Insurance carriers that provide health care coverage in New York (and in other states) typically have developed comprehensive anti-fraud plans that help them identify and investigate insurance fraud. An important tool in these anti-fraud plans is post-payment review of claims submitted by health care providers. When insurance carriers detect fraud, and when they are unable to otherwise recoup the amounts they previously paid out, they frequently go to court. In response, a defense that health care providers commonly raise in these cases is that the insurers’ fraud claims are preempted by the Employee Retirement Income Security Act (ERISA).1 A growing number of court decisions, including a 1996 ruling by the U.S. Court of Appeals for the Second Circuit,2 make it quite clear, however, that fraud claims to recover benefits that are brought against health care providers in these kinds of circumstances are not barred by ERISA.

ERISA Preemption

In the ERISA context, there are two types of preemption: “complete” preemption under ERISA §502(a),3 and “express” preemption under ERISA §514.4 Generally speaking, state laws are completely preempted by §502(a) when (i) the plaintiff could have originally brought the claim under §502, and (ii) no other legal duty supported the claim.5 The express preemption provision of ERISA §514(a) provides that ERISA generally “shall supersede any and all State laws insofar as they may now or hereafter relate to an employee benefit plan.”6 The objective of the express preemption provision is “to avoid a multiplicity of regulation in order to permit the nationally uniform administration of employee benefit plans.”7

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