A Massachusetts statute requires that specified minimum mental-health-care benefits be provided a Massachusetts resident who is insured under a general insurance policy, an accident or sickness insurance policy, or an employee health-care plan that covers hospital and surgical expenses. The first question before us in these cases is whether the state statute, as applied to insurance policies purchased by employee health-care plans regulated by the federal Employee Retirement Income Security Act of 1974, is pre-empted by that Act. The second question is whether the state statute, as applied to insurance policies purchased pursuant to negotiated collective-bargaining agreements regulated by the National Labor Relations Act, is pre-empted by the labor Act.
General health insurance typically is sold as group insurance to an employer or other group.
While mandated-benefit statutes are a relatively recent phenomenon,
Mandated-benefit statutes, then, are only one variety of a matrix of state laws that regulate the substantive content of health-insurance policies to further state health policy. Massachusetts Gen. Laws Ann., ch. 175, § 47B (West Supp. 1985), is typical of mandated-benefit laws currently in place in the majority of States.
In addition, the Commonwealth concluded that the voluntary insurance market was not adequately providing mental-health coverage, because of "adverse selection" in mental-health insurance: good insurance risks were not purchasing coverage, and this drove up the price of coverage for those who otherwise might purchase mental-health insurance. The legislature believed that the public interest required that it correct the insurance market in the Commonwealth by mandating minimum-coverage levels, effectively forcing the good-risk individuals to become part of the risk pool, and enabling insurers to price the insurance at an average market rather than a market retracted due to adverse selection. See Findings of Fact of the Superior Court, App. to Juris. Statement in No. 84-325, pp. 50a-53a. Section 47B, then, was intended to help safeguard the public against the high costs of comprehensive inpatient and outpatient mental-health care, reduce nonpsychiatric medical-care expenditures for mentally related illness, shift the delivery of treatment from inpatient to outpatient services, and relieve the Commonwealth of some of the financial burden it otherwise would encounter with respect to mental-health problems. Ibid.
The federal Employee Retirement Income Security Act of 1974, 88 Stat. 829, as amended, 29 U. S. C. § 1001 et seq. (ERISA), comprehensively regulates employee pension and welfare plans. An employee welfare-benefit plan or welfare plan is defined as one which provides to employees "medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability [or] death," whether these benefits are provided "through the purchase of insurance or otherwise." § 3(1), 29 U. S. C. § 1002(1). Plans may self-insure or they may purchase insurance for their participants. Plans that purchase insurance — so-called "insured plans" — are directly affected by state laws that regulate the insurance industry.
ERISA imposes upon pension plans a variety of substantive requirements relating to participation, funding and vesting. §§ 201-306, 29 U. S. C. §§ 1051-1086. It also establishes various uniform procedural standards concerning reporting, disclosure, and fiduciary responsibility for both pension and welfare plans. §§ 101-111, 401-414, 29 U. S. C. §§ 1021-1031, 1101-1114. It does not regulate the substantive content of welfare-benefit plans. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 91 (1983).
ERISA thus contains almost no federal regulation of the terms of benefit plans. It does, however, contain a broad pre-emption provision declaring that the statute shall "supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." § 514(a), 29 U. S. C. § 1144(a). Appellant Metropolitan in No. 84-325 argues that ERISA pre-empts Massachusetts' mandated-benefit law insofar as § 47B restricts the kinds of insurance policies that benefit plans may purchase.
Wholly apart from the question whether Massachusetts' mandated-benefit law is pre-empted by ERISA, appellant Travelers in No. 84-356 argues that as applied to benefit plans negotiated pursuant to collective-bargaining agreements, § 47B is pre-empted by the National Labor Relations Act, 49 Stat. 449, as amended, 29 U. S. C. § 151 et seq. (NLRA), because it effectively imposes a contract term on the parties that otherwise would be a mandatory subject of collective bargaining. Unlike ERISA, the NLRA contains no statutory provision indicating the extent to which it was intended to pre-empt state law. Resolution of the NLRA pre-emption question, therefore, requires us to discern legislative intent from the general purpose of the NLRA, and not from any particular statutory language.
