FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY The Honorable Thea
A. Sherry, Judge
R. RUSSELL, JUDGE
the third time this Court has addressed the issue presented
in this case - whether Missouri's anti-subrogation law is
preempted by 5 U.S.C. § 8902(m)(1) with regard to any
contract for health benefits negotiated between the federal
government and an insurance carrier. Because the United
States Supreme Court recently held § 8902(m)(1) validly
preempts state anti-subrogation laws, this Court affirms the
trial court's judgment.
and Procedural Background
Nevils was a federal employee insured through a health
insurance 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 the proceeds
of a settlement Nevils received from the party responsible
for the accident. Nevils satisfied the subrogation lien and
filed a class action petition arguing Missouri law does not
permit subrogation or reimbursement of personal injury
claims. Coventry and ACS moved for summary judgment,
asserting FEHBA preempts Missouri's anti-subrogation law.
FEHBA's preemption clause provides:
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, or any regulation issued
thereunder, which relates to health insurance or plans.
5 U.S.C. § 8902(m)(1). The trial court entered judgment
for Coventry and ACS, and Nevils appealed.
Nevils v. Group Health Plan, Inc., 418 S.W.3d 451
(Mo. banc 2014) (Nevils I), this Court reversed and
held the FEHBA preemption clause does not preempt
Missouri's anti-subrogation law because an insurer's
subrogation rights do not relate to the nature, provision, or
extent of coverage or benefits. 418 S.W.3d at 452. In
reaching this conclusion, this Court noted the presumption
that a state's police powers are not preempted by federal
statute unless such is the "clear and manifest purpose
of Congress." Id. at 454 (quoting Cipollone
v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992)).
Relying on Empire Healthchoice Assurance, Inc. v.
McVeigh, 547 U.S. 677, 697 (2006), this Court found the
FEHBA preemption clause susceptible to plausible, alternate
interpretations because it does not directly address an
insurer's subrogation or reimbursement rights.
Id. As a result, this Court concluded Congress did
not manifest a clear intent to preempt state anti-subrogation
laws when it enacted the FEHBA preemption
clause. Id. at 457.
Nevils I was decided, the federal Office of
Personnel Management promulgated a new 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" within the meaning of FEHBA's preemption
clause. 5 C.F.R. § 890.106(h). The United States Supreme
Court granted certiorari, vacated this Court's opinion in
Nevils I, and remanded the case to this Court to
consider whether FEHBA preempts Missouri's
anti-subrogation law in light of the new rule. Coventry
Health Care of Mo., Inc. v. Nevils, 135 S.Ct. 2886
Nevils v. Group Health Plan, Inc., 492 S.W.3d 918
(Mo. banc 2016) (Nevils II), this Court held the
rule did not alter "the fact that the FEHBA preemption
clause does not express Congress' clear and manifest
intent to preempt Missouri's anti-subrogation law."
492 S.W.3d at 925. Accordingly, this Court again reversed the
trial court's judgment in favor of Coventry and
United States Supreme Court granted certiorari and held an
insurer's subrogation and reimbursement rights
"relate to . . . payments with respect to benefits"
because it is the insurance carrier's provision of
benefits that triggers its right to payment from either the
beneficiary or a third party after a judgment against a
tortfeasor is entered or settlement is reached. Coventry
Health Care of Mo., Inc. v. Nevils, 137 S.Ct. 1190, 1197
(2017). The United States Supreme Court began with the
statute's use of the phrase "relate to, " which
"expresses a broad pre-emptive purpose" in a
preemption clause and, therefore, "weighs against"
the narrow construction of § 8902(m)(1) urged by Nevils
and employed by this Court in its earlier opinions.
Id. It further supported its holding by citing the
strong federal interest "in uniform administration"
of FEHBA plans, "free from state interference,
particularly in regard to coverage, benefits, and payments,
" and noting that the federal government has a strong
financial stake in ensuring insurance carriers with federal
contracts are reimbursed. Id. at 1197-98.
United States Supreme Court further held § 8902(m)(1)
"strips state law of its force, " not the language
of federal employee health benefits contracts. Id.
at 1198. This holding rejected the argument that the language
of the preemption clause - which provides the "terms
of any contract" between the federal government and
an insurance carrier "shall supersede and preempt"
local and state laws - violates the Supremacy Clause "by
assigning preemptive effect to the terms of a contract."
Id. at 1198-99. Concluding that this argument
"elevates semantics over substance, " the United
States Supreme Court held the FEHBA preemption clause
"manifests the same intent to preempt state law" as
other federal preemption statutes despite the different
"linguistic formulation" of § 8902(m)(1).
Id. at 1198-99. The United States Supreme Court
vacated this Court's decision in Nevils II and
remanded the case for further proceedings. Id. at
with the United States Supreme Court's decision in
Coventry, this Court holds that the FEHBA preemption
clause applies in this case to preempt Missouri's
anti-subrogation law. "Contractual provisions for
subrogation and reimbursement relate to payments with respect
to benefits" within the meaning of FEHBA's
preemption clause. Coventry, 137 S.Ct. at 1197
(alterations and internal quotations omitted). Further, FEHBA
complies with the Supremacy Clause because it is the language
of § 8902(m)(1) that "strips state law of its
force, " not the terms of any contract, despite the
unusual phrasing of the preemption clause. Id. at
1198-99. Applying these clear directives from the United
States Supreme Court, the trial court properly entered