"This is another Employee Retirement Income Security Act (ERISA) pre-emption case," Justice Stevens wrote for a 7-2 majority. Respondent NYSA-ILA is an ERISA plan that operates three medical centers. The issue in the case was whether New York could apply a tax, the Health Facility Assessment ("HFA"), to patient services at those centers. The Second Circuit held that the HFA was pre-empted by ERISA because it directly depleted the assets of the ERISA plan.The Supreme Court reversed, applying its earlier decision in New York State Conference v. Travelers Insurance Co., 514 U.S. 645 (1995). Travelers held that ERISA did not preempt a New York surcharge imposed on care for patients covered by commercial insurers, but not imposed on care for patients covered by Blue Cross/Blue Shield. While that surcharge did favor Blue Cross over the ERISA-governed commercial plans, the Court in Travelers held that it was not pre-empted because the impact on ERISA plans was indirect, and because the surcharge operated in a field generally regulated by the states.
Though the impact of the HFA on facilities owned by ERISA plans was more direct than the Travelers surcharge, the Supreme Court did not find that dispositive, or even significant. Instead, the Court said, because the HFA is a form of traditional state regulation, it enjoys a presumption against pre-emption. That presumption was not overcome, given that the HFA is a generally applicable tax on all hospitals, most of which are not operated by ERISA plans. The Court did acknowledge, as it had in Travelers, that some generally applicable state laws might have economic effects so acute as to forced ERISA plans to alter their coverage scheme, but that was not the case for New York's HFA.
In dissent, Justices Scalia and Thomas argued that the case should be set for reargument on a question not addressed by the parties: whether the ERISA plan's lawsuit was barred by the Tax Injunction Act.