Proposed Regulations Would Create “Individual Contraceptive Arrangement,” Rescind Contraceptive Coverage Mandate’s Moral Exemption

The IRS, DOL, and HHS have issued proposed regulations that would provide an additional method for individuals to obtain no-cost contraceptive services if their health plan or insurer does not provide such services due to a religious exemption. Under final regulations issued in 2018, qualifying religious employers and other entities with sincerely held religious beliefs or moral convictions are exempt from the Affordable Care Act’s contraceptive coverage mandate, which generally requires coverage of contraceptive services without cost-sharing. Exempt entities may voluntarily engage in an accommodation process that allows plan participants to receive contraceptive services directly from a TPA or insurer without the employer’s involvement (see our Checkpoint article). In an FAQ (Part 48) issued in 2021, the agencies announced they were considering changes to the 2018 regulations “in light of recent litigation” (see our Checkpoint article). Here are highlights of the proposal:

• Individual Contraceptive Arrangement. Leaving in place the existing religious exemptions and accommodations, the agencies have proposed to add a new “individual contraceptive arrangement” through which individuals enrolled in plans or coverage sponsored or arranged by entities with religious objections could access no-cost contraceptive services without the involvement of their employer, group health plan, plan sponsor, or insurer. A provider or facility that furnishes contraceptive services in accordance with the individual contraceptive arrangement would be reimbursed through an arrangement with an Exchange insurer, which would request an Exchange user fee adjustment to cover the costs.

• Moral Exemption Rescinded. The proposed regulations would rescind the 2018 regulations’ moral exemption and accommodation. The agencies explain that “there have not been a large number of entities that have expressed a desire for an exemption based on a non-religious moral objection” and that there is no legal obligation (including under the Religious Freedom Restoration Act) to provide such an exemption.

EBIA Comment: As highlighted in the HHS news release, this proposal comes on the heels of the U.S. Supreme Court’s Dobbs decision (see our Checkpoint article), which has heightened the Biden administration’s focus on access to contraceptive services. The agencies previously issued post-Dobbs FAQs (Part 54), addressing required coverage of contraceptives by non-grandfathered health plans and insurers (see our Checkpoint article). For more information, see EBIA’s Health Care Reform manual at Section XII.C (“Coverage of Preventive Health Services”). See also EBIA’s Group Health Plan Mandates manual at Section XIV.E (“Contraceptive Coverage: Exemptions and Accommodations Based on Religious Beliefs and Moral Convictions”) and EBIA’s Self-Insured Health Plans manual at Section XIII.C.1 (“Preventive Health Services”).

Contributing Editors: EBIA Staff.