Term: 2016
Docket: 16-149
Coventry Health Care Of Missouri v. Nevils
- Pro
16-149 COVENTRY HEALTH CARE OF MISSOURI, INC. V. NEVILS DECISION BELOW: 492 S.W.3d 918 CERT. GRANTED 11/4/2016 QUESTION PRESENTED: The Federal Employees Health Benefits Act ("FEHBA"), 5 U.S.C. § 8901 et seq., governs the health benefits of millions of federal workers and dependents, and authorizes the Office of Personnel Management ("OPM'.") to enter into contracts with private insurance carriers to administer benefit plans. FEHBA expressly "preempt[s] any State or local law" that would prevent enforcement of "the terms of any contract" between OPM and a carrier which "relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits)." Id. § 8902(m)(l). In a 2015 regulation, OPM codified its longstanding position that FEHBA-contract provisions requiring carriers to seek subrogation or reimbursement "relate to ... benefits" and "payments with respect to benefits," and therefore FEHBA preempts state laws that purport to prevent FEHBA insurance carriers from pursuing subrogation and reimbursement recoveries. 5 C.F.R. § 890.106(h). Expressly disagreeing with multiple federal circuits and state appellate courts, the Missouri Supreme Court nevertheless construed FEHBA not to preempt such state laws-explicitly refusing to accord any deference to OPM's regulation. A majority of the court further concluded that Section 8902(m)(l) violates the Supremacy Clause of the U.S. Constitution. The questions presented are: 1. Whether FEHBA preempts state laws that prevent carriers from seeking subrogation or reimbursement pursuant to their FEHBA contracts. 2. Whether FEHBA's express-preemption provision, 5 U.S.C. § 8902(m)(l), violates the Supremacy Clause. LOWER COURT CASE NUMBER: SC93134
The U.S. Supreme Court case Coventry Health Care of Missouri v. Nevils in 2016 revolved around the issue of whether federal law preempts state laws that prohibit insurance companies from seeking reimbursement for medical expenses paid on behalf of a policyholder who has received a personal injury settlement or award. The plaintiff, Jodie Nevils, was insured under a Federal Employees Health Benefits Act (FEHBA) plan administered by Coventry when he suffered injuries in an automobile accident and sued the driver responsible for his injuries. After settling his lawsuit, Coventry sought to recover from him the costs it had incurred for his medical care based on its contract's subrogation clause - which is often prohibited by state law but allowed under FEHBA contracts. Nevils argued that Missouri's anti-subrogation law should apply instead of federal regulations allowing such recovery because FEHBA does not clearly express Congress' intent to preempt state laws regarding insurance contracts. However, the Supreme Court ruled unanimously in favor of Coventry and held that FEHBA preempts state anti-subrogation laws due to its provision stating terms "relate to" coverage or benefits shall supersede any State or local law relating to health insurance.
In the dissenting opinion for Coventry Health Care of Missouri v. Nevils, Justice Ginsburg argued that state laws should not be preempted by federal law in this case. She believed that the Federal Employees Health Benefits Act (FEHBA) did not contain explicit preemption language and thus, it was inappropriate to infer such a strong preemption from its terms. Furthermore, she pointed out that FEHBA's contract clause only applies to contracts between the government and insurance carriers - not those between insurers and insured individuals. Therefore, she concluded that Missouri's anti-subrogation law could coexist with FEHBA without causing significant conflict or undermining federal interests.
