Title: Nevils v. Group Health Plan, Inc.
Citation: N/A
Docket Number: SC93134
State: Missouri
Issuer: Missouri Supreme Court
Date: July 11, 2017

SUPREME COURT OF MISSOURI 
en banc 
JODIE NEVILS, 
) 
) 
Appellant, 
) 
) 
v. 
) 
No. SC93134 
) 
GROUP HEALTH PLAN, INC., and  
) 
ACS RECOVERY SERVICES, INC., 
) 
) 
Respondents. 
) 
APPEAL FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY 
The Honorable Thea A. Sherry, Judge 
This is the third time this Court has addressed the issue presented in this case – 
whether Missouri’s anti-subrogation law is preempted by 5 U.S.C. § 8902(m)(1) with 
regard to any contract for health benefits negotiated between the federal government and 
an insurance carrier.  Because the United States Supreme Court recently held 
§ 8902(m)(1) validly preempts state anti-subrogation laws, this Court affirms the trial
court’s judgment.  
Factual and Procedural Background 
Jodie Nevils was a federal employee insured through a health insurance plan 
governed by the Federal Employee Health Benefits Act (FEHBA) when she was injured 
Opinion issued July 11, 2017
2 
 
in an automobile accident.1  Coventry paid her medical expenses and asserted a 
subrogation lien against the proceeds of a settlement Nevils received from the party 
responsible for the accident.  Nevils satisfied the subrogation lien and filed a class action 
petition arguing Missouri law does not permit subrogation or reimbursement of personal 
injury claims.  Coventry and ACS moved for summary judgment, asserting FEHBA 
preempts Missouri’s anti-subrogation law.  FEHBA’s preemption clause provides:  
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, or any 
regulation issued thereunder, which relates to health insurance or plans. 
 
5 U.S.C. § 8902(m)(1).  The trial court entered judgment for Coventry and ACS, and 
Nevils appealed.   
In Nevils v. Group Health Plan, Inc., 418 S.W.3d 451 (Mo. banc 2014) (Nevils I), 
this Court reversed and held the FEHBA preemption clause does not preempt Missouri’s 
anti-subrogation law because an insurer’s subrogation rights do not relate to the nature, 
provision, or extent of coverage or benefits.  418 S.W.3d at 452.  In reaching this 
conclusion, this Court noted the presumption that a state’s police powers are not 
preempted by federal statute unless such is the “clear and manifest purpose of Congress.”  
Id. at 454 (quoting Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992)).  Relying on 
Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 697 (2006), this Court 
found the FEHBA preemption clause susceptible to plausible, alternate interpretations 
                                                 
1 For a more comprehensive statement of the facts, see Nevils v. Group Health Plan, Inc., 418 
S.W.3d 451, 452-53 (Mo. banc 2014). 
3 
 
because it does not directly address an insurer’s subrogation or reimbursement rights.  Id.  
As a result, this Court concluded Congress did not manifest a clear intent to preempt state 
anti-subrogation laws when it enacted the FEHBA preemption clause.2  Id. at 457.   
After Nevils I was decided, the federal Office of Personnel Management 
promulgated a new rule providing that an insurer’s rights to subrogation and 
reimbursement under federal employee health benefits contracts “relate to the nature, 
provision, and extent of coverage or benefits” within the meaning of FEHBA’s 
preemption clause.  5 C.F.R. § 890.106(h).  The United States Supreme Court granted 
certiorari, vacated this Court’s opinion in Nevils I, and remanded the case to this Court to 
consider whether FEHBA preempts Missouri’s anti-subrogation law in light of the new 
rule.  Coventry Health Care of Mo., Inc. v. Nevils, 135 S. Ct. 2886 (2015).   
In Nevils v. Group Health Plan, Inc., 492 S.W.3d 918 (Mo. banc 2016) (Nevils II), 
this Court held the rule did not alter “the fact that the FEHBA preemption clause does not 
express Congress’ clear and manifest intent to preempt Missouri’s anti-subrogation law.”  
492 S.W.3d at 925.  Accordingly, this Court again reversed the trial court’s judgment in 
favor of Coventry and ACS.3  Id.   
                                                 
