The Departments of Labor, Health and Human Services, and the Treasury have issued their long-awaited final rule on the Affordable Care Act’s (ACA) contraceptive coverage mandate. Generally, the ACA requires non-grandfathered group health plans and health insurance issuers to provide coverage for recommended women’s preventive health services – including contraceptive services – without cost sharing. Due to religious objections expressed by certain religious organizations, however, the new rule exempts specified religious employers from the contraceptive services requirement. In addition, the final rule provides accommodations for other non-profit religion-affiliated organizations so that they will not have to contract, arrange, or pay for contraceptive coverage. Instead, health insurance companies or third party administrators will pay for contraceptive services used by women who otherwise receive health coverage under health plans offered by these organizations.

First, the rule simplifies the definition of “religious employer” for purposes of the exemption from the contraceptive coverage requirement. Under the rule, a religious employer is one that is organized and operates as a nonprofit entity and would be considered a religious employer under the tax code.

With respect to other non-profit religious-affiliated organizations, including non-profit religious hospitals and universities that object to providing contraceptive coverage, the rule outlines an accommodation. Specifically, these organizations will not be obligated to contract, arrange, pay for or refer contraceptive coverage over which they object on religious grounds to participants, but must take certain steps to ensure that separate coverage offering these services at no cost will be available to women enrolled in their health plans. To qualify for this accommodation, the entity must:

  • oppose, on religious grounds, the provision of coverage for some or all of any contraceptive services required to be covered under the ACA
  • be organized and operate as a nonprofit entity
  • hold itself out as a religious organization
  • self-certify that it satisfies these criteria

A sample certification form can be found here.

For insured health plans, including student health plans, the objecting non-profit religious organization must provide notice to its insurer regarding its objection to providing contraception coverage. The insurer will, in turn, inform the enrollees that it will provide separate no-cost payments for contraceptive services for as long as they remain enrolled in the health plan.

For self-insured health plans, the objecting non-profit religious organization will notify its third-party administrator about its contraceptive coverage objections. The third-party administrator will then notify enrollees that it is providing or arranging separate no-cost payments for contraceptive services for them for as long as they remain enrolled in the health plan.

The amendments to the religious employer exemption apply to group health plans and health insurance issuers for plan years beginning on or after August 1, 2013. All other aspects of the final rule apply to group health plans and health insurance issuers for plan years beginning on or after January 1, 2014. The agencies have put in place a temporary enforcement safe harbor that will be in effect until the first plan year that begins on or after January 1, 2014. More information on this safe harbor can be found here.

An HHS fact sheet discussing the ACA’s rules relating to preventive services for women can be found here.  A fact sheet that specifically discusses the coverage obligations of non-profit religious organizations with respect to women’s preventive services can be found here.