February 11, 2025

The Departments of Health and Human Services (HHS), Labor (DOL) and the IRS (the Departments) rescinded a proposed rule that would have updated how group health plans and insurance issuers must provide preventive services without cost-sharing or prescription. The proposed rule – originally issued in October 2024 – aimed to expand the Affordable Care Act’s (ACA) preventive services requirements by mandating first-dollar coverage for FDA-approved OTC contraceptive products, among other items.

Under the ACA, non-grandfathered health plans are required to cover a range of preventive services, including contraceptive care, without cost-sharing. The now-withdrawn proposal would have built upon this requirement by eliminating prescription mandates for OTC contraceptives, requiring plans to cover them at the point of sale, and establishing additional requirements related to reimbursement, exceptions processes, and network coverage. The proposed rule also sought to strengthen oversight of medical management techniques, ensuring that prior authorization, step therapy and other restrictions included a clear and expedient exceptions process for enrollees.

While the withdrawal means there will be no immediate changes to existing contraceptive coverage rules, the Departments acknowledged in their withdrawal of notice of proposed rulemaking that they may revisit preventive services coverage in the future and could propose new rules on the issue at a later time. It is important to note that this notice was issued by the Biden administration just days before the transition between administrations, and it is unlikely that the Trump administration will consider republishing the proposed rule or finalizing the proposed rule as it was written prior.

Prior to the draft regulation’s withdrawal, Business Group on Health submitted comments to the agencies that emphasized the importance of maintaining plan flexibility in structuring coverage for preventive services, including the ability to implement reasonable medical management techniques and retain discretion over prescription requirements.

While the Departments have opted not to finalize the proposed rule at this time, the Business Group will continue to monitor for future regulatory developments that could impact employer-sponsored health plans’ coverage of preventive services and compliance with ACA requirements.

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