                United States Court of Appeals
                           For the Eighth Circuit
                       ___________________________

                               No. 14-3731
                       ___________________________

                                    Teresa Bell,

                      lllllllllllllllllllll Plaintiff - Appellant,

                                          v.

  Blue Cross and Blue Shield of Oklahoma, a Division of Health Care Service
  Corporation, a Mutual Legal Reserve Company agent of Health Care Service
  Corporation; Blue Cross and Blue Shield of Texas, a Division of Health Care
  Service Corporation, a Mutual Legal Reserve Company agent of Health Care
                             Service Corporation,

                    lllllllllllllllllllll Defendants - Appellees,

                            ------------------------------

          Association of Federal Health Organizations; United States,

                 lllllllllllllllllllllAmici on Behalf of Appellees.
                                      ____________

                   Appeal from United States District Court
              for the Western District of Arkansas - Fayetteville.
                               ____________

                         Submitted: September 23, 2015
                             Filed: May 26, 2016
                                ____________

Before WOLLMAN, COLLOTON, and KELLY, Circuit Judges.
                       ____________
COLLOTON, Circuit Judge.

       This appeal concerns a dispute between Teresa Bell and two Blue Cross and
Blue Shield insurance carriers that administer Bell’s government-sponsored benefit
plan (“the Plan”). Bell was injured in a motor vehicle accident in Arkansas, and the
Plan paid medical benefits on Bell’s behalf. Bell then received a payment from a
different carrier that insured the party who was allegedly responsible for Bell’s injury.

       The Blue Cross carriers contend that under the terms of Bell’s benefit plan, she
must use any monies obtained from the alleged tortfeasor’s insurer to reimburse the
Plan for medical benefits paid by Blue Cross. Bell responds that under Arkansas law,
she is not required to reimburse the Plan unless she has been wholly compensated for
her injuries, and that she was not “made whole” by the payments from Blue Cross and
the alleged tortfeasor’s insurer. Blue Cross’s position is that a provision of the
Federal Employees Health Benefits Act, 5 U.S.C. § 8902(m)(1), expressly preempts
Bell’s state-law defense, and that the Plan governs the question of reimbursement.
We conclude that federal law preempts the Arkansas state-law defense, and that Bell
must reimburse the Plan. We therefore affirm the decision of the district court.*

                                           I.

       The Federal Employees Health Benefits Act of 1959 (“FEHBA”), 5 U.S.C.
§§ 8901-14, creates a “comprehensive program of health insurance for federal
employees.” Empire HealthChoice Assur., Inc. v. McVeigh, 547 U.S. 677, 682
(2006). Under the Act, the Office of Personnel Management, commonly known as
OPM, contracts with private carriers to offer federal employees a variety of health-
care plans. 5 U.S.C. § 8902(a). One of these plans is the Blue Cross and Blue Shield


      *
      The Honorable Timothy L. Brooks, United States District Judge for the
Western District of Arkansas.

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Service Benefit Plan, a government-wide plan that is established between OPM and
the Blue Cross and Blue Shield Association. See 5 U.S.C. § 8903(1); McVeigh, 547
U.S. at 682. Blue Cross and Blue Shield companies in their respective localities
administer this plan.

       Each contract between OPM and a carrier like Blue Cross must include “a
detailed statement of benefits offered.” 5 U.S.C. § 8902(d). OPM issues official
descriptions of plan terms through a “statement of benefits” or “brochure.” See id.
§§ 8902(a), (d), 8907. The Statement of Benefits for the contract at issue here
includes a section discussing the rights of the parties when others are responsible for
injuries to an employee. It provides, among other things, that if another person causes
an employee to suffer an injury, and the Plan pays benefits for that injury, the
employee must agree that the Plan is entitled to be reimbursed for its benefit
payments even if the employee is not “made whole” for all of her damages in the
recoveries that she receives.

       Teresa Bell, an employee of the Department of Veterans Affairs, received
health-care benefits through a government-sponsored plan that was administered by
Blue Cross and Blue Shield of Oklahoma and Blue Cross and Blue Shield of Texas
(collectively, “Blue Cross”). In October 2010, she sustained personal injuries and
medical expenses from a motor vehicle accident that occurred in Arkansas. Bell’s
benefit plan paid $33,014.01 in medical benefits on her behalf. Bell also pursued a
third party who allegedly caused her injury, and she received an undisclosed payment
from Progressive Insurance Company, the alleged tortfeasor’s insurer, pursuant to a
settlement.

