Certain Preventive Services Under the Affordable Care Act
Federal Register, 21 March, 2012, p. 16501-16508
A Proposed Rule by the Health and Human Services Department, the
Employee Benefits Security Administration, and the Internal Revenue Service
text: 77 FR 16501]
The Obama administration has decided that, as a matter of public
policy, individual women should not have to pay for
contraceptive services," which include surgical sterilization,
contraceptives, and embryocides.
for this policy are mainly economic and socio-political.
Since sterilization and birth control have to be paid for by
someone, the administration intends to force others to pay for them
through insurance plans, even if they object to doing so for reasons
of conscience or religion.
On 20 January, 2012, Kathleen Sebelius, Secretary of the
Department of Health and Human Services, announced the final form of
regulation to be enacted for this
purpose, and gave objecting institutions a year to comply with it
The announcement generated a revolt against the HHS mandate by
religious institutions across the United States, protests from many
other people and organizations (including 154 member of the U.S.
House of Representatives), and the filing of two new civil suits
against the US Federal Government.
As a result, on 10 February, 2012, the adminstration
stated that it would seek to
accommodate religious objections. This document is the first
practical indication of the adminstration's intentions.
Contrary to its title, it does not propose new rules for
accommodation, but invites comments about how such rules might be
The rule-making process is expected to stretch into 2013, well
beyond the November, 2012 presidential election.
The Project's annotations are provided in text boxes to the
"Religious organization" is a new term, distinct
from "religious employer," the term used in the
"Contraceptive services" include surgical sterilization and
embryocidal drugs and devices.
This document requests comments
to assist in making rules some time after 19 June, 2012. The rules
may not be finalized until ten months after the November, 2012
presidential election. (See Additional
This advance notice of proposed rulemaking announces the intention of
the Departments of Health and Human Services, Labor, and the Treasury to
propose amendments to regulations regarding certain preventive health
services under provisions of the Patient Protection and Affordable Care
Act (Affordable Care Act). The proposed amendments would establish
alternative ways to fulfill the requirements of section 2713 of the
Public Health Service Act and companion provisions under the Employee
Retirement Income Security Act and the Internal Revenue Code when health
coverage is sponsored or arranged by a religious organization that
objects to the coverage of contraceptive services for religious reasons
and that is not exempt under the final regulations published February
15, 2012. This document serves as a request for comments in advance of
proposed rulemaking on the potential means of accommodating such
organizations while ensuring contraceptive coverage for plan
participants and beneficiaries covered under their plans (or, in the
case of student health insurance plans, student enrollees and their
dependents) without cost sharing.
Comments are due on or before June 19, 2012.
The Patient Protection
and Affordable Care Act,
Public Law 111-148, was enacted on March 23, 2010; the Health Care and
Education Reconciliation Act of 2010,
Public Law 111-152, was enacted on March 30, 2010 (collectively, the
Affordable Care Act). The Affordable Care Act reorganizes, amends, and adds
to the provisions of part A of title XXVII of the Public Health Service Act
(PHS Act) relating to group health plans and health insurance issuers in the
group and individual markets. The Affordable Care Act adds section 715(a)(1)
to the Employee Retirement Income Security Act (ERISA) and section
9815(a)(1) to the Internal Revenue Code (Code) to incorporate the provisions
of part A of title XXVII of the PHS Act into ERISA and the Code, and make
them applicable to group health plans.
"Contraceptive services," including surgical
embryocidal drugs and devices, must be provided by group and
individual health care insurance plans without charge to women.
Section 2713 of the PHS Act, as added by the Affordable Care Act and
incorporated into ERISA and the Code, requires that non-grandfathered group
health plans and health insurance issuers offering non-grandfathered group or
individual health insurance coverage provide benefits for certain preventive
health services without the imposition of cost sharing. These preventive health
services include, with respect to women, preventive care and screening provided
for in the comprehensive guidelines supported by the Health Resources and
Services Administration (HRSA) that were issued on August 1, 2011 (HRSA
As relevant here, the HRSA Guidelines require coverage, without cost
sharing, for "[a]ll Food and Drug Administration [(FDA)] approved contraceptive
methods, sterilization procedures, and patient education and counseling for all
women with reproductive capacity," as prescribed by a provider.
 Except as discussed below, non-grandfathered group health plans
and health insurance issuers offering non-grandfathered group or individual
health insurance coverage are required to provide coverage consistent with the
HRSA Guidelines, without cost sharing, in plan years (or, in the individual
market, policy years) beginning on or after August 1, 2012.
 These guidelines were based on recommendations of the independent
Institute of Medicine, which undertook a review of the scientific and medical
evidence on women's preventive services.
The Departments of Health and Human Services (HHS), Labor, and the Treasury
(the Departments) published interim final regulations implementing section
2713 of the PHS Act on July 19, 2010 (75
FR 41726). In response to comments, the Departments amended the interim
final regulations on August 1, 2011.
 The amendment provided HRSA with discretion to establish an
exemption for group health plans established or maintained by certain
religious employers (and any group health insurance coverage provided in
connection with such plans) with respect to any contraceptive services that
they would otherwise be required to cover consistent with the HRSA
"Religious employer" is defined to exclude
individual religious believers and most of the social, educational and
charitable organizations operated by religious believers.
