United States: Final Affordable Care Act Regulations on the Exemption of Contraceptives Coverage by Religious Employers and Student Health Insurance

The final regulations retain the definition of a religious employer, modify the accommodations provided for eligible organizations that object to contraception coverage on religious grounds, and describe how contraceptives will be provided and paid for under both a fully insured and a self-insured group health plan.


The U.S. Departments of Labor, Health and Human Services, and the Treasury (the regulators) released final regulations on July 2, 2013, regarding coverage of certain women's preventive services under the Affordable Care Act.

The applicability date of these final regulations, with the exception of the amendments to the religious employer exemption, apply to group health plans and health insurance issuers for plan years beginning on or after January 1, 2014.  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.

The final regulations retain the definition of a religious employer, modify the accommodations provided for eligible organizations that object to contraception coverage on religious grounds, and describe how contraceptives will be provided and paid for under both a fully insured and a self-insured group health plan.

Definition of Religious Employer

The final regulations maintain the February 2013 proposed regulation's definition of a religious employer.  A religious employer continues to be defined as one that is organized and operates as a nonprofit entity and is described in sections 6033(a)(1) and 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code (Code).  Sections 6033(a)(3)(A)(i) and (iii) of the Code refer to churches, their integrated auxiliaries, and conventions or associations of churches, as well as to the exclusively religious activities of any religious order.

Accommodations for Eligible Organizations

In addition to religious employers, the final regulations establish accommodations for eligible organizations that meet the self-certification standard.  Each organization seeking to be treated as an eligible organization can avoid contracting, arranging, paying or referring for contraceptive coverage as long as it self-certifies, prior to the beginning of the first plan year to which an accommodation is to apply, that it meets the definition of an eligible organization.

Definition of Eligible Organization

The final regulations retain the definition of an eligible organization set forth in the proposed regulations.  An eligible organization is an organization that (1) opposes providing coverage for some or all of the contraceptive services required to be covered under section 2713 of the Public Health Service Act (PHSA) and the companion provisions of the Employee Retirement Income Security Act (ERISA) and the Code on account of religious objections; (2) is organized and operates as a nonprofit entity; (3) holds itself out as a religious organization; and (4) self-certifies that it satisfies the first three criteria (as discussed in more detail later in this section).  The final rule makes no accommodation for secular or for-profit employers.

Self-Certification

The self-certification only needs to be executed once. A copy of the self-certification then must be provided to any new health insurance issuers or third-party administrators if the eligible organization changes issuers or third-party administrators.  An issuer or third-party administrator may not require any documentation from the organization beyond its self-certification as to its status as an eligible organization.  EBSA Form 700, which should be used for the self-certification, also has been published.  The self-certification does not have to be submitted to regulators but must be available for examination upon request.  A copy of the self-certification must be maintained for at least six years pursuant to ERISA record retention requirements.

Contraceptive Services for Participants, Beneficiaries, Student Enrollees and Their Covered Dependents in Insured Group Health Plans

With respect to an insured health plan (including a student health plan), if an eligible organization provides the self-certification form to its insurance issuer, the issuer must exclude contraceptive coverage from the religious organization's group health coverage.  The final regulations permit issuers to use a standard exclusion from a group health insurance policy for all recommended contraceptive services.  Alternatively, issuers may, at their option, choose to offer customized exclusions from group health insurance policies based on the differing religious objections to contraceptive coverage of each eligible organization (or to offer several different but standardized exclusions from group health insurance policies from which eligible organizations may choose).

Regardless of whether an issuer uses a standard or customized exclusion from a group health insurance policy (or student health insurance coverage), the issuer must separately provide payment for preventive care contraceptive services excluded under the insurance coverage at no cost to plan participants and beneficiaries (or student enrollees and their covered dependents) for as long as they remain enrolled in the coverage.  The proposed regulations required the issuer to provide individual health insurance policies covering contraceptive services without cost-sharing, premium, fee or other charge to plan participants or beneficiaries (or student enrollees and their covered dependents) or to the eligible organization or its plan.  Under the final regulations, the issuer is not required to issue to plan participants and beneficiaries (and student enrollees and their covered dependents) individual health insurance policies covering contraceptive services.  The issuer must, however, as a federal regulatory requirement, provide payments for contraceptive services for plan participants and beneficiaries (and student enrollees and their covered dependents), separate from the group insurance coverage.  Issuers have flexibility in how to structure these payments and achieve cost neutrality, provided that they are able to show that eligible organization premiums were not used to pay for contraceptive care.  The regulators referred to this change as a simplified approach.

