The Affordable Care Act requires most health plans to cover certain women’s preventive services, including contraception, without charging a co-pay or deductible. On January 30, 2013, the Obama Administration released proposed rules that continue to implement provisions in the health care law providing women contraceptive coverage without cost sharing, while at the same time respond to religious objections to contraceptive services by certain religious organizations.

Exemption for Religious Employers

Group health plans of “religious employers” are exempted from having to provide contraceptive coverage, if they have religious objections to contraception. The proposed rule simplifies the existing definition of a “religious employer” as it relates to contraceptive coverage by eliminating criteria that a religious employer: (1) have the inculcation of religious values as its purpose; (2) primarily employ persons who share its religious tenets; and (3) primarily serve persons who share its religious tenets. The simple definition of “religious employer” for purposes of the exemption would primarily include churches, other houses of worship, and their affiliated organizations, including hospitals, schools and universities.

Accommodations for Non-Profit Religious Organizations 

The rule proposes accommodations for additional non-profit religious organizations, while also separately providing those organizations’ enrollees contraceptive coverage with no co-pays.  The proposed regulations define an eligible organization as an organization that: (1) opposes providing coverage for some or all of any contraceptive services required to be covered under Section 2713 of the Public Health Services Act, on account of religious objections; (2) is organized and operates as a nonprofit entity; (3) holds itself out as a religious organization; and (4) self-certifies that it meets these criteria and specifies the contraceptive services for which it objects to providing coverage. Under the proposed accommodations, such eligible organizations would not have to contract, arrange, pay or refer for any contraceptive coverage to which they object on religious grounds. Plan participants would receive contraceptive coverage through separate individual health insurance policies, without cost sharing or additional premiums.  The issuer would work to ensure a seamless process for plan participants to receive contraceptive coverage.

With respect to insured group health plans, the eligible organization would provide self-certification to the health insurance issuer, which in turn would provide separate, individual market contraceptive coverage at no cost for plan participants. The regulations state that issuers generally would find that providing such contraceptive coverage is cost neutral because they would be insuring the same set of individuals under both policies and would experience lower costs from improvements in women’s health and fewer childbirths. With respect to self-insured group health plans, the eligible organization would notify the third party administrator, which in turn would work with a health insurance issuer to provide separate, individual health insurance policies at no cost for participants. The regulations state that the costs of both the health insurance issuer and third party administrator would be offset by adjustments in federally-facilitated Exchange user fees that insurers pay.

The rule also proposes that eligible religious non-profit organizations that are institutions of higher education that arrange for student health insurance coverage may take advantage of an accommodation comparable to that for an eligible organization, and not provide contraceptive coverage if they object on religious grounds.

The proposed rule does not provide any exemptions or accommodations for secular organizations owned by individuals who object on religious grounds to providing employees with contraceptive coverage, so we should expect to see those court challenges continue.