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
 
In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.