Supreme Court eyes benefits preemption cases

Insurers argue that letting FEHBA preempt state laws is important.

Lawyers for Coventry Health Care of Missouri Inc., for example, argue in a brief filed in connection with the Nevils case that the text of FEHBA is similar to the section of the Employee Retirement Income Security Act (ERISA) that preempts state efforts to shield patients from plan moves to seek reimbursement for benefits paid from lawsuit recoveries.

The federal government itself argued in a pleading filed in connection with the Kobold case that it “‘is exceedingly unlikely that Congress intended a broader role for state law,’ or ‘desired less uniformity,’ ‘in the case of federal employees than for private employees,’” lawyers for Coventry write.

OPM generally has federal health benefits program contracts include provisions requiring enrollees to pay the plans back if the enrollees get recoveries from other parties, Coventry’s lawyers write.

Lawyers for Nevils argue in another brief that FEHBA preempts state anti-subrogation laws, or laws that prohibit insurers from suing the parties who have caused an insured’s injury, but that FEHBA does not let a contract preempt state laws prohibiting an insurer from trying to seek reimbursement directly from the insured’s recoveries. Nevils’ lawyers say the petitioners are trying to blur the distinction between the term “subrogation” and the term “reimbursement.” Nevils’ lawyers contend that the health plan contract provision in the Nevils case does not include a provision that lets the insurer seek reimbursement from the insured.