Ongoing Legal Challenge to ACA Definition of Cost-Sharing; No Enforcement Changes Expected Pending New Guidance

Not covered in HHS/CMS’ guidance with the 2025 inflation-adjusted MOOP limits, but related, employer plan sponsors should also be aware of ongoing legal and regulatory activity that may eventually impact the ACA cost-sharing limits. In late September 2023, the U.S. District Court for the District of Columbia issued a ruling in the case HIV and Hepatitis Policy Institute et al. v. HHS. The court’s ruling vacated portions of an HHS regulatory provision regarding the definition of cost sharing limits under the ACA and the application of prescription drug manufacturing assistance. For additional context and insight, please see our article on the court’s ruling and please listen to the replay of our November 2023 Regulatory & Compliance Update webinar.

While the District Court opinion creates some uncertainty for employer plan sponsors, on November 28, 2024, HHS filed a notice of appeal to the D.C. Circuit Court of Appeals to challenge the decision. Additionally, on November 27, 2023, HHS indicated in a request for clarifications from the District Court that it would undertake rulemaking to address any issues remaining open after a final decision, but “[p]ending the issuance of a new final rule, HHS does not intend to take any enforcement action against issuers or plans based on their treatment of such manufacturer assistance (emphasis added).” This means that employers may effectively continue to administer plans as previously designed with respect to manufacturer assistance until additional rulemaking is finalized.