New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Co.
514 U.S. 645 (1995)


  • A New York statute required hospitals to collect surcharges from patients covered by a commercial insurer, as well as a surcharge on HMOs, but NOT from patients insured by a Blue Cross/Blue Shield plan.
  • Several commercial insurers, acting as fiduciaries of ERISA plans they administer, joined with their trade associations to bring actions against state officials in United States District Court seeking to invalidate the surcharge statutes.


  • The district court granted summary judgment to the plaintiffs.
  • The Court of Appeals affirmed.

Whether the Employee Retirement Income Security Act of 1974 (ERISA) preempts the state provisions for surcharges.

No. Case reversed.

  • “We hold that the provisions for surcharges do not ‘relate to’ employee benefit plans within the meaning of ERISA’s pre-emption provision, § 514(a), and accordingly suffer no preemption.”


  • Section 514(a) of ERISA preempts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan covered by the Act.”
    • A law “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.
  • Here, because the surcharges were imposed regardless of whether coverage was secured by an ERISA plan, the court ruled out the “reference to” test and focused solely on the “connection with” test.
    • Prof: ‘Connection with’ focuses on whether the state law frustrates the purposes of ERISA administration.
  • The court held that the purpose of ERISA was to permit nationally uniform administration of employee benefit plans, NOT cost uniformity.
  • The surcharges had only an indirect economic influence and didn’t bind plan administrators to any particular choice. Thus, they didn’t  function as a regulation of an ERISA plan.
  • It’s also worth noting that when federal law is said to bar state action in fields of traditional state regulation, there’s an assumption that the police powers of the States are NOT to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.

Rule: A law “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.