Appellants are Metropolitan Life Insurance Company and Travelers Insurance Company (insurers) who are located in New York and Connecticut respectively and who issue group-health policies providing hospital and surgical coverage to plans, or to employers or unions that employ or represent employees residing in Massachusetts. Under the terms of § 47B, both appellants are required to provide minimal mental-health benefits in policies issued to cover Commonwealth residents.
In 1979, the Attorney General of Massachusetts brought suit in Massachusetts Superior Court for declaratory and injunctive relief to enforce § 47B. The Commonwealth asserted that since January 1, 1976, the effective date of § 47B, the insurers had issued policies to group policyholders situated outside Massachusetts that provided for hospital and surgical coverage for certain residents of the Commonwealth. App. 8-9. It further asserted that those policies failed to provide Massachusetts-resident beneficiaries the mental-health coverage mandated by § 47B, and that the insurers intended to issue more such policies, believing themselves not bound by § 47B for policies issued outside the Commonwealth. In their answer, the insurers admitted these allegations.
The complaint further asserted that the insurers had amended a number of policies in effect prior to January 1, 1976, but had failed to include the benefits mandated by § 47B in the amended policies, in violation of the law. App. 9-10. Finally, the Commonwealth asserted that the insurers refused to provide the mandated benefits in part on the ground that they believed ERISA and the NLRA pre-empted § 47B. App. 10. Though the insurers had not actually refused to provide the mandated benefits in any policy issued after January 1, 1976, within the Commonwealth, the insurers preserved their right to challenge the applicability of § 47B
The Superior Court issued a preliminary injunction requiring the insurers to provide the coverage mandated by § 47B. App. 57-59. After trial, a different judge issued a permanent injunction to the same effect, see App. to Juris. Statement in No. 84-325, pp. 67a-70a, making extensive findings of fact concerning the cost, nature, purpose, and effect of the mandated-benefit law. See id., at 36a-62a. The Supreme Judicial Court of Massachusetts granted the insurers' application for direct appellate review and affirmed the judgment of the Superior Court. Attorney General v. Travelers Ins. Co., 385 Mass. 598, 433 N.E.2d 1223 (1982).
Addressing first the ERISA pre-emption question, the court recognized that § 47B is a law that " `relate[s] to' benefit plans," and so would be pre-empted unless it fell within one of the exceptions to the pre-emption clause of ERISA. 385 Mass., at 605, 433 N. E. 2d, at 1227. The court went on to hold, however, that § 47B is a law "which regulates insurance," as understood by the ERISA saving clause, § 514(b)(2)(A), 29 U. S. C. § 1144(b)(2)(A), and therefore is not pre-empted by ERISA. 385 Mass., at 606-609, 433 N. E. 2d, at 1228-1230.
The court then went on to conclude that the NLRA does not pre-empt § 47B. Although § 47B regulates health benefits, a subject of mandatory collective bargaining, the NLRA does not pre-empt all local regulation affecting employment relations. A public health statute, § 47B does not regulate labor-management relations as such or affect the free play of economic forces between labor and management. "It is unlikely that Congress intended, by enacting the NLRA, to bind the hands of State Legislatures with respect to problems such as mental health." 385 Mass., at 613, 433 N. E. 2d, at 1232.
