Employee Benefits Compliance, Exchanges, Exchanges / Marketplaces / Subsidies, Marketplaces, Preventive Services

Proposed Rule on How Contraceptive Coverage Might be Provided in Self-Insured Health Plans of Religious Employers

On March 19, 2012, the HHS, DOL and Treasury Departments issued an advance notice of proposed rulemaking (ANPRM) (this is a temporary link until the ANPRM is officially published on March 21st) that would allow the third-party administrators of self-insured group health plans sponsored by non-exempt religious organizations to essentially become the plan administrator solely for purposes of providing contraceptive coverage to participants and beneficiaries in such plans, in cases where the religious organization objected on religious grounds to providing contraceptive coverage. 
The Departments and the White House previously issued bulletins stating their intent to issue rules that would require health insurers to provide contraceptive coverage—at no cost to the participants or to the religious organizations—to such participants and beneficiaries in insured plans, but the issue remained as to how contraceptive coverage would be provided to participants in self-insured plans offered by non-exempt religious organizations.  (Today’s ANPRM also reaffirms the previously-stated position on requiring insurers to provide contraceptive coverage to participants in insured plans.)
Quick Summary
Who will provide contraceptive services to participants and beneficiaries in group health plans sponsored by religious organizations:
Insured plans
The insurer
Self-insured plans
The third-party administrator
Student Health plans offered by Religious Institutions of Higher Education
The insurer
Additional Details on What’s Addressed in Today’s ANPRM
Specifically, today’s ANPRM allows the third-party administrator to–“separate from the religious organization and as directed by regulations and guidance, notify plan participants and beneficiaries of the availability of separate contraceptive coverage, provide this coverage automatically to participants and beneficiaries covered under the organization’s plan (for example, without an application or enrollment process), and protect the privacy of participants and beneficiaries covered under the plan who use contraceptive services.”  Today’s ANPRM also proposes several ways the independent third party could fund this separate contraceptive coverage and seeks comments on these proposals.  (See below for details on this.)
Today’s notice also would require religious organizations to self-certify—under the same procedures set forth in prior guidance for religious employers—that they are not offering contraceptive services because of their religious objections to offering such services.  This would put the insurer or third-party administrator on notice that they, rather than the plan sponsor, would have the obligation to provide contraceptive services.
A separate final rule on student health insurance (also issued today) would apply the same requirements stated above to student health plans offered by religious institutions of higher education that have religious objections to covering contraceptive services (i.e. to contract with independent third parties (either insurers or third-party administrators) to provide contraceptive coverage to participants and beneficiaries, separate from the religious institution of higher education).
If you can’t remember the fairly complicated chain of events and guidance leading up to today’s advance notice of proposed rulemaking, you might find it worth reading the “Background” section below to clarify the details.
Background
Contraceptive services are part of preventive services, which the Affordable Care Ace (ACA) requires non-grandfathered group health plans and individual policies to provide with no cost-sharing by participants and beneficiaries.  The effective date for the requirement to provide most preventive services was the first day of the plan year (or policy year for individual policies) beginning on or after September 23, 2010 (i.e., January 1, 2011 for calendar year plans).  For women’s preventive services, which includes contraceptive services, the effective date is the first plan year beginning on or after August 1, 2012, which is one year after the date guidelines were issued on what preventive services for women are required to be covered. 
An exemption was provided for religious employers, and additionally a one-year enforcement safe harbor was granted for religious organizations that do not meet the definition of religious employer but that, on and after February 10, 2012, do not provide some or all of the contraceptive coverage otherwise required, consistent with any applicable State law, because of the religious beliefs of the organization.  Thus, such religious organizations will not be required to provide contraceptive coverage until the first plan year beginning on or after August 1, 2013 (i.e., January 1, 2014 for calendar year plans).   By that date, the government intends to issue final regulations.  Today’s ANPRM is the first step in specifying how contraceptive services eventually will be provided to participants and beneficiaries in health plans sponsored by religious organizations.
Today’s ANPRM: How Contraceptive Coverage can be Provided to Participants in Health Plans of Religious Organizations that Elect not to Provide Such Coverage
As noted above, today’s ANPRM proposes to allow the third-party administrators of self-insured group health plans sponsored by non-exempt religious organizations to automatically provide separate contraceptive coverage to plan participants and beneficiaries  (for example, without an application or enrollment process), to notify plan participants and beneficiaries of the availability of this separate contraceptive coverage, and to protect the privacy of plan participants and beneficiaries who use contraceptive services.  For insured plans, the ANPRM would allow insurers to provide contraceptive coverage directly to plan participants and beneficiaries.  Both the insurers and third-party administrators would provide these services separate from the religious organization and in accordance with regulations and guidance.
The ANPRM provides that insurance issuers “would pay for contraceptive coverage from the estimated savings from the elimination of the need to pay for services that would otherwise be used if contraceptives were not covered.”  The Departments are considering the following possible means by which third party administrators might fund such contraceptive coverage for self-insured plans, and request comments on these options:
  1. A third-party administrator could use revenue such as drug rebates, service fees, disease management program fees, or other sources that are not already obligated to plan sponsors.
  2. A third-party administrator could receive funds from a private, non-profit organization to pay for contraceptive services for the participants and beneficiaries covered under the plan of a religious organization.
  3. A third-party administrator could separately arrange for contraceptive coverage from another independent entity such as an insurance issuer. The Departments are considering having the Office of Personnel Management (OPM) identify a private insurer to provide this coverage. One option for covering the cost of the contraceptive coverage would be a credit against any user fees such an insurer would be required to pay in order to offer coverage on the Exchanges.
  4. A third-party administrator could receive a credit or rebate on the amount that it pays under the reinsurance program under ACA section 1341, which creates a reinsurance program to balance out risk selection from 2014 through 2016.  This reinsurance program collects payments from TPAs.
Student Health Plans Offered by Certain Religious Institutions of Higher Education
“The preamble to the final regulation on student health insurance plans provides that the temporary enforcement safe harbor announced on February 10, 2012, with respect to certain non-exempt, non-profit organizations with religious objections to contraceptive coverage extends on comparable terms to student health insurance plans if offered through non-profit institutions of higher education with such objections.  After the one-year transition period, the Departments would propose to treat student health insurance plans arranged by non-profit religious institutions of higher education that object to contraceptive coverage on religious grounds in a manner comparable to that in which insured group health plans sponsored by religious organizations eligible for the accommodation are treated. This means that the issuer of the student health insurance plan would, independent of the agreement with the institution of higher education, provide student enrollees and their dependents with contraceptive coverage without cost sharing and without charge.”