Fifth Circuit Reverses Injunction in ACA Preventive Care Challenge and Sends It Back to the District Court

July 02, 2024

On June 21, 2024, the Fifth Circuit Court of Appeals (Fifth Circuit) reversed the nationwide injunction imposed by a Texas federal district court that prohibited the federal government from enforcing the ACA’s preventive care mandate. However, the Fifth Circuit remanded the case back to the district court for further proceedings, so the fate of the mandate remains unresolved. 

On September 7, 2022, the US District Court for the Northern District of Texas issued a ruling in Braidwood Management Inc. v. Becerra, in which the court ruled that certain ACA preventive care mandates violated the US Constitution as well as the Religious Freedom Restoration Act (RFRA). 

In this case, the plaintiffs included two businesses and six individuals who sought health insurance that excluded or limited coverage required by the ACA preventive care mandates. Among other claims, the plaintiffs argued that the ACA preventive care mandates violate the US Constitution because the appointment process for members of three entities that made recommendations for services covered by the mandate, the US Preventive Services Task Force (PSTF), the Advisory Committee on Immunization Practices (ACIP), and the Health Resources and Services Administration (HRSA), did not satisfy the constitutional method for appointing “US officers.” A person is a US officer if that person occupies a continuing position established by federal law and exercises significant authority under that law. 

The plaintiffs also asserted that the PSTF-recommended requirement to cover pre-exposure prophylaxis (PrEP) drugs to prevent HIV infection violated their religious rights under the RFRA. 

The district court determined that the appointment process for members of the PSTF did not satisfy the constitutional method for appointing US officers. The court agreed with the plaintiffs that the actions of the PSTF, whose decisions bind those subject to the ACA mandate (such as insurers and sponsors of self-insured plans), are actions that must be done by persons appointed using the process under the Constitution (or actions that must be ratified by someone who was so appointed). The court did find that the other two entities passed constitutional muster. The court also found that the requirement to cover PrEP drugs violated the RFRA. 

Accordingly, the district court issued a judgment that invalidated and prohibited the DOL, IRS, and HHS (the departments) from enforcing all PSTF-recommended preventive care mandates issued since the ACA's March 23, 2010, enactment on a nationwide basis. Additionally, the final judgment prevents the departments from enforcing the PrEP coverage requirements as to the plaintiffs with religious objections. See the article in the April 5, 2023, edition of Compliance Corner, for more information and discussion on the impact of this ruling. 

Note that the Fifth Circuit stayed the injunction pending the resolution of the appeal, meaning the nationwide injunction was delayed until the appellate court reached a decision. Due to the June 21 decision, the nationwide injunction will not go into effect. 

The Fifth Circuit agreed with the district court that the members of the PSTF were not validly appointed as required by Article II of the Constitution and that the federal government had not cured this deficiency. However, the appellate court also determined that the district court overreached by enjoining all government action taken to enforce the preventive care mandate because it lacked the statutory authority to do so. Similarly, the Fifth Circuit found that the district court lacked the authority to vacate all previous decisions made by the PSTF. Instead, the Fifth Circuit limited the injunction by preventing the government from enforcing the mandate against the plaintiffs in the case. 

The Fifth Circuit also remanded the case back to the district court to consider the fate of two other government entities involved in determining what must be covered under the preventive care mandate. Although the district court and the Fifth Circuit found that the members of the ACIP and the HRSA were properly appointed, the Fifth Circuit questioned whether the process that these entities followed when making their recommendations complied with requirements under the federal Administrative Procedures Act (APA), and therefore remanded the matter back to the district court for further consideration. 

With the specific exceptions of the plaintiffs in this case, the preventive care mandate is still in effect. However, the case is not over, and the mandate may be struck down later. As this case continues through the legal process, employers should be aware of the recent appellate decision, consult with their carriers and TPAs, and monitor future developments. For specific advice and guidance, employers should always engage their attorneys. 

Braidwood Management Inc. v. Becerra