Contraceptive Coverage Guidance Expanded

The Departments of Labor, HHS and Treasury (the Departments) have issued new guidance on the ACA’s requirement that non-grandfathered health plans cover contraceptive care and services, without cost-sharing [1].   The Departments note that they have received complaints and other feedback suggesting that many plans are not complying with previous guidance on  contraceptive coverage.  The new guidance emphasizes the Departments’ commitment to ensuring compliance while offering plans a new medical management methodology – called “therapeutic equivalence” – that they can add to their plans to help control costs.

The therapeutic equivalence option builds on the existing rules, so a quick refresher on those rules may be useful.

The Contraceptive Mandate

Under the ACA, health plans must cover  contractive products and services listed in the Health Resources and Services Administration (HRSA) guidelines.  These include:

(1) sterilization surgery for women;

(2) implantable rods;

(3) copper intrauterine devices;

(4) intrauterine devices with progestin (all durations and doses);

(5) injectable contraceptives;

(6) oral contraceptives (combined pill);

(7) oral contraceptives (progestin only);

(8) oral contraceptives (extended or continuous use);

(9) patches;

(10) vaginal rings;

(11) diaphragms;

(12) sponges;

(13) cervical caps;

(14) condoms;

(15) spermicides;

(16) emergency contraception (levonorgestrel);

(17) emergency contraception (ulipristal acetate); and

(18) any additional contraceptives approved, granted, or cleared by the FDA.

Previous Guidance

The Departments have interpreted the ACA to require plans to cover without cost sharing at least one form of contraception in each of these categories and any FDA- approved product or service that an individual’s doctor has determined to be medically appropriate.  Plans may use reasonable medical management techniques within a particular category to control costs and promote efficient delivery of care.  For example, a plan may impose a copayment on a brand name oral contraceptive if it covers an equivalent generic drug.  However, medical management techniques may not be used:

• Within a given category unless multiple, similar services or products are available within that category and the plan covers at least one of them without cost-sharing.
• If the techniques are “unreasonable”.
• If an individual’s doctor has determined that a specific FDA-approved product or service is medically necessary.
• Unless the plan has an exceptions process that is accessible, transparent and expedient and is not overly burdensome.

The Departments have given examples of medical management techniques that it deems unreasonable:

• Denying coverage for brand name contraceptives, even after the individual’s attending provider advises the plan that a particular service or FDA-approved, contraceptive product is medically necessary with respect to that individual.
• Requiring individuals to fail first using other services or FDA-approved contraceptive products within the same or a different category of contraception before the plan will approve coverage for the service or FDA-approved contraceptive product that is medically necessary for the individual, as determined by the individual’s doctor.
• Imposing an age limit on contraceptive coverage instead of providing these benefits to all individuals with reproductive capacity.

Medical management techniques must offer an exceptions process that is accessible, transparent and expedient and is not overly burdensome on individuals or their doctors.  For example, the plan’s SPD should prominently display information about how the exceptions process can be initiated, including all information required and the name of a contact person who can answer questions.  A plan cannot require a person to file an appeal to take advantage of the exceptions process.

New Guidance 2024: Therapeutic Equivalence

In January of 2024, the Departments provided additional guidance that permits plans to adopt a “therapeutic equivalence” approach to its medical management techniques.[2]  The therapeutic equivalence approach only applies to contraceptive drugs and drug-led devices.[3]  Under that approach, the Departments will consider a plan’s medical management techniques reasonable if the plan covers all FDA-approved contraceptive drugs and drug-led devices in a category without cost sharing, other than those for which there is at least one therapeutic equivalent drug or drug-led device that the plan or issuer covers without cost sharing.  A drug or drug-led device is deemed to have a therapeutic equivalent if it is identified as such in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the so called “Orange Book”[4]).

Note that the therapeutic equivalence approach does not supplant previous guidance that requires plans to have a reasonable exceptions process that permits individuals to have access without cost-sharing to FDA-approved contraceptive drugs and services that the individual’s doctor determines are medically necessary.

Action Items for Plan Sponsors

The 2024 FAQs Part 64 were motivated by the Departments’ perception that plans and issuers were failing to comply with previous guidance on the coverage of contraceptive services and products.  Plan sponsors may wish to:

• Confer with their the TPAs and legal counsel to ensure that their plans are compliant with the Departments’ prior guidance.

Determine whether they wish to add the therapeutic equivalence approach to their medical management of access to contraceptive service and products.

[1] Certain entities with moral or religious objections to providing coverage for contraceptive care and services may not have to comply with this requirement.  Discussion of this exception is outside the scope of this article.

[2] FAQs About the Affordable Care Act Implementation Part 64 https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64.pdf

[3] A “drug-led device” is a product that combines a drug and a device but in which the drug provides the primary therapy.  One example might be an IUD that releases hormones that prevent pregnancy.

[4] https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeutic-equivalence-evaluations-orange-book