Moreover, the court pointed out, Congress has indicated in the McCarran-Ferguson Act, 59 Stat. 33, as amended, 15 U. S. C. § 1011 et seq., that federal laws should not be construed to supersede state laws "regulating the business of insurance." § 1012(b). Section 47B operates upon insurance and insurance policies. The McCarran-Ferguson Act
On appeal, this Court, 463 U.S. 1221 (1983), vacated the judgment of the Supreme Judicial Court and remanded the cases for further consideration in light of the intervening decision in Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983). Appropriately refocusing on the ERISA pre-emption provisions that were the subject of that decision, the Supreme Judicial Court, with one justice dissenting, reinstated its former judgment. Attorney General v. Travelers Ins. Co., 391 Mass. 730, 463 N.E.2d 548 (1984). The court reasoned that this Court had not addressed the insurance exception in Shaw, and as that decision construed none of the exceptions listed in § 514(b), our statement that the exceptions were "narrow" was merely dictum that did not compel the Massachusetts court to change its result. 391 Mass., at 733, 463 N. E. 2d, at 550. Unlike the exemption from ERISA coverage at issue in Shaw, the exception in § 514(b) is phrased very broadly. Nor was there reason to alter the limiting construction given the saving clause. The Court in Shaw held that ERISA's broad pre-emption provision was intended to pre-empt any state law that "relate[d] to" an employee-benefit plan, not merely those state laws that directly conflicted with a substantive provision in the federal statute. Though the Court thus had rejected a conflict-based analysis of the broadly phrased pre-emption clause as being too narrow an interpretation of that provision, it did not follow that the conflict-based limitation on the saving clause imposed by the Supreme Judicial Court similarly should be rejected.
The dissenting justice felt that the Shaw Court had made clear that the exemptions and exceptions to ERISA's preemption clause should be read narrowly in order to preserve nationwide uniformity in the administration of welfare plans.
The insurers once again appealed pursuant to 28 U. S. C. § 1257(2), and we noted probable jurisdiction. 469 U.S. 929 (1984).
"In deciding whether a federal law pre-empts a state statute, our task is to ascertain Congress' intent in enacting the federal statute at issue. `Pre-emption may be either express or implied, and "is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose." Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977).' Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U.S. 141, 152-153 (1982)." Shaw v. Delta Air Lines, Inc., 463 U. S., at 95. The narrow statutory ERISA question presented is whether Mass. Gen. Laws Ann., ch. 175, § 47B (West Supp. 1985), is a law "which regulates insurance" within the meaning of § 514(b)(2)(A), 29 U. S. C. § 1144(b)(2)(A), and so would not be pre-empted by § 514(a).
Section 47B clearly "relate[s] to" welfare plans governed by ERISA so as to fall within the reach of ERISA's preemption provision, § 514(a). The broad scope of the preemption clause was noted recently in Shaw v. Delta Air Lines, Inc., supra, where we held that the New York Human Rights Law and that State's Disability Benefits Law "relate[d] to" welfare plans governed by ERISA. The phrase "relate to" was given its broad common-sense meaning, such that a state law "relate[s] to" a benefit plan "in the normal sense of the phrase, if it has a connection with or reference to such a plan." 463 U. S., at 97. The pre-emption provision was intended to displace all state laws that fall within its sphere, even including state laws that are consistent with ERISA's substantive requirements. Id., at 98-99. "[E]ven indirect state action bearing on private pensions may encroach upon the area of exclusive federal concern." Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 525 (1981).
Though § 47B is not denominated a benefit-plan law, it bears indirectly but substantially on all insured benefit plans, for it requires them to purchase the mental-health benefits specified in the statute when they purchase a certain kind of common insurance policy. The Commonwealth does not argue that § 47B as applied to policies purchased by benefit plans does not relate to those plans, and we agree with the Supreme Judicial Court that the mandated-benefit law as applied relates to ERISA plans and thus is covered by ERISA's broad pre-emption provision set forth in § 514(a).
Nonetheless, the sphere in which § 514(a) operates was explicitly limited by § 514(b)(2). The insurance saving clause preserves any state law "which regulates insurance, banking, or securities." The two pre-emption sections, while clear enough on their faces, perhaps are not a model of legislative drafting, for while the general pre-emption clause broadly
Fully aware of this statutory complexity, we still have no choice but to "begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose." Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 194 (1985). We also must presume that Congress did not intend to pre-empt areas of traditional state regulation. See Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977).
