Jodie Nevils v. Group Health Plan, Inc., and ACS Recovery Services, Inc.
418 S.W.3d 451
Mo.2014Background
- Nevils, a federal employee insured under a FEHBA plan administered by Group Health Plan, Inc. (GHP), was injured in a car accident; GHP paid his medical bills and later, through ACS, asserted a $6,592.24 subrogation/reimbursement lien against his tort settlement, which Nevils paid.
- Nevils sued GHP and ACS in state court (class action) alleging Missouri law bars insurer subrogation/reimbursement of personal injury recoveries (claims: consumer-protection, unjust enrichment, conversion, injunctive relief).
- GHP relied on FEHBA § 8902(m)(1), and Buatte v. Gencare, to argue that FEHBA preempts Missouri’s anti-subrogation rule; the trial court granted summary judgment for respondents based on that precedent.
- On appeal the Missouri Supreme Court reviewed de novo whether FEHBA’s preemption clause covers contractual subrogation/reimbursement terms that affect recovery from third-party tortfeasors.
- The court held FEHBA does not preempt Missouri’s prohibition on subrogation of personal injury claims because such reimbursement provisions do not have a direct and immediate relation to the "nature, provision, or extent of coverage or benefits." The judgment was reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FEHBA § 8902(m)(1) preempts Missouri law barring subrogation/reimbursement of personal-injury recoveries | Nevils: FEHBA does not preempt because subrogation/reimbursement does not "relate to the nature, provision, or extent of coverage or benefits" | GHP: Contract terms with OPM that create reimbursement/subrogation rights supersede state law under FEHBA § 8902(m)(1) | Held: No preemption — reimbursement/subrogation provisions are contingent, post‑payment rights that do not directly alter scope of coverage or entitlement to benefits |
| Proper scope of "relate to" in § 8902(m)(1) | Nevils: "Relate to" requires a direct, immediate connection to coverage/benefits; reimbursement is collateral | GHP: "Relate to" encompasses reimbursement terms because they affect net benefits an insured keeps | Held: "Relate to" construed narrowly (presumption against preemption); requires direct connection to coverage/benefits; reimbursement fails this test |
| Effect of Empire HealthChoice Assurance v. McVeigh on preemption analysis | Nevils: Empire supports cautious, narrow reading of FEHBA preemption and distinguishes benefits from reimbursement | GHP: Relied on earlier cases (e.g., Buatte) that read FEHBA broadly to preempt state anti‑subrogation rules | Held: Empire counsels caution; it distinguishes coverage/benefits from carriers’ post‑payment reimbursement rights and undermines broad preemption readings |
| Authority of OPM informal guidance (carrier letter) to support preemption | Nevils: OPM letter is informal and not entitled to Chevron deference here | GHP: OPM position supports that FEHBA preempts anti‑subrogation laws | Held: OPM letter not entitled to Chevron deference; it does not control outcome |
Key Cases Cited
- Buatte v. Gencare Health Sys., Inc., 939 S.W.2d 440 (Mo. Ct. App. 1996) (Missouri appellate decision holding FEHBA preempted state anti‑subrogation law)
- Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (U.S. 2006) (Supreme Court limited FEHBA preemption, distinguishing benefits from carrier reimbursement rights)
- Blue Cross Blue Shield of Illinois v. Cruz, 495 F.3d 510 (7th Cir. 2007) (distinguishes benefits from reimbursement and warns against federal takeover of tort law to achieve uniformity)
- Kobold v. Aetna Life Ins. Co., 309 P.3d 924 (Ariz. Ct. App. 2013) (interpreting "relate to" narrowly; holding FEHBA does not preempt state anti‑subrogation law)
- Behr v. Blue Cross Hosp. Serv., Inc., 715 S.W.2d 251 (Mo. 1986) (insurance‑contract construction; conflicting give‑and‑take provisions create ambiguity)