Recent interim rules issued by federal authorities relaxed contraceptive-coverage requirements imposed by the Obama administration. Employers looking to roll back cost-free coverage of contraceptives under their health plans, pursuant to the interim rules, must play by the regular rules regarding notice-of-benefit cutbacks, according to recent guidance issued by the Department of Health and Human Services (HHS).
The Affordable Care Act (ACA) requires non-grandfathered health plans to cover a variety of preventive services at no out-of-pocket cost to enrollees. Federal rules included all Food and Drug Administration approved contraceptive drugs and devices among the preventive benefits these plans were required to provide.
In response to challenges from employers and groups opposed to contraception, federal authorities excepted some groups, such as churches, from the requirement and granted others an “accommodation.” The accommodation allows these groups to certify their objection to contraception and arrange for the health plan’s insurer or third-party claim payer to supply female enrollees with the contraceptive benefits outside the health plan. The U.S. Supreme Court ultimately expanded the accommodation to for-profit businesses, if they are closely-held.
Recent interim regulations issued by the Trump administration allow all employers, except state and local governments, to simply not provide contraceptive benefits under their health plans, without arranging for the accommodation, if the employer has a sincerely held religious objection to contraception. The same exemption was granted to nonprofit and nonpublicly traded, for-profit employers if they have a sincerely-held moral, but not religious, objection to contraception.
Lockton comment: For these purposes, administrators of student health plans are also considered “employers.”
The recent guidance from HHS answers the question: If an employer took advantage of the accommodation in the past, but under the new interim regulations does not wish to supply contraceptive benefits at all, must it notify its covered employees, and if so, how?
HHS says yes, the affected employees must be notified. The notice may be supplied by the employer or by the insurer or third-party administrator that was supplying the contraceptives outside the plan.
There are two alternative-timing rules for the notice.
- If the employer wishes to withdraw the in the middle of a plan year, the notice must be supplied at least 60 days prior to the effective date of the withdrawal of the accommodation. Notice must be in writing or supplied in accordance with rules for mid-year modification of information contained in a health plan’s summary of benefits and coverage (SBC). If the accommodation is actually described in the plan’s SBC, this notification method is required.
Lockton comment: This notice may also be provided electronically, in accordance with Department of Labor rules for electronic communication of ERISA-required notices. It’s also possible that, for an insured plan particularly, state insurance law might dictate additional or different notice obligations.
- If the employer wishes to withdraw the accommodation the first day of its health plan’s coming plan year, the notice must be provided in a separate written document no later than 30 days prior to the beginning of the new plan year. Presumably, such notice could also be supplied electronically, in accordance with applicable rules.