The triumvirate of federal agencies (HHS, DOL, IRS) responsible for enforcing the Patient Protection and Affordable Care Act (the ACA, often called Obamacare) released final interim rules significantly expanding exceptions from what has become known as the “contraceptives mandate.” This mandate, which has been the subject of extensive and ongoing litigation and political debate, will now not apply to employers, group health plans, insurance issuers, and individuals who object to the mandate “based on sincerely held religious beliefs.” It will also not apply to nonprofits, closely held for-profit entities, and individuals who object “based on sincerely held moral convictions.”

What is the Contraceptives Mandate?

Under the ACA, employers, group health plans and insurance issuers must provide coverage without cost sharing for women’s preventative care and screenings. Under the Obama administration, the Health Resources and Services Administration interpreted this to require coverage for contraceptives, such as birth control medication. Originally, there was an exemption available only for nonprofit “religious employers” with religious objections to contraceptive coverage. The exemption was later expanded to “houses of worship and their integrated auxiliaries” and eventually to closely held, for-profit entities with similar religious objections, such as Hobby Lobby. See Burwell v. Hobby Lobby Stores, Inc.

What entities are eligible for the exception?

The entities who object to any involvement in the provision of coverage for contraceptives based on sincere religious beliefs or moral convictions (Objecting Entities) are excepted from the application of the contraceptives mandate. In regards to sincerely held religious beliefs, essentially all nongovernmental employers may be Objecting Entities. In regards to sincerely held moral convictions, only the following may be Objecting Entities: (1) a nonprofit organization, (2) a closely held for profit entity or (3) an institution of higher education in its arrangement of student health coverage. The agencies provide no guidance as to what it means to have sincere religious beliefs or moral convictions but explain that the mechanisms for making such determinations are a matter of “well-settled” state law.

Are there steps to becoming an Objecting Entity?

No. Entities claiming an exemption from the contraceptives mandate were previously required, in general, to seek an “accommodation” and provide certain notices. Now, there are no applicable certification or reporting requirements, although the accommodation process is still being made available on an optional basis.

If I become an Objecting Entity, can I just stop offering coverage for contraceptives?

No. Under ERISA, a group health plan will still be required to list contraceptives as specific exclusions from coverage and provide notices regarding the reduction in coverage to all persons covered under the plan.

If I am an employer or issuer, can I offer a plan that does not cover contraceptives?

Yes. Even governmental employers may do so. Even if an employer or issuer is not an Objecting Entity, one or more of its employees or covered individuals may be an “Objecting Individual” – that is, an individual who objects to coverage for contraceptives based on sincere religious beliefs or moral convictions. The regulations specifically allow for such “willing entities” to offer a separate plan or benefit package to Objecting Individuals that does not include coverage for contraceptives.

If I am an employer or issuer, do I have to offer a plan that does not cover contraceptives?

No. The preambles to the regulations provide that this “individual exemption” cannot be used to force an employer or issuer to provide coverage omitting contraceptives.

Will the regulations be challenged?

Yes. The regulations will almost certainly be immediately challenged on procedural grounds based on their adoption as “interim final rules,” which makes the regulations immediately effective and circumvents the notice and comment period required by the Administrative Procedures Act. Additionally, the substance of the regulations will undoubtedly be challenged in multiple ways, particularly where the exemption is provided based on “moral convictions.”