July 08, 2024

The U.S. Court of Appeals for the Fifth Circuit issued a decision at the end of June in the case of Braidwood Management v. Becerra – a closely-watched case relating to the ACA’s preventive care mandate. The Appellate Court generally ruled in favor of the plaintiffs, exempting them from the ACA requirements, but declining to apply the ruling universally to all plans. On potentially the most broadly applicable issue, the Appellate Court agreed with the District Court that the United States Preventive Services Task Force (USPSTF) was unconstitutionally appointed and therefore its recommended items and services could not be required for plans to cover. However, the Appellate Court limited the scope of the relief, i.e., the judicial order actually giving the exception from the requirement, only to the plaintiffs in the case.

The Appellate Court sent the case back to the District Court for further proceedings and consideration of other arguments. However, now that the Fifth Circuit has made a decision on part of the case, either or both of the parties could file for review (“certiorari”) to the U.S. Supreme Court before or in lieu of returning to the District Court. If that were to happen, the Supreme Court could choose to hear and decide on all or a portion of the case, which could have widespread impacts in a shorter time frame.

For now, all employer plan sponsors (other than those that are party to the case) generally remain subject to the ACA preventive service requirements that otherwise have applied for many years. As a technical note, in states covered by the Fifth Circuit Court (Texas, Louisiana, and Mississippi), the Appellate Court’s affirmation of the USPSTF’s “appointment” being unconstitutional is - for the time being - a binding legal conclusion in the Fifth Circuit which may have other enforcement or lawsuit implications beyond this case despite the express limitations on the direct relief granted only to the parties.

Additional Background on the ACA Preventive Coverage Requirements and the Braidwood Lawsuit

Under the Affordable Care Act (ACA), health plans must generally cover a set of preventive items and services at no additional cost to the beneficiary. Examples include: screenings for certain cancers, high blood pressure, high cholesterol, Hepatitis B and C, coverage of certain medications, including PrEP for HIV prevention, and certain other immunizations. The U.S. Preventive Services Task Force (USPSTF), Advisory Committee on Immunization Practices (ACIP), and the Health Resources and Services Administration (HRSA) each have authority over certain areas to identify and decide on coverage requirements.

The Braidwood plaintiffs argue generally that the ACA’s preventive services requirement is unconstitutional and violates the Religious Freedom Restoration Act for a variety of reasons. The Fifth Circuit’s primary focus in this decision was the constitutionality of the USPSTF’s authority under the Appointments Clause. Article II of the Constitution vests the executive authority of the United States in the president but allows executive authority to be exercised by officers nominated by the president and confirmed by the Senate (“principal officers”) or by other “inferior officers.” The decision parses through the arguments of whether the 16 members of the USPSTF are “principal” or “inferior” officers, as well as the relevant factors for consideration. Ultimately, the Circuit Court concluded that the USPSTF members are principal officers and therefore should have been subject to presidential nomination and Senate confirmation. Since they were not so nominated and Senate confirmed, their authority is defective and thus unconstitutional.

For the time being, and for practical purposes, the ACA’s preventive service coverage requirements continue to be broadly applicable to employer sponsored plans. We will continue to monitor developments in this case, whether at the District Court or if appealed to the U.S. Supreme Court and provide updates to members with additional information.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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