The amended interim final regulations further specified that,
for purposes of this exemption only, a religious employer is one that-(1)
has the inculcation of religious values as its purpose; (2) primarily
employs persons who share its religious tenets; (3) primarily serves persons
who share its religious tenets; and (4) is a non-profit organization
described in section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii) of the
Code. Section 6033(a)(3)(A)(i) and (iii) of the Code refers to churches,
their integrated auxiliaries, and conventions or associations of churches,
as well as to the exclusively religious activities of any religious order.
This religious exemption is consistent with the policies in some States that
currently both require contraceptive coverage and provide for some type of
religious exemption from their contraceptive coverage requirement.
But groups like the Catholic organization,
Priests for Life, which exist to, among other things, convince people of
the evil of contraception, sterilization, abortion, etc., are not
"religious employers" uder the Guidelines.
In the HRSA Guidelines,
HRSA exercised its discretion under the amended interim final regulations
such that group health plans established or maintained by these
employers (and any group health insurance coverage provided in connection
with such plans) are not required to cover any contraceptive services. In
the final regulations published on February 15, 2012 (77
FR 8725), the Departments adopted the definition of religious employer
in the amended interim final regulations.
However, the regulation clearly demonstrates
that the beliefs of the group are either not not sufficiently
"religious" to be considered, or are not worthy of accommodation.
The Departments emphasize that this religious exemption is intended
solely for purposes of the contraceptive coverage requirement pursuant to
section 2713 of the PHS Act and the companion provisions of ERISA and the
Code. Whether an employer is designated as "religious" for these purposes is
not intended as a judgment about the mission, sincerity, or commitment of
the employer, and the use of such designation is limited to defining the
class that qualifies for this specific exemption. The designation will not
be applied with respect to any other provision of the PHS Act, ERISA, or the
Code, nor is it intended to set a precedent for any other purpose.
This suggests that Catholic institutions insured
through diocesan plans are exempt from the requirement to provide
contraceptives, surgical sterilization and
embryocidal drugs and devices. Whether this will be possible will
presumably depend upon the relationship between the diocese and the
In addition, we note that
this exemption is available to religious employers in a variety of
arrangements. For example, a Catholic elementary school may be a distinct
common-law employer from the Catholic diocese with which it is affiliated.
If the school's employees receive health coverage through a plan established
or maintained by the school, and the school meets the definition of a
religious employer in the final regulations, then the religious employer
exemption applies. If, instead, the same school provides health coverage for
its employees through the same plan under which the diocese provides
coverage for its employees, and the diocese is exempt from the requirement
to cover contraceptive services, then neither the diocese nor the school is
required to offer contraceptive coverage to its employees.
Protection against enforcement ("safe harbour")
is offered only to non-profit organizations, not to individual religious
believers or businesses run by them.
On February 10, 2012,
when the final regulations concerning the exemption were posted, HHS issued
a bulletin entitled "Guidance on the Temporary Enforcement Safe Harbor for
Certain Employers, Group Health Plans and Group Health Insurance Issuers
with Respect to the Requirement to Cover Contraceptive Services Without Cost
Sharing Under Section 2713 of the Public Health Service Act, Section
715(a)(1) of the Employee Retirement Income Security Act, and Section
9815(a)(1) of the Internal Revenue Code."
The bulletin established a temporary enforcement safe harbor for
group health plans sponsored by non-profit organizations 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 (and any group health insurance
coverage provided in connection with such plans). The temporary enforcement
safe harbor is in effect until the first plan year that begins on or after
August 1, 2013. The bulletin confirmed that all three Departments will not
take any enforcement action against an employer, group health plan, or
health insurance issuer that complies with the conditions of the temporary
enforcement safe harbor described in the bulletin
Goal #1: Accommodation of non-profit "religious
organizations", not individual objecting religious believers.
Goal #2: Having contraceptives, surgical sterilization and
embryocidal drugs and devices used by women and students paid for by
At the same time, the
Departments announced plans to expeditiously develop and propose changes to
the final regulations implementing section 2713 of the PHS Act that would
meet two goals-accommodating non-exempt, non-profit religious organizations'
religious objections to covering contraceptive services and assuring that
participants and beneficiaries covered under such organizations' plans
receive contraceptive coverage without cost sharing. The Departments intend
to finalize these amendments to the final regulations such that they are
effective by the end of the temporary enforcement safe harbor; that is, the
amended final regulations would apply to plan years starting on or after
August 1, 2013. This advance notice of proposed rulemaking (ANPRM) is the
first step toward promulgating these amended final regulations. Following
the receipt of public comment, a notice of proposed rulemaking (NPRM) will
be published, which will permit additional public comment, followed by
amended final regulations.
Overview of Regulations
"Contraceptive coverage" includes surgical
embryocidal drugs and devices. No accommodation of
individual objecting religious believers is planned.
On February 10, 2012, the
Departments committed to working with stakeholders to develop alternative
ways of providing contraceptive coverage without cost sharing in order to
accommodate non-exempt, non-profit religious organizations with religious
objections to such coverage.