To state the obvious, § 47B regulates the terms of certain insurance contracts, and so seems to be saved from preemption by the saving clause as a law "which regulates insurance." This common-sense view of the matter, moreover, is reinforced by the language of the subsequent subsection of ERISA, the "deemer clause," which states that an employee-benefit plan shall not be deemed to be an insurance company "for purposes of any law of any State purporting to regulate insurance companies, insurance contracts, banks, trust companies,
The insurers nonetheless argue that § 47B is in reality a health law that merely operates on insurance contracts to accomplish its end, and that it is not the kind of traditional insurance law intended to be saved by § 514(b)(2)(A). We find this argument unpersuasive.
Initially, nothing in § 514(b)(2)(A), or in the "deemer clause" which modifies it, purports to distinguish between traditional and innovative insurance laws. The presumption is against pre-emption, and we are not inclined to read limitations into federal statutes in order to enlarge their preemptive scope. Further, there is no indication in the legislative history that Congress had such a distinction in mind.
Appellants assert that state laws that directly regulate the insurer, and laws that regulate such matters as the way in which insurance may be sold, are traditional laws subject to the clause, while laws that regulate the substantive terms of insurance contracts are recent innovations more properly seen as health laws rather than as insurance laws, which § 514(b)(2)(A) does not save. This distinction reads the saving clause out of ERISA entirely, because laws that regulate only the insurer, or the way in which it may sell insurance, do not "relate to" benefit plans in the first instance. Because they would not be pre-empted by § 514(a), they do not need to be "saved" by § 514(b)(2)(A). There is no indication that Congress could have intended the saving clause to operate
Moreover, it is both historically and conceptually inaccurate to assert that mandated-benefit laws are not traditional insurance laws. As we have indicated, state laws regulating the substantive terms of insurance contracts were commonplace well before the mid-70's, when Congress considered ERISA.
Cases interpreting the scope of the McCarran-Ferguson Act have identified three criteria relevant to determining whether a particular practice falls within that Act's reference to the "business of insurance": "first, whether the practice has the effect of transferring or spreading a policyholder's risk; second, whether the practice is an integral part of the policy relationship between the insurer and the insured; and third, whether the practice is limited to entities within the insurance industry." Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 129 (1982) (emphasis in original). See also Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205 (1979). Application of these principles suggests that mandated-benefit laws are state regulation of the "business of insurance."
Section 47B obviously regulates the spreading of risk: as we have indicated, it was intended to effectuate the legislative judgment that the risk of mental-health care should be shared. See Findings of Fact of the Superior Court, App. to Juris. Statement in No. 84-325, pp. 50a-51a. It is also evident that mandated-benefit laws directly regulate an integral part of the relationship between the insurer and the policyholder by limiting the type of insurance that an insurer may sell to the policyholder. Finally, the third criterion is present here, for mandated-benefit statutes impose requirements only on insurers, with the intent of affecting the relationship between the insurer and the policyholder. Section 47B, then, is the very kind of regulation that this Court has identified as a law that relates to the regulation of the business of insurance as defined in the McCarran-Ferguson Act:
Nor is there any contrary case authority suggesting that laws regulating the terms of insurance contracts should not be understood as laws that regulate insurance. In short, the plain language of the saving clause, its relationship to the other ERISA pre-emption provisions, and the traditional understanding of insurance regulation, all lead us to the conclusion that mandated-benefit laws such as § 47B are saved from pre-emption by the operation of the saving clause.
We therefore decline to impose any limitation on the saving clause beyond those Congress imposed in the clause itself and in the "deemer clause" which modifies it. If a state law "regulates insurance," as mandated-benefit laws do, it is not preempted. Nothing in the language, structure, or legislative history of the Act supports a more narrow reading of the clause, whether it be the Supreme Judicial Court's attempt to save only state regulations unrelated to the substantive provisions
We are aware that our decision results in a distinction between insured and uninsured plans, leaving the former open to indirect regulation while the latter are not. By so doing we merely give life to a distinction created by Congress in the "deemer clause," a distinction Congress is aware of and one it has chosen not to alter.
