Employee Benefits Compliance, Preventive Services

Administration Issues Proposed Rule on Contraception Coverage Mandate and Nonprofit Religious Organizations

The Department of Health and Human Services (HHS) issued proposed regulations and a Fact Sheet today (February 1, 2013) that explains “how nonprofit religious organizations, such as nonprofit religious hospitals or institutions of higher education, that object to contraception on religious grounds can receive an accommodation that provides their enrollees separate contraceptive coverage, and with no co-pays, but at no cost to the religious organization.”

The HHS Fact Sheet explains how the proposed rule (called an “NPR” for Notice of Proposed Rulemaking) will work for two different categories of employers:

  1. “Religious Employers”
  2. “Non-Profit Religious Organizations”

1- Exemption for Religious Employers

Group health plans of “religious employers” are exempted from having to provide contraceptive coverage, if they have religious objections to contraception.  Today’s proposed rule would simplify the existing definition of a “religious employer” as it relates to contraceptive coverage.

2- Accommodations for Non Profit Religious Organizations 

Consistent with the Advance NPRM, the NPRM proposes accommodations for additional non profit religious organizations, while also separately providing enrollees contraceptive coverage with no co-pays.  An eligible organization would be defined as an organization that:

  1. opposes providing coverage for some or all of any contraceptive services required to be covered under Section 2713 of the PHS Act, on account of religious objections;
  2. is organized and operates as a nonprofit entity;
  3. holds itself out as a religious organization; and
  4. self-certifies that it meets these criteria and specifies the contraceptive services for which it objects to providing coverage.

Under the proposed accommodations, the eligible organizations would not have to contract, arrange, pay or refer for any contraceptive coverage to which they object on religious grounds.

In addition, under the proposed accommodations, plan participants would receive contraceptive coverage through separate individual health insurance policies, without cost sharing or additional premiums.  The issuer would work to ensure a seamless process for plan participants to receive contraceptive coverage.

Insured group health plans: the eligible organization would provide the self-certification to the health insurance issuer, which in turn would automatically provide separate, individual market contraceptive coverage at no cost for plan participants.  Issuers generally would find that providing such contraceptive coverage is cost neutral because they would be they would be insuring the same set of individuals under both policies and would experience lower costs from improvements in women’s health and fewer childbirths.

Self-insured group health plans: the eligible organization would notify the third party administrator, which in turn would automatically work with a health insurance issuer to provide separate, individual health insurance policies at no cost for participants.  The costs of both the health insurance issuer and third party administrator would be offset by adjustments in Federally-facilitated Exchange user fees that insurers pay.

Student Health Plans at Universities & Colleges: The NPRM also proposes that an eligible religious non profit organization that is an institution of higher education that arranges for student health insurance coverage may avail itself of an accommodation comparable to that for an eligible organization that is an employer with an insured group health plan.

Short Summary From Kaiser Health News

Kaiser Health News: Religious Nonprofits Won’t Pay For Contraceptive Coverage Under New Rule

After a year of lawsuits and public outcry, the Obama administration proposed Friday a way for women who work at nonprofit religious institutions to get free birth control without requiring their employers to pay for it. Instead, institutions that insure themselves such as hospitals and universities can use a third party to find a separate health policy that would pay for and provide the coverage. Costs will be covered by the fees insurers pay to participate in the new online health marketplaces set to open in October under the health law (Gold, 2/1).

The paragraph above is reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation.  Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.