HHS Issues Temporary and Proposed Rules on Contraceptive Coverage

The Department of Health and Human Services (“HHS”) has recently issued rules to address the Supreme Court’s recent Hobby Lobby ruling. Under a temporary final rule, religious nonprofit organizations can notify the government of their objection to providing contraceptive coverage for employees, rather than having to authorize the coverage themselves. The government will then arrange for contraceptive coverage. HHS also issued a proposed rule that would extend similar accommodations to closely-held, for-profit religious employers.

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Supreme Court Carves Out Religious Exemption to Contraceptive Mandate

The Supreme Court recently ruled in Burwell v. Hobby Lobby Stores, Inc. that closely-held businesses could avoid complying with the ACA’s “contraceptive mandate” on religious grounds. The Court focused on the fact that the government could provide birth control with no cost-sharing in a way that would not violate Hobby Lobby’s owners’ religious beliefs. For example, it could require the government to pay for birth control or shift the cost to insurers.

Experts disagree about the impact of the ruling. Some commentators argue that the ruling only applies to the ACA’s rules on birth control. Others argue that it could allow employers to refuse to cover other services on religious grounds. As the effects of the ruling become more clear, religiously-affiliated business owners may wish to explore their options when it comes to providing birth control for their employees.

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HHS Extends Compliance Date for Contraceptives Coverage for Some Religious Employers

The Department of Health and Human Services (“HHS”) has announced that it will give certain nonprofit religious employers one more year to comply with a requirement to cover contraceptives under health care reform’s preventive services regulations.

The preventive services rules:

  • Require group health plans and health insurers to cover certain preventive services without imposing cost-sharing requirements.
  • Do not apply to grandfathered plans under health care reform.

Under previous HHS rules, plans and insurers were generally required to provide coverage for contraceptive methods and counseling, but a limited exemption was provided for religious employers that satisfied set criteria (for instance, mainly employing individuals who share the employer’s religious beliefs).

HHS did not expand the exemption for religious employers, but has provided a delayed compliance date for nonprofit employers who do not provide contraceptive coverage due to religious beliefs. These employers will have until August 1, 2013 to meet the preventive service requirements. Plans that do not qualify for delayed implementation must cover contraceptives beginning August 1, 2012.

To take advantage of the delayed deadline, nonprofit employers are required to certify that they qualify for the delayed implementation. HHS will require employers that do not cover contraceptive services to give their employees a notice stating that the services are available at other sites, such as public clinics. The delayed compliance date will be included in regulations that finalize interim final regulations on the preventive services requirements for health plans.

© 2012 Parsonage Vandenack Williams LLC

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