Unlike ERISA, the NLRA contains no statutory pre-emption provision. Still, as in any pre-emption analysis, " `[t]he purpose of Congress is the ultimate touchstone.' " Malone v. White Motor Corp., 435 U.S. 497, 504 (1978), quoting Retail Clerks v. Schermerhorn, 375 U.S. 96, 103 (1963). Where the pre-emptive effect of federal enactments is not explicit, "courts sustain a local regulation `unless it conflicts with federal law or would frustrate the federal scheme, or unless the courts discern from the totality of the circumstances
Appellants contend first that because mandated-benefit laws require benefit plans whose terms are arrived at through collective bargaining to purchase certain benefits the parties may not have wished to purchase, such laws in effect mandate terms of collective-bargaining agreements. The Supreme Judicial Court of Massachusetts correctly found that "[b]ecause a plan that purchases insurance has no choice but to provide mental health care benefits, the insurance provisions of § 47B effectively control the content of insured welfare benefit plans." 385 Mass., at 605, 433 N. E. 2d, at 1227. More precisely, faced with § 47B, parties to a collective-bargaining agreement providing for health insurance are forced to make a choice: either they must purchase the mandated benefit, decide not to provide health coverage at all, or decide to become self-insured, assuming they are in a financial position to make that choice.
The question then becomes whether this kind of interference with collective bargaining is forbidden by federal law. Appellants argue that because Congress intended to leave the choice of terms in collective-bargaining agreements to the free play of economic forces, not subject either to state law or to the control of the National Labor Relations Board (NLRB), mandated-benefit laws should be pre-empted by the NLRA.
The Court has articulated two distinct NLRA pre-emption principles. The so-called Garmon rule, see San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), protects the primary jurisdiction of the NLRB to determine in the first instance what kind of conduct is either prohibited or protected by the NLRA.
A second pre-emption doctrine protects against state interference with policies implicated by the structure of the Act itself, by pre-empting state law and state causes of action concerning conduct that Congress intended to be unregulated. The doctrine was designed, at least initially, to govern pre-emption questions that arose concerning activity that was neither arguably protected against employer interference by §§ 7 and 8(a)(1) of the NLRA, nor arguably prohibited as an unfair labor practice by § 8(b) of that Act. 29 U. S. C. §§ 157, 158(a)(1) and (b). Such action falls outside the reach of Garmon pre-emption. See New York Telephone Co. v. New York Labor Dept., 440 U.S. 519, 529-531 (1979) (plurality opinion).
More recently, a divided Court struggled with a feature of New York's unemployment-insurance law that provided certain unemployment-insurance payments to striking workers. New York Telephone Co. v. New York Labor Dept., supra. As in Machinists and Morton, the state law "altered the economic balance between labor and management." 440 U. S., at 532 (plurality opinion). A majority of the Justices nonetheless found the state law not pre-empted, on the ground that the legislative history of the Social Security Act of 1935, along with other federal legislation, suggested that Congress had decided to permit a State to pay unemployment benefits to strikers.
All parties correctly understand this case to involve Machinists pre-emption.
Here, however, appellants do not suggest that § 47B alters the balance of power between the parties to the labor contract. Instead, appellants argue that, not only did Congress establish a balance of bargaining power between labor and management in the Act, but it also intended to prevent the States from establishing minimum employment standards that labor and management would otherwise have been required to negotiate from their federally protected bargaining positions, and would otherwise have been permitted to set at a lower level than that mandated by state law. Appellants assert that such state regulation is permissible only when Congress has authorized its enactment. Because welfare benefits are a mandatory subject of bargaining under the
Appellants assume that Congress' ultimate concern in the NLRA was in leaving the parties free to reach agreement about contract terms. The framework established in the NLRA was merely a means to allow the parties to reach such agreement fairly. A law that interferes with the end result of bargaining is, therefore, even worse than a law that interferes with the bargaining process. Thus, it is argued, this case is a fortiori to cases like Morton, Machinists, and New York Telephone.
