Month: October 2017

On April 18, 2017, the Supreme Court decided Coventry Health Care of Missouri, Inc., v. Nevils. Under the Federal Employees Health Benefits Act of 1959 (FEHBA), the Office of Personnel Management (OPM) may contract with private carriers to provide federal employees health insurance. FEHBA expressly provides, however, that the terms of any such contract relating to “the nature, provision, or extent of coverage or benefits (including payments with respect to benefits)” will “supersede and preempt any State or local or law, or any regulation issued thereunder” relating to health insurance or plans. Here, OPM’s contracts with private insurance carriers provide, among other things, for reimbursement and subrogation. When Jodie Nevils, a former federal employee insured under a FEHBA plan offered by Coventry Health Care of Missouri (Coventry) was injured in an automobile accident, Coventry paid Nevils’ medical expenses. Nevils sued the driver who caused his injuries and obtained a settlement award. Coventry, invoking its OPM contract, then asserted a lien of approximately $6,600 against Nevils’ settlement proceeds to cover the medical bills Coventry had paid for Nevils. He paid off the lien, but then filed a class action suit against Coventry in Missouri state court, claiming the insurance company had unlawfully obtained reimbursement and noting that Missouri law does not permit subrogation or reimbursement in this context. The trial court granted judgment for Coventry on the grounds that FEHBA allowed Coventry’s contract terms to override state law prohibitions. The Missouri Supreme Court, however, reversed, relying on a “presumption against preemption” that excluded subrogation and reimbursement from FEHBA’s preemptive scope.

By a vote of 8-0, the Supreme Court reversed the judgment of the Missouri Supreme Court and remanded the case. In an opinion delivered by Justice Ginsburg, the Supreme Court held that Missouri’s prohibitions on contractual subrogation and reimbursement “relate to … payments with respect to benefits,” and are therefore preempted by FEHBA. The Court further held that FEHBA’s preemption regime comports with the Constitution’s Supremacy Clause, because the statute itself and not the OPM contract triggers federal preemption. All other justices joined Justice Ginsburg’s opinion for the Court except Justice Gorsuch, who took no part in the consideration or decision of the case. Justice Thomas filed a concurring opinion.


To discuss the case, we have George Horvath, a Post-Doctoral Fellow and Lecturer at Berkeley Law.

Today's show discusses: A)  The Jones Act and Puerto Rico; B)  The GOP's tax plan; and C)  Oral arguments in the Zarda v. Altitude Express case we discussed back in Episode 91. Support us on Patreon at patreon.com/law Follow us on Twitter:  @Openargs Facebook:  https://www.facebook.com/openargs/ And email us at openarguments@gmail.com Direct Download