On May 8, 2025, in BlueCross BlueShield of Tennessee v. Nicolopoulos, the Sixth Circuit Court of Appeals determined that ERISA did not preempt state law when the defendant, the commissioner of the New Hampshire Insurance Department, sought to enforce state law against the plaintiff, insurance company BlueCross BlueShield of Tennessee.
The plaintiff is both the carrier and the fiduciary of a health plan that denied coverage for fertility treatments obtained by a participant in the plan. The policy is issued in the state of Tennessee, which does not require that fertility treatments be covered. However, the policy covers employees in New Hampshire, including the employee whose claims were denied. New Hampshire requires fertility treatments to be covered, so the defendant demanded that the plaintiff cover the treatments.
When the plaintiff refused, asserting that the policy is covered only by federal and Tennessee law, the defendant began state administrative proceedings. These proceedings were paused, pending the resolution of this lawsuit filed by the plaintiff in federal court.
In the federal lawsuit, the plaintiff asserted that ERISA preempted (i.e., set aside) the New Hampshire law. ERISA governs most employee benefit plans, particularly by imposing fiduciary duties on entities that exercise any discretionary authority or responsibility over those plans. The plaintiff claimed that the lawsuit concerned their fiduciary duties to the plan since it focused on their decisions to deny claims submitted by a participant, so ERISA preempted the New Hampshire law and prohibited the defendant from forcing them to follow that law.
However, the district court determined that the defendant focused on the plaintiff in its capacity as an insurer. ERISA includes a “savings clause” that allows states to regulate insurers. The defendant was not a participant in the plan, and the court reasoned that the defendant therefore could not bring a suit challenging the plaintiff’s adherence to their fiduciary duties. Instead, the defendant sought to enforce insurance laws that required carriers to issue policies that covered medically necessary fertility treatment. The court concluded that the defendant brought action against the plaintiff in its capacity as a carrier and was not preempted by ERISA.
The district court went on to point out that ERISA’s “savings clause” enabled state insurance agencies to effectively regulate insurance laws. The federal law does not provide a blanket exemption from state law for insurers who administer benefit plans, and insurers cannot automatically evade state regulation by asserting that they are acting as fiduciaries.
The Sixth Circuit affirmed the district court’s decision, sending the matter back to the state administrative proceeding.
Employer Takeaway
This case highlights the scope of ERISA preemption principles. Although most private benefit plans are governed by the federal law of ERISA, which can preempt state law, plans cannot rely on ERISA as a shield to block all state regulation. Specifically, where the plan is insured (i.e., the plan includes an insurance policy), contract terms mandated by state insurance laws become plan terms and these are not preempted by ERISA. In such case, the insurer and plan must comply with applicable state insurance laws. Employers should always consult with their carriers and benefit attorneys if they have questions concerning the applicability of specific state insurance laws to their particular plans. For further information concerning ERISA, including its preemption principles, please ask your broker or consultant for a copy of the NFP publication ERISA Compliance Considerations for Health and Welfare Benefit Plans.