      Bell and Blue Cross disputed whether Bell was required to use the funds
received from Progressive Insurance to reimburse the Plan. Bell contends that under
Arkansas law, the Plan cannot require reimbursement unless Bell has been wholly
compensated for her injuries. See Shelter Mut. Ins. Co. v. Kennedy, 60 S.W.3d 458,

                                         -3-
461 (Ark. 2001). She represents that the payments from Blue Cross and Progressive
did not wholly compensate her. Bell brought suit against Blue Cross in Arkansas
state court, seeking a declaration that she is not required to reimburse the Plan.

       Blue Cross removed the action to federal court on the theory that Blue Cross
was a “person acting under” a federal officer. See 28 U.S.C § 1442(a)(1). The
district court, relying on Jacks v. Meridian Res. Co., 701 F.3d 1224 (8th Cir. 2012),
denied Bell’s motion to remand the case to state court.

      Blue Cross moved for judgment on the pleadings. According to Blue Cross,
the Plan terms described above require Bell to use monies that she obtained from
Progressive Insurance to reimburse the Plan for benefit payments made, even if Bell
has not been “made whole.” Blue Cross asserts that federal law, 5 U.S.C.
§ 8902(m)(1), provides that the terms of the Plan preempt Arkansas law on the
question of the carriers’ right to reimbursement, and that Bell must reimburse the
Plan.

      The district court granted Blue Cross’s motion, concluding that § 8902(m)(1)
expressly preempts Arkansas law. Bell appeals, and we review the district court’s
decision de novo.

                                         II.

       Section 8902(m)(1) provides that “[t]he 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 . . . which relates to health insurance or plans.” 5 U.S.C. § 8902(m)(1)
(emphases added). The Supreme Court has observed that § 8902(m)(1) “is a puzzling
measure, open to more than one construction.” McVeigh, 547 U.S. at 697. On one
view, the subrogation and reimbursement clauses in the contract between OPM and

                                         -4-
Blue Cross function “as a condition or limitation on ‘benefits’ received by a federal
employee.” Id. Under that approach, the contractual terms “relate to . . . benefits”
within the meaning of § 8902(m)(1), and thus preempt state law. Id. An alternative
reading, however, posits that § 8902(m)(1) refers to “contract terms relating to the
beneficiary’s entitlement (or lack thereof) to Plan payment for certain health-care
services he or she has received, and not to terms relating to the carrier’s postpayments
right to reimbursement.” Id. Under that interpretation, the contractual clauses would
not conflict with or preempt Arkansas law.

       Because the Supreme Court in McVeigh deemed both constructions of the
statute “plausible,” id. at 698, the parties invoke rules of construction that favor their
desired outcome. Bell cites a presumption against preemption that applies when a
federal preemption clause is ambiguous. Blue Cross counters with OPM’s rule,
promulgated in 2015, stating that § 8902(m)(1) has preemptive effect. The carriers
argue that the court should defer to the agency’s reasonable construction of an
ambiguous statute under the doctrine of Chevron, U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984).

       Bell cites the Supreme Court’s guidance that “when the text of a pre-emption
clause is susceptible of more than one plausible reading, courts ordinarily ‘accept the
reading that disfavors pre-emption.’” Altria Grp., Inc. v. Good, 555 U.S. 70, 77
(2008) (quoting Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449 (2005)). “That
assumption applies with particular force when Congress has legislated in a field
traditionally occupied by the States.” Id. at 77. The vitality of this presumption
against preemption, however, has been a subject of debate within the Supreme Court.
A dissenting opinion in Altria Group suggested that application of the presumption
has been sporadic, id. at 99 (Thomas, J., dissenting), and the most recent decision in
this area was splintered. See CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2189 (2014)
(plurality opinion) (applying presumption); id. at 2189 (Scalia, J., concurring in part



                                           -5-
and concurring in the judgment) (rejecting presumption and applying ordinary
principles of statutory construction).