The Departments plan to force "issuers" to pay
for contraceptives, surgical sterilization and
embryocidal drugs and devices for women and students. In this
section, they claim that this will be "cost neutral" and "may save
money." In later sections, they appear to contradict this
assertion. (See a, b, c,
Specifically, the Departments indicated their
plans for a rulemaking to require issuers to offer group health insurance
coverage without contraceptive coverage to such an organization (or its plan
sponsor) and simultaneously to provide contraceptive coverage directly to
the participants and beneficiaries covered under the organization's plan
with no cost sharing. Under this approach, the Departments would require
that, in this circumstance, there be no premium charge for the separate
contraceptive coverage. Actuaries and experts have found that coverage of
contraceptives is at least cost neutral, and may save money, when taking
into account all costs and benefits for the issuer.
 If the cost of coverage is reduced, savings may accrue to
employers, plan participants and beneficiaries, and the health care system.
The Departments indicated their intent to develop policies to achieve the
same goals with respect to self-insured group health plans sponsored by
non-exempt, non-profit religious organizations with religious objections to
No accommodation of individual objecting
religious believers is planned.
In the time since this announcement, the Departments have met with
representatives of religious organizations, insurers, women's groups,
insurance experts, and other interested stakeholders. These initial meetings
were used to help identify issues relating to the accommodation to be
developed with respect to non-exempt, non-profit religious organizations with religious objections to contraceptive coverage. These consultations
also began to provide more detailed information on how health coverage
arrangements are currently structured, how religious accommodations work in
States with contraceptive coverage requirements, and the landscape with
respect to religious organizations that offer health benefits today. These
discussions have informed this ANPRM.
Contraceptives, surgical sterilization and
embryocidal drugs and devices will not provided "without cost."
Someone will have to pay for them.
As the consultations with interested parties continue, this ANPRM
presents questions and ideas to help shape these discussions as well as an
early opportunity for any interested stakeholder to provide advice and input
into the policy development relating to the accommodation to be made with
respect to non-exempted, non-profit religious organizations
objections to contraceptive coverage. The Departments welcome all points of
view on how to provide women access to the important preventive services at
issue without cost sharing while accommodating religious liberty interests.
Goal #1: Having contraceptives, surgical
embryocidal drugs and devices used by women and students paid for by
Goal #2: Non-profit "religious organizations" should not be required to
pay, contract or arrange for doverage for contraceptives, surgical
embryocidal drugs and devices.
Individual objecting religious believers will be required to do so.
The starting point for this policy development includes two goals and
several ideas about how to achieve them. First, the Departments aim to
maintain the provision of contraceptive coverage without cost sharing to
individuals who receive coverage through non-exempt, non-profit religious
organizations with religious objections to contraceptive coverage in the
simplest way possible. Second, the Departments aim to protect such religious
organizations from having to contract, arrange, or pay for contraceptive
coverage. As described below, the Departments intend to propose a
requirement that health insurance issuers providing coverage for insured
group health plans sponsored by such religious organizations assume the
responsibility for the provision of contraceptive coverage without cost
sharing to participants and beneficiaries covered under the plan,
independent of the religious organization, as a means of meeting these
goals. HHS also intends to propose a comparable requirement with respect to
student health insurance plans arranged by such religious organizations. For
such religious organizations that sponsor self-insured plans, the
Departments intend to propose that a third-party administrator of the group
health plan or some other independent entity assume this responsibility. The
Departments suggest multiple options for how contraceptive coverage in this
circumstance could be arranged and financed in recognition of the variation
in how such self-insured plans are structured and different religious
organizations' perspectives on what constitutes objectionable cooperation
with the provision of contraceptive coverage. The Departments seek input on
these options, particularly how to enable religious organizations to avoid
such objectionable cooperation when it comes to the funding of contraceptive
coverage, as well as new ideas to inform the next stage of the rulemaking
"Accommodation" is said to be the equivalent of exemption, which raises
the question of why broader exemption was not offered to begin with.
"Religious organization" is undefined.
"Contraceptive coverage" includes surgical sterilization and
embryocidal drugs and devices.
The following sections set forth questions the Departments believe will
help inform the development of proposed regulations, including the policy
options the Departments are considering and potential language related to
such options. Throughout this ANPRM, the term "accommodation"
is used to
refer to an arrangement under which contraceptive coverage is provided
without cost sharing to participants and beneficiaries covered under a plan
independent of the objecting religious organization that sponsors the plan,
which would effectively exempt the religious organization from the
requirement to cover contraceptive services. The term
organization" is used to describe the class of organizations that qualifies
for the accommodation. An "independent entity"
is an issuer, third-party
administrator, or other provider of contraceptive coverage that is not a
religious organization. And "contraceptive coverage" means the contraceptive
coverage required under the HRSA Guidelines.
The Departments note that a
number of questions have been raised about the scope and application of the
contraceptive coverage requirement more generally (that is, questions apart
from the religious accommodation). The Departments' interim final
regulations implementing section 2713 of the PHS Act provide that "[n]othing
prevents a plan or issuer from using reasonable medical management
techniques to determine the frequency, method, treatment, or setting for an
item or service * * * to the extent not specified in the recommendation or
The preamble to the interim final regulations further provides:
"The use of reasonable
medical management techniques allows plans and issuers to adapt these
recommendations and guidelines to coverage of specific items and services
where cost sharing must be waived. Thus, under these interim final
regulations, a plan or issuer may rely on established techniques and the
relevant evidence base to determine the frequency, method, treatment, or
setting for which a recommended preventive service will be available without
cost sharing requirements to the extent not specified in a recommendation or
This policy applies to contraceptive coverage. The Departments plan to
issue further guidance on section 2713 of the PHS Act more generally.
