Federal District Court’s Ruling on Affordable Care Act Preventive Care Eases Employer Burden—at Least for Now

Employers, at least for now, may have some relief from some of the Affordable Care Act (ACA) requirements to cover preventive care services without cost sharing under a nationwide injunction issued March 30, 2023, by a federal judge in Texas.

The ruling—by Judge Reed O’Connor in Braidwood Management Inc. v. Becerra—affects only the services and screening recommended by the United States Preventive Services Task Force (USPSTF), including various cancer and mental health screenings and HIV medications. The ruling does not affect the ACA requirements to cover preventive services, including contraceptives for women and immunizations.

In separate guidance, on April 13, 2023, the U.S. Department of Labor, U.S. Department of the Treasury, and U.S. Department of Health and Human Services clarified how the agencies interpret the ruling and encouraged employers to continue their existing preventive care coverage. This guidance also clarified that high-deductible health plans can, at least until further notice, continue to cover USPSTF-recommended services and screenings before the deductible without jeopardizing the ability of participants to receive health savings account contributions.

In 2022, Judge O’Connor ruled that the USPSTF members’ appointments violated the Appointments Clause of Article II of the U.S. Constitution, but he left open the remedy until his March 30, 2023, ruling. The U.S. Department of Health and Human Services has appealed the ruling to the Fifth Circuit Court of Appeals.

Under the ACA, most group health plans were required to provide the following preventive services without imposing any cost-sharing requirements:

• “[e]vidence-based items or services that have in effect a rating of ‘A’ or ‘B’ in the current recommendations of the [USPSTF]”;
• “[i]mmunizations … that have in effect a recommendation from the Advisory Committee on Immunization Practices [(ACIP)] of the Centers for Disease Control and Prevention”; and
• “evidence-informed preventive care and screenings” for infants, children, adolescents, and women “provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA).”

In Braidwood, the plaintiffs brought suit alleging that the preventive care mandates violated Article II’s Appointments Clause. The court dismissed the Appointments Clause claims as applied to ACIP and HRSA, but found that preventive care coverage recommendations of the USPSTF issued on or after March 23, 2010, were invalid because members of the task force had not been appointed in a manner consistent with the Appointments Clause.

While some USPSTF preventive care guidelines are no longer enforceable, other sources of required preventive care are unaffected by the ruling. The ruling applies only to USPSTF recommendations made on or after March 23, 2010. Insurers will now need to comply with USPSTF guidelines issued before the cutoff date, even though many were subsequently updated post-2010. The ruling does not affect preventive care recommended by HRSA and ACIP. Additionally, many states mandate preventive care for fully insured group plans.

The injunction took effect on March 30, 2023. Marketwide impacts could be felt when insurance contracts renew annually for the 2024 plan year. Employers are not required to drop coverage for USPSTF recommendations that received an “A” or “B” rating.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group will continue to monitor developments with respect to Affordable Care Act coverage requirements and will post updates on the Employee Benefits and Executive Compensation blog as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.