Contraceptive Services for Participants and Their Covered Dependents in Self-Insured Group Health Plans

For eligible organizations with self-insured health plans, if the eligible organization provides its third-party administrator with the self-certification form indicating its objection to contraception coverage, the third-party administrator is itself obligated to pay for preventive care contraceptive services at no cost to plan participants or covered dependents or to the eligible organization.  The third-party administrator becomes an ERISA section 3(16) plan administrator and claims administrator solely with respect to contraceptive services for plan participants and their covered dependents.  The final regulations specifically require the third-party administrator to take on the statutory responsibilities of a plan administrator under ERISA, including the provision of a Summary Plan Description, the filing of annual Form 5500 filings, and other disclosures required under ERISA section 104, although it is unclear how that would be done in practice (for example, the regulations do not require the creation of a separate ERISA-covered "plan" to provide contraception benefits).

An eligible organization is considered to comply with section 2713 of the PHSA and the companion provisions in ERISA and the Code if it provides a copy of its self-certification (described previously) to all third-party administrators with which it or its plan has contracted.  The self-certification for a self-insured plan must also (1) state that the eligible organization will not act as the plan administrator or claims administrator with respect to contraceptive services or contribute to the funding of contraceptive services; and (2) cite ERISA regulations sections, 29 CFR 2510.3-16 and 26 CFR 54.9815-2713A and 29 CFR 2590.715-2713A, which explain the obligations of the third-party administrator.  Upon receipt of the copy of the self-certification, the third-party administrator has the right to decide not to enter into, or remain in, a contractual relationship with the eligible organization to provide administrative services for the plan.

Assuming the third-party administrator agrees to enter into, or remain in, the contractual relationship with the eligible organization, the third-party administrator must then provide or arrange separate payments for contraceptive services without cost-sharing, premium, fee or other charge to plan participants or their covered dependents, or to the eligible organization or its plan.  The third-party administrator can provide such payments on its own, or it can arrange for an issuer or other entity to provide such payments.  In either case, like the payments for contraceptive services under the accommodation for insured plans of eligible organizations discussed previously, the payments are not considered health insurance policies.

With respect to these types of self-insured arrangements, the eligible organization may not directly or indirectly interfere with the third-party administrator's efforts to provide or arrange separate payments for contraceptive services for participants or their covered dependents in the plan, or directly or indirectly seek to influence the third-party administrator's decision to provide or arrange such payments.

The cost of preventive care contraceptive services paid by a third-party administrator (or by an insurer under contract with the third-party administrator to provide the coverage) will be funded through an adjustment to the federally facilitated exchange (FFE) user fees paid by a participating insurance issuer.  An insurance issuer that offers a plan through an FFE may qualify for a reduction to the FFE user fee to the extent that the issuer either (1) made payments for contraceptive services on behalf of a third-party administrator; or (2) is seeking a fee adjustment with respect to a third-party administrator that itself paid for preventive care contraceptive services for an eligible organization.  An insurance issuer that intends to seek an FFE user fee adjustment must give notice to the U.S. Department of Health and Human Services by the later of January 1, 2014, or the 60th calendar day after it receives a self-certification from an eligible organization.  The final regulations describe the process for claiming the FFE fee adjustment.

Notice of Availability of Separate Payments for Contraceptive Services

Consistent with the proposed regulations, the final regulations direct that, for any plan year to which an accommodation is to apply, a health insurance issuer providing separate payments for contraceptive services pursuant to the accommodation, or a third-party administrator arranging or providing such payments (or its agent), must provide timely written notice about this fact to plan participants and beneficiaries in insured or self-insured group health plans (or student enrollees and their covered dependents in student health insurance coverage) of eligible organizations.  The notice must be provided contemporaneous with (to the extent possible), but separate from, any application materials distributed in connection with enrollment (or re-enrollment) in coverage that is effective beginning on the first day of each plan year to which the accommodation applies.  The notice must indicate that the eligible organization does not fund or administer contraceptive benefits, but that the issuer or third-party administrator will provide separate payments for contraceptive services at no cost.  The final regulations provide model language that may be used to satisfy this notice requirement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Fox Rothschild LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Fox Rothschild LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions