Religious exemptions to contraceptive coverage
The Affordable Care Act (ACA) requires non-grandfathered health plans to cover contraceptive services for women without cost-share. However, group health plans sponsored by certain religious employers, and group health insurance coverage provided in connection with such plans, are exempt from the requirement to cover contraceptive services for women.
On June 28, 2013, the Departments of Health and Human Services (HHS), Labor, and the Treasury issued final rules on contraceptive coverage and announced four key changes:
- Modification of the Religious Employer Exemption (REE) definition.
- Extension of the current Temporary Enforcement Safe Harbor (TESH) through Dec. 31, 2013.
- Replacement of the TESH with an Eligible Organization designation for plan years starting on or after Jan. 1, 2014, including a new self-certification form for Eligible Organizations.
- Requires that a health insurance issuer providing fully insured coverage or a third-party administrator that receives certification from an Eligible Organization provide direct payment for contraceptives services at no cost to the plan or its members.
Simplified definition of religious employer
The final rule modified the Religious Employer Exemption (REE). It eliminated requirements that a religious employer primarily employ and serve those who share its religious tenets and otherwise have inculcation of religious values as its purpose.
Prior to the final rules, a religious employer was one that met all of the following requirements:
- Has the inculcation of religious values as its purpose
- Primarily employs persons who share its religious tenets
- Primarily serves persons who share its religious tenets
- Is a non-profit organization under Internal Revenue Code section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii)
Effective for plan years beginning on or after Aug. 1, 2013, the final rules eliminate the first three prongs and modifies the fourth prong of the REE. A "religious employer" now must only be organized and operated as a non-profit organization and referred to under Code section 6033(a)(3)(A)(i) or (iii), which refers to churches, other houses of worship, their integrated auxiliaries and conventions or association of churches, as well as the exclusively religious activities of any religious order.
If you previously submitted a REE certification form to UnitedHealthcare, and wish to continue excluding contraceptive coverage for women as a religious employer, you do not need to do anything. Your current certification will remain in effect.
Customers who are not currently certified as REE, but who qualify as a religious employer and wish to exclude contraceptives, need to complete a REE certification form to self-certify that they meet the requirements under federal and state law. Customers can continue to use the current REE form and Instructions Form posted on the United for Reform Resource Center.
Extends the Temporary Enforcement Safe Harbor
Prior to the final rule, the TESH was to expire for plan years beginning on or after Aug. 1, 2013. The final rule extends this safe harbor to plan years beginning on or before Dec. 31, 2013. If the employer wishes to continue excluding covering contraceptives from its plan for plan years that begin on after Jan. 1, 2014, it must self-certify as an Eligible Organization. More information on TESH.
Introducing the Eligible Organization Designation
The final rules replace the TESH with a new exception for Eligible Organizations. An Eligible Organization is a non-profit religious organization with religious objections to covering contraceptive services. Those organizations that self-certify as an Eligible Organization may exclude coverage for some or all contraceptive services. The new Eligible Organization designation is effective for plan years starting on or after Jan. 1, 2014.
A new self-certification form from the Department of Labor must be completed by employers claiming the Eligible Organization exception for plan years beginning on or after Jan. 1, 2014: EBSA Form 700.
Issuers and TPAs to pay for contraceptive coverage
Under the final rules, a health insurance issuer providing fully insured coverage that receives an Eligible Organization certification form must provide direct payment for contraceptives services at no cost to the plan or its members. A third-party administrator (TPA) who receives an Eligible Organization certification form must either provide or arrange for an issuer or other entity to provide payment for contraceptives services at no cost to the plan or its members. In these cases, UnitedHealthcare, as the issuer or TPA, will pay for the contraceptive coverage and must notify members of the benefit.
If an Eligible Organization contracts with multiple TPAs (for example one TPA to administer medical benefits and another to handle pharmacy benefit management) each TPA would become a plan administrator with respect to the types of claims it normally processes.
Under the final rules, an issuer may require that contraceptive services be obtained in the network in order for members to obtain contraceptives without cost sharing.
The previous requirement that an organization must not have provided contraceptive coverage from Feb. 10, 2012 forward, that existed under TESH, does not apply for either the Religious Employer Exemption or Eligible Organization designation.
Offsetting contraceptive costs
The costs incurred by TPAs for contraceptive services for participants and beneficiaries in self-funded plans of Eligible Organizations may be reimbursed by adjusting the user fees paid in connection with a federally facilitated Exchange.
TPAs may not add this cost to their customers' administrative fees.
Temporary Enforcement Safe Harbor
The final rule extends this safe harbor to plan years beginning on or before Dec. 31, 2013. If the employer wishes to continue excluding covering contraceptives from its plan for plan years that begin on after Jan. 1, 2014, it must self-certify as an Eligible Organization. A non-profit religious organization seeking to qualify for the Temporary Enforcement Safe Harbor for the group health plan it sponsors must meet all of the following criteria:
- The organization must be organized and operated as a non-profit entity.
- From Feb. 10, 2012, onward, the group health plan established or maintained by the organization must not have provided contraceptive coverage at any point consistent with applicable State law, because of the religious beliefs of the organization.
- The group health plan (or another entity on its behalf, such as a health insurance issuer or third-party administrator) must provide to participants of the plan notice stating that contraceptive coverage will not be provided under the plan for the first plan year beginning on or after Aug. 1, 2012.
- The organization must self-certify that it satisfies items 1-3 above, and must document its self-certification in accordance with the procedures outlined in the HHS Bulletin.
- Neither employers, nor group health plans, nor group health insurance issuers will be subject to any enforcement actions by the Departments (HHS, Labor and Treasury) for failing to cover contraceptive services without cost-sharing if all the criteria outlined in the HHS Bulletin are met.