November 02, 2023

The Departments state in the RFI that that the Administration believes requiring group health plans and health insurance issuers (issuers) to cover, without cost sharing, OTC preventive services without a prescription would benefit the Administration’s policy goal of expanding preventive care access and utilization. The Departments are therefore issuing the RFI to gather information from the public to:

• Better understand potential costs and benefits of requiring non-ACA-grandfathered group health plans and health insurance issuers to cover OTC preventive services and items without cost sharing and without a prescription by a health care provider;
• Determine potential operational challenges for plans, issuers, third-party administrators (TPAs), and pharmacy benefits managers (PBMs) associated with providing such coverage;
• Understand whether and how requiring such coverage would benefit consumers; and
• Assess any potential burden that plans and issuers would face if required to provide such coverage, including utilization and economic impacts.

Background and Braidwood Management Inc. v. Becerra

Under the ACA and implementing regulations, most group health plans are required to cover certain preventive services without cost-sharing to participants. These preventive services include those with an “A” or B” rating from the U.S. Preventive Services Task Force (USPSTF), as well as preventive services in the Health Resources and Services Administration’s (HRSA) Women’s Preventive Services Guidelines and immunizations recommended by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC).

While most recommended preventive services require a health care provider to provide a prescription for an item or service, or to directly furnish a service to a patient, several preventive products are available to consumers without the involvement of a health care provider (i.e., OTC preventive products). Examples include certain types of tobacco cessation pharmacotherapy that are recommended by the USPSTF and OTC preventive products recommended by HRSA such as breastfeeding supplies and certain contraceptives.

The Departments interpreted the ACA’s requirements to include coverage for OTC preventive products without cost-sharing, but only when prescribed by a health care provider – despite such OTC products being generally available for individual purchase without a prescription. (see: FAQs About the ACA Part XII issued in February 2013). The Departments reaffirmed this interpretation, and clarified its application to FDA-approved emergency contraception, including OTC products, in FAQs About ACA Implementation Part 54 issued in July 2022.

On March 30, 2023, the U.S. District Court for the Northern District of Texas issued a final judgment in Braidwood Management Inc. v. Becerra. The plaintiffs in Braidwood challenged the ACA’s preventive services coverage mandate on several grounds. The court dismissed the plaintiff’s claims about the ACIP and HRSA; however, the court held that the appointment of the USPSTF violated the “Appointments” clause of the Constitution because the members of the task force were not properly appointed. The decision immediately blocked the requirement nationwide that applicable plans and health insurance issuers cover preventive services recommended or updated by the USPSTF on or after March 23, 2010. The federal government appealed this decision to the 5^th Circuit Court of Appeals, who on June 12, 2023, granted the government a stay of the nationwide impact.

What's Next?

The Departments are accepting public comments to the RFI for 60 days, with comments due December 4, 2023. Until new rules are issued and as the Braidwood appellate litigation proceeds, employer plan sponsors must continue to cover USPSTF “A” and “B” rated items and services, as well as ACIP and HRSA preventive items and services, without cost sharing – but only when prescribed by a health care provider. Public comments received by the Departments in response to the RFI may inform future rulemaking or other FAQ guidance. Business Group on Health will keep members informed of legal and regulatory developments.

If you have questions, comments, or concerns about these or other regulatory and compliance issues, please contact us.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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