Compliance News | June 15, 2023
On June 12, 2023, the United States Court of Appeals for the Fifth Circuit issued a stay on the March 30, 2023 Texas District Court ruling in Braidwood Management Inc. v. Becerra, which had vacated ACA’s coverage requirements for “A” and “B” preventive services recommended by the United States Preventive Services Task Force (USPSTF).
While the stay is in effect, sponsors of non-grandfathered plans are required to continue to cover the “A” and “B” preventive services recommended by the USPSTF with no cost sharing.
The ACA’s preventive services mandate requires non-grandfathered group health plans and insurers to cover certain preventive services with no cost-sharing on an in-network basis.
In Braidwood Management Inc. v. Becerra, plaintiffs challenged the legality of the ACA’s preventive services mandate on U.S. constitutional grounds because members of the USPSTF have not been appointed in a manner consistent with the Appointments Clause under Article II.
Finding for the plaintiffs, Judge Reed O’Connor issued an order on March 30, 2023, that vacated agency actions taken to implement or enforce the ACA preventive-services coverage requirements for an “A” or “B” recommendation by the USPSTF on or after March 23, 2010, and enjoined the defendants from implementing or enforcing those requirements against anyone in response to an “A” or “B” recommendation in the future. For more details about that decision, see our insight, “Implications of Ruling on ACA’s Preventive Services Mandate.”
The defendants appealed this decision to the United States Court of Appeals for the Fifth Circuit and filed a motion for a partial stay pending appeal. On May 15, 2023, the Fifth Circuit issued an administrative stay blocking implementation of Judge O'Connor's district court ruling.
The Fifth Circuit’s order blocking implementation of the lower court decision represents a trade-off between the parties. Essentially, the plaintiffs, concerned that they would not be immunized from statutory penalties or enforcement action should the district court’s judgment be vacated or reversed by the Fifth Circuit, agreed to withdraw their opposition to the partial stay in exchange for the defendants’ agreement not to seek penalties or take any enforcement action.
The stay will remain in effect until the Fifth Circuit rules on the merits of the case. Oral arguments are expected to occur this summer. Multiple patient advocacy groups have filed amicus curiae (friend of the court) briefs with the court arguing that to remove the preventive services requirements will harm patient health and result in an increase in healthcare costs as serious health conditions may be detected much later.
On April 13, 2023, the Departments of Labor, Health and Human Services, and Treasury (collectively, the Departments) issued administrative guidance that disagreed with the Braidwood decision and strongly encouraged plans and insurers to continue to cover the Task Force’s “A” and “B” preventive services without cost sharing. See FAQs about Affordable Care Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 59.
Plan sponsors of non-grandfathered plans may continue to cover preventive services under the ACA requirements in the same manner as prior to the March court decision. In general, the benefits of covering preventive services outweighs the small savings that may result from lifting that coverage. Plan sponsors should consult with legal counsel prior to making any changes to preventive services coverage in response to this litigation.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.