By: HUB’s EB Compliance Team

As has been widely reported elsewhere, a federal district court (the lowest level court in the federal system) in Texas has ruled that part of the Affordable Care Act (“ACA”) preventive services mandate is unconstitutional.  The exact scope of this ruling is still to be determined since it can be subject to appeal.  As a result, there is nothing plan sponsors need to do at this time.

The Case

Some individuals and business owners challenged various aspects of the ACA preventive services mandates.  Their argument was that certain mandates required them to offer coverage for items and services that promote activities (like drug use and extramarital sexual activity) that are inconsistent with their religious beliefs.  As part of this challenge, they also argued the mandates were issued by federal government officers who did not meet the requirements of the Appointments Clause of the U.S. Constitution.

As a reminder, under the ACA, group health plans are generally required to cover certain preventive services without cost-sharing. These include:

  • Evidence-based items or services that have a rating of “A” or “B” in effect in the current United States Preventive Services Task Force (USPSTF) recommendations, except for USPSTF recommendations regarding breast cancer screening, mammography, and prevention issued in or around November 2009 (because prior recommendations provided broader coverage);
  • Immunizations for routine use in children, adolescents, and adults recommended by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC);
  • For infants, children, and adolescents: evidence-informed preventive care and screenings provided in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and
  • For women: preventive care and screenings provided in comprehensive guidelines supported by HRSA.

The Ruling

While the court narrowly ruled that certain specific mandates were invalid with respect to the plaintiffs in the case, that ruling was limited to those particular plaintiffs.  As a result, the holding should not have broad application to other employers. 

The more important ruling was that, of the three bodies listed above (the USPSTF, the ACIP, and the HRSA), the USPSTF was not properly appointed under the Constitution.  As a result, their recommendations, which are binding on group health plans, were invalid, as they came from someone with no accountability to the voters.

By contrast, the ACIP and HRSA recommendations were ruled constitutional because they were adopted by properly-appointed officers (the CDC Director and HRSA Administrator).

What Does This Mean?

Not much at this point. First, the court is awaiting further input from the parties to the case about the scope of its relief.  In other words, we do not know yet how broadly this ruling applies.  The court could issue a nationwide injunction, or it could limit relief to the plaintiffs to the case. Until we hear more, we do not know the full effect.

However, as with previous ACA challenges, in all likelihood, the preventive services rules will be allowed to stand until the full extent of the litigation is resolved.  As a result, even if the court issues a nationwide injunction on the mandates issued by the USPSTF, plans may still have to comply with those mandates until further appeals are made and ruled upon.  Therefore, there is nothing for employers to do now except keep an eye on this case to see what happens next.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.