The question has been before the Court in the past, see Algoma Plywood Co. v. Wisconsin Board, 336 U.S. 301, 312 (1949), and there is a surface plausibility to appellants' argument, which finds support in dicta in some prior Court decisions.
Congress apparently did not consider the question whether state laws of general application affecting terms of collective-bargaining agreements subject to mandatory bargaining were to be pre-empted.
The NLRA is concerned primarily with establishing an equitable process for determining terms and conditions of employment, and not with particular substantive terms of the bargain that is struck when the parties are negotiating from relatively equal positions. See Cox, Recent Developments in Federal Labor Law Preemption, 41 Ohio St. L. J. 277, 297 (1980). The NLRA's declared purpose is to remedy "[t]he inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association." § 1, 29 U. S. C. § 151. The same section notes the desirability of "restoring
One of the ultimate goals of the Act was the resolution of the problem of "depress[ed] wage rates and the purchasing power of wage earners in industry," 29 U. S. C. § 151, and "the widening gap between wages and profits," 79 Cong. Rec. 2371 (1935) (remarks of Sen. Wagner), thought to be the cause of economic decline and depression.
The evil Congress was addressing thus was entirely unrelated to local or federal regulation establishing minimum terms of employment. Neither inequality of bargaining power nor the resultant depressed wage rates were thought to result from the choice between having terms of employment set by public law or having them set by private agreement. No incompatibility exists, therefore, between federal rules designed to restore the equality of bargaining power, and state or federal legislation that imposes minimal substantive requirements on contract terms negotiated between parties to labor agreements, at least so long as the purpose of
Accordingly, it never has been argued successfully that minimal labor standards imposed by other federal laws were not to apply to unionized employers and employees. See, e. g., Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 737, 739 (1981). Cf. Alexander v. Gardner-Denver Co., 415 U.S. 36, 51 (1974). Nor has Congress ever seen fit to exclude unionized workers and employers from laws establishing federal minimal employment standards. We see no reason to believe that for this purpose Congress intended state minimum labor standards to be treated differently from minimum federal standards.
Minimum state labor standards affect union and nonunion employees equally, and neither encourage nor discourage the collective-bargaining processes that are the subject of the NLRA. Nor do they have any but the most indirect effect on the right of self-organization established in the Act. Unlike the NLRA, mandated-benefit laws are not laws designed to encourage or discourage employees in the promotion of their interests collectively; rather, they are in part "designed to give specific minimum protection to individual workers and to ensure that each employee covered by the Act would receive" the mandated health insurance coverage. Barrentine, 450 U. S., at 739 (emphasis in original). Nor do these laws even inadvertently affect these interests implicated in the NLRA. Rather, they are minimum standards "independent of the collective-bargaining process [that] devolve on [employees] as individual workers, not as members of a collective organization." Id., at 745.
It would further few of the purposes of the Act to allow unions and employers to bargain for terms of employment that state law forbids employers to establish unilaterally. "Such a rule of law would delegate to unions and unionized employers the power to exempt themselves from whatever state labor standards they disfavored." Allis-Chalmers
Most significantly, there is no suggestion in the legislative history of the Act that Congress intended to disturb the myriad state laws then in existence that set minimum labor standards, but were unrelated in any way to the processes of bargaining or self-organization. To the contrary, we believe that Congress developed the framework for self-organization and collective bargaining of the NLRA within the larger body of state law promoting public health and safety. The States traditionally have had great latitude under their police powers to legislate as " `to the protection of the lives, limbs, health, comfort, and quiet of all persons.' " Slaughter-House Cases, 16 Wall. 36, 62 (1873), quoting Thorpe v. Rutland & Burlington R. Co, 27 Vt. 140, 149 (1855). "States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State. Child labor laws, minimum and other wage laws, laws affecting occupational health and safety . . . are only a few examples." De Canas v. Bica, 424 U.S. 351, 356 (1976). State laws requiring that employers contribute to unemployment and workmen's compensation funds, laws prescribing mandatory state holidays, and those dictating payment to employees for time spent at the polls or on jury duty all have withstood scrutiny. See, e. g., Day-Brite Lighting, Inc. v. Missouri, 342 U.S. 421 (1952).