A. Who qualifies for the accommodation?
Group 1: "religious employers."
Religious employer is defined to exclude individual religious
believers and most of the social, educational and charitable
organizations operated by religious believers.
Group 2: "non-profit religious organizations."
This term is undefined.
As previously described, group health plans sponsored by certain
religious employers (and any group health insurance coverage provided in
connection with such plans) are exempt from the requirement to offer
coverage of contraceptive services that would otherwise be required under
the HRSA Guidelines for plan years beginning on or after August 1, 2012. A
second set of organizations qualifies for a temporary enforcement safe
harbor: group health plans sponsored by non-exempt, non-profit
organizations, that, consistent with any applicable State law, do not, on or
after February 10, 2012 (the date of the posting of the final regulations),
cover some or all forms of contraceptives due to the organization's
religious objections to them (and any group health insurance coverage
provided in connection with such plans). The temporary enforcement safe
harbor also applies to student health insurance plans arranged by non-profit
institutions of higher education that meet comparable criteria. The
temporary enforcement safe harbor applies for plan years beginning on or
after August 1, 2012, and before August 1, 2013.
Group 3: "non-profit religious
institutions of higher learning."
On February 10, 2012, the
Departments also announced their intention to provide an accommodation with
respect to non-exempt, non-profit religious organizations with religious
objections to contraceptive coverage. The final regulation concerning
student health insurance plans, published elsewhere in this issue of the
Federal Register, states that this
intention extends to student health insurance plans arranged by
religious institutions of higher education with such objections. This
accommodation would apply to some or all organizations that qualify for the
temporary enforcement safe harbor, and possibly to additional organizations.
Thus, a question for purposes of the intended regulations is:
should be eligible for the new accommodation (that is, what is a "religious
Question 1: How do we define
Question 2: Having defined "religious organization,"
which should be accommodated?
Question 3: Should we accommodate "for-profit religious
employers" as well?
Question 3 indicates that the Departments are not primarily concerned
about the accommodation of religious belief, but about whether
accommodation should be extended beyond organizations that are
considered socially useful (that have 'important roles.'
One approach would be to adopt the definition of religious organization
used in another statute or regulation. For example, the definition used in
one or more State laws to afford a religious exemption from a contraceptive
coverage requirement could be adopted. Alternatively, the intended
regulations could base their definition on another Federal law, such as
section 414(e) the Code and section 3(33) of ERISA, which set forth
definitions for purposes of "church plans." A definition based on these
provisions may include organizations such as hospitals, universities, and
charities that are exempt from taxation under section 501 of the Code and
that are controlled by or associated with a church or a convention or
association of churches. In developing a definition of religious
organization, we are cognizant of the important role of ministries of
churches and, as such, seek to accommodate their religious objections to
contraceptive coverage. The Departments seek comment on which religious
organizations should be eligible for the accommodation and whether, as some
religious stakeholders have suggested, for-profit religious employers with
such objections should be considered as well.
"Religious employer" vs. "religious organization"
The Departments underscore, as we did with respect to the definition of
religious employer in the final regulations, that whatever definition of
religious organization is adopted will not be applied with respect to any
other provision of the PHS Act, ERISA, or the Code, nor is it intended to
set a precedent for any other purpose. And, while the participants and
beneficiaries covered under the health plans offered by a "religious
employer" compared to those covered under the health plans offered by a
"religious organization" will have differential access to contraceptive
coverage, nothing in the final regulations or the forthcoming regulations is
intended to differentiate among the religious merits, commitment, mission,
or public or private standing of the organizations themselves.
Everything depends upon the defintion of
"Independent entity" is not identified.
Regardless of the definition of religious organization
that is proposed,
the Departments are considering proposing the same or a similar process for
self-certification that will be used for the temporary enforcement safe
harbor referenced in the final regulations. Under that process, an
individual authorized by the organization certifies that the organization
satisfies the eligibility criteria, and the self-certification is made
available for examination. The Departments expect that, for purposes of the
proposed accommodation, religious organizations would make a similar
self-certification, and similarly make the self-certification available for
examination. The self-certification would be used to put
entity responsible for providing contraceptive coverage on notice that the
religious organization has invoked the accommodation. The future rulemaking
would require that the independent entity be responsible for providing the
contraceptive coverage in this case.
The issue for objector is not freedom of
expression (their ability to express opposition) but freedom of
conscience and religion (being forced to facilitate activities they
believe to be gravely wrong.)
Under the temporary enforcement safe harbor, an organization that
self-certifies must also provide (or arrange to provide) notice to plan
participants and beneficiaries that its plan qualifies for the one-year
enforcement safe harbor. As the Departments noted in the bulletin
establishing the temporary enforcement safe harbor,
nothing precludes any
organization or individual from expressing opposition, if any, to the
regulations or to the use of contraceptives. The Departments do not
anticipate that religious organizations would be required to provide such
notice to plan participants and beneficiaries beyond the one-year transition
period because the responsibility to provide notice to plan participants and
beneficiaries about the contraceptive coverage would be assumed by the
independent entity. The Departments seek comment on how this notice should
religious institutions of higher education.
