Policy & Advocacy

March 02, 2023

On January 30, 2023, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (collectively, the Departments) released proposed rules with a public comment period entitled, “Coverage of Certain Preventive Services Under the Affordable Care Act.” If finalized, the new rules would amend existing regulations regarding coverage of contraceptive services without cost sharing under the Affordable Care Act (ACA). Below we summarize the existing regulations and provide an overview of the proposed rules.

Most large employers are not expected to be impacted by this rule change, if finalized. However, those with currently effective religious or moral objections should consult with counsel regarding any potential plan impacts.

Background

Under the ACA and implementing regulations, most group health plans are required to cover certain preventive services without cost-sharing to participants. These preventive services include those with an “A” or “B” rating from the U.S. Preventive Services Task Force (USPSTF), as well as the preventive services in the Health Resources and Services Administration’s (HRSA) Women’s Preventive Services Guidelines. The USPSTF and HRSA guidelines include a broad array of women’s contraceptive services.

The Departments’ existing final regulations from 2018 include two potential exemptions for certain employers and plan sponsors: (1) for eligible employers and plan sponsors who object to contraceptive coverage due to sincerely held religious objections; and (2) for eligible employers who object due to sincerely held moral objections. Also eligible for these exemptions are all private universities and colleges with religious or moral objections, with respect to the arrangement of student health insurance coverage.

Under the 2018 final regulations, group health plan sponsors and institutions of higher education that qualify for either a religious or moral exemption may voluntarily avail themselves of an accommodation to the contraceptive coverage requirement. Under the accommodation, the objecting entity can fully remove themselves from the provision of contraceptive coverage – the entity does not have to contract, arrange, pay, or refer an individual for contraceptive coverage – while an individual enrolled in the entity’s group health plan remains eligible for contraceptive services at no cost to the individual or the organization. The group health plan’s insurer or third-party administrator (TPA) instead provides or arranges for contraceptive services to an enrolled individual. For a self-insured group health plan sponsored by an entity with a religious or moral objection, the plan’s TPA can enter into an agreement with a health insurance issuer on a Federally-Facilitated Exchange (FFE) or State-based Exchange on the Federal platform (SBE-FP) to obtain reimbursement for contraceptive services provided in this manner, with the FFE or SBE-FP receiving a reduction to its Exchange user fees.

These accommodations are optional. The Departments note in the proposed rules, however, that under the current model, when an objecting entity does not invoke the optional accommodation, there is no alternative mechanism for individuals enrolled in the entity’s health plan to access contraceptive coverage without cost sharing.

Notice of Proposed Rulemaking

The proposed rules retain the religious objection from the 2018 final rules and create a new independent pathway which the Departments state is intended to ensure that women enrolled in a group health plan maintained by an objecting entity have access to contraceptive services without cost sharing in circumstances when the objecting entity claims the exemption without voluntarily using the accommodation process.

The Departments call the new pathway an “individual contraceptive arrangement,” which would be available to enrollees and beneficiaries without the objecting entity having to take any action to facilitate coverage of the contraceptive services to which the entity objects. The new mechanism would allow individuals to obtain no-cost contraceptive services directly via a provider or facility. The proposed rules amend current regulations to permit these providers and facilities to seek reimbursement for the contraceptive services furnished by entering into agreements with an issuer on a FFE or SBE-FP – the same mechanism that currently exists for TPAs in connection with the optional accommodation for self-insured group health plans.

The proposed rules would also rescind the moral regulatory exemption and eliminate the availability of the optional accommodation for entities that object to contraceptive coverage based on non-religious moral beliefs. The proposed rules would, however, maintain the optional accommodation for group health plan sponsors and institutions of higher education arranging student health insurance coverage that qualify for the sincerely held religious exemption.

What’s Next?

Employers should review the impacts of the proposed rule with legal counsel, consultants, and insurance carriers/TPAs to discuss potential implications should the Departments finalize the proposed rules. The public comment period for the proposed rules is open through April 3, 2023. The Departments do not indicate an anticipated effective date should the proposed rules be finalized as proposed, but the Business Group will monitor and keep members informed of regulatory developments.