This insight discusses the case and implications for plan sponsors.

Background

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. The mandate requires coverage of preventive services recommendations from three entities:

• The United States Preventive Services Task Force (USPSTF), which gives “A” or “B” ratings for specific evidence-based items and services
• The Health Resources and Services Administration (HRSA), which has guidelines regarding preventive care and screening for infants, children, adolescents and women
• The Advisory Committee on Immunization Practices (ACIP), which issues recommendations on immunizations

The case, Braidwood Management, Inc. v. Becerra, was brought by a group of plaintiffs who challenged the legality of the ACA’s preventive services mandate on several grounds, including that it violates the U.S. Constitution because members of the USPSTF were not appointed in a manner consistent with Article II’s Appointments Clause.

On March 30, 2023, an order by the Texas District Court vacated the preventive care services recommended by the USPSTF. The court issued a nationwide injunction preventing the federal government from implementing or enforcing the ACA preventive-services coverage requirements for an “A” or “B” recommendation by the USPSTF.

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

The defendants appealed the district court’s 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, as we discussed in our June 15, 2023 insight.

On April 13, 2023, the Departments of Labor, HHS and Treasury (collectively, the Departments) issued administrative guidance that 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.)

The Fifth Circuit decision

On June 21, 2024, the Fifth Circuit upheld the district court’s ruling on the merits. The court agreed that the USPSTF members were not properly appointed under Article II of the Constitution and rejected the argument that ratification by the Secretary of HHS could cure this constitutional defect. However, the court disagreed with the district court’s remedy of a national injunction. It stated that the ruling applied only to the plaintiffs in the case.

Additionally, the Fifth Circuit reviewed arguments as to whether the mandate to cover ACIP and HRSA recommended services is enforceable. The court agreed that the Secretary of HHS has the authority to ratify the ACIP and HRSA recommendations, but reserved judgment on whether he had effectively done so. The court remanded this issue back to the district court.

Implications for plan sponsors

Since the appellate court’s decision applies only to the plaintiffs in the Braidwood case, sponsors of non-grandfathered group health plans should continue to cover all recommended preventive services with no cost sharing on an in-network basis.

However, the court has opened the door to additional challenges to the authority of the three entities responsible for announcing preventive services recommendations. In light of continuing challenges to ACA regulations, plan sponsors should closely monitor legal developments and consult with legal counsel prior to making any changes to their preventive services coverage.