Opinion ID: 790888
Heading Depth: 4
Heading Rank: 2

Heading: Deemer clause

Text: 46 With regard to self-funded ERISA plans, our ERISA preemption analysis does not end with the savings clause. Instead, under the deemer clause a self-funded ERISA plan, such as Tyson's, cannot be deemed to be an insurance company or other insurer subject to state regulation because of the savings clause. The Miller decision only interpreted ERISA's savings clause. The Miller Court did not consider the effects of the deemer clause because no self-funded ERISA plan was a party to that case. See Miller, 538 U.S. at 336 n. 1, 123 S.Ct. 1471 (The deemer clause presents no obstacle to Kentucky's law, which reaches only those employee benefit plans `not exempt from state regulation by ERISA.'). Thus, we must consider whether, in light of the deemer clause, Tyson's self-funded ERISA plan is subject to regulation by the Arkansas PPA. Following recent Supreme Court decisions applying the deemer clause, we hold that it is not. 47 Similar to the Kentucky statutes considered in Miller, the Arkansas PPA provides that it shall not apply to self-funded or other health benefit plans that are exempt from state regulation by virtue of [ERISA]. Ark.Code Ann. § 23-99-209. Under this exemption, self-funded ERISA plans, such as Tyson's, are not directly regulated by the Arkansas PPA. Recognizing this exemption, the movants argue that because Tyson contracts with insurance companies for access to their provider networks, the Arkansas PPA can indirectly regulate the Tyson plan through those third-party insurance companies. 48 As support for this argument, the movants reference the Supreme Court's statement in Miller that non-insuring entities administering self-insured plans are engaged in the activity of insurance for the purpose of the savings clause. Miller, 538 U.S. at 336 n. 1, 123 S.Ct. 1471 ([N]oninsuring HMOs would be administering self-insured plans, which we think suffices to bring them within the activity of insurance for purposes of [the savings clause].). The movants, however, take this statement out of context. The Miller Court's discussion of third-party administrators came as a response to an argument against the application of the savings clause to the Kentucky AWP laws—namely that the application of those laws to non-insuring HMOs prevents the laws from being specifically directed toward entities engaged in insurance. Id. In Miller, the Supreme Court focused solely on the application of the savings clause. The movants' argument here fails because it ignores the application of the deemer clause to self-funded ERISA plans, a non-issue in Miller, but the controlling issue in this case with regard to the Tyson plan. 49 The Supreme Court has noted repeatedly that because of the deemer clause, statutes that indirectly regulate self-funded ERISA plans are not saved from preemption to the extent such statutes apply to self-funded plans. See Rush Prudential, 536 U.S. at 371 n. 6, 122 S.Ct. 2151 (noting that because of the deemer clause, an Illinois independent review statute would not be `saved' as an insurance law to the extent it indirectly applied to self-funded plans); FMC Corp. v. Holliday, 498 U.S. 52, 64, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990) (Our interpretation of the deemer clause makes clear that if a plan is insured, a State may regulate it indirectly through regulation of its insurer and its insurer's insurance contracts; if the plan is uninsured, the State may not regulate it.); Metro. Life, 471 U.S. at 747, 105 S.Ct. 2380 (We are aware that our decision results in a distinction between insured and uninsured plans, leaving the former open to indirect regulation while the latter are not. By so doing we merely give life to a distinction created by Congress in the `deemer clause,' a distinction Congress is aware of and one it has chosen not to alter.). Nothing in Miller indicates a change in the Court's deemer-clause analysis. Thus, we hold that not only does the Arkansas PPA exempt the Tyson plan and other self-funded ERISA plans from direct regulation but also that ERISA preempts any indirect state regulation of those plans because of the deemer clause. 50 For the above reasons, we reverse the district court's dissolution of the Prudential I injunction against the enforcement of the Arkansas PPA with respect to self-funded ERISA plans. We remand to the district court with directions to enter an injunction prohibiting both direct and indirect enforcement of the Arkansas PPA against self-funded ERISA plans, such as the Tyson plan. 10