HHS on Friday announced a proposed rule clarifying how employees of certain religiously affiliated not-for-profit organizations will be able to access no-cost contraceptive coverage.
The proposal builds on previously announced accommodations for religiously affiliated not-for-profit organizations that object to the federal contraceptive coverage rules being implemented under the Affordable Care Act (ACA).
The contraceptive coverage rules are based on recommendations from the Institute of Medicine on women's preventive services and require that most health plans cover contraceptive services without copayments or deductibles.
Key components of the proposed rule
The proposed rule aims to address many of the concerns voiced over the initial proposal when it was released nearly a year ago.
- Reiterating requirements for insurers: In a fact sheet on the proposed rule, HHS reiterated that an employer's insurer must provide contraceptive coverage directly to employees of religiously affiliated not-for-profits that object to offering it themselves.
- Clarifying use of third-party insurance administrators: The proposed rule states this accommodation also applies to self-insuring, religiously affiliated not-for-profit organizations that must use a third-party administrator to arrange for the coverage with another insurer. In those scenarios, associated costs would be offset through lower user fees, which are fees paid by insurers for operating in federally led health insurance exchanges.
- Detailing employer notifications: HHS also explained how the process will work for notifying employees of the coverage. Under the proposed rule, a not-for-profit would inform its insurer or third-party administrator that it qualifies for the accommodation, and the insurer would then notify the employees that it would provide them with the no-cost contraceptive coverage through a separate policy not connected to the employer.
- Defining 'religious employers': The proposed rule simplifies the definition of entities that are considered "religious employers," which are completely exempt from the contraceptive coverage requirements. HHS said it would remove criteria stating entities that qualify for the exemption must have the inculcation of religious values as its purpose and primarily employ and serve people of its same faith. Instead, HHS would use only an Internal Revenue Service definition that primarily includes houses of worship and their affiliated organizations. The department noted that this change is not expected to expand the number of employers that qualify for the exemption. Rather, the change aims to clarify that a house of worship is not excluded from exemption if it employs or provides charitable services or other outreach to people of different faiths.
Initial reaction to the new rule
The U.S. Conference of Catholic Bishops, which opposed the contraceptive coverage rules when they were first released last year, said it would review the new proposal.
Meanwhile, women's health groups responded positively to HHS' announcement. Cecile Richards—president of the Planned Parenthood Federation of America—said, "This policy delivers on the promise of women having access to birth control without co-pays no matter where they work." Richards added, "Of course, we are reviewing the technical aspects of this proposal, but the principle is clear and consistent. This policy makes it clear that your boss does not get to decide whether you can have birth control."
According to the New York Times, insurers already have questioned some aspects of the proposal, including how they would pay for contraception if they cannot "impose any premium, fee or other charge" for coverage, as stated under the proposed rule. Further, the proposal would bar insurers from imposing annual or lifetime limits on the dollar value of contraceptive coverage, although it states that "the cost of the contraceptive coverage could include a reasonable margin," or profit, for insurers. Insurers said that the costs would be transferred to consumers (Baker, "Healthwatch," The Hill, 2/1; "Washington Wire," Wall Street Journal, 2/1; Kennedy, USA Today, 2/1; Pear, New York Times, 2/1).
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