Claims on injury settlements
Coventry Health Care of Mo. v. Nevils
In brief
The Court ruled that FEHBA repayment terms within the law’s scope can override state bans, overturned the lower-court ruling, and sent the case back.
- Where it stands
- Decided
Decided 8-0 · April 18, 2017 · Opinion by Justice Ginsburg
- What it’s about
- The Court ruled that the Federal Employees Health Benefits Act allows Coventry to enforce contract terms requiring repayment from Jodie Nevils’s personal-injury settlement, despite state laws barring that recovery.
- Who it affects
- Coventry may enforce its repayment terms against Nevils’s settlement despite the state-law bar, but only if those terms fall within FEHBA’s scope.
Summary: written with AI from the case record.
What it's about
It concluded that the federal law itself overrides those state laws without violating the Constitution’s rule that federal law takes priority, overturned the Missouri Supreme Court’s judgment, and sent the case back for further proceedings.
The dispute set a federal health-plan contract’s repayment terms against state laws that bar insurers from recovering money from personal-injury settlements.
Question presented
1. Does the Federal Employee Health Benefits Act (FEHBA) preempt state laws that prohibit insurance companies from claiming the proceeds of personal injury settlements pursuant to their contracts? 2. Does the express preemption clause of the Federal Employee Health Benefits Act (FEHBA) violate the Supremacy Clause of the U.S. Constitution?
What the Court decided
Holding
1. Because contractual subrogation and reimbursement prescriptions plainly “relate to... payments with respect to benefits,” §8902(m)(1), they override state laws barring subrogation and reimbursement. 2. The regime Congress enacted is compatible with the Supremacy Clause. The statute itself, not a contract, strips state law of its force. FEHBA contract terms have preemptive force only if they fall within §8902(m)(1)’s preemptive scope. Many other federal statutes found to preempt state law, including the Employee Retirement Income Security Act of 1974 and the Federal Arbitration Act, leave the contextspecific scope of preemption to contractual terms. While §8902(m)(1)’s phrasing may differ from those other statutes’, FEHBA’s express-preemption provision manifests the same intent to preempt state law. 492 S. W. 3d 918, reversed and remanded.
- Result
- Reversed
The Court's reasoning
The Court said FEHBA covers contract terms tied to payments for benefits, including repayment after a settlement. The statute itself—not the contract—overrides state law, and the Court found this consistent with the Constitution’s rule that federal law takes priority over state law.
The vote
What's next
The case returns to the lower court for further proceedings.
Documents
Opinions
Docket activity
New analysis added
AI analysis generated: Impact Analysis
New analysis added
AI analysis generated: Case Briefing
AI analysis generated: Opinion Summary
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AI analysis generated: Decision Record
Case data updated: summary, question_presented, generation_metadata
Case data updated: question_presented, extraction_metadata
Opinion added: Nevils
More questions
- What issue did Justice Thomas leave open?
- He noted an unraised question about whether Congress gave the executive branch too much freedom to make contracts that override state laws; the lower court could consider it, if at all.
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.