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SUPREME COURT OF THE UNITED STATES
_________________
No. 16–149
_________________
COVENTRY HEALTH CARE OF MISSOURI, INC., fka
GROUP HEALTH PLAN, INC., PETITIONER
v. JODIE NEVILS
on writ of certiorari to the supreme court of
missouri
[April 18, 2017]
Justice Ginsburg delivered the opinion of the
Court.
In the Federal Employees Health Benefits Act of
1959 (FEHBA), 5 U. S. C. §8901
et seq.,
Congress authorized the Office of Personnel Management (OPM) to
contract with private carriers for federal employees’ health
insurance. §8902(a), (d). FEHBA contains a provision expressly
preempting state law. §8902(m)(1). That provision reads:
“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.”
Contracts OPM negotiates with private carriers
provide for reimbursement and subrogation. Reimbursement requires
an insured employee who receives payment from another source
(
e.g., the proceeds yielded by a tort claim) to return
healthcare costs earlier paid out by the carrier. Subrogation
involves transfer of the right to a third-party payment from the
insured employee to the carrier, who can then pursue the claim
against the third party. Several States, however, Missouri among
them, bar enforcement of contractual subrogation and reimbursement
provisions.
The questions here presented: Does FEHBA’s
express-preemption prescription, §8902(m)(1), override state law
prohibiting subrogation and reimbursement; and if §8902(m)(1) has
that effect, is the statutory prescription consistent with the
Supremacy Clause, U. S. Const., Art. VI, cl. 2? 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. We further hold,
again contrary to the Missouri Supreme Court, that the regime
Congress enacted is compatible with the Supremacy Clause. Section
8902(m)(1) itself, not the contracts OPM negotiates, triggers the
federal preemption. 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.
I
A
FEHBA “establishes a comprehensive program of
health insurance for federal employees.”
Empire HealthChoice
Assurance, Inc. v.
McVeigh, 547 U. S. 677, 682
(2006) . As just noted,
supra, at 1, FEHBA contains an
express-preemption provision, §8902(m)(1). FEHBA assigns to OPM
broad administrative and rulemaking authority over the program. See
§§8901–8913. OPM contracts with private insurance carriers to offer
a range of healthcare plans. §§8902, 8903.
OPM’s contracts with private carriers have long
included provisions requiring those carriers to seek subrogation
and reimbursement. Accordingly, OPM has issued detailed regulations
governing subrogation and reimbursement clauses in FEHBA contracts.
See 5 CFR §890.106 (2016). Under those regulations, a carrier’s
“right to pursue and receive subrogation and reimbursement
recoveries constitutes a condition of and a limitation on the
nature of benefits or benefit payments and on the provision of
benefits under the plan’s coverage.” §890.106(b)(1).
In 2015, after notice and comment, OPM published
a rule confirming that “[a] carrier’s rights and responsibilities
pertaining to subrogation and reimbursement under any [FEHBA]
contract relate to the nature, provision, and extent of coverage or
benefits (including payments with respect to benefits) within the
meaning of” §8902(m)(1). §890.106(h). Such “rights and
responsibilities,” OPM’s rule provides, “are . . .
effective notwithstanding any state or local law, or any regulation
issued thereunder, which relates to health insurance or plans.”
Ibid. Its rule, OPM explained, “comports with longstanding
Federal policy and furthers Congres[s’] goals of reducing health
care costs and enabling uniform, nationwide application of [FEHBA]
contracts.” 80 Fed. Reg. 29203 (2015) (final rule).
B
Respondent Jodie Nevils is a former federal
employee who enrolled in and was insured under a FEHBA plan offered
by petitioner Coventry Health Care of Missouri.[
1]
Nevils v.
Group Health Plan,
Inc., 418 S. W. 3d 451, 453 (Mo. 2014) (
Nevils
I ). When Nevils was injured in an automobile accident,
Coventry paid his medical expenses.
Ibid. Nevils sued the
driver who caused his injuries and recovered a settlement award.
Ibid. Based on its contract with OPM, see App. to Pet. for
Cert. 129a–130a, Coventry asserted a lien for $6,592.24 against
part of the settlement proceeds to cover medical bills it had paid.
Nevils I, 418 S. W. 3d, at 453. Nevils repaid that
amount, thereby satisfying the lien.
