On July 10, the U.S. Department of Health and Human Services (HHS), the U.S. Department of Labor (DOL), and the U.S. Department of the Treasury issued final regulations on coverage of certain preventive services under the Affordable Care Act (ACA). Specifically, the new regulations focus on the ACA’s controversial “contraceptive mandate.”
The contraceptive mandate
Under the ACA and related regulations, many health insurance plans must cover certain preventive services for women without cost-sharing (e.g., coinsurance, copayments, and deductibles). The preventive services include contraceptive methods and counseling—or more specifically, “all Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.”
However, there are exceptions to the mandate. For example, the requirement to cover preventive services doesn’t apply to grandfathered health plans or certain religious employers. Additionally, HHS has provided an accommodation to nonprofit organizations with religious objections to providing contraceptive coverage.
The new regulations set out another way for nonprofit religious organizations eligible for an accommodation to give notice of their religious objections to providing contraceptive services coverage. Under the regulations, eligible organizations could notify HHS in writing of their religious objections to providing such coverage (instead of filling out the DOL form to provide to their insurer or third-party administrator). HHS and/or the DOL will then notify insurers and third-party administrators so employees who are enrolled in the plans of such organizations will receive separate coverage for contraceptive services, with no additional cost to employees and no involvement by the employers.
The departments also addressed closely held for-profit entities in the new regulations. The guidance was necessary after the U.S. Supreme Court held last year in Burwell v. Hobby Lobby Stores, Inc., that the ACA’s contraceptive mandate violated the Religious Freedom Restoration Act of 1993 (RFRA) as it is applied to “closely held corporations.”
The new regulations extend the accommodations available to nonprofit religious organizations to closely held for-profit entities. The rules also clarify that the definition of “closely held for-profit entity” means an entity that is not publicly traded and that has:
- An ownership structure under which more than 50 percent of the organization’s ownership interest is owned by five or fewer individuals; or
- A substantially similar ownership structure.
Additionally, the regulations provide that all ownership interests held by members of a family are treated as being owned by one individual. According to the departments’ news release, they “believe that this definition includes all of the for-profit companies that have challenged the contraceptive-coverage requirement on religious grounds.”