H&W: Coverage of Contraceptive Services

Coverage of Contraceptive Services: The ACA provides that all non-grandfathered health plans and health insurance policies provide coverage for preventive services as recommended by the Health Resources and Services Administration (HRSA). Such coverage must be provided without cost-sharing. The preventive services recommended by the HRSA were FDA-approved contraceptive methods, sterilization and patient education and counseling.

The HRSA guidelines included an exemption for health plans maintained by religious employers. The government then issued a “safe-harbor” rule for compliance pending the issuance of formal regulations. That safe harbor rule is in effect until the first plan year beginning on or after August 1, 2013.

On February 6, 2013, the government published proposed regulations that, if adopted, would replace the safe harbor rule.

The safe harbor included a 4-part test to determine which organizations would be considered eligible for the exemption. That test was deemed too narrow. The proposed rule would make the exemption available to an organization that meets all the following criteria (Eligible Organization):

• The organization opposes providing coverage for some or all of the contraceptive services required to be covered under the ACA on account of religious objections.
• The organization is organized and operates as a nonprofit entity.
• The organization holds itself out as a religious organization.
• The organization self-certifies that it satisfies the first three criteria.

Under the proposed rule, an organization would not fail to qualify simply because it hired or provided services to persons with different religious affiliations.

If an Eligible Organization maintains an insured plan, the insurer would be required to issue individual policies to plan participants and beneficiaries that provide the requisite contraceptive coverage. The insurer cannot charge a premium to the Eligible Organization or to the person covered and the services must be paid by the policy without any cost-sharing. The preamble to the proposed rule asserts that actuaries, economists, and insurers estimate that providing contraceptive coverage at no charge is at least cost neutral, and may result in cost-savings when taking into account all costs and benefits for the insurer.

If the Eligible Organization maintains a self-funded plan, the plan’s third party administrator would be obliged to arrange for an insurance company to issue individual policies providing contraceptive coverage to the Organization’s participants and beneficiaries. As in the case of an insured plan, there would be no premiums charged to the Organization or covered persons and no cost-sharing obligations. The TPA would be paid by the insurance company and the insurer would be paid through a reduction in the Federally-facilitated Exchange user fees that it would otherwise owe.

Similar rules would apply to student health coverage provided by educational institutions that qualify as Eligible Organizations.

The proposed rule contains several scenarios detailing ways that these processes might be implemented.

In the case of employers with coverage through a MEWA that included both Eligible and ineligible Organizations, the proposed rule would apply only to the Eligible Organizations.

Persons wishing to provide comments on the proposed rule must do so no later than April 8, 2013. Seewww.regulations.gov and search for CMS-9968-P.