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Agencies Expand Contraceptive Coverage Mandate Exemptions

Agencies Expand Contraceptive Coverage Mandate Exemptions

In October 2017, the Department of Labor (“DOL”), the Department of Health and Human Services (“HHS”), and the Internal Revenue Service (“IRS”) (hereinafter collectively referred to as “the Agencies”) released two sets of interim final regulations regarding the contraceptive coverage mandate exemptions. These regulations, which are effective immediately (as of October 6, 2017), expand the availability of the religious exemption from the Affordable Care Act’s (“ACA”) contraceptive coverage mandate and add a moral objection exemption.

Background

In 2015, the Agencies issued final regulations which provided an exemption from the ACA’s contraceptive coverage mandate for qualifying religious employers. The final regulations also provided an accommodation process for certain other employers with religious objections to contraceptives requiring that these employers self-certify their objection to their insurer, third-party administrator (“TPA”), or HHS. This accommodation process allowed employers to opt out of providing and paying for contraceptive coverage, but the insurer/TPA remained responsible for covering the cost of contraceptives thus ensuring access to covered employees and their dependents. Several lawsuits were filed challenging the notice requirement as an impermissible burden under the Religious Freedom Restoration Act (“RFRA”).

Religious Exemption Regulations

The religious exemption interim final regulations amend the 2015 regulations to expand the exemption from the contraceptive coverage mandate to include individuals and nongovernmental organizations that object to providing coverage for some or all contraceptives and related services based upon sincerely held religious beliefs. The expanded exemption covers:

  • Churches;
  • Nonprofit entities; and
  • For-profit entities (whether or not closely held), including publicly traded entities.

The religious exemption interim final regulations do not define the means to determine whether an organization holds such beliefs. However, the preamble notes that the Agencies expect that such principles or views would be adopted or documented in accordance with state laws under which the entity was incorporated or organized. Further, the regulations continue to offer the existing 2015 accommodation as a voluntary alternative.

Moral Objection Exemption Regulations

In addition to amending existing regulations to expand the religious exemption, the Agencies issued additional interim final regulations which expand exemptions to the contraceptive coverage mandate to entities and individuals that object to some or all contraceptives based on sincerely held moral objections (but not religious beliefs). Publicly traded entities are not eligible for the moral objection exemption. The moral objection interim final regulations also expand the existing 2015 accommodation as a voluntary alternative. The moral objection interim final regulations do not define the means to determine whether an individual or eligible entity holds moral objections. However, the preamble notes that the Agencies expect that any such sincerely held moral objection would be adopted and documented in accordance with the state laws under which the entity was incorporated or organized.

What Now?

The interim final regulations clarify that exempt entities are not subject to any new notice requirements. However, objecting employers must consider existing ERISA plan document rules regarding coverage details and ensure that any exclusion for contraceptives is clearly stated in the plan documents and summary plan descriptions. Additionally, prior to reducing or eliminating coverage of contraceptives, group health plans should ensure compliance with ERISA disclosure rules which require timely notification where there is a reduction in a covered service or benefit.

The content herein is provided for educational and informational purposes only and does not contain legal advice. Please contact our office if you have any questions about the ACA contraceptive coverage mandate or the exemptions under the interim final regulations.

Dated: October 31, 2017

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