H&W: FINAL RULES: Religious Objection to the Coverage of Contraceptive Services
Final rules published on July 14, 2015 finalized the July 2010 interim final regulations related to coverage of recommended preventive services, the August 2014 interim final regulations related to the process an eligible organization uses to provide notice of its religious objection to the coverage of contraceptive services, and the August 2013 proposed regulations related to the definition of eligible organization. The final rules are effective on the first day of the plan year that begins on or after September 14, 2015.
In addition, these rules finalize the preventive services standards in the 2010 interim final regulations to ensure that when a recommendation or guideline for a preventive service is changed or eliminated in the middle of a plan year, group health plans and insurers must continue to cover the preventive service without cost sharing through the end of the plan year. However, this does not apply to a recommendation that is downgraded from an “A” or “B” rating to a “D” rating; or is subject to a safety recall; or is otherwise determined to pose a significant safety concern by an appropriate federal agency.
Also included in the July 2015 final rules is clarification that a plan or issuer that does not have in its network a provider who can provide a particular recommended preventive service is required to cover the preventive service when performed by an out-of-network provider, and may not impose cost sharing with respect to the preventive service.
Under the Affordable Care Act (ACA), since 2012, women enrolled in most health plans and health insurance policies (non-grandfathered plans and policies) are guaranteed coverage for recommended preventive services, including contraceptive services, without cost sharing (no co-pays, co-insurance, or deductible applied).
Exemption for Religious Employers
Under the July 2013 final rules, group health plans of “religious employers” were exempted from having to provide coverage for contraceptive services. The definition of “religious employer” for purposes of the exemption was based solely on section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code, which primarily concerns churches and other houses of worship.
Accommodations for Additional “Non-Profit” Religious Organizations
The July 2013 final rules also provided an accommodation for other non-profit religious organizations that object to providing contraceptive services coverage on religious grounds. An eligible organization, under the July 2013 final rules, is one that:
- on account of religious objections, opposes providing coverage for some or all of any contraceptive services otherwise required to be covered;
- is organized and operates as a nonprofit entity;
- holds itself out as a religious organization; and
- self-certifies that it meets these criteria in accordance with the provisions of the final regulations
Under the accommodation, an eligible organization does not have to contract, arrange, pay, or refer a person for contraceptive services coverage. At the same time, contraceptive services are available for women enrolled in the health plan of the organization, at no cost to the women or to the organization. The insurance issuer or third-party administrator is required to pick up the cost in these situations.
Notification Options for Accommodation
Under the 2013 final rules, an organization has two options to seek certification of eligibility for the accommodation depending on whether they are fully-insured or self-insured. The first option provides that Fully-insured plans may provide a copy of their self-certification to their health insurance issuer. These issuers must then provide separate payments for contraceptive services for the women in the health plan of the organization, at no cost to the women or to the organization. Self-insured plans may provide a copy of their self-certification to their third party administrator (TPA) and the TPA must provide or arrange separate payments for contraceptive services for the women in the health plan of the organization, at no cost to the women or to the organization.
Additional Notification Option for the Accommodation
The first two options raised objections by certain religious organizations stating these options required the organizations to “arrange for payment” of contraceptive services which was not supported by their religious belief. So another option was introduced in the August 2014 interim final regulations. It provides that an eligible organization may notify the Department of Health and Human Services (HHS) in writing of its religious objection to providing coverage for contraceptive services. HHS will then notify the insurer for an insured health plan, or will work with the Department of Labor to notify the TPA for a self-insured plan, that the organization objects to providing coverage for contraceptive services and that the insurer or TPA is responsible for providing enrollees in the health plan separate no-cost payments for contraceptive services. In essence, the HHS is then in the position of “arranging for payment” not the organization. (Model Notice to Secretary of HHS)
Accommodation Extended to Certain Closely Held “For-Profit” Entities
Also in the August 2014 rules, in response to the Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014), the Departments proposed regulations to expand the availability of the accommodation to include a closely held for-profit entity whose owners have a religious objection to providing coverage for some or all contraceptive services. These final rules define a qualifying closely held for-profit entity as an entity that:
- is not a nonprofit entity;
- has no publicly traded ownership interests; and
- has more than 50 percent of the value of its ownership interest owned directly or indirectly by five or fewer individuals (a definition based on a test that is already used in Federal tax law).
Note: for purposes of this definition, all of the ownership interests held by members of a family are treated as being owned by a single individual.
Additionally, to be eligible for the accommodation, the for-profit entity’s highest governing body (such as its board of directors, board of trustees, or owners, if managed directly by its owners) must adopt a resolution or similar action, under the organization’s applicable rules of governance and consistent with applicable state law, establishing that it objects to covering some or all of the contraceptive services on account of the owners’ sincerely held religious beliefs. Documentation of the decision is subject to ERISA’s standard record retention requirements.