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The United States Supreme Court Holds That FEHBA Preempts State Anti-Subrogation Laws.

April 18th, 2017

On April 18, 2017, the United States Supreme Court handed down an 8 to 0 decision written by Justice Ginsburg in the case of Coventry Health Care of Missouri, Inc v. Nevils, 2017 WL 1377380, holding that the Federal Employees Health Benefits Act (FEHBA) preempts states’ anti-subrogation laws. The interesting issue in this case was whether the FEHBA could give preemptive force of law to private contracts.  The Court ruled in favor of the health insurer and permitted FEHBA subrogation, stating:

“We hold, contrary to the decision of the Missouri Supreme Court, that contractual subrogation and reimbursement prescriptions plainly “relate to . . . payments with respect to benefits,” §8902(m)(1); therefore, by statutory instruction, they override state law barring subrogation and reimbursement.”

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