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This rule would finalize proposed amendments to the final rules regarding religious and moral exemptions and accommodations regarding coverage of certain preventive services under Title I of the Patient Protection and Affordable Care Act.

Statement of Need:

Previous rules, regulations, and court decisions have left many women without contraceptive coverage and access to contraceptive services without cost sharing. These rules would seek to resolve the long-running litigation with respect to religious objections to providing contraceptive coverage by honoring the objecting entities’ religious objections while also ensuring that women enrolled in a group health plan established or maintained, or in health insurance covered offered or arranged, by an objecting entity have the opportunity to obtain contraceptive services at no cost. These rules would also eliminate the exemption for entities and individuals that object to contraceptive coverage based on non-religious moral beliefs, which prevents access to contraceptive services without cost sharing.

Summary of the Legal Basis:

The Department of Labor regulations would be adopted pursuant to the authority contained in 29 U.S.C. 1002, 1135, 1182, 1185d, 1191a, 1191b, and 1191c; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 2012).

Alternatives:

In developing this rule, the Departments considered various alternative approaches. The Departments considered maintaining the exemption (along with the existing accommodations and the proposed individual contraceptive arrangement) with respect to group health plans, health insurance issuers, and institutions of higher education that have a non-religious, moral objection to contraceptive coverage. With respect to individuals enrolled in coverage through entities that have a religious objection to contraceptive coverage, the Departments considered an approach under which contraceptive coverage would be available through separate individual insurance policies that cover only contraceptives and in which participants, beneficiaries, and enrollees would have to separately enroll if they desired contraceptive coverage. The Departments also considered an approach under which, if an objecting entity contracts for a health plan without contraceptive coverage, the contraceptive coverage requirement would apply directly to the issuer in the case of a fully insured plan, or the third party administrator in the case of a self-insured plan. The issuer or third party administrator would then be required to fulfill its separate and independent obligation to provide contraceptive coverage.

Anticipated Costs and Benefits:

This rule is expected to increase access to contraceptive services without cost sharing through the individual contraceptive arrangement for eligible individuals and the elimination of the exemption for entities and individuals that object to contraceptive coverage based on non-religious moral beliefs. This rule would increase health equity given the disproportionate burden of out-of-pocket spending on contraceptive services currently faced by low-income individuals (as those individuals with lower incomes must spend a greater percentage of their incomes on contraceptive services). This rule would also lead to better health outcomes for eligible individuals by increasing access to contraceptive services and reducing unintended pregnancies.  Participating providers of contraceptive services (including clinicians, facilities, and pharmacies) and issuers would incur costs associated with entering into signed agreements for reimbursement of costs associated with the provision of contraceptive services to eligible individuals, including costs of verifying consumer eligibility and other associated administrative costs. Eligible individuals would incur costs associated with participating in the individual contraception arrangement, including confirming eligibility to their provider of contraceptive services. HHS estimates the total cost to providers of contraceptive services, issuers, and eligible individuals to be approximately $30.2 million annually. The rule would also lead to a reduction in health care costs for individuals, issuers, group health plan sponsors, and states due to reductions in unintended pregnancies.

Risks:

Departments do not have information on the number of entities and individuals that have claimed a moral exemption to providing contraceptive coverage and are therefore uncertain of the amount of the potential transfer from plans and issuers to participants, beneficiaries, and enrollees due to reduced out-of-pocket spending on contraceptive services associated with the proposed elimination of the exemption for entities and individuals that object to contraceptive coverage based on nonreligious moral beliefs. The Departments estimate that the provision of the individual contraceptive arrangement could lead to a transfer from the Federal Government to individuals (via issuers to providers of contraceptive services) of approximately $49.9 million annually. This estimate is uncertain due to the limited information available in the 2019 user fee adjustment data. The Departments are uncertain as to how the number of participating providers might vary (for example, across rural and urban areas) and how this variation might affect access to services under the individual contraceptive arrangement. Due to the lack of data, the Departments are unable to develop a precise estimate of the number of eligible individuals who might participate in the individual contraceptive arrangement. This overall lack of data leads to uncertainty regarding the magnitudes of the total cost savings to eligible individuals and any resulting potential cost savings to states (associated with reduced spending on State-funded programs that provide contraceptive services or a potential reduction in the number of unintended pregnancies that would otherwise impose costs to states).