The Departments also intend to propose an accommodation for
organizations that are non-profit institutions of higher education with
religious objections to contraceptive coverage with respect to the student
health insurance plans that they arrange. In the final regulation published
elsewhere in this issue of the Federal Register, "student health insurance
coverage" is defined as a type of individual market health insurance
coverage offered to students and their dependents under a written agreement
between an institution of higher education and an issuer. Some non-profit
religious colleges and universities object to signing a written agreement
providing for student health insurance coverage that includes contraceptive
coverage. Some non-profit religious colleges and universities include
funding for their student health insurance plans in their student aid
packages and would object if contraceptive coverage were included in the
student health insurance plan. 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.
Question 4: Should
accommodation be offered to "religious organizations" that object to
only some contraceptives or surgical sterilization or
embryocidal drugs and devices?
They do not consider the possibility of objections to the provision of
contraceptives in some circumstances (i.e., for extra-marital sex).
The Departments seek comment on whether the definition of religious
organization should include religious organizations that provide coverage
for some, but not all, FDA-approved contraceptives consistent with their
religious beliefs. That is, under the forthcoming proposed regulations, the
Departments could allow religious organizations to continue to provide
coverage for some forms of contraceptives without cost sharing, and allow
them to qualify for the accommodation with respect to other forms of
contraceptives consistent with their religious beliefs.
B. Who administers the accommodation?
An "independent entity" is required.
However, coverage would still be provided "under organization's plan."
This would seem to defeat the purpose of the independent entity, but
this is not clear.
The accommodation aims to simultaneously fulfill the requirement that
plan participants and beneficiaries be offered contraceptive coverage
without cost sharing and without charge, and protect a
organization that objects on religious grounds from having to provide
contraceptive coverage. To achieve these goals, an independent entity is
needed to assume certain functions. This entity would, 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
Self-insured groups usually contract with an
independent administrator to manage their plans.
Self-insured plans are exempt from State insurance
Today, in most instances, an independent entity either provides or
administers health coverage for group health plans. Such group coverage
falls into two categories: Insured coverage and self-insured coverage. A
group that buys insured coverage pays a premium to a State-licensed and
State-regulated health insurance issuer which bears the risk of claims for
that coverage. A group that self-insures its coverage does not pay premiums
to a health insurance issuer; instead, employer and/or employee
contributions fund the health claims of participants and beneficiaries
covered under the plan. Typically, self-insured plans contract with a
third-party administrator, under a fee arrangement, for administrative
services, such as network contracting, managed care services, and payment of
claims. Insured group health plans and self-insured group health plans that
are not church plans or governmental plans are generally subject to Title I
of ERISA. Because there is no insurance provided by a health insurance
issuer, self-insured plans are not subject to State insurance laws.
A health insurance provider will not be
permitted to charge beneficiaries or objecting religious organizations
for contraceptives or surgical sterilization or
embryocidal drugs and devices.
The Departments intend to
propose that, when offering insured coverage to a religious organization
that self-certifies as qualifying for the accommodation, a health insurance
issuer may not include contraceptive coverage in that organization's insured
coverage. This means that contraceptive coverage would not be included in
the plan document, contract, or premium charged to the religious
organization. Instead, the issuer would be required to provide participants
and beneficiaries covered under the plan separate coverage for contraceptive
services, potentially as excepted benefits, without cost sharing, and notify
plan participants and beneficiaries of its availability.
The issuer could
not charge a premium to the religious organization or plan participants or
beneficiaries for the contraceptive coverage.
Possible amendment to regulation
To incorporate this proposal
into regulations with respect to insured group health plans (comparable
regulatory language would be developed with respect to student health
insurance plans), the Departments are considering proposing new language in
the existing preventive services regulations at
45 CFR 147.130,
29 CFR 2590.715-2713 and
26 CFR 54.9815-2713 providing: "In the case of an insured group health
plan established or maintained by a religious organization-
- The group health plan established or maintained by the religious
organization (and the group health insurance coverage provided in
connection with the plan) need not comply with any requirement under
this section to provide coverage for contraceptive services with respect
to the insured group coverage if all of the following conditions are
- The organization provides the issuer with written notice that the
organization is a religious organization, and will not act as the designated
plan administrator or claims administrator with respect to claims for
- The issuer has access to information necessary to communicate
with the plan's participants and beneficiaries and to act as a
claims administrator and plan administrator with respect to
- An issuer that receives the notice described above must offer to the
religious organization group health insurance coverage that does not
include coverage for contraceptive services otherwise required to be
covered under this section. The issuer must additionally provide to the
participants and beneficiaries covered under the plan separate health
insurance coverage consisting solely of coverage for contraceptive
services required to be covered under this section. The issuer must make
such health insurance coverage for contraceptive services available
without any charge to the organization, group health plan, or plan
participants or beneficiaries. The issuer must notify plan participants
and beneficiaries of the availability of such coverage for contraceptive
services in accordance with guidance issued by the Secretary. The issuer
must not impose any cost sharing requirements (such as a copayment,
coinsurance, or a deductible) on such coverage for contraceptive
services and must comply with all other requirements of this section
with respect to coverage for contraceptive services."
