In a closely watched legal case with major implications for employer-sponsored health plans, the U.S. Supreme Court has upheld the constitutionality of the Affordable Care Act’s (ACA) preventive services mandate.
In Kennedy v. Braidwood Management, Inc., the Court reversed lower court decisions that had threatened to dismantle one of the ACA’s most significant provisions: the requirement that employer-sponsored health plans cover preventive services — such as cancer screenings, vaccinations, and HIV prevention medication — at no cost to employees.
While this decision preserves the status quo, it also serves as a reminder to employers: ACA compliance extends beyond filing 1095-Cs. Coverage requirements, affordability standards, and penalty exposure must be monitored year-round.
Here’s what happened, why it matters, and what you should do next.
The Legal Challenge: Kennedy v. Braidwood
The case centered on the authority of the U.S. Preventive Services Task Force — a panel of medical and public health experts established under the Department of Health and Human Services (HHS). Since the passage of the ACA in 2010, the Task Force’s recommendations have served as the foundation for preventive services that must be covered without cost sharing by group health plans.
In Kennedy v. Braidwood, the plaintiffs argued that the Task Force was unconstitutional under the Appointments Clause because its members were not nominated by the President and confirmed by the Senate. They claimed that as “principal officers,” Task Force members could not lawfully impose binding mandates on insurers or employers.
Lower courts, including the U.S. Court of Appeals for the Fifth Circuit, agreed with this argument — raising the prospect that the entire ACA preventive care mandate could be invalidated.
The Supreme Court’s Ruling
The Supreme Court reversed the lower courts’ decisions, holding that:
- Task Force members are “inferior officers,” not principal officers.
- Congress is permitted to allow department heads—such as the HHS Secretary—to appoint inferior officers without Senate confirmation.
- The HHS Secretary retains supervision over the Task Force, including the power to review, approve, or remove its recommendations and members.
The result? The ACA’s preventive care provisions remain intact—and employer-sponsored health plans must continue to cover the full suite of Task Force-endorsed services, including HIV prevention medication (PrEP), cancer screenings, immunizations, and more.
What It Means for Employers and Insurers
This ruling affirms the ACA’s preventive care requirements, meaning:
- No immediate changes are required to health plan design or coverage.
- Employers must continue to cover Task Force-recommended services without cost sharing.
- Religious exemptions may still apply for some employers, but the ruling does not expand those exemptions.
In short, the preventive care mandate continues to apply to most group health plans, reinforcing the need for employers to keep pace with ACA compliance across both reporting and plan design obligations.
Why This Matters for Your ACA Strategy
While much of the focus around ACA compliance lands on tax filings and coding, benefits coverage is just as critical. The Employer Mandate requires applicable large employers (ALEs) to offer:
- Minimum Essential Coverage to at least 95% of full-time employees
- Coverage that is affordable and meets minimum value thresholds
Failing to offer coverage that complies with preventive care mandates can jeopardize your ACA compliance status—even if your reporting is technically correct.
This ruling reinforces why employers must take a holistic, year-round approach to ACA compliance:
- Track employee eligibility and offer coverage in line with legal requirements
- Ensure that benefits meet all ACA standards, including preventive services
- Monitor risk with tools like Trusaic’s Penalty Risk Assessment, which flags potential ESRP liability before it becomes a penalty letter
- Reconcile payroll and benefits data to prevent reporting errors tied to coverage gaps
Final Thoughts
The Supreme Court’s decision in Kennedy v. Braidwood affirms what compliance professionals already know: ACA regulations are here to stay, and employer obligations continue to evolve under close legal scrutiny.
Employers should take this moment — between filing seasons — to reevaluate their ACA compliance posture, ensure coverage meets legal thresholds, and verify that their vendors are tracking the full scope of requirements, not just the reporting component.
Need help aligning your plan design with ACA mandates? Schedule a demo to see how Trusaic enables proactive compliance.