       Whatever the force of the presumption against preemption as an interpretive
tool, the Court has recognized that the presumption should not apply where
“considerable federal interests” are at stake. United States v. Locke, 529 U.S. 89, 94,
108 (2000). In Locke, a case involving regulations that affected maritime commerce,
the Court opined that despite “the historic role of the States to regulate local ports and
waters under appropriate circumstances,” the “‘assumption’ of nonpre-emption is not
triggered when the State regulates in an area where there has been a history of
significant federal presence.” Id. at 108-09. Similarly, in Buckman Co. v. Plaintiffs’
Legal Committee, 531 U.S. 341 (2001), the Court rejected a presumption against
preemption of state-law fraud-on-the-FDA claims, because “the relationship between
a federal agency and the entity it regulates is inherently federal in character because
the relationship originates from, is governed by, and terminates according to federal
law.” Id. at 347.

       This case involves federal interests comparable to those involved in Buckman
and Locke. Although health care in general is an area of traditional state regulation,
e.g., Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 387 (2002), this dispute
concerns benefits from a federal health insurance plan for federal employees that arise
from a federal law. There is obviously a long history of federal involvement in
federal employment and benefits. “[D]istinctly federal interests are involved.”
McVeigh, 547 U.S. at 696. The scope of a federal employee’s reimbursement
obligations has a significant impact on the federal treasury and on premiums or
benefits for other employees. See 5 U.S.C. § 8909(b); 5 C.F.R. § 890.503(c)(2). The
employee’s benefit plan “could be described as ‘federal in nature’ because it is
negotiated by a federal agency and concerns federal employees.” McVeigh, 547 U.S.
at 696. “The United States no doubt has an overwhelming interest in attracting able
workers to the federal workforce and in the health and welfare of the federal workers

                                           -6-
upon whom it relies to carry out its functions.” Id. at 701 (internal quotation marks
omitted). Under these circumstances, we see no warrant to place a thumb on the
scales against preemptive effect of the federal statute. Ordinary principles of
statutory construction should guide the decision. Accord Helfrich v. Blue Cross &
Blue Shield Ass’n, 804 F.3d 1090, 1104-06 (10th Cir. 2015).

       Blue Cross argues that if the preemption statute is ambiguous, we should
accord Chevron deference to the recent interpretation of OPM that subrogation and
reimbursement clauses “relate to” the provision of benefits within the meaning of
§ 8902(m)(1), and that such clauses are “effective notwithstanding any state or local
law.” 5 C.F.R. § 890.106(h). OPM concluded that its interpretation of the statute
“comports with longstanding Federal policy, lowers the cost of benefits, and creates
greater uniformity in benefits and benefits administration.” Federal Employees
Health Benefits Program; Subrogation and Reimbursement Recovery, 80 Fed. Reg.
931, 932 (Jan. 7, 2015). The agency believed that subrogation and reimbursement
clauses “relate to the nature, provision, and extent of coverage or benefits (and the
payment of benefits) by making those payments conditional upon a right to
subrogation or reimbursement of equivalent amounts, either from a third-party, or
from the enrollee, in the event a third party is obligated to pay for the same injury or
illness.” Id. OPM said that its interpretation “furthers Congress’s goals of reducing
health care costs and enabling uniform, nationwide application of [Federal Employee
Health Benefits] contracts.” Id. (citing H.R. Rep. No. 105-374, at 9 (1997); H.R. Rep.
No. 86-957, (1959)).

       The law concerning application of Chevron to an agency’s view on preemption
is unsettled. The Supreme Court once assumed without deciding that Chevron is not
applicable to the question whether a federal statute is pre-emptive, Smiley v. Citibank
(S. Dakota), N.A., 517 U.S. 735, 744 (1996), then said its interpretation of a
preemption statute was “substantially informed” by agency regulations, Medtronic,
Inc. v. Lohr, 518 U.S. 470, 495 (1996), then later invoked Chevron in a preemption

                                          -7-
case but ruled that an agency’s interpretation was impermissible, so deference was not
actually accorded. Cuomo v. Clearing House Ass’n, 557 U.S. 519, 535-36 (2009).
The Court in City of Arlington v. FCC, 133 S. Ct. 1863, 1874 (2013) (Scalia, J.),
deferred to an agency’s interpretation concerning the scope of its own jurisdiction,
but City of Arlington did not address a preemption question, and the opinion’s author
previously joined an opinion concluding that “when an agency purports to decide the
scope of federal pre-emption, a healthy respect for state sovereignty calls for
something less than Chevron deference.” Watters v. Wachovia Bank, N.A., 550 U.S.
1, 22, 41 (2007) (Stevens, J., dissenting). Justice O’Connor wrote in 1996 that “[i]t
is not certain that an agency regulation determining the pre-emptive effect of any
federal statute is entitled to deference,” Lohr, 518 U.S. at 512 (O’Connor, J.,
concurring in part and dissenting in part) (emphasis omitted), and it is not clear that
the law has evolved materially since then.

