In a March 2023 ruling, a Texas federal district court vacated all actions taken by the Departments of Labor (“DOL”), Health and Human Services (“HHS”), and Treasury (collectively, the “Departments”) to implement or enforce certain preventive care requirements under the Patient Protection and Affordable Care Act (“ACA”). Recently, the Departments released initial FAQ guidance addressing group health plans’ obligations in light of the court ruling. Before making changes to coverage, plan sponsors should carefully consider the ruling and the guidance from the Departments.
The ACA Preventive Services Coverage Requirement
Under the ACA, most insured and self-insured group health plans are required to provide coverage for preventive services in-network and without participant cost-sharing (meaning, without deductibles, co-payments, or co-insurance). This includes:
- Evidence-based items or services with an “A” or “B” rating in the current recommendations from the U.S. Preventive Services Task Force (“USPSTF”).
- Immunization for routine use for children, adolescents, or adults is recommended by the Advisory Committee on Immunization Practices (“ACIP”) of the Centers for Disease Control and Prevention.
- Infant, pediatric, and adolescent evidenced-based preventive care and screenings are provided for in the comprehensive Health Resources & Services Administration guidelines (“HRSA”).
- Additional HRSA-supported preventive care and screenings for women, including FDA-approved contraceptives.
The Texas Ruling
The Texas decision eliminates the USPSTF-recommended preventive services coverage requirement for any recommendation made on or after March 23, 2010, on constitutional grounds. The court also concluded that the preventive health services requirement to cover PrEP (with antiretroviral therapy for people who are at a high risk of acquiring HIV) violated certain plaintiffs’ rights under the Religious Freedom Restoration Act (“RFRA”). As a result, the court also prohibited the Departments from implementing or enforcing the PrEP coverage requirement regarding these plaintiffs.
Guidance from the Department
On April 13, 2023, the Departments issued initial FAQ guidance addressing group health plans and health insurers’ coverage obligations in light of the ruling. The Departments take the following views:
- Plans and insurers must continue to cover, without cost-sharing, items or services with a rating of “A” or “B” based on USPSTF recommendations made before March 23, 2010.
- The requirements of coverage for immunizations, preventive care and screenings for infants and children through age 21, and preventive care and screenings for women under HRSA guidelines (including contraceptives) are not affected by the ruling.
- The ruling does not prevent states from enacting or enforcing laws requiring insured arrangements to cover items or services having an A or B rating from the USPSTF.
- Plans and insurers are encouraged to consider other federal and state requirements (as well as contractual requirements, such as collective bargaining agreements) in deciding whether to make mid-year changes to reflect the ruling.
- Plans or insurers that make coverage changes must do so consistent with applicable notice requirements, including the 60-day advance notice requirement that applies to changes that would affect the content of the ACA summaries of benefits and coverage (“SBCs”).
- Under the Internal Revenue Code’s health savings account (“HSA”) rules, a high-deductible health plan (“HDHP”) may not provide benefits for a year until the deductible for that year is met. However, an exception to this rule permits HDHPs to provide preventive health care benefits without a deductible (or a low deductible). Under the Departments’ view, items or services with an A or B rating from USPSTF, on or after March 23, 2010, will be treated as preventive care for purposes of the HDHP exception, even though these services are not required to be provided without cost-sharing under the Texas ruling.
- Because the ruling did not change the coverage requirements regarding ACIP-recommended immunizations, plans, and insurers must still cover, without cost sharing, any qualifying coronavirus preventive service that is an immunization with an ACIP recommendation.
Takeaways for Employers that Sponsor Group Health Plans
Regardless of the ultimate legal outcome of this dispute, employers that sponsor health and welfare plans are still permitted to provide coverage for preventive services without participant cost sharing. The decision—even if it stands—only implicates the requirement (not the ability) of employer group health plans and insurers to provide this coverage.
Practically, most group health plan sponsors will be unlikely to scale back coverage for preventive services in any meaningful way. Providing generous coverage for preventive services was a trend even before the implementation of the ACA, and the workforce has come to expect such benefits.
Given that the Departments’ FAQs largely allow for plans to continue “business as usual” for preventive care services, as well as the uncertainty of the ultimate legal outcome, it may be best for group health plan sponsors to adopt a “wait and see” approach before making any changes to their plan designs. The FAQs also indicate that the Departments intend to issue further guidance on preventive care coverage requirements given the court’s ruling.
Employee Benefits & Executive Compensation
About the Author:
Eric W. Gregory is a Member of Dickinson Wright’s Troy, Michigan office, where he assists clients in all areas of employee benefits law, including qualified retirement plans, welfare plans, and nonqualified compensation programs. Eric can be reached at 248-433-7669 or firstname.lastname@example.org , and you can visit his bio here.