Pleasant surprise

Nearly eleven years ago, U.S. Supreme Court Justice Ruth Bader Ginsburg authored a 5-4 decision in Empire Healthchoice v. McVeigh. The case concerned a federal court jurisdiction issue but in the course of the opinion, the FEHB Act’s state law preemption provision (5 U.S.C. Sec. 8902(m)(1)) was placed under a cloud. This provision allows for uniform nationwide administration of FEHB plans. The court’s decision lead to a lot of costly litigation.

Today, Justice Ginsburg righted the ship by authoring a unanimous opinion strongly upholding the FEHBA’s state law preemption provision. The Court held in Coventry Health Care v. Nevils that the FEHBA preempts a Missouri state law prohibiting health insurers from recovering benefit payments from the responsible party, e.g., the person who caused the auto accident. As Congress directed, where FEHBA contract terms “relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits),” § 8902(m)(1) ensures that those terms will be uniformly enforceable nationwide, free from state interference.” Amen.

Thank you Justice Ginsburg , the other members of the Court, and Miguel Estrada, the Gibson Dunn lawyer who argued the case for Coventry, for this outcome which will simplify FEHBP administration.

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