NATSO Analysis: Supreme Court Blocks Vaccine and Test Rule

The U.S. Supreme Court on Jan. 13, 2022, blocked the Biden Administration from enforcing a "vaccine or testing" mandate for all employers with at least one hundred employees. 

Technically the Court's decision temporarily stays the rule pending the outcome of a decision on the merits by the Sixth Circuit and any subsequent petition for review of that decision to the Supreme Court.  As a practical matter, the Court's opinion -- available here -- makes clear that the Court's majority does not believe OSHA has the authority to issue the vaccine mandate.  

​It is hard to see a path forward where OSHA gets this rule reinstated, or where the Biden Administration initiates a new rulemaking that goes through a traditional public comment process. Rules that go through that process receive greater judicial deference than Emergency Temporary Standards such as OSHA's vaccine mandate.  Nevertheless, the Court's opinion signals that any such effort would be futile. 

President Biden basically acknowledged as much in his statement after the Court's opinion was released: "As a result of the Court's decision, it is now up to States and individual employers to determine whether to make their workplaces as safe as possible for employees....I call on business leaders to immediately join those who have already stepped up -- including one third of Fortune 100 companies -- and institute vaccination requirements to protect their workers, customers, and communities."

The ruling came very shortly after OSHA issued new guidance (now moot) on the mandate's application to truck drivers, saying it didn't apply to drivers who are the sole occupants of their vehicles or to individuals who spend only brief periods indoors with others.

The ruling leaves employers facing a patchwork of inconsistent state rules over vaccine policies. States have much clearer constitutional authority than the federal government to impose vaccine mandates. (This was one of the main reasons the Supreme Court held that the federal government did not have that authority.) Illinois, for example, recently adopted the equivalent of the federal rule for companies in that state. 

As of this month, 13 states have some form of prohibition against requiring people to be vaccinated or to showing proof of immunization, according to the Kaiser Family Foundation. In Montana, employers cannot take action against workers based on vaccination status. Texas forbids employers from compelling workers or consumers to receive a coronavirus vaccine. And in Utah, employers must offer an exemption to any employee or job applicant who does not want to receive a vaccine or show proof of being vaccinated. 

The Supreme Court's opinion, which was unsigned but supported by the Court's six GOP-appointed justices (and opposed by the three Democrat-appointed justices) stated that although the risks associated with the coronavirus occur in many workplaces, "it is not an occupational hazard in most" (emphasis in original). 

"COVID-19 can and does spread at home, in schools, during sporting events, and everywhere else that people gather," the order says. "That kind of universal risk is no different from the day-to-day dangers that all face from crime, air pollution, or any number of communicable diseases.  Permitting OSHA to regulate the hazards of daily life -- simply because most Americans have jobs and face those same risks while on the clock -- would significantly expand OSHA's regulatory authority without clear congressional authorization."  The majority said that OSHA might have more limited authority "where the virus poses a special danger because of the particular features of an employee's job or workplace, targeted regulations are plainly permissible, mentioning specifically those who work in "particularly crowded or cramped environments."

The Court's three liberals issued an aggressive dissent defending OSHA's expertise and authority. "Over the past two years, COVID-19 has affected -- indeed, transformed -- virtually every workforce and workplace in the Nation," and it is "perverse" to read federal law as "constraining OSHA from addressing one of the gravest workplace hazards in the agency's history."  The Court's minority asked who should decide whether vaccine mandates are appropriate: "An agency with expertise in workplace health and safety, acting as Congress and the President authorized? Or a court, lacking any knowledge of how to safeguard workplaces, and insulated from responsibility for any damage it causes?"

Corporate leaders applauded the decision, the WSJ reports. 

"Many prominent U.S. companies have some sort of vaccine requirements but have stopped short of mandating them for all staff.  U.S. airlines and a few high-profile companies, including Walt Disney Co. and Tyson Foods Inc., have adopted vaccine mandates for their workers.  Others such as Facebook owner Meta Platforms Inc. and JPMorgan Chase & Co. required them for employees returning to their offices."

"But many other corporate leaders held off in implementing vaccine or testing policies, waiting to see if the Biden Administration's rules would withstand legal challenges....A number of companies [such as GE and Union Pacific] put their plans to mandate vaccines on pause after the Biden administration's requirements ... were challenged."

Group Health Plans / OTC Covid-19 Tests

The Biden Administration this week issued highly anticipated guidance in the form of Frequently Asked Questions (FAQs) aimed at clarifying a requirement announcement late last year that insurance companies and group health plans cover the cost of over-the-counter (OTC) at-home COVID-19 tests throughout the duration of the public health emergency (PHE) beginning on January 15, 2022. For most companies this will have primarily cost implications, creating a new temporary process, and dealing with employee questions.

Among the FAQs are those aimed at clarifying the circumstances under which OTC tests must be covered, along with various limits and safe harbors for plans and issuers.  This includes clarifying that plans and issuers:

• Must provide coverage without cost-sharing requirements, prior authorization, or other medical management requirements with respect to OTC COVID-19 tests available without an order or individualized clinical assessment by a health care provider purchased on or after January 15, 2022, and during the PHE. Coverage may, but is not required to, be provided for OTC COVID-19 tests purchased before January 15, 2022. 
• May not limit coverage to tests that are provided through preferred pharmacies or other retailers unless a plan or issuer arranges for direct coverage through both its pharmacy network and a direct-to-consumer shipping program if various access and costs situations are met.  In that case, they may limit reimbursement from non-preferred pharmacies or other retailers to no less than the actual price, or $12 per test (whichever is lower). 
• May set limits on the number or frequency of OTC COVID-19 tests covered without cost sharing to no less than 8 tests per 30-day period (or per calendar) per participant, beneficiary, or enrollee, for those tests administered without a provider's involvement or prescription.
• Are permitted and may act to prevent, detect, and address fraud and abuse.
• May provide education and information resources to support consumers seeking OTC COVID-19 testing, as long as such resources make clear that the plan or issuer provides coverage and reimbursement of all eligible OTC COVID-19 tests and such information is consistent with the test's emergency use authorization.