Employers Concerned by Court Ruling Undermining Preventive Care Benefits of Affordable Care Act

April 25, 2023by Alex Strautman

A federal judge in the U.S. District Court in Northern Texas ruled In late March that the federal government cannot require health plans to cover all preventive care services that had previously been required by the Affordable Care Act (ACA). Since then, employers have been considering what their next steps should be.

The ruling in Braidwood Management Inc. v. Becerra eliminates first-dollar, zero cost coverage for preventive care services recommended solely by the U.S. Preventive Services Task Force (USPSTF) as of the date the ACA was signed into law (March 23, 2010).

Under the ACA, preventive care services include coverage for more than a dozen immunizations as well as screenings for blood pressure, cholesterol, colorectal, depression, hepatitis, lung cancer, and tuberculosis screenings.

Another ruling in the same case invalidates the ACA requirement for employer-sponsored health plans to include coverage for anti-HIV medication, pre-exposure prophylaxis (PrEP). The Texas judge said the requirement is unconstitutional because it violates some employers’ religious beliefs and the plaintiffs’ rights under the Religious Freedom Restoration Act (RFRA). He agreed with the Christian-owned company’s argument that PrEP coverage “forces religious employers to provide coverage for drugs that facilitate and encourage homosexual behavior, prostitution, sexual promiscuity, and intravenous drug use.”

The federal decision is not expected to directly impact plans participating in CaliforniaChoice. California’s Department of Managed Health Care released a statement in April from the California Health & Human Services Agency (CalHHS) concerning the case. “Senate Bill (SB) 406 (in 2020) amended state law to require health plans provide coverage of evidence-based items or services in the recommendations of the USPSTF independent of federal requirements under the ACA.”

In addition, California Senate Bill 523, established the Conception Equity Act of 2022. It expanded coverage of FDA-approved contraception drugs and devices with no patient cost sharing. Senate Bill 159, enacted in 2019, requires health plans to provide coverage of pre-exposure and post-exposure HIV prophylaxis drugs (e.g., PrEP).

There is also legislation moving through the California legislature that would explicitly require coverage without cost-sharing for anti-HIV medication and HIV screenings and STI screenings for all plans regulated by the state – including grandfathered ACA plans.

Some insurance professionals believe changes to ACA preventive care coverage is less likely in the near term. That’s because, in addition to state mandates, insurance contract provisions typically apply for plan years. Coverage considerations were built into 2023 plans now in force.

An article by the Kaiser Family Foundation (KFF) published in April outlines implications of the ACA preventive services ruling, if not overturned on appeal. On April 28, Reuters reported that the Biden administration asked a federal appeals court to put a hold on the Texas judge’s ruling. The Justice Department said the order “has no legal justification and threatens the public health.”

KFF has noted the Fifth Circuit Court of Appeals in New Orleans may – or may not – issue a stay. Or it may not do so in an expedient way. That could lead to an appeal to the U.S. Supreme Court. If the Supreme Court takes up the matter, it could review the issue of the stay, but not consider the merits of the case as a whole.

We will continue to monitor the case and its potential impact on employers and employees.


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