Court Says State Limit on Insurer Recoveries Preempted by Conflicting FEHBA Provision

An Arkansas law that requires insured beneficiaries injured by third parties be fully compensated before insurers may assert a subrogation lien on any settlements they obtain is preempted by the Federal Employees Health Benefits Act, a federal court ruled Nov. 3 (Bell v. Blue Cross & Blue Shield of Okla., 2014 BL 311228, W.D. Ark., 5:14-cv-05046-TLB, 11/3/14).

The U.S. District Court for the Western District of Arkansas ruled that Blue Cross and Blue Shield of Oklahoma and Blue Cross and Blue Shield of Texas, which administer the FEHBA plan that insured Teresa Bell, were entitled to assert ...