In Central United Life Ins. Co. v. Burwell, D.C. Cir. No. 15-5310 (July 1, 2016), a D.C. Circuit panel affirmed, 3-0, a trial court injunction barring enforcement of the 2014 HHS regulation permitting individual fixed-indemnity policies to be sold only as supplements to ACA minimum essential coverage. You’ve heard this theme before. The Public Health Service Act, 42 U.S.C. §§  300-21(c)(2), 300gg-63(b), 300gg-91(c)(3), defines “excepted benefits” as policies offered separately from and not coordinated with health plans. When passing the ACA, Congress adopted and piggy-backed on those PHS Act provisions. Many consumers decided to buy fixed indemnity plans in lieu of ACA Marketplace plans, despite the ACA individual mandate penalties for not buying minimum essential coverage. Displeased, HHS issued a regulation “to amend the criteria for fixed indemnity insurance to be treated as an excepted benefit,” outlawing such plans unless sold as a supplement minimum essential coverage. See 79 Fed. Reg. 30240, 30253 (May 27, 2014). But only Congress may amend a statute, the Court held, and Congress did nothing of the sort in the ACA. Rather, the ACA reaffirmed the existing definition of “excepted benefits” and how that definition applied to individuals’ purchase of fixed indemnity plans.

As of this writing, HHS has not requested rehearing and has not filed an appeal notice. We expect the government to take a mulligan, asking the full D.C. Circuit to over-rule the panel opinion. We think that likely because 4-4 Supreme Court opinions are treated as affirming the decision appealed. While we wait, we’ll be interested to see whether and how quickly insurers resume marketing fixed indemnity plans to individuals as alternatives to ACA minimum essential coverage.