On February 10, 2012, President Obama announced a policy change intended to address the concerns of many religiously affiliated organizations over the preventive care mandate that requires nongrandfathered group health plans to provide FDAapproved contraceptive and sterilization procedures to women with no cost sharing. The announcement was accompanied by the issuance of a final rule published in the Federal Register on February 15, 2012. The final rule implements Section 2713 of the Public Health Service Act, as added by PPACA.
A narrow exemption to the contraceptive coverage requirement, initially set forth in an interim final rule published August 3, 2011, applies to "religious employers" that primarily employ or serve persons who share the same religious tenets as the employer. On January 20, 2012, the U.S. Department of Health and Human Services (HHS) confirmed that religiously affiliated institutions, such as universities, hospitals, charities or media companies that serve or employ people of other faiths, were required to comply with the preventive care mandate. However, these organizations were granted until the first plan year beginning on or after August 1, 2013, to comply.
The HHS announcement commenced a nationwide debate over whether the preventive care mandate violates religious liberty. In response, President Obama set forth a new policy for religious institutions that object to "directly providing insurance that covers contraceptive services." Under the new policy, when an employer is a religiously affiliated organization, such as a charity, school or a hospital with religious objection to providing or paying for contraceptive services, the insurer is "required to reach out and offer the woman contraceptive care free of charge without co-pays, without hassle."
The new policy leaves open issues and unanswered questions with regard to the tracking of premium dollars collected from religiously affiliated employers relative to the insurer’s funds used to pay for such services, as well as the self-insured. Although the announcement states that such religious organizations will not be required to subsidize the cost of such services, it does not specifically address organizations that are self-insured. A self-insured employer is, essentially, the "insurer" and uses other insurance companies only to administer or advise on its group health plan.
While the final rule does not include the policy change announced by the President on February 10, it is anticipated that a new regulation to define the responsibilities of insurance companies and group health plans in covering contraceptive and other preventive services will be issued during the one-year transition period. The policy announced on February 10 by President Obama faces continued opposition by some religious organizations, including the United States Conference of Catholic Bishops.