Kentucky Ass'n. of Health Plans Inc. v. Miller,
No. 00-1471 (U.S. Apr. 2, 2003)

The U.S. Supreme Court upheld Kentucky's "any willing provider" (AWP) law, which prohibits health insurers from discriminating against any provider located within the geographic area of the plan, holding that it was not subject to preemption by ERISA. The Court established a new test to determine if a state law "regulates insurance" and is thus exempt from ERISA pre-emption. First, the law must be specifically directed towards entities engaged in insurance. Second, it must substantially affect the risk-pooling arrangement between the insurer and the insured.

The Court reasoned that even though the AWP law prohibited providers from entering into exclusive agreements with insurers, it was still directed towards insurers. The Court said that the fact that the law focused on the relationship between an insurer and a provider rather than on terms of an insurance policy does not mean that the law failed to regulate insurance because, by expanding the pool of providers, the AWP law altered the scope of permissible bargains between insurers and insureds. According to the Court, this would substantially affect the type of risk-pooling arrangements that insurers may offer.