Empire HealthChoice Assurance v. McVeigh

In accordance with the Federal Employees Health Benefits Act of 1959 (FEHBA), the Office of Personnel Management has negotiated a health insurance plan for federal employees with the Blue Cross Blue Shield Association. The plan requires the administrator to make a reasonable effort to recoup amounts paid for medical care from beneficiaries if those beneficiaries receive recoveries from another source (for example, a law suit or settlement against a third party that caused injury). In New York State, the plan is administered by Empire Healthchoice Assurance (Empire).

Empire brought suit in federal district court against the estate of Joseph McVeigh, a former federal employee who was injured in an accident and eventually won a settlement with the third party allegedly responsible for his injuries. Empire sought reimbursement for the money spent on McVeigh's medical care. Denise McVeigh, the administrator of Joseph McVeigh's estate, argued that the district court did not have jurisdiction to hear the case under FEHBA and that it should be heard instead by the state court. The district court and Second Circuit Court of Appeals agreed, dismissing the case for lack of jurisdiction.