Opinion ID: 2634504
Heading Depth: 4
Heading Rank: 2

Heading: Interpreting Rush Prudential in light of Aetna Health

Text: The next question is whether Rush Prudential and Miller (discussed supra ) survive Aetna Health; in other words, does ERISA's saving clause still have meaning, or are all state laws relating to employee benefit plans preempted by § 1132(a)? We believe that the United States Supreme Court's holding in Aetna Health was not intended to overrule Rush Prudential or Miller. Based on Aetna Health, Miller, and Rush Prudential, we believe that the Hawai'i legislature may continue to regulate [] insurance so long as the legislature does not create a cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy. Aetna Health, ___ U.S. at ___, 124 S.Ct. at 2495. Reading Rush Prudential and Aetna Health together, we believe that the Supreme Court intended to distinguish between state laws that (1) create a state law claim for relief against an employee benefit plan and (2) require insurers to provide certain procedural protections to insureds (even if the insurance is provided as part of an ERISA-covered employee benefit plan). Aetna Health struck down the state statute at issue because any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted. Aetna Health, ___ U.S. at ___, 124 S.Ct. at 2495. The Supreme Court has consistently struck down state laws that create claims for relief against ERISA-covered employee benefit plans, even if those state laws also regulate insurance. See, e.g., Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 135, 145, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) (holding that an employee's claim for relief for wrongful discharge based on state common law was preempted by § 1132(a)); Pilot Life, 481 U.S. at 57, 107 S.Ct. 1549 (holding that a state common law claim for bad faith did not fall under the saving clause and was therefore preempted by § 1144(a)). As the United States Court of Appeals for the Third Circuit recently explained: Reading Pilot Life, Rush Prudential, and Aetna Health together, a state statute is preempted by ERISA if it provides a form of ultimate relief in a judicial forum that added to the judicial remedies provided by ERISA, Rush Prudential, 536 U.S. at 379, 122 S.Ct. 2151, or stated another way, if it duplicates, supplements, or supplants the ERISA civil enforcement remedy. Aetna Health, ___ U.S. at ___, 124 S.Ct. at 2495 (citing Pilot Life, 481 U.S. at 54-56, 107 S.Ct. 1549). Barber v. Unum Life Ins. Co. of Am., 383 F.3d 134, 140 (3d Cir.2004). In contrast, Rush Prudential upheld the state statute at issue because it was a state regulatory scheme that provide[d] no new cause of action under state law and authorize[d] no new form of ultimate relief. Rush Prudential, 536 U.S. at 379, 122 S.Ct. 2151. As Rush Prudential demonstrates, the Court has been careful not to read the saving clause out of the statute. Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985). Although the dissenting Justices in Rush Prudential argued that state insurance regulations would undermine congressional intent (by corroding uniformity in the area of employee welfare benefit plans), the majority rejected this argument. Instead, the majority held that the states were entitled to require insurers to comply with certain procedural requirements as a condition of engaging in the business of insurance within the state's borders. See Rush Prudential, 536 U.S. at 379-80, 122 S.Ct. 2151. Again, the Court limited states' power by stating that a state law would be preempted if it enlarged a claim for benefits beyond what was available pursuant to § 1132(a): [T]he relief ultimately available would still be what ERISA authorizes in a suit for benefits under § 1132(a). Id. at 380, 122 S.Ct. 2151. Thus, both Rush Prudential and Aetna Health hold that a state may not create a new cause of action. [14] Both cases preserve the states' right to regulate insurance so long as those insurance regulations do not conflict with ERISA's civil enforcement scheme. In sum, Aetna Health does not overrule Rush Prudential. [15] Therefore, we hold that a state law that regulates insurance is not preempted so long as it does not create a new claim for relief and does not enlarge a claim for benefits beyond that available in § 1132(a). The following subsection applies this principle to HRS § 432E-6.