Affordable Care Act: Is Preventative Health Care Benefits a Thing of the Past?
Author: From our expert member in ‘Talent Management’ and select ‘Benefits Consulting’ – RRC RESOURCES
On March 30th, the U.S. District Court in the Northern District of Texas issued a judgement in a court case challenging a provision of the Affordable Care Act (ACA) that requires most private health plans cover a range of preventive care (such as screening exams for conditions such as diabetes, hepatitis, and certain cancers) without a deductible or co-pay. It concluded that certain aspects of the requirement were unconstitutional and violated religious rights. The judge sought to impose limits on the government’s ability to enforce these requirements nationwide.
According to the New Jersey Monitor, one of the issues in this case, according to the judge, is the fact that members of the volunteer task force who decided which preventative services were to be included, were appointed by the director of a federal agency, are “‘officers’ of the United States” and should have been appointed by the president and confirmed by the Senate. Because they were not, he ruled that the use of their recommendations to set free preventive services under the ACA is unconstitutional.
This decision could affect ACA and job-based insurance plans nationwide resulting in a host of medical services that will no longer be free for patients. If this ruling stand, HealthSystemTracker.org estimates it will affect about 100 million privately insured people. People could end up paying more for preventive care. Some may lose access to certain services. However, as sweeping as the ruling is, it does not completely and immediately wipe out preventive services coverage under the ACA. It has left many people with a lot of questions and confusion.
Not all preventive services will be affected. The Kaiser Family Foundation, states that requirements for vaccines recommended by the Advisory Committee on Immunization Practices, women’s preventive health services recommended by the Health Resources and Services Administration (i.e., contraception, well woman care, prenatal care, breastfeeding support, intimate partner violence screening) or services for children and young adults recommended by Bright Futures would not be overturned.
Separately, the ruling found that pre-exposure prophylaxis medication to prevent HIV violated the plaintiff’s religious rights and because these medications were after 2010, the drugs and some ancillary lab services can now be subject to out-of-pocket costs across all health plans or coverage could even be dropped.
Section 213 of the IRS code addresses what medical expenses can be reimbursed under a Health Reimbursement Arrangement (HRA), Health Savings Account (HSA), Flexible Spending Arrangement (FSA), or Archer Medical Savings Account. Generally, if certain conditions are met, this code allows for medical expenses incurred in a taxable year to be deducted or paid by the vehicles. These expenses must be primarily for the alleviation or prevention of a physical or mental disability or illness.
The IRS published a list of frequently asked questions about medical expenses related to nutrition, wellness, and general health under Section 213.[i] Generally, an exam that provides a diagnosis of a disease or illness, the cost of a program to treat a substance abuse disorder, smoking cessation or therapy that is treatment for a disease can be covered or reimbursed via an HRA, HSA, FSA or Archer MSA. If a physician diagnoses a disease that warrants nutritional counseling, a weight-loss program or a gym membership can be paid for or reimbursed. Food and over-the-counter drugs (except for insulin) can also be covered. The cost of exercise for general health cannot be covered.
Although the ruling is effective immediately, most coverage will not change until the employer’s or individual’s health care policy is renewed. In addition, states can issue their own requirements for coverage to fill in some of the expense this legislation will incur. However, if your company has a level funded or self-insured employee benefit plan, it is subject to federal not state requirements.
As expected, the Biden administration is appealing this ruling and will seek a stay of this remedy from the Fifth Circuit Court of Appeals. The Fifth Circuit may or may not issue that stay or do so in an expedient way, and the rulings could be appealed to the Supreme Court.
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[1] www.irs.gov/individuals/frequebntly-asked-questions-about-medical-expenses-related -to-nutrition-wellness-and-general-health
