Proposed Rule Addresses Contraceptive Mandate for Non-Profit Religious Organizations
February 4, 2013
On February 1, 2013, the Departments of Health and Human Services, Treasury and Labor issued guidance on the provision of coverage for contraceptives with no cost-sharing for non-profit religious organizations. The proposed regulations pertain to women’s preventive services that must be covered, without cost-sharing, by non-grandfathered plans under the Patient Protection and Affordable Care Act (PPACA). The services include all Food and Drug Administration (FDA)-approved contraceptives.
The proposed rule outlines:
- An expanded definition of what qualifies a religious employer for an exemption
- How women working for non-profit religious organizations can obtain contraceptives without cost-sharing through an individual policy that is administered separately from their employer’s plan
- How the contraceptives without cost-sharing will be paid for
Religious employers meeting a strict set of criteria are exempt from the contraceptive coverage requirement for their employees. Some non-profit religious employers oppose covering and paying for contraceptives but do not qualify for this exemption. Such employers are addressed by the proposed rule, which is effective for plan years beginning on or after August 1, 2013.
Non-Profit Religious Organizations
A non-profit religious organization is a group such as a faith-based hospital, university or charity that:
- Has religious objections to providing coverage for some or all of the contraceptive services required under PPACA
- Operates as a non-profit organization
- Identifies itself as a religious organization
- Certifies to its insurer or administrator that it meets these criteria and defines the contraceptive services for which it objects to providing coverage
This rule will also apply to non-profit religious educational institutions that provide student health insurance coverage.
Clarification of Religious Employers that are Not Required to Cover Contraceptives
Religious employers are exempt from providing contraceptive coverage if the employer has religious objections. The definition of a religious employer has been expanded to include charitable organizations affiliated with churches and other houses of worship.
Under previous proposed regulations, the definition of a religious employer applied primarily to churches. Under the new proposed regulation, an employer can be considered a religious employer even if it employs or provides services to people of different religious faiths.
How Contraceptives will be Covered for Non-Profit Religious Organizations
Non-profit religious organizations who qualify for the exemption do not have to cover any contraceptives to which they object on religious grounds. Instead, their employees will be automatically enrolled in separate individual health insurance policies that provide contraceptive coverage at no cost to the employer or the employee.
For insured plans, the current insurer for that employer will provide and pay for the contraceptive coverage through an individual policy. For self-insured plans, the current administrator for that employer will arrange for an insurer to provide and pay for the coverage. The insurer will notify plan participants that the coverage is available.
Insurers that provide and pay for contraceptive coverage for self-insured plans will be compensated through a reduction in fees they pay to offer plans through federally administered Exchanges.
No Change in Contraceptive Coverage Requirements for Other Businesses
The rule does not change the contraceptive coverage requirement for employers that don't have a formal religious affiliation but whose owners oppose contraceptive coverage.
Comments are due on the proposed regulations by April 8, 2013.
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