Proposed Rules for Contraceptive Services

The Affordable Care Act (ACA) requires non-grandfathered health plans to cover contraceptives in 18 FDA-defined categories with no cost sharing.  This mandate has a long and politically contentious history, resulting in numerous lawsuits and four appeals to the U.S. Supreme Court.

Even in light of Supreme Court cases in 2014 (Burwell v Hobby Lobby) and 2016 (Zubik v Burwell), only churches and their integrated auxiliaries were outright exempt from the mandate the first few years it was in effect.  Under the ACA, religious non-profits objecting to some or all of the mandate were required to navigate a formal accommodation process whereby they notify their insurer/TPA (or HHS) of the parts of the contraceptive mandate to which they object. Subsequently, the insurer/TPA could then provide the coverage by other means to affected employees.  Later in 2014, after the Hobby Lobby decision, closely held for profit employers gained access to the accommodation process as well.

Further, in 2018, the Trump administration issued rules that extended exemption to a much broader list of qualifying employers with sincerely held religious beliefs or moral convictions and made accommodation an optional process.  Those 2018 final rules have continued to this day, having been upheld 7-2 in the Supreme Court decision: Little Sisters of the Poor v Pennsylvania on July 8, 2020.

Most recently, federal regulators have announced a proposed rule with new ideas and are accepting public comment through April 2, 2023.  A fact sheet outlines the proposal, consisting of two major parts:

• First, they are proposing to eliminate the exemption based on moral convictions.
  • Regulators stated “there have not been a large number of entities that have expressed a desire for an exemption based on a non-religious moral objection.”
  • They also noted the Religious Freedom Restoration Act (RFRA) does not require this.
• Second, they are proposing a new way to accommodate individuals whose plan excludes one or more contraceptives for religious reasons.
  • The previous accommodation process would remain available but is not “required” of employers with sincerely held religious beliefs.
  • A second option creates a new “individual contraceptive arrangement” whereby willing health care providers or pharmacies could be reimbursed through an arrangement with an Exchange insurer, which in turn would seek an Exchange user fee adjustment.
  • The goal of this proposed new option would be to balance the religious rights of certain employers who object to participating in the accommodation process with the ACA’s goal of individual access to no-cost contraceptive health care.
  • Notably, the proposed rule doesn’t include providing an individual contraceptive arrangement to those enrolled in grandfathered plans which might not cover all contraceptives and/or may impose a cost to plan participants. Public comment is being accepted which may alter the language prior to the release of the final rule.
  • They also “seek comment on adequate ways to ensure individuals are aware of the individual contraceptive arrangement, can learn if they are eligible, and can find participating providers to access contraceptive services at no cost.”

Employers interested in providing public comment can click the proposed rule link above.  We will keep employers informed when a final rule is issued.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.