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Appeals Court Issues Split Ruling on ACA’s Preventive Services Requirements

by | Jul 9, 2024 |

In Braidwood Management, Inc. v. Becerra, the U.S. Court of Appeals for the Fifth Circuit has issued a “mixed bag” of rulings with regards to the preventive services requirements of the Affordable Care Act (“ACA”).

Law.  Under the ACA, health insurance must generally cover all essential health benefits (“EHBs”) as defined by the ACA without imposing annual or lifetime limits.

EHBs include: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; lab services; “preventive” and wellness services; chronic disease management; and pediatric services.

Preventive services include:

  • Items and services given an “A” or “B” rating by the United States Preventive Services Task Force (“USPSTF”) with respect to the individual concerned;
  • Immunizations, as recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control (“ACIP”);
  • Children’s preventive care and screenings, as recommended by the Health Resources and Services Administration (“HRSA”); and
  • Women’s preventive care and screenings as recommended by HRSA.

Pursuant to this mandate, employer-sponsored group health plans must cover all FDA-approved contraception, which includes medications and devices that may act as abortifacients as well sterilization procedures.  However, ACA regulations provide certain employers with grounds for claiming an exemption from the preventive services rules, including an exemption based on sincerely-held religious beliefs.

The current exemption also allows objecting employers to remove themselves completely from providing birth control coverage while ensuring women and covered dependents enrolled in their plans can access contraceptive services at no additional charge.

Facts.  A group of employers sued to challenge the definition of preventive services and the appointments of the members of the agencies and committees that designated the required preventive services.  “Collectively, they object to the preventive-care mandates on religious grounds and specifically allege that compulsory coverage of these services requires them to violate their religious beliefs by making them complicit in facilitating homosexual behavior, drug use, and sexual activity outside of marriage between one man and one woman.  For those reasons, the plaintiffs all wish to obtain or provide health insurance that excludes or limits coverage currently required by the preventive-care mandates.”

The district court rejected the plaintiffs’ challenges against ACIP and HRSA member appointments, saying the federal government did have the authority to make these appointments.

However, the district court agreed that the members of the USPSTF had been unlawfully appointed and vacated “any and all agency actions taken to implement or enforce the preventive care coverage requirements in response to an ‘A’ or ‘B’ recommendation” by the USPSTF, and enjoined the federal government “from implementing or enforcing its compulsory coverage requirements in response to an ‘A’ or ‘B’ rating from the USPSTF in the future.”

Fifth Circuit Court of Appeals.  The Fifth Circuit agreed with the district court’s decision that the USPSTF officials had not been validly appointed and that the lower court properly enjoined the government from enforcing the preventive-care mandates to the extent they came at the recommendation of the USPTF.  The appeals court went on to say that, “[w]e think it was error, however, for the district court to have also vacated all agency actions taken to enforce the preventive-care mandates [against employers and insurers nationwide] and to universally enjoin  [the government] from enforcing them.”

“The district court erred in vacating all agency actions taken to enforce the preventive-care mandates, so we have no reason to uphold relief broader than what is necessary to redress the plaintiffs’ injuries.…We must therefore conclude that it was an abuse of discretion to enter universal injunctive relief after already providing complete relief to the plaintiffs.”

Next, although the Fifth Circuit agreed with the district court that the government had the power to appoint members of the ACIP and HRSA, it noted that “the district court had no opportunity to consider the plaintiffs’ arguments that the government did not follow correct appointment procedures because “the structures of the […]ACIP, and HRSA violate the U.S. Constitution, insofar as the members of each are acting as principal officers of the United States who have not been nominated by the President and confirmed by the Senate.”

It therefore remanded the case back to the district court for further proceedings on this issue.

Employer Takeaway.  For now, employers should continue to follow the current rules for ACA preventive services.  However, they can expect further litigation which may affect these requirements in the future.