August 25, 2014
- Obama Administration Issues New Rules to Accommodate Religious Objections to Contraceptive Coverage under PPACA
Obama Administration Issues New Rules to Accommodate Religious Objections to Contraceptive Coverage under PPACA
The U.S. departments of Health and Human Services (HHS), Labor (DOL) and Treasury released proposed and interim final rules on August 22 providing new alternatives for certain employers who object on religious grounds to providing coverage of contraceptive services as required under the Patient Protection and Affordable Care Act (PPACA).
Under the health care law, certain women’s preventive health services must be covered at no additional cost, including FDA-approved contraception methods and contraceptive counseling. Final rules issued in July 2013 provided an exclusion for “religious employers” and other non-profit, religiously affiliated organizations. Prior regulations provided accommodations whereby insured plans would provide notice to their insurer and self-insured plans would provide notice to a third-party administrator of their religious objection to contraceptive coverage. Under the regulations, insurers and third-party administrators provided with such notice would be required to provide contraceptive coverage consistent with the PPACA.
The interim final regulations (IFR), to be published in the Federal Register on August 27, provide an additional notification option for eligible non-profit religious organizations that permits them to notify HHS directly in writing of their religious objection to contraception coverage. HHS will then notify the insurer for an insured health plan, or DOL will notify the TPA for a self-insured plan, that the organization objects to providing contraception coverage and that the insurer or TPA is responsible for providing enrollees in the health plan separate no-cost coverage for contraceptive services for as long as they remain enrolled in the health plan.Regardless of whether the eligible organization self-certifies in accordance with the July 2013 final rules or provides notice to HHS in accordance with the new IFR, the obligations of insurers and/or TPAs regarding providing or arranging separate payments for contraceptive services are the same, as discussed in the HHS fact sheet. The interim final rules are effective upon date of publication in the Federal Register. The comment deadline is 60 days after publication.
HHS contemporaneously issued proposed regulations in response to the recent U.S. Supreme Court decision Hobby Lobby v. Burwell (as we reported in a June 30 Benefits Byte story) holding that, under the Religious Freedom Restoration Act of 1993 (RFRA), the requirement to provide contraceptive coverage could not be applied to certain closely held for-profit corporations whose owners hold religious objections to such coverage. The proposed regulations set out two possible approaches for defining a qualifying closely held for-profit entity. Under one approach, the entity could not be publicly traded and ownership of the entity would be limited to a certain number of owners. Under an alternative approach, the entity could not be publicly traded and a minimum percentage of ownership would be concentrated among a certain number of owners. The number and concentration are not specified in the proposed rules. HHS is soliciting comments on these and other possible approaches for defining a closely held for-profit entity.
The proposed rules further provide that valid corporate action taken in accordance with the entity’s governing structure (in accordance with state law) stating its owners’ religious objection can serve to establish that the entity objects to providing contraceptive coverage on religious grounds. Comments on the proposed rules will be accepted through October 21, 2014.
For more information, contact Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.