2 Judge Wilson concurred in the result of Nevils I but disagreed with the majority opinion’s 
conclusion that subrogation rights of an insurer are not “related to” the nature of coverage or 
benefits under a health or insurance plan.  Id. at 459-62 (Wilson, J., concurring).  Instead, Judge 
Wilson concluded “the preemption language in § 8902(m)(1) is not a valid application of the 
supremacy clause” because that constitutional provision gives “primacy solely to federal law,” 
not to terms contained in a privately negotiated contract, as the language of the preemption 
clause appeared to do.  Id. at 463 (emphasis in original).   
3 Judge Wilson concurred in the result for the same reasons stated in his concurrence in Nevils I, 
and a majority of this Court joined in his concurrence.  Id. (Wilson, J., concurring). 
4 
 
The United States Supreme Court granted certiorari and held an insurer’s 
subrogation and reimbursement rights “relate to . . . payments with respect to benefits” 
because it is the insurance carrier’s provision of benefits that triggers its right to payment 
from either the beneficiary or a third party after a judgment against a tortfeasor is entered 
or settlement is reached.  Coventry Health Care of Mo., Inc. v. Nevils, 137 S. Ct. 1190, 
1197 (2017).  The United States Supreme Court began with the statute’s use of the phrase 
“relate to,” which “expresses a broad pre-emptive purpose” in a preemption clause and, 
therefore, “weighs against” the narrow construction of § 8902(m)(1) urged by Nevils and 
employed by this Court in its earlier opinions.  Id.  It further supported its holding by 
citing the strong federal interest “in uniform administration” of FEHBA plans, “free from 
state interference, particularly in regard to coverage, benefits, and payments,” and noting 
that the federal government has a strong financial stake in ensuring insurance carriers 
with federal contracts are reimbursed.  Id. at 1197-98.   
The United States Supreme Court further held § 8902(m)(1) “strips state law of its 
force,” not the language of federal employee health benefits contracts.  Id. at 1198.  This 
holding rejected the argument that the language of the preemption clause – which 
provides the “terms of any contract” between the federal government and an insurance 
carrier “shall supersede and preempt” local and state laws – violates the Supremacy 
Clause “by assigning preemptive effect to the terms of a contract.”  Id. at 1198-99.  
Concluding that this argument “elevates semantics over substance,” the United States 
Supreme Court held the FEHBA preemption clause “manifests the same intent to preempt 
state law” as other federal preemption statutes despite the different “linguistic 
5 
 
formulation” of § 8902(m)(1).  Id. at 1198-99.  The United States Supreme Court vacated 
this Court’s decision in Nevils II and remanded the case for further proceedings.  Id. at 
1199.     
Analysis 
 
Consistent with the United States Supreme Court’s decision in Coventry, this 
Court holds that the FEHBA preemption clause applies in this case to preempt Missouri’s 
anti-subrogation law.  “Contractual provisions for subrogation and reimbursement relate 
to payments with respect to benefits” within the meaning of FEHBA’s preemption clause.  
Coventry, 137 S. Ct. at 1197 (alterations and internal quotations omitted).  Further, 
FEHBA complies with the Supremacy Clause because it is the language of § 8902(m)(1) 
that “strips state law of its force,” not the terms of any contract, despite the unusual 
phrasing of the preemption clause.  Id at 1198-99.  Applying these clear directives from 
the United States Supreme Court, the trial court properly entered summary judgment in 
favor of Coventry and ACS because FEHBA preempts Missouri’s anti-subrogation law 
with regard to the federal employee health benefits contract at issue in this case.   
Conclusion 
The trial court’s judgment is affirmed. 
 
______________________________ 
Mary R. Russell, Judge 
 
 
 
Fischer, C.J., Draper, Wilson, Breckenridge and Stith, JJ., concur.  Powell, J., not 
participating.