FEHBA
The Federal Employees Health Benefits Act (FEHBA) program provides health insurance coverage to current and former federal employees, and their families. It is the largest employer-sponsored group health insurance program in the world, covering more than 8 million federal employees, retirees, former employees, and family members.
FEHBA contains a preemption provision which provides that certain contract terms in health insurance plans “shall” preempt state or local law. The language of a FEHBA Plan preempts state law, whether consistent or inconsistent with federal plan provisions, on matters of “coverage or benefits” (5 U.S.C. 8902(m)(1)). FEHBA authorizes the Office of Personnel Management (OPM) to contract with private insurance carriers to administer FEHBA plans. These OPM contracts have traditionally required the private insurance carriers to pursue subrogation and reimbursement.
Obtaining a copy of your client’s insurance benefit card is always the best practice to identify the appropriate entity with a possible lien interest on the settlement funds.
FEHBA plans are for federal employees like United States Postal Workers, IRS agents, Social Security Administration representatives, Border Patrol agents etc.
The most relevant law for FEHBA plans came in 2017 when the Supreme Court, held that the subrogation/reimbursement plan language contained in the health insurance contracts of Federal Employee Health Benefit plans (FEHBA) preempted state law.
“We conclude, however, that the statute, not a contract, strips state law of its force. … FEHBA contract terms have preemptive force.” Coventry Health Care of Missouri, Inc. v. Nevils, 137 S. Ct. 1190 (2017)
This decision empowered FEHBA plans to demand full reimbursement when a settlement occurs. With the holding that FEHBA preempts state law and that such preemption is constitutionally permissible, subrogation vendors handling these liens are emboldened to demand 100% reimbursement.
FEHBA Resources
Does a FEHBA plan have policy language like an ERISA plan?
Yes. FEHBA Plans can be found here or requested through the subrogation vendor or insurance carrier.
Do I need to notify a FEHBA Plan when I make a claim for personal injuries against a third party?
The terms of a FEHBA Plan will articulate the responsibilities of the parties. Typically, the Plan requires cooperation and notification in circumstances where another party may become responsible for the medical benefits the Plan has already paid.
Here’s an example of relevant policy language:
- If you do seek damages for your illness or injury, you must tell us promptly that you have made a claim against another party for a condition that we have paid or may pay benefits for, you must seek recovery of our benefit payments and liabilities, and you must tell us about any recoveries you obtain, whether in or out of court.
- We may request that you sign a reimbursement agreement and/or assign to us (1) your right to bring an action or (2) your right to the proceeds of a claim for your illness or injury. We may delay processing of your claims until you provide the signed reimbursement agreement and/or assignment, and we may enforce our right of recovery by offsetting future benefits.
Audit
The review of the FEHBA Payment Summary to ensure there are no errors, duplicates, or unrelated treatment is included.
FEHBA
The Federal Employees Health Benefits Act (FEHBA) of 1959 (5 U.S.C. 8901 et seq.)
OPM
The Office of Personnel Management. This federal agency manages and directs the FEHBA program including the approval of Plan language and the negotiation of contract rates.
Plan Document
The governing document outlining the coverage, as well as the rights and responsibilities, agreed to by the plan holder and the beneficiary.