NRPM: Standards for Privacy of Individually Identifiable Health Information. iii. What is a law that “relates to the privacy of individually identifiable health information”?


The meaning of the term “relate to” has been extensively adjudicated in a somewhat similar context, the issue of the preemption of State laws by ERISA. Section 514(a) of ERISA (29 U.S.C. 1144(a)) provides that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” (Emphasis added.) The U.S. Supreme Court alone has decided 17 ERISA preemption cases, and there are numerous lower court cases. The term also has been interpreted in other contexts. Thus, there would seem to be several options for defining the term “relates to”: (1) by using the criteria developed by the Supreme Court as they evolve, (2) by using the criteria developed by the Supreme Court, but on a static basis, and (3) based on the legislative history, by setting federal criteria.

The first option would be based on the definition adopted in an early ERISA case, Shaw v. Delta Airlines, Inc., 463 U.S. 85 (1983), as it continues to evolve. In Shaw, a unanimous Supreme Court adopted a very broad reading of the term, holding that a law “relates to” an employee benefit plan “if it has a connection with or reference to” such a plan. Later cases have developed a more particularized and complex definition of this general definition. The Supreme Court has also applied the Shaw definition outside of the ERISA context. In Morales v. Trans World Airlines, 504 U.S. 374 (1992), the Court defined the term “relating to” in the Airline Deregulation Act by using the definition of the term “relates to” developed under the ERISA cases above. While this option would appear to be a supportable reading of the statutory term, tying the agency interpretation to an evolving court interpretation will make it more difficult to make judgments, and particular judgments may change as the underlying court interpretations change.

The second option we considered would “freeze” the definition of “relates to” as the Court has currently defined it. This option also is a supportable reading of the statutory term, but is less of a moving target than the prior option. The complexity of the underlying court definition presents problems.

The option selected and reflected in the rules proposed below grows out of the movement in recent years of the Supreme Court away from the literal, textual approach of Shaw and related cases to an analysis that looks more at the purposes and effects of the preemption statute in question. In New York State Conference of Blue Cross v. Travelers Insurance Co., 514 U.S. 645 (1995), the Court held that the proper inquiry in determining whether the State law in question related to an employee benefit plan was to look to the objectives of the [ERISA] statute as a guide to the scope of the State law that Congress understood would survive. The Court drew a similar line in Morales, concluding that State actions that affected airline rates, routes, or services in “too tenuous, remote, or peripheral a manner” would not be preempted. 504 U.S. at 384. The Court drew a conceptually consistent line with respect to the question of the effect of a State law in English v. General Electric Co., 496 U.S. 72, 84 (1990); see also, Gade v. National Solid Wastes Management Ass’n., 505 U.S. 88 (1992). The Court held that deciding which State laws were preempted by the OSH Act required also looking at the effect of the State law in question, and that those which regulated occupational safety and health in a “clear, direct, and substantial way” would be preempted. These cases suggest an approach that looks to the legislative history of HIPAA and seeks to determine what kinds of State laws Congress meant, in this area, to leave intact and also seeks to apply more of a “rule of reason” in deciding which State laws “relate to” privacy and which do not.

The legislative history of HIPAA offers some insight into the meaning of the term “relates to.” The House Report (House Rep. No. 496, 104th Cong., 2d Sess., at 103) states that –

The intent of this section is to ensure that State privacy laws that are more stringent than the requirements and standards contained in the bill are not superseded.

Based on this legislative history, one could argue that the “State laws” covered by the “relates to” clause are simply those that are specifically or explicitly designed to regulate the privacy of personal health information, and not ones that might have the incidental effect of doing so. Thus, the option selected below appears to be consistent with the Court’s approach in Travelers, and, together with the “effect” test, seems to be closer to how the Court is analyzing preemption issues. It makes sense on a common sense basis as well, and appears, from the little legislative history available, to be what Congress intended in this context.