America

April 20, 2017

Missouri Statute Is Preempted Under Federal Law: SC


US Supreme Court

On April 18, in Coventry Health Care of Missouri, Inc. vs. Nevils, the US Supreme Court ruled that a Missouri statute, which served to expand insurance benefits for federal employees, is preempted under federal law. Under the Federal Employees Health Benefits Act of 1959 (FEHBA - a system of "managed competition" through which employee health benefits are provided to civilian government employees and annuitants of the US government), the Office of Personnel Management (OPM - an independent agency of the US government that manages the civil service of the federal government) is authorized to contract with private carriers for federal employees’ health insurance policies.

These policies include "subrogation" clauses that allow insurers to recover funds incurred by insureds from third parties, most often through tort lawsuits. Missouri, like other states, has a consumer-protection statute that invalidates subrogation clauses in insurance contracts.

FEHBA contains an express preemption provision called §8902(m)(1), which states that 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 or plans."

The court noticed that contractual subrogation and reimbursement prescriptions plainly "relate to... payments with respect to benefits," and therefore, they override state laws barring subrogation and reimbursement. Furthermore, the court determined that the statute preempts the Missouri state law.

latest News

  • US President Signs Executive Order To Review Of Trade Agreements And WTO Membership

    On April 29, US President Donald Trump signed an executive order directing the Commerce Department and the US Trade Representative to review all US tr...

    Read More
  • Remonetization: Situation Is Almost Normal, says Finance Minister

    Finance Minister Arun Jaitley had emphasized on one of the most underlined topic that is remonetization.

    Read More
  • Navin Pahwa Designated Senior Advocate By Gujarat HC

    Navin Pahwa designated as Senior Advocate by Gujarat High Court. Navin was enrolled at the Bar in the year 1993.

    Read More