Employee Benefits Compliance

Proposed Rules, if Finalized, Expand Preventive Services Under Affordable Care Act to Include Over-the-Counter Contraception

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Introduction

On October 21, 2024, the Departments of Health and Human Services, Labor, and of the Treasury (collectively, the Departments) released proposed rules with comment period entitled “Enhancing Coverage of Preventive Services Under the Affordable Care Act.” These proposed rules would expand access to coverage of recommended preventive services without cost sharing in the commercial market, with a particular focus on reducing barriers to coverage of contraceptive services, including Over-The-Counter (OTC) contraceptives, without a prescription (religious exemptions for sincerely held beliefs exist).

Background

The Affordable Care Act (ACA) added section 2713 of the Public Health Service Act (PHS Act), which requires non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage (plans and issuers) to provide coverage for certain recommended preventive services without imposing any cost-sharing requirements, such as a copayment, coinsurance, or deductible. These preventive services include :

(1) certain evidence-based items or services recommended by the United States Preventive Services Task Force;

(2) immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention;

(3) preventive care and screenings for infants, children, and adolescents recommended by the Health Resources and Services Administration (HRSA); and

(4) preventive care and screenings for women as provided for in comprehensive guidelines supported by HRSA.

The Departments’ regulations and guidance allow plans and issuers to use reasonable medical management techniques to determine the frequency, method, treatment, or setting for coverage of a recommended preventive service to the extent not specified in the relevant recommendation or guideline, and require plans and issuers to cover, without cost sharing, items and services that are integral to the furnishing of a recommended preventive service.

Since the ACA was enacted in 2010, the Departments have received ongoing complaints and questions from interested parties regarding issues related to coverage of certain recommended preventive services. In addition, under the Departments’ current guidance, coverage of OTC preventive services without cost sharing is only required when prescribed by a health care provider. In October 2023, the Departments issued a Request for Information (OTC Preventive Products RFI) aimed at gathering input from the public regarding benefits and challenges that would be associated with requiring coverage of OTC preventive products, including contraception, without cost sharing and without a prescription from a provider.

In light of comments to the OTC Preventive Products RFI, ongoing complaints to the Departments and credible reports of widespread failure by plans and issuers to provide coverage of the full range of contraceptive services, as well as recent Executive Orders, and the FDA approval in July 2023 of a progestin-only oral contraceptive as the first daily oral contraceptive available without a prescription by a health care provider, the Departments are now proposing to amend the regulations governing how plans and issuers cover preventive services and how they communicate information about this coverage to participants, beneficiaries, and enrollees.

Summary of Proposed Rules

Exceptions Process for All Recommended Preventive Services

The Departments propose to codify previous guidance on the use of reasonable medical management techniques by plans and issuers. The proposed rules would provide that plans and issuers that utilize reasonable medical management techniques with respect to any recommended preventive services must provide an easily accessible, transparent, and sufficiently expedient exceptions process that allows an individual to receive coverage without cost sharing for the preventive service according to the frequency, method, treatment, or setting that is medically necessary for them, as determined by the individual’s attending provider, even if that service is not generally covered under their plan or coverage. The exceptions process would ensure that an individual can access coverage of medically necessary recommended preventive services without cost sharing and prevents medical management from functioning as an unreasonable barrier to coverage.

Contraceptive Coverage and Disclosure 

These proposed rules would also require plans and issuers to cover recommended OTC contraceptive items without requiring a prescription and without imposing cost-sharing requirements. The Departments’ previously issued guidance provides that OTC preventive health care items (such as folic acid and certain contraceptive products, including contraceptive sponges, spermicides, and emergency contraception) must be covered without cost sharing only when prescribed by a health care provider. However, neither section 2713 of the PHS Act, and its implementing regulations, nor the current HRSA-supported Guidelines require a prescription as a condition of coverage without cost sharing for recommended contraceptives that are available OTC.

Additionally, the proposed rules would require plans and issuers to cover certain recommended contraceptive items that are drugs and drug-led combination products without imposing cost‑sharing requirements, unless at least one therapeutic equivalent of the drug or drug-led combination product is covered without cost sharing. For purposes of these proposed rules, the Departments also propose to define the terms “therapeutic equivalent” and “drug-led combination” product, consistent with FDA definitions of these terms.

Finally, these rules would require plans and issuers to add a disclosure to the results of any Transparency in Coverage self-service tool search, for covered contraceptives, that explains that OTC contraceptive items are covered without a prescription and without cost sharing and includes a phone number and internet link to where a participant, beneficiary, or enrollee can learn more information about the plan or policy’s contraception coverage.

These proposed rules would not modify federal conscience protections related to contraceptive coverage for employers, plans, or issuers. Religious employers with a sincerely held belief may still opt-out of providing contraceptive coverage.

Applicability Dates and Comment Period

The Departments propose that the requirement to provide an exceptions process for all recommended preventive services would be applicable on the effective date of the final rules. The Departments propose that the proposals specific to contraceptive coverage (including the OTC contraception coverage proposal, therapeutic equivalence proposal, and transparency in coverage disclosure proposal related to OTC contraceptive coverage information) would be applicable for plan years beginning on or after January 1, 2026.

Visit the Federal Register to read more about the proposed rules.

Conclusion

Plan sponsors should work with their Leavitt Group Trusted Advisor to ensure their plan documents and benefits summaries include language as to this expanded coverage with no cost-sharing if these rules are finalized. A new administration may result in changes to the final rule that only time and the election will tell. Be sure you are subscribed to the Leavitt Group news site to receive updates as to the final rule and any subsequent guidance or changes. No action is to be taken at this time, but it is worth strategizing ahead of any change, especially if a religious organization that may seek an exemption from having to provide contraceptive coverage.

Resources

Source: Some content by Leavitt Group. Other content source: CMS.gov Newsroom Fact Sheet Enhancing Coverage of Preventive Services Under the Affordable Care Act Proposed Rules | CMS.