Additionally, to ensure that
contraceptive coverage offered by a health insurance issuer under these
circumstances does not confront obstacles due to other Federal requirements
(such as the guaranteed issue requirement under section 2702 of the PHS Act,
the single risk pool requirement under section 1312(c) of the Affordable
Care Act, and the essential health benefits requirement under section 2707
of the PHS Act), the Departments are considering adding by regulation
contraceptive coverage to the types of excepted benefits in the individual
45 CFR 148.220(b). In so doing, the Departments would consider
preserving certain PHS Act protections such as appeals and grievances rights
while ensuring relief from others such as the requirement to provide
essential health benefits. The Departments seek comment on whether and how
to structure such a change to the excepted benefits regulations, and what
PHS Act protections should (or should not) continue to apply. In addition,
the Departments seek comment on ways to structure the contraceptive-only
benefit as a benefit separate from the insured group coverage other than as
an excepted benefit.
The health insurance provider must pay the
costs of contraceptives or surgical sterilization or
embryocidal drugs and devices.
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. Typically, issuers build into their
premiums projected costs and savings from a set of services. Premiums from
multiple organizations are pooled in a "book of business" from which the
issuer pays for services. To the extent that contraceptive coverage lowers
the draw-down for other health care services from the pool, funds would be
available to pay for contraceptive services without an additional premium
charged to the religious organization or plan participants or beneficiaries.
Actuaries, insurers, and economists estimate that covering contraceptive
services is at least cost neutral.
For self-insured plans, the Departments propose
that the plan administrators be made to pay the costs of
contraceptives or surgical sterilization or
embryocidal drugs and devices.
However, it would seem that such administrators would lack the premium base
or other revenue from which to draw to make such payments and may be
uwilling to do so. See below.
For a religious organization
that sponsors a self-insured group health plan, the Departments aim to
similarly shield it from contracting, arranging, paying, or referring for
contraceptive coverage. The Departments intend to propose, and invite
comments on, having the third-party administrator of an objecting religious
organization fulfill such responsibility. For ERISA plans,
 the Departments are considering proposing that the
self-certification of the religious organization, described above, would
serve as a notice to the third-party administrator that the requirement to
provide contraceptive coverage will not be fulfilled by the religious
organization. The proposed regulations, in this circumstance, would set
forth the circumstances and criteria under which the third-party
administrator would be designated as the plan administrator for ERISA plans
solely for the purpose of fulfilling the requirement to provide
contraceptive coverage. As prescribed by the proposed regulations, the
third-party administrator would provide or arrange for such coverage in such
circumstances. The third-party administrator would notify plan participants
and beneficiaries of this coverage. The religious organization would take no
action other than self-certification.
Possible amendment to regulation
To incorporate this proposal
into regulations with respect to self-insured group health plans, the
Departments are considering proposing new language in the existing
preventive services regulations at
29 CFR 2590.715-2713 and
26 CFR 54.9815-2713 providing that: "A religious organization
maintaining a self-insured group health plan is not responsible for
compliance with any requirement under this section to provide coverage for
contraceptive services if all of the following conditions are satisfied:
- The plan contracts with one or more third parties for processing of
- Before entering into each such contract, the employer provides each
third party administrator (TPA) with written notice that the employer:
(1) Is a religious organization, (2) will not act as the designated plan
administrator or claims administrator with respect to claims for
contraceptive services, (3) will not contribute to the funding of
contraceptive services, and (4) will not participate in claims
processing with respect to claims for contraceptive services.
- With respect to contraceptive benefits, the TPAs have authority and
control over the funds available to pay the benefit, authority to act as
a claims administrator and plan administrator, and access to information
necessary to communicate with the plan's participants and
In addition, with respect to
ERISA plans, the Department of Labor is considering proposing a new
29 CFR 2510.3-16 providing: "In the case of a group health plan
established or maintained by a religious organization that is not
responsible for compliance with any requirement under Â§ 2590.715-2713 of
this part to provide coverage for contraceptive services, the required
notice from the religious organization provided to a third party
administrator (TPA) of the religious organization's refusal to provide and
fund such benefits shall be an instrument under which the plan is operated
and shall have the effect of designating such TPA as the plan administrator
under section 3(16) of ERISA for those contraceptive benefits for which that
TPA processes claims in its normal course of business. A TPA that becomes a
plan administrator pursuant to this section shall be responsible for-
- The plan's compliance with section 2713 of the Public Health
Service Act (as incorporated into section 715 of ERISA and Â§
2590.715-2713 of this part) as to those categories of contraceptive
benefits for which the TPA processes claims in its normal course of
business (for example, surgical procedures, non-surgical procedures,
patient education and counseling, prescription benefits and
- Establishing and operating a procedure for determining such claims
for contraceptive benefits in accordance with Â§ 2560.503-1 of this
- Complying with disclosure requirements and other requirements under
Title I of ERISA for such benefits to participants and beneficiaries."
If TPA's refuse,
this would seem to rule out accommodation in such cases.
We note that there is no obligation for a TPA to enter into such a
contract if it objects to these terms.
Providing for an independent
entity to assume responsibility for plan-related functions when other plan
sponsors or officials fail or refuse to do so would not be unique to the
instant context. For example, where certain retirement savings plans have
been abandoned by their sponsors, Department of Labor regulations authorize
asset custodians to distribute plan benefits and wind up the plan's affairs.
29 CFR 2578.1.
This appears to contradict earlier assertions
that providing contraceptive coverage is cost-neutral or may save money.
