A federal appeals court on June 21 ruled to preserve the Affordable Care Act’s preventive services mandate.
However, the U.S. Court of Appeals for the 5th Circuit ruled that the plaintiffs, a group of Christian companies, did not have to comply with the mandate. This opens up the possibility for a broader ruling down the road that could still undermine the mandate nationwide.
The case, Braidwood Management Inc. v. Xavier Becerra, previously known as Kelley v. Becerra, dates back to 2020 and involves Texas District Judge Reed O’Connor, the same judge who previously ruled the ACA unconstitutional without the federal Individual Mandate.
The appellate panel also ruled the task force that determines which preventive services are free must be confirmed by Congress, and asked a lower court to review the authority of the groups that make those decisions for contraception and vaccines.
Background of the Case
In Braidwood Management Inc. v. Xavier Becerra, the plaintiffs, two Christian-owned companies in Texas, asserted that Section 2713 of the ACA, often referred to as the preventive care clause that guarantees eligible individuals receive specific healthcare services without needing to pay a copayment, infringes numerous sections of the constitution, their conservative religious beliefs and violates the Religious Freedom Restoration Act.
And in the original 2020 statement, Braidwood Management argued that the costs associated with Section 2713 force them and other religious employers “to provide coverage for drugs that facilitate and encourage homosexual behavior, prostitution, sexual promiscuity, and intravenous drug use.”
Then, in September 2022, Judge O’Connor ruled in favor of the plaintiffs and subsequently eliminated the requirement for insurers to cover select preventive care services as mandated by Section 2713 of the ACA.
O’Connor’s decision was then applied across the entire U.S., in a nationwide injunction issued in March 2023, to which the Biden administration filed an appeal and a stay so that the services would remain in effect until an appeals hearing.
The Constitutional Debate
The requirement for insurers to cover specific services comes from recommendations made by three government agencies; the U.S. Preventive Services Task Force (USPSTF), the Advisory Committee on Immunization Practices (ACIP), and the Health Resources and Services Administration (HRSA).
O’Connor’s decision to strike down the ACA’s Section 2731 stems from the Appointments Clause of the Constitution, which states that people must be officers of the U.S. to use government powers.
In the case, the plaintiffs assert that the PSTF, ACIP, and HRSA deciding the preventative care service recommendations were not properly appointed by the U.S. government, but rather, were assumed into positions of power due to the ACA’s verbiage.
What Happens Next?
Moving forward, members of the USPSTF must be nominated by the president and confirmed by the Senate, the 5th Circuit ruled.
The panel did not decide, however, whether the groups that recommend which vaccines and contraceptives should be free for consumers have the authority to do so. Those groups are the Advisory Committee on Immunization Practices (a committee within the Centers for Disease Control and Prevention) and HHS subagency the Health Resources and Services Administration.
Instead, the 5th Circuit sent that question back to O’Connor, who has a history of targeting the ACA: In 2018, O’Connor ruled the entire ACA was unconstitutional, though the Supreme Court upheld the law in a 7-2 decision in 2021.
The current case has been closely followed, as it threatens access to preventive services for the majority of Americans that receive health insurance through their employer: some 164 million people as of last year, according to government estimates.
As such, the 5th Circuit’s decision is a relief for U.S. citizens that get insurance through their job, according to patient advocacy and health policy groups.
State of The ACA
As the Appeals Court determines the fate of the ACA’s preventive court services, the ACA continues to gain momentum leading up to the election later this year.
A recent report issued by the Kaiser Family Foundation finds that 6 in 10 Americans hold a favorable view of the now 14-year-old healthcare law.
ACA enrollment is on the rise as well. In fact, the most recent enrollment saw over 21 million sign-ups through both state and federal marketplaces, a notable increase from the 16 million enrolled the previous year.
Individual states are taking things into their own hands as well. Michigan, for example, codified a law last November that prohibits health insurers from denying coverage based on pre-existing conditions — a provision that mimics requirements of the federal ACA.
The Great Lakes state joined 15 others that have written similar legislation in law, including California, Maryland, and Hawaii.
ACA Compliance Remains a Top Priority
While the future of Section 2731 is uncertain, the ACA remains a bedrock of U.S. healthcare. And that means organizations must still comply with the Employer Mandate portion of the law.
Under the ACA’s Employer Mandate, Applicable Large Employers, those with 50 or more full-time employees and full-time equivalent employees, must offer Minimum Essential Coverage that meets Minimum Value and affordability to at least 95% of their full-time employees and their dependents.
Failing to meet these requirements could earn you a Letter 226J penalty notice from the IRS.
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