Nevils v. Group Health Plan, Inc.Annotate this Case
Nevils was a federal employee insured through a plan governed by the Federal Employee Health Benefits Act (FEHBA) when she was injured in an automobile accident. Coventry paid her medical expenses and asserted a subrogation lien against a settlement Nevils received from the party responsible for the accident. Nevils filed a class action, arguing Missouri law does not permit subrogation of personal injury claims. Coventry obtained summary judgment, based on FEHBA’s preemption clause: The terms of any contract under this chapter which relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, ... which relates to health insurance, 5 U.S.C. 8902(m)(1). Initially, the Missouri Supreme Court concluded Congress did not manifest a clear intent to preempt state anti-subrogation laws. The Office of Personnel Management subsequently promulgated a rule providing that an insurer’s rights to subrogation and reimbursement under federal employee health benefits contracts “relate to the nature, provision, and extent of coverage or benefits” under FEHBA. On remand, the Missouri Supreme Court held the rule did not alter its analysis. The U.S. Supreme Court then held an insurer’s subrogation rights “relate to . . . payments with respect to benefits” and that FEHBA “manifests the same intent to preempt state law” as other federal preemption statutes despite the different “linguistic formulation” of section 8902(m)(1). In light of that holding, the Missouri Supreme Court affirmed the trial court’s judgment.