The Departments do not appear to know how to make good the promise that
"religious organizations" will not be made to pay for contraceptives or
surgical sterilization or
embryocidal drugs and devices.
The Departments seek comment on the following possible approaches that a
third-party administrator could use to fund the contraceptive coverage
without using funds provided by the religious organization. The third-party
administrator could use revenue that is not already obligated to plan
sponsors such as drug rebates, service fees, disease management program
fees, or other sources. These funds may inure to the third-party
administrator rather than the plan or its sponsor and drug rebates, for
example, could be larger if contraceptive coverage were provided.
Additionally, nothing precludes a third-party administrator from receiving
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. Comments should address the ways in which
third-party administrators generally receive funding to pay benefits, other
flows of funds, the extent to which funding from other sources may be
available for payment of claims, and the monitoring responsibilities and
oversight that would be associated with such arrangements.
This appears to be an admission that paying for
contraceptives or surgical sterilization or
embryocidal drugs and devices is not "cost-netural."
Another option under consideration would be to have the third-party
administrator receive a credit or rebate on the amount that it pays under
the reinsurance program under Affordable Care Act section 1341
in order to
fund contraceptive coverage for participants and beneficiaries covered under
the plan of a religious organization that sponsors a self-insured plan.
Section 1341 of the Affordable Care Act creates a reinsurance program to
balance out risk selection from 2014 through 2016. Payments from health
insurance issuers and third-party administrators on behalf of group health
plans will be made to a reinsurance entity. Payments are used, among other
things, to offset the cost of reinsurance for health insurance issuers.
While the reinsurance program does not provide payments to group health
plans, it collects payments from third-party administrators to support the
program. Under this proposal, a third-party administrator that funds
contraceptive coverage separate from a religious organization could offset
the amount of this cost with a credit or rebate against its assessments
under the reinsurance program. Such a policy could help advance the goals of
the reinsurance program, which is one of many in the Act designed to make
health insurance affordable, accessible, meaningful, and stable. The
Departments seek comments on such an interpretation of Affordable Care Act
section 1341and on ideas of alternative sources of funding
temporary program ends.
The federal office Office of Personnel
Management may force insurers to pay for contraceptives or surgical
embryocidal drugs and devices. Once more, the suggestion
implies that there will be a cost for this, contrary to earlier
assertions that the coverage will be "cost-neutral."
An additional option would have the third-party administrator separately
arrange for contraceptive coverage. In this case, an additional independent
entity other than a third-party administrator would be needed. The
Departments are considering having the Office of Personnel Management (OPM)
identify a private insurer to provide this coverage. Under section 1334 of
the Affordable Care Act, OPM is responsible for contracting with at least
two insurers to offer multi-State plans in each Exchange in each State to
promote choice, competition, and access to health services.
Director, in consultation with the HHS Secretary, has the authority to
impose appropriate requirements on the insurers that offer multi-State
plans. Accordingly, OPM could incentivize or require one or more of the
insurers offering a multi-State plan also to provide, at no additional
charge, contraceptive coverage to participants and beneficiaries covered
under religious organizations' self-insured plans. The third-party
administrator would send a copy of the religious organization's
self-certification to OPM along with information on plan participants and
beneficiaries. 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. The Departments
seek comment on the impact of this proposal on the multi-State plan program,
ways to administer it, and additional funding ideas.
If adopted, the reinsurance program and multi-State plan options may
require amendments to the regulations and guidance governing those programs.
In addition, these programs start on January 1, 2014. There may be some
religious organizations with plan years that begin on or after August 1,
2013, but before those programs begin, so, should the Departments propose
these options, we would also propose a means of resolving this gap in
relief. The Departments seek input on such means as well as how many
religious organizations have plan years that start between August 1 and
Appears to admit that paying for contraceptives
or surgical sterilization or
embryocidal drugs and devices is not "cost-neutral."
Public funding is proposed as an acceptable alternative.
The Departments welcome ideas on other options for the source of funds
for contraceptive coverage. Some religious stakeholders have suggested, for
example, the use of tax-preferred accounts that employees may in their
discretion use for a range of medical services that neither precludes nor
obligates funds to be used for contraceptive services.
A number of religious
stakeholders have also suggested that public funding to support coverage of
contraceptive services is not objectionable. The Departments seek comment on
these and other proposals. Comments are also requested on additional
considerations that should be taken into account with respect to these and
other proposals and on suggestions for structuring the implementation of the
proposals in light of these considerations.
Acknowledges it will cost to provide coverage.
The Departments expect that the third-party administrator could use
these sources of funds individually or in combination. The Departments also
note that nothing precludes a religious organization from switching from a
self-insured plan to an insured plan such that a health insurance issuer
rather than a third-party administrator is responsible for providing the
The Departments also seek information on coordination when there are
multiple third-party administrators and on the prevalence of multi-year
contracts as well as options for addressing the application of these
proposals in such instances. The Departments invite comment on the extent to
which there are self-insured health plans without a third-party
administrator as well as options for how the accommodation would work in
these rare circumstances. One option would be to have a religious
organization send its self-certification to OPM, which would be directed to
independently arrange for contraceptive coverage through a private insurer.
The Departments seek comment on the prevalence and number of participants
and beneficiaries of health plans sponsored by religious organizations
without a third-party administrator.
