Texas District Court Blocks Enforcement of ACA's Preventive Health Services Requirements (in Part), Including PrEP

Practical Law Legal Update w-039-0273 (Approx. 7 pages)

Texas District Court Blocks Enforcement of ACA's Preventive Health Services Requirements (in Part), Including PrEP

by Practical Law Employee Benefits & Executive Compensation

Preventive Health Services Under the ACA: USPSTF Recommendations

As background, the ACA requires non-grandfathered group health plans and health insurers to cover preventive care and screenings without cost-sharing. Plans and insurers must provide first-dollar coverage for the following four general categories of preventive health services:

Evidence-based items or services with a rating of "A" or "B" under current recommendations from the USPSTF, including PrEP.
Routine immunizations recommended by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC), including the human papillomavirus (HPV) vaccine.
Preventive care and screenings for infants and children through age 21 under guidelines supported by the Health Resources and Services Administration (HRSA), including screenings and counseling related to tobacco use, obesity, alcohol abuse, and sexually transmitted infections (STIs).
Preventive care and screenings for women under HRSA guidelines, including contraceptives (see Practice Note, Contraceptives Coverage Under the ACA: Overview and Abortion and Contraceptives Services for Group Health Plans Toolkit).

The court's March 2023 ruling involves the first component of these requirements—that is, required coverage in response to "A" or "B" ratings made by the USPSTF on or after March 23, 2010 (the enactment date of the Patient Protection and Affordable Care Act (PPACA)) (see Practice Notes, Affordable Care Act (ACA) Overview). The USPSTF has issued "A" or "B" grade ratings regarding a variety of conditions and treatments, including colonoscopies and related services, several kinds of cancer screenings, screenings for STIs, postpartem depression, weight loss behavioral interventions, and—under a recommendation from June 2019—offering PrEP for individuals who are at high risk of acquiring HIV. For more information, see:

Many (but not all) of the USPSTF's "A" or "B" ratings have been issued since PPACA was enacted.

Litigation Challenges Preventive Health Services Coverage Mandate

The plaintiffs in this case include employers and individuals that objected on religious and non-religious grounds to obtaining or providing health insurance coverage that includes HPV vaccines, STI and drug-related screenings and counseling, PrEP, and contraceptives. Some employers and individuals objected to purchasing coverage that included preventive care that they do not want or need. The employers and individuals sued the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (collectively, Departments) alleging that:

The USPSTF, ACIP, and HRSA violated requirements under the US Constitution's Appointments Clause and nondelegation doctrine (among other provisions).
The PrEP coverage mandate violated RFRA.

In its September 2022 ruling, the district court held that:

One of the religious employers had Article III standing. (However, the court did not address the standing of other plaintiffs.)
The appointments of ACIP and HRSA members did not violate the Appointments Clause, but the appointments of the USPSTF's members did.
The preventive health coverage mandates did not violate the nondelegation doctrine.
The PrEP coverage mandate violated the religious employer's rights under RFRA.

The court sought additional briefing from the parties as to the appropriate remedies for the Appointments Clause and RFRA violations. The parties asked the court to rule on the remaining issues without a trial.

Other Religious Employers Had Standing to Sue

In its March 2023 ruling, the district court evaluated whether certain employers and individuals (other than the employer whose claims were analyzed in the September 2022 ruling) had standing to sue. Applying a "purchaser standing" doctrine, the court concluded that the employers and individuals who objected to the USPSTF recommendations on religious grounds had standing. Standing under a purchaser theory may be available to plaintiffs who are "deprived of the opportunity to purchase a desired product due to government action." The objecting religious employers and individuals argued that:

They did not require coverage of PrEP and services such as screenings and behavioral counseling for STIs.
Compulsory coverage for these services violated "their religious beliefs by making them complicit in facilitating homosexual behavior, drug use, and sexual activity outside of marriage between one man and one woman."

The court agreed with the objecting religious employers' argument that they were deprived of the opportunity to purchase the health insurance coverage they desired (that is, health insurance that excluded the preventive health services they viewed as objectionable).

PrEP Coverage Mandate Violated the Religious Plaintiffs' RFRA Rights

On the merits, the district court held that the PrEP coverage mandate violated the rights of the other objecting religious employers and individuals under RFRA. In the court's view:

The availability of PrEP facilitated behaviors (for example, sexual activity outside of marriage between one man and one woman) that conflicted with the objecting religious employers' and individuals' beliefs.
Purchasing insurance that covered PrEP made the objecting employers and individuals complicit in these behaviors and forced them to choose between purchasing coverage that violated their religious beliefs or going without coverage.

As a result, the court concluded that the PrEP mandate substantially burdened the objecting employers' and individuals' religious exercise.

