As expected, on Monday, November 9, 2015, the U.S. Department of Health & Human Services (HHS) filed a Notice of Appeal from the decision issued by Judge Royce Lamberth of the United States District Court for the District of Columbia in the case of Central United Life, Inc. v. Burwell.

The Burwell decision enjoined enforcement by HHS of that portion of a new rule it issued in 2014 which, effective January 1, 2015, prohibited insurers from selling new fixed indemnity health insurance policies in the individual market unless they first obtain an attestation from the policyholder, in their application, stating that they have other health coverage that meets the minimum essential coverage required under the Affordable Care Act (ACA). Fixed indemnity health insurance products provide limited and fixed medical benefits, and thus they are not designed or intended to provide comprehensive medical coverage and do not satisfy the individual mandate contained in the ACA. For that reason, some federal and state regulators have tried to regulate and limit the sale of such products – ostensibly to prevent consumers from confusing the coverage provided under a fixed indemnity policy with comprehensive medical coverage – and the attestation requirement imposed by HHS is another example of that regulatory objective.

In addition to the attestation requirement for new policies issued after January 1, 2015, the new HHS rule also provided that the attestation requirement would have to be met at the time of the first renewal after October 1, 2016, for any policies that were already issued and in-force as of January 1, 2015.

However, in a decision dated September 11, 2015, Judge Lamberth concluded that the attestation requirement in the new rule reflected an attempt by HHS to interpret and define the concept of fixed indemnity insurance “in a way that imports wholly foreign concepts” and “contravene[s] the very statute they are implementing.” He therefore permanently enjoined HHS from enforcing the attestation requirement (other less controversial aspects of the new rule were left untouched).

Given that, under the current political environment, there would not seem to be a viable legislative path available to HHS to clarify its authority to issue the attestation requirement, the appeal by HHS to the Federal Circuit Court of Appeals was expected.