C. Additional Questions
Question 5: Should freedom of
conscience be allowed to health insurance issuers ?
To inform the notice of proposed rulemaking, the Departments seek
information on several additional questions. One question that has arisen
from religious stakeholders is whether an exemption or accommodation should
be made for certain religious health insurance issuers or third-party
administrators with respect to contraceptive coverage. The Departments have
little information about the number and location of such issuers and
administrators and whether and how such issuers operate in the 28 States
with contraceptive coverage requirements.
The Departments also recognize that various denominations may offer
coverage to institutions affiliated with those denominations. For example,
their plans may be offered as "church plans" (described above) to individual
churches as a means of pooling their risk. The Departments seek comment on
whether different accommodations are needed for such plans.
State laws will be narrowed to match the
restrictions in federal law.
In addition, the Departments are aware that 28 States have adopted laws
requiring that certain health insurance issuers provide contraceptive
coverage. Some of these laws contain exemptions related to religious
organizations, but the scope of the exemptions varies among the States.
Generally, Federal health insurance coverage regulation creates a floor to
which States may add consumer protections, but may not subtract. This means
that, in States with broader religious exemptions than that in the final
regulations, the exemptions will be narrowed to align with that in the final
regulations because this will help more consumers. Organizations that
qualify for an exemption under State law but do not qualify for the
exemption under the final regulations may be eligible for the temporary
enforcement safe harbor. During this transition period, State laws that
require contraceptive coverage with narrower or no religious exemptions will
continue. The Departments seek comment on the interaction between these
State laws and the intended regulations on which we are seeking comment in
this notice and on the extent to which there is a need for consistency
between any Federal regulations and these State laws. Similarly, the
Departments solicit comment on what other Federal or State laws or
accounting rules governing funding and accounting could affect the proposed
options described herein.
Despite assurances that the proposed
accommodation will be "cost-neutral," this suggests that the proposal
has been made without an understanding of the practical issues involved.
In addition, the Departments solicit information on the number of
potentially affected issuers and religious organizations as well as their
plan participants and beneficiaries; the administrative cost of providing
separate contraceptive coverage, including details regarding the nature of
the costs (for example, one-time systems changes or ongoing administrative
costs); and the average costs and savings to health plans, plan participants
and beneficiaries, and the public of providing contraceptive coverage.
Final rules may not be in place until ten months
after the November, 2012 presidential election.
The 90-day comment period is designed to encourage maximum input into
the development of an accommodation for religious organizations with
religious objections to providing contraceptive coverage while ensuring the
availability of contraceptive coverage without cost sharing for plan
participants and beneficiaries. The Departments seek comments on the ideas
and questions outlined in this ANPRM as well as new suggestions to achieve
its goals. The Departments also intend to hold listening sessions to ensure
all voices are heard. This will not be the only opportunity for comment. The
subsequent notice of proposed rulemaking will also include a public comment
period. The Departments aim to ensure that the final accommodation is fully
vetted and published in advance of the expiration of the temporary
enforcement safe harbor.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement,
Internal Revenue Service.
Signed this day of March 14, 2012.
Phyllis C. Borzi.
Assistant Secretary, Employee Benefits Security
Administration, Department of Labor.
Dated: March 15, 2012.
Acting Administrator, Centers for Medicare &
Approved: March 15, 2012.
Secretary, Department of Health and Human
[FR Doc. 2012-6689 Filed 3-16-12; 4:15 pm]
BILLING CODE 4120-01-P
1. The HRSA Guidelines are available at:
2. Note: This
excludes items and services such as vasectomies and condoms.
3. The interim final regulations
published by the Departments on July 19, 2010, generally provide that
plans and issuers must cover a newly recommended preventive service
starting with the first plan year (or, in the individual market, policy
year) that begins on or after the date that is one year after the date
on which the new recommendation or guideline is issued.
26 CFR 54.9815-2713T(b)(1);
29 CFR 2590.715-2713(b)(1);
45 CFR 147.130(b)(1).
4. The amendment to the interim final
rules was published on August 3, 2011, at
5. The bulletin can be found at:
6. Bertko, John, F.S.A., M.A.A.A.,
Director of Special Initiatives and Pricing, Center for Consumer
Information and Insurance Oversight, Centers for Medicare & Medicaid
Services, Glied, Sherry, Ph.D., Assistant Secretary for Planning and
Evaluation, Department of Health and Human Services (ASPE/HHS), Miller,
Erin, MPH, ASPE/HHS, Wilson, Lee, ASPE/HHS, Simmons, Adelle, ASPE/HHS,
"The Cost of Covering Contraceptives Through Health Insurance,"
(February 9, 2012), available at:
26 CFR 54.9815-2713T(a)(4),
29 CFR 2590.715-2713(a)(4), and
45 CFR 147.130(a)(4).
8. See also the Departments' guidance in
http://www.dol.gov/ebsa/pdf/faq-aca2.pdf and FAQ-1 at
9. Note that, even if the definition of
religious organization for purposes of the accommodation were to include
religious employers eligible for the exemption, nothing in the proposed
regulations would limit eligibility of religious employers for the
10. A church plan as defined under
section 3(33) of ERISA is exempt from ERISA's requirements under section
4(b) of ERISA, and, therefore, any proposed ERISA regulations would not
apply to church plans. Comments are sought on potential options for