Courts Block Trump Rules Expanding Moral Objection Opt-out of Contraceptive Coverage Mandate

Executive Summary

Ruling effects employers seeking to avoid providing contraceptive coverage due to a moral objection
Courts block Trump Administration regulations from taking effect until legal proceedings are finished
Obama Administration rules remain in effect; no action required

In rapid succession, two federal district courts ruled to halt the Trump Administration’s regulations that would have, essentially, rolled-back the Affordable Care Act (ACA) provision that requires most employers and health insurance issuers/companies to provide certain Women’s Preventive Care Services at no cost (i.e., no cost-sharing such as co-pays, co-insurance or deductibles). The Trump regulations were set to take effect this week. This latest ruling is yet another volley in the game over women’s contraceptive coverage over the last two years and is not the final ruling. The court only halts the regulations from going into effect while the legal challenges proceed.

Contraceptive Coverage Mandate Exemptions

Certain Non-profit religious employers are exempt from the contraceptive coverage requirement.
An accommodations approach applies to eligible nonprofit religious organizations that do not qualify for the church exemption.
- Church-affiliated institutions
  - Schools
  - Charities
  - Hospitals
  - Universities
- Closely-held, private companies

Summary of Changes in the Contraceptive Coverage Regulations for Objecting Entities
Obama Administration Aug. 2012 to Present		Trump Administration – Halted But was Set to be Effective Jan. 14, 2019
Types of contraceptives mandated to be covered without cost-sharing	At least one of each of the 18 FDA approved contraceptive methods for women, as prescribed, along with counseling and related services must be covered without cost-sharing.	No change
Employers exempt from mandate	Religious institutions defined as “houses of worship.” Grandfathered plans. No notice to employees is required. Women workers and female dependents must pay for their own contraceptives.	Religious institutions defined as “houses of worship.” Grandfathered plans. Nonprofit or for-profit employers (including publicly traded companies), insurers, or private colleges or universities that issue student insurance plans with a religious objection to contraception. Nonprofit or closely held for-profit employers, insurers, or private colleges or universities that issue student insurance plans with a moral objection to contraception. Notice is only required if the plan previously included contraceptive coverage. Women workers and female dependents must pay for their own contraceptives.
Who pays for the contraceptive coverage provided to employees of exempt organizations?	The cost of contraceptives is borne by women workers and female dependents. There is no guarantee of contraceptive coverage for employees of an exempt organization. The employer may choose to cover some methods, but has no obligation to cover all 18 FDA methods without cost sharing.	No change
Types of employers eligible to seek accommodation	Closely held for-profit corporations and religiously affiliated nonprofits with religious objections to contraception can opt out of providing and paying for contraceptive coverage. Notice must be provided to either their insurer, third party administrator, or the federal government of their objection. Women workers and female dependents receive no cost contraceptive coverage.	Any entity eligible for an exemption can voluntarily choose the accommodation instead of the exemption. Notice must be provided to either their insurer, third party administrator, or the federal government of their objection. Women workers and female dependents receive no cost contraceptive coverage.
Who pays for contraceptive coverage for employees of organizations receiving accommodation?	Insurance companies of firms obtaining an accommodation must pay for contraceptive coverage. Third-party administrators (TPA) of self-funded health plans must cover the costs of contraceptives for employees. The costs of the benefit are offset by reductions in the fees the TPA pays to participate in the federal exchange.	No change
When can entities change from an accommodation to an exemption?	N/A	When an employer or private college or university currently using the accommodation opts for an exemption, the revocation of contraceptive coverage will be effective on the first day of the first plan year that begins 30 days after the date of the revocation or 60 days notice may be given in a summary of benefits statement. The issuer or third party administrator is responsible for providing the notice to the beneficiaries.

* The Trump Administration issued Interim Final Regulations in Oct. 2017 but two Federal courts stayed the regulations in Dec. 2017 while litigation proceeded. The Obama-era regulations have been in effect as the cases have been appealed.

** The Trump Administration’s regulations extend the exemption to any employer, organization or sponsor that adopts a health plan established by an employer eligible for an exemption.

States with No-Cost Contraceptive Coverage Laws

Even if the Trump Administration’s regulations go into effect allowing employers with moral objections to opt-out of providing employees no-cost contraception, the state in which the plan is operating may impose similar rules: requiring insured health plans provide women contraceptive coverage with no cost-sharing. Be sure to check with your insurance carrier if you should choose to change your contraceptive coverage following implementation of the Trump Administration regulations, if and when, the legal proceedings have concluded.

Conclusion

The Trump Administration’s new regulations would substantially expand the exemption to employers with religious or moral objections to contraceptive coverage. This latest twist is just another federal district court upholding the lower court’s ruling to halt implementation of the Trump Administration’s regulations. Those regulations a roll-back of the prior Administration’s mandate to provide contraceptive coverage. As we rock back-and-forth on this rocking sail boat called “The ACA”, employers should be aware that regulations, the courts or politicians may step in and change it again. Another important reason to have a broker like Leavitt Group Agency who can help you navigate these choppy waters.