranc e.” Consequently, we affirm the district court’s order of January 31, 1997 , granting summary judgment in favor of appellees and de nying appellants’ cross-motion41

for summary judgment. However, we reverse the district court’s amendment of it s jud gment in its order of March 14, 1997, which found the Arkansas PPA preempte d only “insofar as” it relates to ERISA plans. We hold instead that the Arkansas PPA is preempted in its entirety and that appellees are entitled to injunctive relief permanently enjoining appellants from enforcing the Arkansas PPA in its entirety. Th erefore, the orders of the district court are affirmed in part, reversed in part, and this case is remanded to the district court with directions to enter judgment i n accord with this decision.
A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT