Contraceptives Coverage under PPACA, Proposed Rules Offer One-Year Safe Harbor


The Departments of Treasury, Labor, and Health and Human Services jointly issued proposed rules last week in an attempt to balance two conflicting goals: 1) to provide contraceptive coverage without cost-sharing and 2) to accommodate the religious exemption of non-profit organizations whose principles object to covering contraceptive services.

The proposed rules offer a one-year safe harbor to those employers who both meet the four-pronged test and can certify in writing to additional requirements in the regulations. Once certified, the rule would allow exempted organizations to issue plans that do not cover contraceptives directly. Instead, employees would receive contraceptive coverage through a stand-alone, private insurance policy.

Generally, the Patient Protection and Affordable Care Act requires non-grandfathered group health plans to provide certain preventive health services, including contraception, without cost-sharing. Several religiously focused employers objected to the mandatory contraceptive requirement, arguing that it would force them to go against their faith-based beliefs. More than 40 lawsuits have been filed so far.

The U.S. Court of Appeals for the District of Columbia Circuit ruled in January that it would hold a legal challenge from two colleges, Belmont Abbey in Belmont, N.C. and Wheaton College in Wheaton, Ill., “in abeyance” while the federal government worked to issue these new rules.

Under the proposal, exempted organizations would be allowed to offer employees a plan that does not cover contraceptives. Their health insurer will then automatically enroll employees in a separate individual policy, covering only contraceptives, at no cost. Insurers would be able to offset their costs by claiming an adjustment in federally facilitated exchange user fees.

Comments are solicited by the agencies before early May 2013. The proposed rules can be reviewed here.