Plan sponsors do not need to take any action in response to this decision and may be best served by monitoring the response by the federal government and higher courts.

Note: For more recent information about this litigation, see our June 15, 2023 insight, “Court Reinstates ACA’s Preventive Services Mandate.”

Background

Judge O’Connor has issued a series of decisions against the ACA — including a 2018 decision invalidating the ACA in its entirety, which was overruled by the U.S. Supreme Court in 2021. In September 2022, O'Connor ruled that mandated coverage of the HIV prevention treatment known as PrEP violated plaintiffs' religious rights under the Religious Freedom Restoration Act.

The decision

The recent case, Braidwood Management Inc. v. Becerra, was brought by plaintiffs who challenged the legality of the ACA’s preventive services mandate on several grounds, including that it violates the Constitution because members of the United States Preventive Services Task Force (USPSTF) have not been appointed in a manner consistent with Article II’s Appointments Clause.

The court ordered that the preventive care requirements issued based on the USPSTF are vacated and the federal government is enjoined from implementing or enforcing them. The court’s order is complex — in part because:

• The USPSTF recommends “A” or “B” ratings for specific evidence-based items and services for all patient demographics.
• The Health Resources and Services Administration (HRSA) issues guidance regarding preventive care and screening for infants, children, adolescents and women.
• The Advisory Committee on Immunization Practices (ACIP) recommends certain immunizations.

Because both ACIP and HRSA are ultimately subject to the “supervision and direction” of the Secretary of Health and Human Services, the court’s order does not appear to extend to ACA-mandated preventive care recommended by the ACIP or the HRSA, including contraceptive coverage and vaccines.

What’s next?

The administration is expected to appeal the decision and seek a “stay,” which would prevent the ruling from taking effect until higher courts can rule on the case. In addition, congressional Democrats could introduce legislation to address the coverage of preventive services.

Implications

As noted above, plan sponsors of non-grandfathered plans do not have to take any action in response to the decision.

It is important to look at how the federal government approaches the decision before making choices to change preventive services coverage. If, after considering the federal response and discussing the issue with legal counsel, a plan sponsor wishes to modify preventive services coverage, it would likely be considered a material reduction in benefits, requiring a 60-day advance notice if the change is made mid-year.