On October 6, 2017 the Department of Health and Human Services (HHS) and the Department of the Treasury released interim rules expanding the exemptions from providing contraceptive coverage without cost sharing.
The Affordable Care Act (ACA) required coverage of certain preventive services without cost sharing. Congress granted the Health Resources and Services Administration (HRSA), a part of HHS, discretion to determine what was included in “preventive services” for women. HRSA concluded that preventive services included contraceptives. However, the Departments reserved authority to reevaluate the definition of “preventive services” and the accommodation/exemption rules.
On May 4, 2017 President Trump issued the “Presidential Executive Order Promoting Free Speech and Religious Liberty.” This directed various Departments to “consider issuing amended regulations, consistent with applicable law, to address conscience-based objections to the preventive care mandate…” This prompted federal Departments to release interim final rules on October 6th that expand the exemptions for religious and moral objections to contraceptive coverage. Departing from tradition, these interim rules are effective immediately and not upon the issuance of final regulations. The Departments are holding a notice-and-comment period that expires December 5, 2017. It’s unknown when the government anticipates releasing final regulations.
Previously, only nonprofit “religious employers” were eligible for an exemption from the contraceptive mandate. This was extended to closely held, for-profit employers with sincerely held religious objections after the Hobby Lobby Supreme Court decision.
The new rules expand the exemption to many non-governmental employers, issuers and individuals with sincerely held religious objections. The following are now eligible to claim a religious exemption:
- For-profit corporations (regardless of size or if they are publically/privately held);
- Churches, integrated church auxiliaries, church conventions or association and religious orders;
- Nonprofit organizations; and
- Higher education institutions.
The interim rules also created a new exemption for certain non-governmental employers with sincerely held moral convictions against the contraceptive mandate. The following are now eligible to claim a moral exemption:
- Nonprofit organizations;
- Privately held for-profit employers;
- Insurers; and
- Higher education institutions.
How to Claim the Exemption
Under the interim rules, if an employer objects on either religious or moral ground they do not have to provide any kind of self-certification or notice to the government to claim the exemption. The existing accommodation process still exists; it’s just optional. However, ERISA plans will still need to follow employee notice procedures for changes in covered benefits. In addition, if information contained in the Summary of Benefits and Coverage (SBC) is materially changed, plans should send out a Summary of Material Modification (SMM) 60 days before adopting the reduction.
There’s a lot of uncertainty around these interim rules. The interim rules request comments and suggestions around multiple aspects of the law including if the eligible parties should be expanded, if a formal procedure to claim the exemption should be added, how to determine if a religious or moral objection is “sincerely-held,” and how this will affect various types of corporate entities. To complicate matters, multiple lawsuits have already been filed that may halt the interim rules. The California Attorney General and the American Civil Liberties Union (ACLU) already filed suit and others are expected to follow.
In sum, employers should proceed with caution if claiming the religious or moral exemption due to the continued administrative process and ongoing litigation.
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About The Author
Andie Schieler is an attorney and works in MMA's Compliance division specializing in interpreting the Affordable Care Act and various insurance laws. She advises clients on legal and regulatory issues affecting their employee benefit plans. She obtained her law degree from Saint Louis University and undergraduate from Indiana University Bloomington.
This article was reproduced with permission from the authors.