      One state court has deemed Chevron applicable to OPM’s interpretation of
§ 8902(m)(1), Kobold v. Aetna Life Ins. Co., No. 1 CA-CV 12-0315, 2016 WL
1273024, at *1 (Ariz. Ct. App. Mar. 31, 2016), and another concluded that Chevron
does not apply. Nevils v. Group Health Plan, Inc. (Nevils II), No. SC93134, slip op.
9-12 (Mo. May 3, 2016). Like the Tenth Circuit in Helfrich, 804 F.3d at 1109, we
think it is unnecessary to decide. Even without deference to the agency under
Chevron, the better reading of the statute is that Arkansas law is preempted.

       This court already ruled in 1994 that § 8902(m)(1) preempts state law that is
inconsistent with a contract under the Federal Employees Health Benefits Act. In
MedCenters Health Care v. Ochs, 26 F.3d 865, 867 (8th Cir. 1994), the court
affirmed a district court’s ruling that a subrogation and reimbursement clause in a
contract under the Act preempted and superseded Minnesota common law that
established a “full recovery rule” as a predicate to reimbursement. See MedCenters
Health Care, Inc. v. Ochs, 854 F. Supp. 589, 592-93 (D. Minn. 1993). Although
Ochs was abrogated in part by the Supreme Court’s decision in McVeigh, because this

                                         -8-
court also thought § 8902(m)(1) conferred federal jurisdiction, see 26 F.3d at 867;
854 F. Supp. at 593 n.3, the analysis of Ochs concerning ordinary preemption was
unaffected by McVeigh. Indeed, the Second Circuit opinion that was affirmed on the
jurisdictional question in McVeigh likewise implied that § 8902(m)(1) would preempt
a state-law defense to a subrogation claim. Empire HealthChoice Assur., Inc. v.
McVeigh, 396 F.3d 136, 145 n.9 (2d Cir. 2005) (Sotomayor, J.), aff’d, 547 U.S. 677
(2006).

       The better reading of the statute’s text supports the conclusion in Ochs. The
Act gives preemptive effect to contractual terms that “relate to . . . benefits (including
payments with respect to benefits).” The reimbursement and subrogation provisions
are limitations on the payment of benefits. Each contract must “contain a detailed
statement of benefits offered and shall include such maximums, limitations,
exclusions, and other definitions of benefits as the Office considers necessary or
desirable.” 5 U.S.C. § 8902(d). Blue Cross’s statement of benefits informs the
insured that “[i]f another person . . . causes you to suffer an injury or illness, and if
we pay benefits for that injury or illness, you must agree to the provisions listed
below.” Those provisions advise the insured of Blue Cross’s “right of recovery to be
reimbursed for our benefit payments even if you are not ‘made whole,’” and its right
“to initiate recovery on your behalf (including the right to bring suit in your name).”
Blue Cross also informs the insured that it “may delay processing of your claims
until” it receives “the signed reimbursement agreement and/or assignment.” Because
these provisions restrict the payment of benefits, they relate to “benefits (including
payments with respect to benefits).”

       The reimbursement provision also requires an insured to make repayment of
prior benefit payments if the insured recovers from a third party. Blue Cross “may
seek a first priority lien on the proceeds of your claim in order to reimburse ourselves
to the full amount of benefits we have paid or will pay.” That provision relates to
“payments with respect to benefits” because, after an insured recovers from a third

                                           -9-
party, the contract results in repayment of funds that were previously received as
benefits. The contractual provisions also allow Blue Cross to enforce its “right of
recovery by offsetting future benefits.” An offset of future benefits affects the
payment of future benefits and therefore relates to payments with respect to benefits.