The court concluded that the Departments failed to show that:

They had a compelling interest in enforcing the PrEP coverage mandate against private, religious employers (especially given the exemptions from the ACA's preventive health services rules for grandfathered plans and small employers).
The PrEP mandate was the least restrictive means of satisfying that interest.

Vacatur Was the Appropriate Remedy for Appointments Clause Claim

In its September 2022 decision, the district court declined to rule on the appropriate remedy for its holding that appointment of USPSTF's members violated the Appointments Clause. With the benefit of additional briefing, the district court held in its March 2023 ruling that the appropriate remedy was to vacate the challenged agency actions taken to implement or enforce the coverage mandate resulting from "A" or "B" ratings made by the USPSTF on or after March 23, 2010. The court concluded that the objecting religious employers and individuals were entitled to a universal remedy (rather than more narrowly tailored relief) because:

The Administrative Procedure Act (APA) authorizes vacatur of agency actions that are contrary to law or constitutional power (5 U.S.C. § 706).
The objecting religious employers and individuals successfully challenged the ACA's constitutionality in requiring coverage of preventive health services with an "A" or "B" rating under the USPSTF's recommendations, which necessarily implicated agency actions taken to implement or enforce those recommendations.
The fact that the plaintiffs did not bring the Appointments Clause claim under the APA did not prevent the court from granting an APA remedy.
The Departments were not prejudiced by vacatur because they had adequate notice that the objecting religious employers and individuals were seeking broad relief.

The court rejected an alternative remedy favored by the Departments—namely, severing the statutory provision requiring USPSTF members to be independent and free from political pressure (42 U.S.C. § 299b-4(6)). According to the Departments, severing this provision from the ACA would cure the Appointments Clause violation because it would allow HHS to review and approve the USPSTF's recommendations. This proposed remedy was inadequate in the court's view because HHS would not be required to review the recommendations and USPSTF's ratings would have legal effect until ratified or vetoed by HHS.

The court therefore:

Vacated all agency actions taken to implement or enforce the requirement to cover preventive health services with a rating of "A" or "B" under the USPSTF's recommendations since March 23, 2010.
Enjoined the Departments from future enforcement of those coverage mandates.

Practical Impact

The Departments have already appealed the Texas district court's rulings to the Fifth Circuit, and it's possible the rulings will be stayed during the appeal. The same judge who issued the Braidwood rulings also concluded (in December 2018) that the ACA's individual mandate was unconstitutional and that the rest of the ACA was not severable from the individual mandate and was therefore invalid. The Supreme Court later rejected this challenge to the ACA (Cal. v. Tex., 141 S. Ct. 2104 (2021); see Legal Update, Supreme Court Rules Plaintiffs Lack Standing to Challenge ACA's Individual Mandate).

While some of the USPSTF preventive health recommendations at issue in this latest ACA litigation are relatively new, others have been in place for several years—long enough for participants and beneficiaries to have grown accustomed to having the coverage. As a result, plans and insurers should probably not rush to drop coverage of USPSTF recommendations (made on or after March 23, 2010) consistent with the March 2023 ruling. And as noted, the other components of the ACA's preventive health services—including recommendations and guidelines made by ACIP or HRSA—remain in place. Post-Braidwood, it will be important to know which agency was the source of a given preventive health recommendation or guideline.

Plans that do ultimately make coverage changes in light of the March 2023 ruling will need to do so consistent with:

Requirements under state insurance law (for insured health plans).
Governing notice requirements under ERISA, as implemented (see Practice Notes, Summaries of Material Modifications (SMMs) for ERISA Health Plans and Summaries of Benefits and Coverage Under the ACA).

Notably, we are also awaiting another important decision involving reproductive health rights from a Texas district court. In late March, a Texas judge heard arguments in a case brought by health providers and medical associations that oppose abortion to challenge the FDA's approval of a medication abortion drug (mifepristone) in 2000 and related regulatory actions. The plaintiffs in that case seek a preliminary injunction ordering the FDA to withdraw or suspend its approval of mifepristone (see Practice Note, Health Plan Coverage for Surgical and Medication Abortion and Related Services: Medication Abortion). Medication abortion has been an important abortion method in the US—even before the Supreme Court's Dobbs ruling from last June holding that there is not a federal constitutional right to abortion (Dobbs v. Jackson Women's Health Org., 142 S. Ct. 2228 (2022)). As a result, the Texas medication abortion litigation and related developments also may have significant implications for employer-sponsored health plans that cover drugs such as mifepristone.

For additional resources addressing plan coverage of reproductive health services, see Abortion and Contraceptives Services for Group Health Plans Toolkit.

Texas District Court Blocks Enforcement of ACA's Preventive Health Services Requirements (in Part), Including PrEP | Practical Law