By: HUB’s EB Compliance Team
As has been widely reported, a Federal District Court issued an order in Braidwood Mgmt. Inc. v. Becerra, striking down implementation and enforcement of certain preventive service provisions required by the Affordable Care Act (“ACA”). However, plan sponsors should be slow to make any changes and should take into account recent FAQs issued by the agencies that enforce the ACA.
Background
Recall that the Health and Human Services (“HHS”) website lists three sets of preventive services that must be covered without cost-sharing under the ACA. The lists generally correspond with the grade A and B recommendations of the U.S. Preventive Services Task Force (USPSTF), the vaccine recommendations of the CDC’s Advisory Committee on Immunization Practices (ACIP), and the guidelines for women’s and children’s preventive services provided by the Health Resources and Services Administration (HRSA).
This case was brought by several businesses, including religious businesses, and six individuals in Texas, asserting economic harm for having to pay more money for a health plan that includes services they do not want or need, and religious harm for having to include services they object to. Specifically, they assert that:
- the recommend covered preventive services requirements were made in reliance on the USPSTF, an independent, volunteer panel of national experts in disease prevention and evidence-based medicine, are unconstitutional under the Appointments Clause; and
- the requirement to cover preexposure prophylaxis (PrEP), medication for HIV prevention, violates their rights under the Religious Freedom Restoration Act (RFRA).
After a technical and lengthy analysis of the makeup and authority of the USPSTF, HRSA, and ACIP, the court held that the members of USPSTF—but not HRSA or ACIP—were unconstitutionally appointed for purposes of making rules. As a result, they do not have the authority to determine the preventive services that must be covered under private health plans.
The court further held as to the one religious employer that the PrEP coverage mandate violated the employer’s rights under the RFRA. The court concluded that the agencies failed to show a compelling government interest in requiring religious employers to provide coverage without cost-sharing or religious exemptions. The court also determined that the agencies failed to show that the PrEP coverage mandate is the least restrictive means of satisfying the government’s interest in providing PrEP.
The Latest Ruling
After making these initial rulings, the Court asked for additional briefing on the appropriate remedy. The court vacated, as unlawful, all agency actions taken on or after March 23, 2010, to implement or enforce the USPSTF–recommended preventive care. In addition, the IRS, DOL, and HHS are also blocked from implementing or enforcing coverage requirements in response to such USPSTF ratings in the future. Furthermore, the agencies are specifically blocked from enforcing the PrEP coverage requirement against the religious objectors in the case. As a reminder, the ACIP and HRSA recommendations were not affected by this ruling and are still in effect.
The federal government quickly appealed the ruling. The case will now go to the US Court of Appeals for the Fifth Circuit. The government also is likely to ask the presiding judge to delay implementing his decision while the appeal plays out.
FAQ Response
In the interim, the agencies charged with enforcing the ACA issued a set of FAQs regarding Coverage of Preventive Services following the Briadwood decision. FAQ 3 makes clear that the Braidwood decision does not change the requirement to cover without cost sharing immunizations recommended by ACIP or preventive services recommended by the HRSA. Therefore, among other recommendations by those bodies, plans and issuers must continue to provide coverage, without cost sharing, for COVID-19 vaccines recommended by the ACIP and their administration. As of the date of the FAQs, the USPSTF has not recommended any qualifying coronavirus preventive services with an "A" or "B" rating.
Even so, the FAQs confirm that plans and issuers are not required to make any changes at all to coverage or cost sharing as a result of the Braidwood decision. Even though the agencies that enforce the ACA cannot enforce the USPSTF mandates or changes after March 23, 2010, the agencies strongly encourage plans and issuers to continue to cover, without cost sharing, items and services affected by the court's decision.
Before making any changes, employers must consider other provisions of applicable federal and state law that may mandate coverage of preventive services. Employers may also have contractual obligations (such as through collective bargaining agreements) to offer certain preventive services. Additionally, the FAQs helpfully clarify that the USPSTF recommendations will continue to be treated as preventive care for health savings account (HSA) purposes. That means high deductible health plans can cover those items pre-deductible without jeopardizing the ability of employees to make or receive HSA contributions.
As FAQ 6 points out mid-year changes would be considered by the agencies to be a material reduction in benefits under, requiring notice no later than 60-days after the change is adopted. This presumably would also give employees an opportunity to unenroll from the coverage under applicable cafeteria plan rules. If any changes affect the content of the summary of benefits and coverage (SBC), a revised SBC would need to be issued 60 days in advance of the change.
Plan Sponsor Considerations
If the presiding judge goes along with the request to delay the ruling while the appeal plays out, or the federal government obtains an injunction blocking enforcement of the ruling, plan sponsors will not need to make any changes to the USPSTF preventative services and the requirement to cover PrEP medication for HIV prevention.
If, on the other hand, the federal government is not successful, a self-funded plan sponsor may decide to continue to voluntarily honor the current USPSTF preventative service lists available under the group health plan and insurers may similarly choose to do so. However, the ultimate outcome will likely not be known for some time.
Considering the quick action to appeal the ruling and issue FAQs, plan sponsors should follow this matter closely and await the outcome of these actions. Unless Congress takes action to maintain the current ACA preventative services, this case is just the first step in what will likely be a long litigation battle that ends at the Supreme Court. Regardless, plan sponsors should be slow to make any changes at this stage since the ultimate outcome of any appeals is uncertain.
If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.
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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.