Verdict - Summer 2017 - 36

> CASE UPDATES

CHEERLESS CLARITY
The Federal Employees Health Benefits
Act's express preemption prescription
overriding state law prohibiting
subrogation and reimbursement
BY SHAWN OWEN AND WESLEY STARRETT
THE FEDERAL EMPLOYEES HEALTH

State or local law... which relates to health

Benefits Act of 1959 (FEHBA), 5 U.S.C. § 8901

insurance or plans."4

et seq., authorizes the Office of Personnel

The Court found this to be in line with FEHBA's

Management (OPM) to contract with pri-

"text, context, and purpose. Contractual pro-

vate carriers for federal employees' health

visions for subrogation and reimbursement

Prior to the decision in Coventry, this issue

insurance.1 Additionally, FEHBA contains a

'relate to... payments with respect to benefits'

was looked at in Georgia in Blue Cross Blue

provision expressly preempting state law. 2

because subrogation and reimbursement rights

Shield Plan of Georgia v. Gunter, 541 F.3d 1320

Jodie Nevils was insured under a FEHBA

yield just such payments." Put another way,

(11th Cir., 2008) when the court held that in a

plan offered by Coventry Health Care of

"the carrier's very provision of benefits triggers

reimbursement claim brought by an FEHBA plan

Missouri. Nevils was injured in a car wreck and

the right to payment."6

administrator there was no federal question

5

Coventry paid his medical expenses. Coventry

The Court acknowledged the Federal

jurisdiction. While the issue as to whether or

then filed a lien against Nevils' recovery from

Government's "significant financial stake

not the FEHBA plan language could preempt

the at-fault driver. Nevils satisfied the lien,

in subrogation and reimbursement" given

state law was still outstanding, this case

then filed a class action in Missouri alleging

the fact that FEHBA concerns benefits from

offered a glimmer of hope for Plaintiff's law-

Coventry unlawfully obtained reimbursement

a federal health insurance plan for federal

yers. The law on FEHBA subrogation remained

as Missouri law prohibits subrogation and

employees that arise from a federal law.

unsettled and although it was certainly still

reimbursement in this context. 3

7

The Court further found this regime con-

evolving, it appeared, at least for a short time

sistent with the Supremacy Clause because

that an FEHBA plan's right to reimbursement

ing questions:

the "statute itself, not a contract, strips state

might be governed by Georgia state law and

1. Does FEHBA's express preemption pre-

law of its force."

that O.C.G.A. § 33-24-56.1 would apply. That

The Supreme Court addressed the follow-

scription override state law prohibiting
subrogation and reimbursement?
2. If so, is the statutory prescription consis-

8

Previously, an insurer's right to reimburse-

statute provides that a benefit provider may

ment and subrogation under an FEHBA plan

require reimbursement only if "the amount of

was opaque in many jurisdictions, including

the recovery exceeds the sum of all economic

Georgia, adhering to versions of the made

and non-economic losses incurred as a result

In an 8-0 decision, the Court answered

whole doctrine. In such jurisdictions, the made

of the injury, exclusive of losses for which reim-

yes to both questions. The Court reasoned

whole doctrine helps individuals who were not

bursement may be sought under this code sec-

FEHBA's preemption prescription overrides

fully compensated for all economic and non-

tion; and the amount of reimbursement claim

state insurance law because the very lan-

economic losses fight against contractual

is reduced by the pro rata amount of the attor-

guage of FEHBA provides the "terms of any

rights of reimbursement and subrogation. 9

ney's fees and expenses of litigation incurred

contract under this chapter which relate to

Put another way, the made whole doctrine

by the injured party in bringing the claim."

the nature, provision, or extent of coverage

assured the insurer - not the insured - would

However, in the wake of Coventry, the water

or benefits (including payments with respect

bear the burden of any recovery less than

is clear enough to see that people insured

to benefits) shall supersede and preempt any

enough to cover all the insured's losses.

under FEHBA plans will not be protected by

tent with the Supremacy Clause?

36

Georgia Trial Lawyers Association



Table of Contents for the Digital Edition of Verdict - Summer 2017

President’s Message
Don’t Stop Fighting: Overcoming Obstacles Leads to Record Verdict in Camden County
Amazing Things Happen When Women Get Involved!
AAJ Addresses Top Concerns with Congress
Pro Bono Representation: A Bond Forged between a Naval Officer and Trial Lawyer
3 Tips for Defeating Daubert Motions
Common Issues to Stay on Guard in Cases Involving Tortious Security Officers
The Confusing Question of Causation in Criminal Attack Premises Liability Cases
Technology: Notetaking for the Digital Lawyer
New Lawyers’ Corner: 6 Questions for Verdict
Pope Langdale: Community Investments for a Cause
Case Updates: Federal Employees Health Benefits Act of 1959
Workers’ Comp: Standard of Review — “Any Evidence” Rule
Thank You, Civil Justice PAC Contributors!
GTLA Champion Members
Welcome New GTLA Members!
Index to Advertisers/Advertiser.com
Verdict - Summer 2017 - Intro
Verdict - Summer 2017 - cover1
Verdict - Summer 2017 - cover2
Verdict - Summer 2017 - 3
Verdict - Summer 2017 - 4
Verdict - Summer 2017 - 5
Verdict - Summer 2017 - 6
Verdict - Summer 2017 - 7
Verdict - Summer 2017 - 8
Verdict - Summer 2017 - President’s Message
Verdict - Summer 2017 - Don’t Stop Fighting: Overcoming Obstacles Leads to Record Verdict in Camden County
Verdict - Summer 2017 - 11
Verdict - Summer 2017 - Amazing Things Happen When Women Get Involved!
Verdict - Summer 2017 - AAJ Addresses Top Concerns with Congress
Verdict - Summer 2017 - Pro Bono Representation: A Bond Forged between a Naval Officer and Trial Lawyer
Verdict - Summer 2017 - 15
Verdict - Summer 2017 - 3 Tips for Defeating Daubert Motions
Verdict - Summer 2017 - 17
Verdict - Summer 2017 - Common Issues to Stay on Guard in Cases Involving Tortious Security Officers
Verdict - Summer 2017 - 19
Verdict - Summer 2017 - 20
Verdict - Summer 2017 - 21
Verdict - Summer 2017 - 22
Verdict - Summer 2017 - 23
Verdict - Summer 2017 - The Confusing Question of Causation in Criminal Attack Premises Liability Cases
Verdict - Summer 2017 - 25
Verdict - Summer 2017 - 26
Verdict - Summer 2017 - 27
Verdict - Summer 2017 - Technology: Notetaking for the Digital Lawyer
Verdict - Summer 2017 - 29
Verdict - Summer 2017 - 30
Verdict - Summer 2017 - New Lawyers’ Corner: 6 Questions for Verdict
Verdict - Summer 2017 - 32
Verdict - Summer 2017 - 33
Verdict - Summer 2017 - Pope Langdale: Community Investments for a Cause
Verdict - Summer 2017 - 35
Verdict - Summer 2017 - Case Updates: Federal Employees Health Benefits Act of 1959
Verdict - Summer 2017 - 37
Verdict - Summer 2017 - Workers’ Comp: Standard of Review — “Any Evidence” Rule
Verdict - Summer 2017 - 39
Verdict - Summer 2017 - Thank You, Civil Justice PAC Contributors!
Verdict - Summer 2017 - Welcome New GTLA Members!
Verdict - Summer 2017 - Index to Advertisers/Advertiser.com
Verdict - Summer 2017 - cover3
Verdict - Summer 2017 - cover4
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