It’s a Roller Coaster … Employer Considerations After Court Invalidates ACA Preventive Care Mandate

by Alex Smith

Since the Affordable Care Act (“ACA”) became law in 2010, numerous groups have attempted to invalidate the ACA or specific parts of the ACA through litigation. Even after a number of plaintiffs unsuccessfully attempted to invalidate the ACA over the past dozen years, a Federal district court judge in Texas recently invalidated the ACA’s requirement that non-grandfathered group health plans provide preventive care services with an “A” or “B” rating in the current recommendations from the United States Preventive Services Task Force (e.g., certain cancer screenings, depression screening, statins to prevent heart disease, etc.) with no cost sharing. In addition, the court ruled that the requirement that plans cover PrEP HIV medications cannot be enforced against plan sponsors with religious objections. The ACA’s other preventive care mandates remain in effect.

The Departments of Health and Human Services, Labor, and Treasury (collectively, the “Departments”) are appealing the ruling. The Departments may request the judge’s ruling be stayed pending appeal, so that it will not take effect until the appeal process has concluded. It is worth noting that this case was decided by the same judge who invalidated the entire ACA in 2018 in a decision that was eventually reversed by the US Supreme Court in 2021.

Employers are not required to make any changes to their group health plans in response to this ruling. Even if the decision is affirmed on appeal, employers may still choose to cover the affected preventive care services at no cost to participants. Employers may decide it is not desirable to cut back health plan benefits that participants view as “free”. In addition, employers with self-funded plans may decide it makes financial sense to encourage participants to receive the preventive care services so that health conditions are detected earlier and can be treated at a lower cost.

Any employer with a self-funded plan that is considering imposing cost sharing on some or all of the affected preventive care services mid-year should be mindful that 60 days advance notice to participants is required for any change that affects the content of the Summary of Benefits and Coverage (“SBC”). For fully insured plans, the coverage will likely remain unchanged through the end of the policy year, and state insurance requirements may still require some or all of the affected preventive care services be covered without cost sharing.