FAQs Guidance Released in Wake of ACA Preventive Services Mandate Ruling

On April 13, 2023, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury (collectively, the Departments) released FAQs guidance in response to the recent Texas district court decision in Braidwood Management v. Becerra (“Braidwood ruling”), which struck down certain parts of the Affordable Care Act (ACA) requirement for health plans to cover preventive services without participant cost-sharing on constitutional grounds.  The Braidwood ruling also specifically struck down the preventive service requirement to cover medication that prevents HIV (commonly known as PrEP) on religious grounds.

While the Braidwood ruling took effect nationwide on March 30, 2023, the Departments affirmatively expressed disagreement with it and are considering all available options, in consultation with the Department of Justice (DOJ). The DOJ filed a notice of appeal on March 31, 2023, and a motion for a stay on April 12, 2023.

The Departments have released these FAQs to provide clarity to group health plans in light of the Braidwood ruling.

ACA Preventive Services Mandate Background

As a reminder, the ACA requires most private health insurance plans, including employer-sponsored group health plans, to cover a range of recommended preventive services without participant cost-sharing. This means these preventive services must be covered with no deductibles, copayments, or coinsurance (often referred to as “first-dollar coverage”).

Preventive services include screening tests, immunizations, behavioral counseling, and medications that can prevent the development or exacerbation of diseases and health conditions and include the following:

• Evidence-based items or services with an “A” or “B” rating included in the current recommendations from the U.S. Preventive Services Task Force (USPSTF). This includes cancer screenings, other disease screenings, and PrEP coverage to prevent transmission of HIV.
• Vaccinations recommended by the Advisory Committee (ACIP) and endorsed by the Director of the Centers for Disease Control and Prevention (CDC). This includes childhood and adult vaccinations, including COVID-19 vaccinations.
• Women’s health services recommended by the Health Resources and Services Administration (HRSA) and endorsed by the Secretary of Health and Human Services. This includes prenatal care, contraceptives, breastfeeding services/supplies, and wellness examinations.
• Preventive care and screenings recommended for infants, children, and adolescents provided for in other HRSA guidelines.

The Braidwood ruling applies to the U.S. Preventive Services Task Force (USPSTF) recommendations and finds them unconstitutional and, in particular, struck down the PrEP coverage mandate requirement on religious grounds.

FAQs Guidance

The April 13, 2023, FAQs guidance provides clarity for health plans to navigate through the Braidwood ruling as litigation continues through the courts. Below are the highlights summarizing this FAQs guidance:

1. Which USPSTF-recommended items/services are impacted by the Braidwood ruling?

   The USPSTF-recommended items/services that were added or updated to the recommendations list after March 23, 2010, are impacted by the ruling (which are most of them). Only those USPSTF-recommended items/services from before March 23, 2010, are not impacted by the ruling and must be covered without participant cost-sharing. Practically, this means only two items on this list pre-date March 23, 2010, and both relate to Rh(D) incompatibility screening for pregnant women.

2. Are USPSTF-recommended items/services that were added or updated after March 23, 2010, still required to be covered by health plans with no participant cost-sharing?

   No. However, the Departments strongly encourage plans to continue covering such items and services without participant cost-sharing for disease-mitigation, chronic-disease management, health-outcome disparity mitigation, and other public health purposes. Further, the Departments underscore that the Braidwood ruling does not preclude plans from continuing to provide the full extent of such coverage.

3. Does the Braidwood ruling impact the ACA preventive services requirements under the HRSA guidelines (for women and children health services) or ACIP immunization recommendations?

   No, the Braidwood ruling does not impact the HRSA guidelines or the ACIP immunization recommendations and those items/services must still be covered without participant cost-sharing, including contraceptive coverage. To the extent any item/service within either the HRSA guidelines or ACIP immunization recommendations overlap with USPSTF-recommended items/services impacted by the Braidwood ruling, plans must still continue to cover these items/services without participant cost-sharing.

4. How does the Braidwood ruling impact state laws requiring plans to cover impacted USPSTF-recommended items/services without participant cost-sharing?

   The Braidwood ruling generally does not impact state laws requiring plans to cover any impacted USPSTF-recommended items/services without participant cost-sharing. Some states have already released statements reminding state-regulated plans to continue covering USPSTF-recommended items/services without participant cost-sharing despite the Braidwood ruling, including California. Maryland, and Michigan.

