Metropolitan Life Insurance Co. v. Massachusetts

Supreme Court of the United States · 1985 · Labor Law

471 U.S. 724 (1985)

Updated August 1, 2026

Labor Lawminimum labor standardspreemptionERISANLRAinsurance regulationERISA preemptionsaving clause

Facts

Massachusetts enacted a statute requiring certain health insurance policies and benefit plans providing hospital and surgical coverage to include specified minimum mental-health benefits for Massachusetts residents, including inpatient and outpatient coverage. Metropolitan and Travelers issued group health policies outside Massachusetts that covered Massachusetts residents but did not include the mandated benefits, and Massachusetts sought to compel compliance. The insurers argued that, as applied to insurance purchased for ERISA-regulated employee benefit plans and plans arising from collective-bargaining agreements governed by the NLRA, the statute was preempted by federal law. Massachusetts did not attempt to enforce the statute directly against self-insured ERISA plans.

Issue

Whether Massachusetts' mandated mental-health-benefit statute, as applied to insurance policies purchased for ERISA employee benefit plans, is preempted by ERISA or saved as a law that regulates insurance. Whether the same statute, as applied to plans negotiated pursuant to collective-bargaining agreements subject to the NLRA, is preempted by federal labor law.

Rule

A state law that regulates the substantive terms of insurance contracts is a law that regulates insurance within ERISA's saving clause and is therefore not preempted when applied to insurers selling policies to ERISA plans, although self-insured plans remain protected by ERISA's deemer clause. Under the NLRA, generally applicable state minimum labor standards are not preempted so long as they do not regulate the bargaining process or self-organization and are not inconsistent with the general legislative goals of federal labor law.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

Oregon enacts a statute requiring every group health insurance policy covering Oregon residents to include at least 20 physical-therapy visits per year after a stroke. Cascadia Toolworks maintains an ERISA welfare plan for its employees in Portland and buys a group policy from Willamette Harbor Insurance, which omits the required benefit.

If Willamette Harbor argues the Oregon law is preempted by ERISA because it forces ERISA plans to buy coverage they otherwise might not choose, what is the best answer?

Explanation. The majority held that a mandated-benefit law requiring particular terms in insurance policies does relate to ERISA plans because it substantially affects insured benefit plans. But such a law is saved by ERISA's insurance saving clause when applied to insurers and insurance contracts. The Court rejected the view that mandated-benefit laws are outside the saving clause merely because they influence plan choices or pursue health policy goals.