Ibid.
Nevils then filed this class action against
Coventry in Missouri state court, alleging that Coventry had
unlawfully obtained reimbursement.
Ibid. Nevils premised his
claim on Missouri law, which does not permit subrogation or
reimbursement in this context, see,
e.g.,
Benton House,
LLC v.
Cook & Younts Ins., Inc., 249
S. W. 3d 878, 881–882 (Mo. App. 2008). Coventry countered
that §8902(m)(1) makes subrogation and reimbursement clauses in
FEHBA contracts enforceable notwithstanding state law. The trial
court granted summary judgment in Coventry’s favor,
Nevils
v.
Group Health Plan, Inc., No. 11SL–CC00535 (Cir. Ct.,
St. Louis Cty., Mo., May 21, 2012), App. to Pet. for Cert.
28a, 32a, and the Missouri Court of Appeals affirmed,
Nevils
v.
Group Health Plan, Inc., 2012 WL 6689542, *5 (Dec. 26,
2012).
The Missouri Supreme Court reversed.
Nevils
I, 418 S. W. 3d, at 457. That court began with “the
assumption that the historic police powers of the States [are] not
to be superseded by . . . Federal Act unless that [is]
the clear and manifest purpose of Congress.”
Id., at 454
(quoting
Cipollone v.
Liggett Group, Inc., 505
U. S. 504, 516 (1992) ) (alterations in original). Finding
§8902(m)(1) susceptible to diverse “plausible readings,” the court
invoked a “presumption against preemption” to conclude that the
federal statute’s preemptive scope excluded subrogation and
reimbursement. 418 S. W. 3d, at 455.
Judge Wilson, joined by Judge Breckenridge,
concurred in the judgment.
Id., at 457. Observing that “it
defies logic to insist that benefit repayment terms do not relate
to the nature or extent of Nevils’ benefits,”
id., at 460
(emphasis deleted), Judge Wilson concluded that “Congress plainly
intended for §8902(m)(1) to apply to the benefit repayment terms in
[Coventry’s] contract,”
id., at 462. He nevertheless
concurred, reasoning that the Supremacy Clause did not authorize
preemption based on the terms of FEHBA contracts.
Id., at
462–465.
Coventry sought our review, and we invited the
Solicitor General to file a brief expressing the views of the
United States.
Coventry Health Care of Mo., Inc. v.
Nevils, 574 U. S. ___ (2014). While Coventry’s petition
was pending, OPM finalized its rule governing subrogation and
reimbursement. See
supra, at 3. This Court granted
certiorari, vacated the Missouri Supreme Court’s judgment, and
remanded for further consideration in light of OPM’s recently
adopted rule.
Coventry Health Care of Mo., Inc. v.
Nevils, 576 U. S. ___ (2015).
On remand, the Missouri Supreme Court adhered to
its earlier decision.
Nevils v.
Group Health Plan,
Inc., 492 S. W. 3d 918, 920, 925 (2016). OPM’s rule,
the court maintained, “does not overcome the presumption against
preemption and demonstrate Congress’ clear and manifest intent to
preempt state law.”
Id., at 920.
Judge Wilson again concurred, this time joined
by a majority of the judges of the Missouri Supreme Court.
Id., at 925.[
2] In their
view, Congress’ “attempt to give preemptive effect to the
provisions of a contract between the federal government and a
private party is not a valid application of the Supremacy Clause”
and, “therefore, does not displace Missouri law here.”
Ibid.
We granted certiorari to resolve conflicting
interpretations of §8902(m)(1). 580 U. S. ___ (2016). Compare
492 S. W. 2d, at 925 (majority opinion), with
Bell
v.
Blue Cross & Blue Shield of Okla., 823 F. 3d
1198, 1199 (CA8 2016) (§8902(m)(1) preempts state antisubrogation
law);
Helfrich v.
Blue Cross & Blue Shield Assn.,
804 F. 3d 1090, 1092 (CA10 2015) (same).
II
Section 8902(m)(1) places two preconditions on
federal preemption. See
supra, at 1. The parties agree that
Missouri’s law prohibiting subrogation and reimbursement meets one
of the two limitations,
i.e., the State’s law “relates to
health insurance or plans.” §8902(m)(1). They dispute only whether
the subrogation and reimbursement requirements in OPM’s contract
with Coventry “relate to the nature, provision, or extent of
coverage or benefits,” “including payments with respect to
benefits.”
