On Friday October 6, 2017, the Trump administration released two interim final rules expanding the exemptions allowed under the Patient Protection and Affordable Care Act’s (the “ACA’s”) contraceptive coverage mandate. Under the ACA, employer group health plans generally are required to cover contraceptives, sterilization, and related patient education and counseling, with exemptions provided for religious houses of worship. The exemption was expanded by the Department of Health and Human Services (HHS) as a result of the Supreme Court’s decision in Burwell v. Hobby Lobby 34 S. Ct. 2751 (2014), which held health plans of closely held for-profit corporations are not required to cover contraceptives if doing so would contradict the owner’s religious beliefs under the Religious Freedom Restoration Act.
The interim final rules, released by the Treasury Department, Department of Labor (DOL), and HHS, are effective immediately and provide exemptions from the contraceptive coverage mandate to many employers with “sincerely held religious beliefs” or “sincerely held moral convictions”. The interim final rules limit the exemption for “sincerely held moral convictions” to houses of worship, tax-exempt entities, and closely held for-profit corporations, but permit publicly traded for-profit entities to use the exemption for “sincerely held religious beliefs.” According to the Trump administration, the United States has had a long history of providing protections in the regulation of health care for individuals and entities with objections based on religious beliefs or moral convictions. To take advantage of the new exemption, eligible employers must notify employees that they will no longer provide contraceptive coverage but need not inform the federal government. The Employee Retirement Income Security Act of 1974, as amended (ERISA) requires that a Summary of Material Modification (SMM) is provided within 60 days of a “material reduction” in covered services or benefits provided under a group health plan. A material reduction includes the elimination of benefits payable under a group health plan. According to an Obama administration report released last year, 55 million women have gained access to no-cost birth control as a result of the contraceptive coverage mandate. It is not clear how many entities may claim the exemptions, but HHS has predicted about 200 entities (affecting 120,000 women) may do so based on the number of entities that filed lawsuits. Written comments on the interim final rules are due December 5, 2017.