In an earlier blog post, we discussed the recent Hobby Lobby case in which the Supreme Court held the ACA’s requirement that health plans cover contraception violated the Religious Freedom Restoration Act (RFRA). In the wake of that decision, the government has provided some guidance for employers who may wish to drop or limit contraceptive coverage in accordance with that decision
Guidance on Disclosures and SPDs
On July 17, 2014, DOL, HHS and IRS jointly released guidance on notices and disclosures required for a plan that chooses not to cover contraceptive services.
Specifically, the guidance notes that under long-standing DOL regulations, an SPD must provide a description of the extent to which preventive services (which includes contraceptive services) are covered under the plan. If an ERISA plan excludes all or a subset of contraceptive services from coverage under its group health plan, the plan’s SPD must describe the extent of the limitation or exclusion of coverage.
In addition, if a plan wishes to make a mid-year change in contraceptive coverage, this would be viewed as a material reduction in benefits. This will trigger an expedited notice obligation no later than 60 days after the date the reduction is adopted.
Guidance on Pregnancy Discrimination
On July 14, 2014, the EEOC released Enforcement Guidance on Pregnancy Discrimination and Related Issues, including Q&As and a Fact Sheet. While this primarily provided employment guidance, it also included a review of an employer’s obligation under Title VII to provide health insurance coverage that does not discriminate on the basis of gender or pregnancy.
The guidance states that employers can violate Title VII by providing health insurance that excludes coverage of prescription contraceptives, whether the contraceptives are prescribed for birth control or for medical purposes. Because prescription contraceptives are available only for women, a health insurance plan facially discriminates against women on the basis of gender if it excludes prescription contraception, but otherwise provides comprehensive coverage.
The EEOC acknowledged the Hobby Lobby case, but noted that that decision specifically relates to the Affordable Care Act.
Employers that may wish to drop contraceptive coverage for religious reasons should consult with counsel regarding potential issues arising under Title VII.
For more information, see the Other Nondiscrimination Acts compliance activity on Compliancedashboard.