Ibid.
Coventry contends that §8902(m)(1) unambiguously
covers the contractual terms at issue here. In any event, Coventry,
joined by the United States as
amicus curiae, urges that the
rule published by OPM in 2015 leaves no room for doubt that
insurance-contract terms providing for subrogation and
reimbursement fall within §8902(m)(1)’s preemptive scope. See
supra, at 3. Deference is due to OPM’s reading, Coventry and
the United States assert, under
Chevron U. S. A.
Inc. v.
Natural Resources Defense Council, Inc., 467
U. S. 837 (1984) . In Nevils’ view, by contrast, §8902(m)(1)
does not preempt state antisubrogation and antireimbursement laws
in light of the presumption against preemption. Given that
presumption, Nevils maintains, OPM’s rule is not entitled to
deference. Though we have called Nevils’ construction “plausible,”
McVeigh, 547 U. S., at 698, the reading advanced by
Coventry and the United States best comports with §8902(m)(1)’s
text, context, and purpose.
A
Contractual provisions for subrogation and
reimbursement “relate to . . . payments with respect to
benefits” because subrogation and reimbursement rights yield just
such payments. When a carrier exercises its right to either
reimbursement or subrogation, it receives from either the
beneficiary or a third party “payment” respecting the benefits the
carrier had previously paid. The carrier’s very provision of
benefits triggers the right to payment. See Tr. of Oral Arg. 31;
Helfrich, 804 F. 3d, at 1106;
Bell, 823
F. 3d, at 1204.
Congress’ use of the expansive phrase “relate
to” shores up that understanding. We have “repeatedly recognized”
that the phrase “relate to” in a preemption clause “express[es] a
broad pre-emptive purpose.”
Morales v.
Trans World
Airlines, Inc., 504 U. S. 374, 383 (1992) ; accord
Northwest, Inc. v.
Ginsberg, 572 U. S. ___, ___,
___ (2014) (slip op., at 5, 9). Congress characteristically employs
the phrase to reach any subject that has “a connection with, or
reference to,” the topics the statute enumerates.
Morales,
504 U. S., at 384. The phrase therefore weighs against Nevils’
effort to narrow the term “payments” to exclude payments that occur
“long after” a carrier’s provision of benefits (Brief for
Respondent 27 (quoting
McVeigh, 547 U. S., at 697)).
See
Nevils I, 418 S. W. 3d, at 460 (Wilson, J.,
concurring); cf.
Hillman v.
Maretta, 569 U. S.
___, ___ (2013) (slip op., at 10) (in the Federal Employees’ Group
Life Insurance Act context, it “makes no difference” whether state
law withholds benefits in the first instance or instead takes them
away after they have been paid). Given language notably “expansive
[in] sweep,”
Morales, 504 U. S., at 384 (internal
quotation marks omitted), Nevils’ argument that Congress intended
to preempt only state coverage requirements (
e.g., for
acupuncture and chiropractic services, see Brief for Respondent 36)
also miscarries.
The statutory context and purpose reinforce our
conclusion. FEHBA concerns “benefits from a federal health
insurance plan for federal employees that arise from a federal law”
in an area with a “long history of federal involvement.”
Bell, 823 F. 3d, at 1202. Strong and “distinctly
federal interests are involved,”
McVeigh, 547 U. S., at
696, in uniform administration of the program, free from state
interference, particularly in regard to coverage, benefits, and
payments. The Federal Government, more-over, has a significant
financial stake. OPM estimates that, in 2014 alone, FEHBA “carriers
were reimbursed by approximately $126 million in subrogation
recoveries.” 80 Fed. Reg. 29203. Such “recoveries translate to
premium cost savings for the federal government and [FEHBA]
enrollees.”
Ibid.
B
Invoking our suggestion in
McVeigh that
§8902(m)(1) has two “plausible” interpretations, 547 U. S., at
698, Nevils nonetheless urges us to apply a presumption against
preemption because §8902(m)(1) does not clearly cover contractual
terms pertaining to subrogation and reimbursement. This argument is
blind to
McVeigh’s context.