Federal labor law in this sense is interstitial, supplementing state law where compatible, and supplanting it only when it prevents the accomplishment of the purposes of the federal Act. Hines v. Davidowitz, 312 U.S. 52, 67, n. 20 (1941); Electrical Workers v. Wisconsin Employment Relations
Thus, in Malone v. White Motor Corp., supra, the Court rejected a similar challenge to a pre-ERISA state pension Act which established minimum funding and vesting levels for employee pension plans. The Court found the law not pre-empted by the NLRA, in part for reasons relevant here:
We hold that Massachusetts' mandated-benefit law is a "law which regulates insurance" and so is not pre-empted by ERISA as it applies to insurance contracts purchased for plans subject to ERISA. We further hold that the mandated-benefit law as applied to a plan negotiated pursuant to a collective-bargaining agreement subject to the NLRA is not pre-empted by federal labor law.
The judgment of the Supreme Judicial Court of Massachusetts is therefore affirmed.
It is so ordered.
JUSTICE POWELL took no part in the decision of these cases.
Briefs of amici curiae urging affirmance were filed for the State of Connecticut et al. by Joseph I. Lieberman, Attorney General of Connecticut, Elliot F. Gerson, Deputy Attorney General, Arnold B. Feigin, Jonathon L. Ensign, John G. Haines, Richard T. Sponzo, and Robert E. Walsh, Assistant Attorneys General, and by the Attorneys General of their respective States as follows: John K. Van de Kamp of California, Robert T. Stephan of Kansas, William J. Guste, Jr., of Louisiana, James E. Tierney of Maine, Stephen H. Sachs of Maryland, Frank J. Kelley of Michigan, Hubert H. Humphrey III of Minnesota, Mike Greely of Montana, Irwin I. Kimmelman of New Jersey, Paul G. Bardacke of New Mexico, Robert Abrams of New York, Lacy H. Thornburg of North Carolina, Nicholas Spaeth of North Dakota, T. Travis Medlock of South Carolina, Jeffrey L. Amestoy of Vermont, Bronson C. La Follette of Wisconsin, and Gerald L. Baliles of Virginia; for the State of Oregon by Dave Frohnmayer, Attorney General, William F. Gary, Deputy Attorney General, James E. Mountain, Jr., Solicitor General, Virginia L. Linder, Assistant Solicitor General, and Kathleen G. Dahlin, Assistant Attorney General; for the National Conference of State Legislatures et al. by Joyce Holmes Benjamin and Lawrence R. Velvel; for the American Chiropractic Association by Harry N. Rosenfield; for the American Optometric Association by Ellis Lyons, Bennett Boskey, and Edward A. Groobert; for the American Psychiatric Association et al. by Joel I. Klein; for the American Psychological Association et al. by Donald N. Bersoff and Bruce J. Ennis; for the American Public Health Association et al. by Bruce H. Schneider and Herbert Semmel; for the Committee for Comprehensive Insurance Coverage by Edward A. Scallet; and for the National Association of Alcoholism Treatment Programs, Inc., by Paul L. Perito and Frederick H. Graefe.
Different States mandate a great variety of different kinds of insurance coverage. For example, many require alcoholism coverage, see Conn. Gen. Stat. § 38-262b (Supp. 1985), while others require certain birth-defect coverage, see Md. Ann. Code, Art. 48A, § 477X (Supp. 1984), outpatient kidney-dialysis coverage, see Ohio Rev. Code Ann. § 3923.25 (Supp. 1984), or reconstructive surgery for insured mastectomies, see Ariz. Rev. Stat. Ann. § 20-1402(5) (Supp. 1984-1985).