       The structure of the Act likewise favors giving preemptive effect to the
contractual terms concerning reimbursement and subrogation. The Treasury credits
all reimbursement and subrogation to the Federal Employees Health Benefits Fund
under the Act. McVeigh, 547 U.S. at 685. As Justice Breyer observed, “[a]fter
benefits are paid, any surplus in the fund can be used at the agency’s discretion to
reduce premiums, to increase plan benefits, or to make a refund to the Government
and enrollees.” Id. at 703 (Breyer, J., dissenting); see 5 U.S.C. § 8909(b); 5 C.F.R.
§ 890.503(c)(2). Hence, the contractual provisions relate to benefits, including
payments with respect to benefits, because they may trigger an increase in plan
benefits through the workings of the statutory scheme.

       Bell relies on Nevils v. Group Health Plan, Inc. (Nevils I), 418 S.W.3d 451
(Mo. 2014), vacated sub nom., Coventry Health Care of Missouri, Inc. v. Nevils, 135
S. Ct. 2886 (2015), and Kobold v. Aetna Life Insurance Co., 309 P.3d 924 (Ariz. Ct.
App. 2013), vacated, 135 S. Ct. 2886 (2015), in asserting that § 8901(m)(1) requires
a more “immediate relationship” between the payment of benefits and the contractual
provision in question. Nevils I, 418 S.W.3d at 457; Kobold, 309 P.3d at 928. But the
Arizona court has reversed course, see Kobold, 2016 WL 1273024, at *1, and the
Missouri court’s conclusion, to which it recently adhered, was influenced by a
presumption against preemption with which we respectfully disagree. See Nevils I,
418 S.W.3d at 456. The text of § 8902(m)(1) includes no “immediacy” requirement,
and the phrase “relate to” benefits is properly given a broad meaning in ordinary
usage. See Morales v. Trans World Airlines, 504 U.S. 374, 384 (1992). Nothing
about the context here, involving a statute that serves to promote uniformity in the



                                        -10-
administration of federal employee benefits and stewardship of the public fisc,
suggests a narrower meaning.

       Bell asserts that § 8901(m)(1) violates the Supremacy Clause of the
Constitution because it provides that contractual terms, rather than federal law, will
supersede and preempt state laws. Bell did not raise this constitutional argument in
response to the motion for judgment on the pleadings in the district court, and the
point is therefore forfeited. See Helfrich, 804 F.3d at 1110. There is no obvious error
that warrants correction on appeal. Others have been skeptical that § 8901(m)(1)
presents a constitutional problem, see id. (citing Boyle v. United Techs. Corp., 487
U.S. 500, 512-13 (1988)), but in any event, the statute can reasonably be construed
to mean that federal law (either the Act itself or federal common law), not the
contractual terms, has the preemptive force. See McVeigh, 396 F.3d at 144-45
(Sotomayor, J.); id. at 155-56 (Raggi, J., dissenting). Several Justices of the Missouri
court have concluded that there is no basis to construe § 8901(m)(1) in a manner that
is constitutional, because Congress plainly did not intend the creation of federal
common law, and the Supreme Court in McVeigh rejected it. See Nevils II, slip op.
at 14 (Wilson, J., concurring in the result); Nevils I, 418 S.W.3d at 464-65 (Wilson,
J., concurring). Then-Judge Sotomayor, however, relied on “Congress’s stated intent
to maintain ‘uniformity’ in FEHBA benefits and to ‘displace State or local law
relating to health insurance or plans.’” 396 F.3d at 145 (quoting H.R. Rep. No. 105-
374, at 9, 16 (1997)). We are not convinced that a saving construction would be
antithetical to any congressional goal that must be discerned from the statute’s text.
As we understand McVeigh, the Supreme Court held only that federal common law
did not displace the entire area of state law involving “FEHBA-authorized contracts
at large.” 547 U.S. at 691-93. The Court left open the possibility that state law could
be displaced more narrowly, when there is a “significant conflict . . . between an
identifiable federal policy or interest and the operation of state law,” id. at 693
(quoting 396 F.3d at 150 (Sack, J., concurring)), and the Court’s reasoning does not



                                         -11-
preclude construing § 8901(m)(1) to mean that federal common law or the Act
displaces state law in the case of such a conflict.

                               *      *       *

     For the foregoing reasons, the judgment of the district court is affirmed.
                     ______________________________




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