471 U.S. 724 (1985)
The statute requires that any general health-insurance policy providing hospital and surgical coverage, or any benefit plan with such coverage, must also furnish minimum mental-health benefits to Massachusetts residents.1 These benefits include sixty days of inpatient coverage in a mental hospital, inpatient coverage in a general hospital equal to that for nonmental illness, and at least five hundred dollars in outpatient benefits over a twelve-month period.2
The statute was intended to address the high cost of mental-health treatment, adverse selection in the voluntary market, and the Commonwealth's financial burden from institutionalizing mentally ill residents in state facilities rather than community centers.3 Appellants Metropolitan Life Insurance Company, located in New York, and Travelers Insurance Company, located in Connecticut, issue group-health policies providing hospital and surgical coverage to employee benefit plans or to employers and unions whose employees or members reside in Massachusetts.4
Since the statute's effective date of January 1, 1976, the insurers have issued policies to group policyholders situated outside Massachusetts that cover residents of the Commonwealth yet omit the mandated mental-health benefits.5 They have also amended pre-1976 policies without adding the required coverage.6 In 1979 the Attorney General of Massachusetts filed suit in Massachusetts Superior Court seeking declaratory and injunctive relief to enforce § 47B against the insurers.7 The complaint alleged that the policies failed to provide the mandated benefits and that the insurers intended to continue issuing noncompliant policies.8
The complaint further alleged that the insurers refused to provide the benefits in part because they believed ERISA and the NLRA pre-empted the statute.9 The Superior Court issued a preliminary injunction requiring the insurers to provide the mandated coverage.10 After trial, a different judge entered a permanent injunction to the same effect, making extensive findings of fact on the cost, nature, purpose, and effect of the mandated-benefit law.11 The Supreme Judicial Court of Massachusetts granted direct appellate review and affirmed the judgment.12
On appeal, the United States Supreme Court vacated the judgment and remanded for further consideration in light of Shaw v. Delta Air Lines, Inc. On remand the Supreme Judicial Court reinstated its prior judgment, after which the insurers again appealed.13 The Supreme Court noted probable jurisdiction and consolidated the appeals.14 The record established that virtually all insurance policies issued by both appellants to cover Massachusetts employees were issued to provide benefits for plans subject to ERISA.15 Both appellants had issued contracts to plans that were the product of collective-bargaining agreements subject to the NLRA.16
Whether the Massachusetts statute is pre-empted by ERISA as applied to insurance policies purchased by employee health-care plans?17
Under ERISA, 29 U.S.C. § 1144(a) expressly preempts any and all state laws insofar as they relate to any employee benefit plan.18 This preemption is limited by the insurance saving clause in § 1144(b)(2)(A) that preserves state laws which regulate insurance.19 The deemer clause in § 1144(b)(2)(B) prevents employee benefit plans from being deemed insurers.20
No. The statute relates to ERISA plans.21 The insurers issued group health policies providing hospital and surgical coverage to employee benefit plans covering Massachusetts residents.22 Yet the policies omitted the required mental health benefits after the January 1, 1976 effective date.23 The Attorney General sued to enforce compliance through declaratory and injunctive relief.24 Nevertheless, the saving clause applies. Section 47B regulates the substantive terms of insurance contracts by mandating sixty days of inpatient mental hospital coverage, equal general hospital coverage, and five hundred dollars in outpatient benefits.25 This spreads policyholder risk.26 It affects the insurer-insured relationship.27 It operates only on entities within the insurance industry under the McCarran-Ferguson criteria.28
The deemer clause does not remove the protection because the Commonwealth enforced the law solely against insurers selling policies to plans rather than against the plans themselves.29 The Supreme Judicial Court of Massachusetts affirmed the permanent injunction after trial findings on the cost, nature, purpose, and effect of the law.30
Massachusetts Gen. Laws Ann., ch. 175, § 47B is not preempted by ERISA when applied to insurance policies purchased by ERISA regulated employee health care plans.31
Whether the Massachusetts statute is pre-empted by the NLRA as applied to insurance policies purchased pursuant to collective-bargaining agreements?32
The NLRA contains no express preemption provision.33 Preemption analysis turns on whether the state law conflicts with federal law, frustrates the federal scheme, or reveals congressional intent to occupy the field.34 Under Machinists preemption, a state law is preempted only if it interferes with conduct Congress intended to leave unregulated by the free play of economic forces between labor and management.35
No. The statute affects the content of insured welfare benefit plans that are products of collective bargaining agreements.36 Parties must either purchase the mandated mental health coverage, decide against providing health coverage, or self insure.37 Yet it does not alter the balance of power between labor and management or penalize conduct left unregulated by the NLRA.38 Instead § 47B establishes minimum employment standards of general application that protect individual workers equally whether union or nonunion.39 These standards operate independently of the collective bargaining process without encouraging or discouraging self organization.40
The Supreme Judicial Court correctly held that the law is a public health measure unrelated to labor management relations as such.41 The United States Supreme Court affirmed the judgment.42 The Court noted that Congress developed the NLRA framework within the larger body of state police power laws.43 These laws set minimum labor standards such as unemployment compensation and workers' compensation.44 Such standards have long coexisted with federal labor policy.45 The record showed that both appellants had issued contracts to plans arising from NLRA-covered collective-bargaining agreements.46 Nevertheless, the state law does not interfere with the bargaining process itself.47
Massachusetts Gen. Laws Ann., ch. 175, § 47B is not preempted by the NLRA when applied to insurance policies purchased pursuant to collective bargaining agreements regulated by that Act.48