In 2020, the Affordable Care Act (ACA) amended the Public Health Service Act (PHSA) to require non-grandfathered group health plans and insurers of fully-insured group health plans to cover a range of preventive health services free of member cost-sharing (such as a deductible, coinsurance, or copay) when provided on an in-network basis. On March 30, 2023, in the case Braidwood Management Inc. v. Becerra (“Braidwood decision”), the District Court for the Northern District of Texas issued a judgment finding that the means by which certain preventive care requirements are determined violates the Appointments Clause of Article II of the United States Constitution and is therefore unlawful.
PHSA Preventive Coverage Requirements
The extensive list of items and services subject to the PHSA’s no-cost preventive coverage requirements are determined in a variety of ways, including:
- Evidence-based items or services that have a rating of “A” or “B” according to the current recommendations issued by the United States Preventive Services Task Force (USPSTF);
- Immunizations for routine use under recommendations issued by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC);
- With respect to infants, children, and adolescents, preventive care and screenings provided for in guidelines supported by the Health Resources and Services Administration (HRSA); and
- With respect to women, preventive care and screenings provided for in guidelines supported by the HRSA
The initial Braidwood decision solely prevented the Departments of Labor, Health and Human Services, and the Treasury (“the Departments”) from enforcing the preventive service coverage requirements related to an “A” or “B” recommendation by the USPSTF on or after March 23, 2010. Both the federal government and the Braidwood plaintiffs have appealed the decision on separate grounds, and it is expected that the case will eventually be heard by the U.S. Supreme Court. Shortly after the initial decision, the Department of Justice (DOJ) also filed a motion for a partial stay requesting a limit on the Braidwood ruling—which, if granted, would preserve the coverage mandate for all preventive items and services listed above (aside from those offered under the plaintiffs’ plans) while the case winds its way through the appellate and high court systems.
On April 13, 2023, the Departments issued a series of FAQs clarifying the impact of the Braidwood decision on employer-sponsored (and other) health plans pending any related decisions by the Court of Appeals. That full sub-regulatory FAQ can be found here and is summarized below:
First, the Departments confirmed that the Braidwood decision applies strictly to items and services required to be covered by plans and issuers without cost-sharing “in response to an ‘A’ or ‘B’ recommendation by the USPSTF on or after March 23, 2010.” This means that plans and issuers must continue to cover, without cost-sharing, items and services recommended with an “A” or “B” rating by the USPSTF before March 23, 2010, but items and services that received the requisite graded recommendation after that date—or that will receive the USPSTF recommendation in the future—are not subject to the coverage requirement.
The Departments anticipate providing additional guidance with respect to the USPSTF’s pre-March 23, 2010 recommendations. The guidance also says that plans and issuers are strongly encouraged, though not required, to continue to cover the preventive items and services that fall within the carveout resulting from the Braidwood decision.
The FAQs also verify that the Braidwood decision does not affect guidance related to immunizations recommended by ACIP or the various preventive care and screenings recommended for children, adolescents, and women under the HRSA guidelines (including, but not limited to, contraceptive coverage). Further, this applies to all services and items that are recommended by the ACIP and/or the HRSA even if the same preventive care has also been separately recommended with an “A” or “B” rating by the USPSTF (e.g., breastfeeding services and supplies, cervical cancer screening, mammograms, pediatric preventive care, etc.).
The Departments’ guidance also clarifies that state laws may still require health insurance offering group or individual health insurance coverage issuers (i.e., health plan carriers) to provide coverage without cost-sharing of items and services recommended with an “A” or “B” rating by the USPSTF on or after March 23, 2010.
The FAQs emphasize that if an employer chooses to make changes to their plan’s coverage of services affected by the Braidwood decision, applicable participant notice requirements must be taken into consideration, including:
- Complying with the Summary of Benefits and Coverage (SBC) rules, which require that if a group health plan makes a material modification to any of the terms of the plan or coverage that would affect the content of the SBC, the plan must provide notice of the modification to enrollees 60 days prior to the date on which the modification will become effective.
- Additional requirements that apply in the event of a reduction in covered benefits or services or other modification of plan terms, including the requirement that a plan subject to ERISA provide a summary of material reduction (SMR) within 60 days of adoption of that material reduction.
Preventive Health Services and HSA Eligibility
Under current rules, a high deductible health plan (HDHP) may provide preventive care benefits without a deductible or with a deductible below the minimum statutory annual deductible without compromising the plan’s health savings account (HSA) compatibility. The Departments have clarified that until further guidance is issued, items and services recommended with an “A” or “B” rating by the USPSTF on or after March 23, 2010, will continue to be treated as preventive care for purposes of qualifying HDHP and HSA eligibility requirements, regardless of whether these items and services must be covered without cost-sharing in light of the Braidwood decision.
Coverage of COVID-19 Preventive Services and Vaccines
The Coronavirus Aid, Relief, and Economic Security (CARES) Act requires non-grandfathered group health plans to cover, without cost-sharing, any qualifying coronavirus preventive service pursuant to section 2713(a) of the PHSA and its implementing regulations (or any successor regulations). As previously mentioned, the Braidwood decision does not change the requirement to cover immunizations recommended by ACIP without cost sharing. Therefore, Departments’ guidance affirms that plans and issuers must continue to provide coverage, without cost sharing, for any qualifying coronavirus vaccines. This includes COVID-19 vaccines furnished after the end of the COVID-19 public health emergency.
Newest Developments and Recommendations
On May 15, 2023, the U.S. Court of Appeals for the Fifth Circuit issued a ruling which temporarily stayed the broad, nationwide scope of the initial Braidwood decision while the Fifth Circuit considers the DOJ's motion for a partial stay pending appeal. This means that as of today, all preventive services—including those recommended with an “A” or “B” rating by the USPSTF on or after March 23, 2010—must again be covered at no cost to covered individuals under non-grandfathered group health plans. This decision renders the agencies’ guidance summarized above largely inapplicable, but should the original Braidwood decision be reinstated, that Departmental guidance will likely become relevant once again.
The Braidwood decision’s multiple appeals mean that it will likely be several months before a final judgement is issued, and the impact of the original decision could change again soon. Because virtually every group medical plan will be affected by what’s decided by the courts, all plan sponsors should remain vigilant for developments in the case (and any relevant guidance) as it winds its way through the appellate and High Court levels. Also, to date, insurance carriers and third-party administrators have not made any wholesale changes to the coverage of preventive services under their group health products and plans. Considering the tenuous nature of the Braidwood decision, it’s generally recommended that group health plan sponsors refrain from scaling back coverage for preventive services until a final decision is rendered.