In Dialysis Newco Inc. v. Community Health Systems Inc. Group Health Plan et al.,1 the U.S. Court of Appeals for the Fifth Circuit held that the Employee Retirement Income Security Act expressly preempts a Tennessee statute that barred anti-assignment clauses in insurance policies, as applied to the self-funded benefit plan at issue. Importantly, the court distinguished a previous decision that many viewed as establishing that such statutes are not preempted.

This likely signals a change in the Fifth Circ uit’s ERISA preemption analysis to bring it in line with the U.S. Supreme Court’s 2016 ruling in Gobeille v. Liberty Mutual Insurance Co.2 . The change also brings the Fifth Circuit in line with the Eighth and Tenth Circuits, which have both held that ERISA preempts statutes that prohibit assignment of benefit plan rights, and effectively overrules a prior Fifth Circuit case that held a similar Louisiana statute was not preempted. The case thus ends a circuit split and acknowledges that Gobeille represents a shift in favor of a broader application of ERISA’s preemption provision.

To read the full article, please download the PDF below. This article was first published on Law360 on 3 October 2019.

  1. Dialysis Newco, Inc. v. Community Health Systems Group Health Plan et al. , No. 18-40863 (5th Cir. Sept. 11, 2019).
  2. Gobeille v. Liberty Mutual Ins. Co., 136 S. Ct. 936 (2016).