The Affordable Care Act (ACA) requires non-grandfathered group health plans to provide benefits for certain preventive health services without imposing cost-sharing requirements. These services include, with respect to women, the preventive care and screenings described in guidelines issued by the Departments of Health and Human Services (HHS), Treasury and Labor (Departments) in August 2011.
The guidelines require coverage, without cost sharing, for all FDA-approved contraceptive methods, sterilization procedures and patient education and counseling for all women with reproductive capacity, as prescribed by a provider. Non-grandfathered health plans must comply with the women’s preventive services mandate for plan years beginning on or after Aug. 1, 2012.
SPECIAL RULES FOR RELIGIOUS EMPLOYERS
To address concerns from religious employers, the following special rules have been created for the contraceptive coverage requirement: The Departments’ guidelines created an exemption to the contraceptive coverage requirement for group health plans of certain nonprofit religious employers. To qualify for the exemption, the employer must have the inculcation of religious values as its purpose, primarily employ persons who share its religious beliefs and primarily serve persons who share its religious beliefs.
This exemption covers churches and similar organizations. HHS created a one-year enforcement safe harbor for group health plans sponsored by nonprofit organizations that do not provide some or all of the required contraceptive coverage (consistent with state law) because of the organization’s religious beliefs. This safe harbor applies to religious organizations that do not qualify for the exemption, such as schools, charities, hospitals and universities. The temporary enforcement safe harbor will be in effect until the plan year that begins on or after Aug. 1, 2013.
On Feb. 10, 2012, President Obama announced that a new regulation will be drafted during the safe harbor period. According to the White House, the regulation would not require religious organizations, such as schools, charities, hospitals and universities, to provide contraceptive coverage, refer their employees to organizations that provide contraception or subsidize the cost of contraception. However, contraceptive coverage would be provided to female employees by the employers’ insurance companies directly and free of charge.
On March 21, 2012, the Departments issued an advance notice of proposed rulemaking (ANPR) to outline draft proposals and seek input on the contraceptive coverage requirement for religious employers. Comments on the ANPR are due by June 19, 2012.
OVERVIEW OF ANPR According to the Departments, the proposals described in the ANPR are intended to maintain contraceptive coverage without cost-sharing for individuals who receive coverage through non-exempt, non-profit religious organizations with Administration Seeks Input on Contraceptive objections to contraceptive coverage, while also protecting these religious organizations from having to contract, arrange or pay for contraceptive coverage.
Accommodation Approach To satisfy these competing goals, the ANPR outlines an accommodation approach of having an independent entity, such as a health insurer or third-party administrator, assume the responsibility for providing contraceptive coverage to participants and beneficiaries without cost-sharing.
The independent entity would be responsible for: Notifying plan participants and beneficiaries about the availability of contraceptive coverage; Providing the coverage automatically to participants and beneficiaries covered under the plan (that is, without an application or enrollment process); and Protecting the privacy of the plan’s participants and beneficiaries who use contraceptives.
Under the ANPR, the accommodation approach would apply to both insured and self-insured health plans, although the details would vary based on whether the plan contracts with an insurance company or self-funds its benefits.
Insured Health Plans For religious organizations with insured health plans, the insurer would assume responsibility for providing contraceptive coverage without cost-sharing to the plan’s participants and beneficiaries. The contraceptive coverage would not be included in the plan document, contract or premium charged to the religious organization. To pay for the contraceptive coverage, issuers would use the estimated savings from not paying for services that would otherwise be used if contraceptives were not covered.
Self-Insured Health Plans
For religious organizations with self-insured health plans, the third-party administrator would assume the contraceptive coverage responsibility. The religious organization would not contribute to the funding of contraceptive services and would not participate in the processing of claims for contraceptive coverage. The ANPR outlines some possible approaches to fund the contraceptive coverage without using funds provided by the religious organization, including using revenue that is not already obligated to plan sponsors such as drug rebates,
service fees and disease management program fees.
Other possible funding methods include receiving funds from a private, non-profit organization, receiving a credit or rebate under ACA’s reinsurance program (beginning in 2014) or using tax preferred accounts, such as health reimbursement arrangements (HRAs) and health savings accounts (HSAs) to pay for contraceptive coverage.
Self-Certification Process and Notice to Participants and Beneficiaries
The ANPR describes a self-certification process for religious organization that want to take advantage of the oneyear enforcement safe harbor or use the accommodation approach for plan years beginning on or after Aug. 1, 2013.
Under that process, an individual authorized by the organization certifies that the organization satisfies the eligibility criteria and the self-certification is made available for examination. Under the accommodation approach, the self-certification would be used to put the independent entity responsible for providing contraceptive coverage on notice that the religious organization has invoked the accommodation. The religious organizations would not need to take any action other than self-certification. Administration Seeks Input on Contraceptive Coverage for Religious Employers
Under the temporary enforcement safe harbor, an organization that self-certifies must also provide a notice to plan participants and beneficiaries that the plan qualifies for the one-year extension. This notice would only be required for one year because the independent entity would then take over responsibility for providing contraceptive coverage. In the ANPR, the Departments seek input on how this notice should be provided.
The ANPR also seeks information on several additional topics to help with the proposed rule making process, including the following: Whether an exemption or accommodation should be made for certain religious health insurance issuers or third-party administrators with respect to contraceptive coverage; The extent to which there are self-insured health plans without a third-party administrator, as well as options for how the accommodation approach could work for these plans; and The interaction between federal and state laws when state insurance laws require contraceptive coverage for insured health plans, and whether there is a need for consistency between the federal regulations and state laws.
The guidance provided in the ANPR is the first step in the rule making process. Its purpose is to request comments on a variety of approaches being considered by the Departments for applying ACA’s contraceptive mandate to religious employers. Next, the Departments intend to issue proposed regulations based on the feedback they receive to the ANPR. The Departments intend to finalize the regulations so that they are effective by the end of the enforcement safe
harbor, or for plan years beginning on or after Aug. 1, 2013. For religious employers that wish to utilize the one-year enforcement safe harbor, it is likely that the Departments will issue more guidance on the self-certification process and notice requirement in the coming months.