"Any blanket or general policy of insurance . . . or any policy of accident and sickness insurance . . . or any employees' health and welfare fund which provides hospital expense and surgical expense benefits and which is promulgated or renewed to any person or group of persons in this commonwealth . . . shall, provide benefits for expense of residents of the commonwealth covered under any such policy or plan, arising from mental or nervous conditions as described in the standard nomenclature of the American Psychiatric Association which are at least equal to the following minimum requirements:
"(a) In the case of benefits based upon confinement as an inpatient in a mental hospital . . . the period of confinement for which benefits shall be payable shall be at least sixty days in any calendar year . . . .
"(b) In the case of benefits based upon confinement as an inpatient in a licensed or accredited general hospital, such benefits shall be no different than for any other illness.
"(c) In the case of out-patient benefits, these shall cover, to the extent of five hundred dollars over a twelve-month period, services furnished (1) by a comprehensive health service organization, (2) by a licensed or accredited hospital (3) or subject to the approval of the department of mental health services furnished by a community mental health center or other mental health clinic or day care center which furnishes mental health services or (4) consultations or diagnostic or treatment sessions . . . ."
The Conference Committee that was convened to work out differences between the Senate and House versions of ERISA broadened the general pre-emption provision from one that pre-empted state laws only insofar as they regulated the same areas explicitly regulated by ERISA, to one that pre-empts all state laws unless otherwise saved. See H. R. Conf. Rep. No. 93-1280, p. 383 (1974). The change gave the insurance saving clause a much more significant role, as a provision that saved an entire body of law from the sweeping general pre-emption clause. There were no comments on the floor of either Chamber specifically concerning the insurance saving clause, and hardly any concerning the exceptions to the pre-emption clause in general. See n. 24, infra.
The change in the pre-emption provision was not disclosed until the Report was filed with Congress 10 days before final action was taken on ERISA. The House conferees filed their Report, H. R. Conf. Rep. No. 93-1280, on August 12, 1974, while the Senate conferees filed their Report, S. Conf. Rep. No. 93-1090, the following day. 30 Cong. Q. Almanac 252 (1974). ERISA was passed by the House on August 20, and by the Senate on August 22. 120 Cong. Rec. 29215-29216, 29963 (1974).
Such pre-emption does not involve in the first instance a balancing of state and federal interests, see Brown v. Hotel Employees, 468 U.S. 491, 502-503 (1984), but an analysis of the structure of the federal labor law to determine whether certain conduct was meant to be unregulated. An appreciation of the State's interest in regulating a certain kind of conduct may still be relevant in determining whether Congress in fact intended the conduct to be unregulated. See New York Telephone Co. v. New York Labor Dept., 440 U. S., at 539-540.
"[Under the new program] [e]mployees were guaranteed protection in their cooperative efforts, in order that they might help the Government to insure a sufficient flow of purchasing power through adequate wages." Hearings on S. 1958 before the Senate Committee on Education and Labor, 74th Cong., 1st Sess., 34-35 (1935) (statement of Sen. Wagner).
"The Railway Labor Act, like the National Labor Relations Act, does not undertake governmental regulation of wages, hours, or working conditions. Instead it seeks to provide a means by which agreement may be reached with respect to them. The national interest expressed by those Acts is not primarily in the working conditions as such. . . .
"State laws have long regulated a great variety of conditions in transportation and industry . . . . But it cannot be that the minimum requirements laid down by state authority are all set aside. We hold that the enactment by Congress of the Railway Labor Act was not a preemption of the field of regulating working conditions themselves and did not preclude the State . . . from making the order in question." Terminal Railroad Assn. v. Railroad Trainmen, 318 U.S. 1, 6-7 (1943) (footnote omitted).