In
McVeigh, we considered the discrete
question whether 28 U. S. C. §1331 gives federal courts
subject-matter jurisdiction over FEHBA reimbursement actions. See
547 U. S., at 683. Our principal holding was that §1331 did
not confer federal jurisdiction.
Ibid.; see
Bell, 823
F. 3d, at 1205.
The carrier in
McVeigh, as part of its
argument in favor of federal jurisdiction, asserted that
§8902(m)(1) itself conferred federal jurisdiction. See 547
U. S., at 697. In responding to that assertion, we summarized
competing interpretations of §8902(m)(1) advanced in briefing,
readings that map closely onto the parties’ positions here. See
ibid. (carrier and United States as
amicus curiae
urged interpretation similar to Coventry’s; an
amicus brief
in support of beneficiary offered interpretation similar to
Nevils’).
We made no choice between the two
interpretationsset out in
McVeigh, however, because the
answer madeno difference to the question there presented.
Id., at698. “[E]ven if FEHBA’s preemption provision reaches
contract-based reimbursement claims,” we explained, “that provision
is not sufficiently broad to confer federal jurisdiction.”
Ibid. Because §8902(m)(1) is a “choice-of-law prescription,”
not a “jurisdiction-conferring provision,”
id., at 697, we
had no cause to consider §8902(m)(1)’s text, context, and purpose,
as we do today, see
supra, at 6–8.[
3]
III
Nevils further contends that, if §8902(m)(1)
covers subrogation and reimbursement clauses in OPM contracts, then
the statute itself would violate the Supremacy Clause by assigning
preemptive effect to the terms of a contract, not to the laws of
the United States. We conclude, however, that the statute, not a
contract, strips state law of its force.
Without §8902(m)(1), there would be no
preemption of state insurance law. FEHBA contract terms have
preemptive force only as they “relate to the nature, provision, or
extent of coverage or benefits (including payments with respect to
benefits),” §8902(m)(1)—
i.e., when the contract terms fall
within the statute’s preemptive scope. It is therefore the statute
that “ensures that [FEHBA contract] terms will be uniformly
enforceable nationwide, notwithstanding any state law relating to
health insurance or plans.” Brief for United States as
Amicus
Curiae 28 (internal quotation marks omitted).
Many other federal statutes preempt state law in
this way, leaving the context-specific scope of preemption to
contractual terms. The Employee Retirement Income Security Act of
1974 (ERISA), 29 U. S. C. §1001
et seq., for
example, preempts “any and all State laws insofar as
they . . . relate to any employee benefit plan.”
§1144(a). And the Federal Arbitration Act (FAA), 9
U. S. C. §1
et seq., limits the grounds for
denying enforcement of “written provision[s] in . . .
contract[s]” providing for arbitration, thereby preempting state
laws that would otherwise interfere with such contracts. §2. This
Court has several times held that those statutes preempt state law,
see,
e.g.,
Gobeille v.
Liberty Mut. Ins. Co.,
577 U. S. ___, ___–___ (2016) (slip op., at 5–12) (ERISA);
Marmet Health Care Center, Inc. v.
Brown, 565
U. S. 530 –534 (2012) (
per curiam) (FAA), and Nevils
does not contend that those measures violate the Supremacy Clause,
see Brief for Respondent 22.
Nevils instead attempts to distinguish those
other statutes by highlighting a particular textual feature of
§8902(m)(1): Section 8902(m)(1) states that the “
terms of any
contract” between OPM and a carrier “shall supersede and
preempt” certain state or local laws. (Emphasis added.) That
formulation, Nevils asserts, violates the Supremacy Clause’s
mandate that only the “
Laws of the United States” may reign
supreme over state law. U. S. Const., Art. VI, cl. 2
(emphasis added). Nevils’ argument elevates semantics over
substance. While Congress’ formulation might differ from the
phrasing of other statutes, §8902(m)(1) manifests the same intent
to preempt state law.[
4]
Because we do not require Congress to employ a particular
linguistic formulation when preempting state law, Nevils’ Supremacy
Clause challenge fails.[
5]
* * *
For the reasons stated, the judgment of the
Supreme Court of Missouri is reversed, and the case is remanded for
further proceedings not inconsistent with this opinion.
It is so ordered.
Justice Gorsuch took no part in the
consideration or decision of this case.
