Exemption to ACA Contraceptive Mandate Extended to For-Profit Entities and Individuals
Under the ACA, employers must provide plans that cover birth control and other preventative health services with no out-of-pocket costs. Certain religious employers with religious objections to providing contraceptive services have been exempt from the requirement. (Accommodations have also been provided to non-profit religious organizations objecting to the rule and expanded to closely held for-profit entities objecting to the mandate on religious grounds, see https://www.benefitslawadvisor.com/2014/07/articles/employee-health-welfare-plans/1007/).
The new rules, issued through the IRS, DOL, and HHS, broaden the exemption in scope and in application to for-profit entities that object to providing or covering identified contraceptive services due to sincerely held religious beliefs or moral convictions.
Exemptions for Plan Sponsors
For employers, the temporary and proposed regulations issued by the administration extend use of the religious exemption to for-profit, non-governmental plan sponsors of group health plans, including closely-held and publicly held for-profit entities, non-religious non-profit organizations, and institutions of higher education in their arrangements of student health insurance coverage.
The regulations also provide an exemption based upon sincerely held moral convictions to non-Federal governmental plan sponsors, including non-profit organizations, for-profit entities with no publicly traded ownership interests, and institutions of higher education in the arrangement of student health insurance coverage.
Exemptions for Health Insurance Issuers
Health insurance issuers offering group or individual insurance coverage (“issuers”) that object to providing coverage for certain contraceptive services are provided an exemption from offering coverage of mandated contraceptive services to the extent the exemption is based upon the issuer’s sincerely held religious beliefs or moral convictions.
An issuer is also exempt from providing coverage where the exemption is provided to a plan sponsor due to the sponsor’s religious or moral objection (regardless of whether the issuer has its own objection).
The issuer exemption does not exempt a group health plan from providing mandated contraceptive services under the ACA. Therefore, unless the plan sponsor itself is exempt under the regulations, issuers that hold religious or moral objections should notify plan sponsors of any contraceptive services not covered due to the issuer’s exemption. The issuer should also inform the plan sponsor that the group health plan remains obligated to provide mandated contraceptive services.
Exemptions for Individuals
Individuals who object to coverage or payment of certain contraceptive services by a sponsoring employer are exempt to the degree that the plan sponsor and health insurance issuer agree to offer separate benefit package option, policy, or insurance certificate or contract omitting contraceptive coverage to the objecting individual. The individual exemption cannot be used to require a plan sponsor or insurance issuer to omit contraceptive coverage if the plan sponsor or issuer has no objection to providing such coverage, nor can it be used to prevent application of laws requiring contraceptive coverage under State law.
The individual exemption may be recognized by private and governmental employers. A non-exempt governmental employer may choose to offer an individual participant coverage omitting contraceptive services that honors the individual’s objections. Note, however, this exemption is limited to the ACA mandate for contraceptive services and is not applicable to state laws requiring contraceptive coverage.
Exemption Notification Requirements for Employers
Plan sponsors are not required under the new rules to file an exemption notice or comply with a self-certification process to claim a religious or moral exemption from the ACA’s contraceptive mandate. Nevertheless, employer-provided group health plans remain subject to ERISA and its disclosure requirements. Employers objecting to the provision of certain contraceptive services must make sure that any coverage exclusions are clearly identified in the plan document. Any contraceptive services subsequently omitted from plan coverage must be adequately communicated to participants and beneficiaries through all applicable ERISA disclosures.
Although the interim final rule is effective immediately, HHS is requesting public comments on the rule (see http://www.regulations.gov). Written comments must be received by December 5, 2017.