5. If a health plan is permitted to make changes to its coverage as a result of the Braidwood ruling, can it make those changes mid-year?

   Yes, generally. However (as stated above), the Departments strongly encourage plans to continue covering the impacted USPSTF-recommended items/services without participant cost-sharing for disease-mitigation, chronic-disease management, health-outcome disparity mitigation, and other public health purposes. The Departments underscore the importance of plans to consider applicable federal and state law requirements, in addition to any other applicable contractual and collective bargaining agreement (CBA) provisions, when determining whether to permit mid-year plan coverage changes.

6. If a health plan is permitted and elects to make mid-year coverage changes as a result of the Braidwood ruling, what are the plan’s notification requirements to plan participants?

   To the extent a health plan is permitted and elects to make changes to coverage, including cost-sharing, as a result of the Braidwood ruling, the plan must comply with applicable notice requirements when making any changes to the terms of coverage with respect to items and services recommended by the USPSTF. This includes providing notice of those plan changes in advance of the effective date, which is generally 60 days' notice in advance of the change as preventive care cost-sharing information is included in a plan’s Summary of Benefits and Coverage (SBC).^[1]

   Moreover, any cost-sharing plan changes mid-year as a result of the Braidwood ruling are considered a material reduction in benefits^[2], as confirmed by the Departments in this section of the FAQs. As a result, a summary of material reduction in benefits requires notification to plan participants within 60 days after the adoption of the change.^[3]

7. Can a High-Deductible Health Plan (HDHP) continue to cover the impacted USPSTF-recommended items/services with no participant cost-sharing without jeopardizing the Health Savings Account (HSA) eligibility for those HDHP participants?

   Yes. Until further guidance is released, the impacted USPSTF-recommended items/services will be treated as preventive care for purposes of Internal Revenue Code (IRC) § 223(c)(2)(C)^[4], regardless of cost share for these items/services. As a result, HSA eligibility will not be jeopardized for these HDHP participants if plans continue to cover them without participant cost-sharing.

8. Does the Braidwood ruling affect the CARES Act requirement for health plans to cover COVID-19 vaccines as a preventive service?

   No, the Braidwood ruling does not change the requirement to cover without cost-sharing immunizations recommended by ACIP (as stated above), including COVID-19 vaccines and their administration. This includes COVID-19 vaccines administered after the end of the COVID-19 Public Health Emergency (PHE). Click here for a Risk Strategies article to assist health plans with wind down and transition efforts from the COVID-19 PHE.

Employer Implications

As noted above, the Departments strongly encourage health plans, including employer-sponsored group health plans, to continue covering the impacted USPSTF-recommended items/services without participant cost-sharing for disease-mitigation, chronic-disease management, health-outcome disparity mitigation, and other public health purposes. Again, the Departments underscore that the Braidwood ruling does not prohibit health plans from continuing to provide the full extent of such coverage — so health plans may continue covering the impacted USPSTF-recommended items/services without participant cost-sharing.

ACA preventive services requirements remain popular with many employees and were fairly prevalent even before the ACA was passed. They also serve as an important tool for employers to manage their workforce’s health and wellbeing.

If an employer with a fully insured group health plan wishes to consider any mid-year changes to their benefit plans as a result of the Braidwood ruling, they must consult with their insurance carriers since, as this FAQs guidance highlights, applicable state law might prohibit or limit mid-year changes.

Employers with self-funded health plans are advised to review and evaluate, in collaboration with their benefits counsel, any applicable federal, contractual, or CBA provisions before making any mid-year plan changes as a result of the Braidwood ruling.

On a practical level, employers are encouraged to consider taking a “wait-and-see” approach to any mid-year changes or even with respect to changes for the 2024 plan year as litigation continues through the courts, and the DOJ’s motion for a stay of the ruling could be granted by the appeals court. This would prevent the ruling from taking effect until the appeals court decision is issued.

Risk Strategies is closely following these developments and will provide updates when available. Contact us directly with any questions at benefits@risk-strategies.com.

[1] 29 CFR § 2590.715-2715(b)

[2] 29 CFR § 2520.104b-3(d)(3)

[3] 29 CFR § 2520.104b-3(d)

[4] IRC Code § 223(c)(2)(C) provides a safe harbor for the absence of a preventive care deductible.