On February 2, 2023, the Departments of Labor (DOL), Treasury, and Health and Human Services (HHS) issued proposed regulations that address benefits coverage of contraceptive items and services without cost-sharing, as required by Public Health Service Act (PHS Act) section 2713 incorporated into ERISA through the Affordable Care Act (ACA) market reform provisions, ERISA section 715, 29 U.S.C. §1185(d), and the exemptions related to that coverage. Under current regulations, entities claiming a religious or moral objection to contraception are not required to provide contraception benefits coverage to women, as otherwise required by the ACA. The Departments request comments on multiple issues related to the proposed rule that impact employers, plans, issuers, and participants, including medical management practices utilized by plans and issuers that may improperly limit access to and impose undue costs on contraception.

The proposed rulemaking would eliminate the moral exemption to providing contraception coverage that is available to employers, plans, some colleges and universities, and issuers through regulations issued by the tri-agencies in 2018, while leaving in place the parallel religious exemption. The regulations would establish a new "individual contraceptive arrangement" for an employee, student, or enrollee of an objecting entity to access contraception without cost-sharing directly from a health provider or facility without any involvement from the objecting entity. The health provider or facility would be reimbursed through an arrangement with an issuer on a federally facilitated exchange or state exchange on the federal platform, which in turn may seek a user fee adjustment from the federal government. Employers, issuers, private colleges and universities, and others claiming a religious exemption may still invoke a voluntary accommodation made available by prior regulations whereby enrollees under their plans or coverage can access contraception without their ongoing involvement. Some exempt entities did not invoke this accommodation, leaving participants and enrollees without contraception benefits coverage.

In the preamble to the proposed rule, the Departments state that "in light of the Supreme Court's decision in Dobbs, [they] have concluded that it is all the more critical now to ensure women's access to reproductive health care and contraception services without cost-sharing, and have determined that it is necessary to provide women enrolled in plans with respect to which the sponsor or issuer has non-religious moral objections to contraceptive coverage, with such coverage directly through their plan." Dobbs v. Jackson Women's Health Organization, 597 U.S. ____ (2022); 2022WL2276808 (overturning Roe v. Wade, 410 U.S. 113 (1973). They state that the proposed rule also advances the goals of Executive Order 14076, "Protecting Access to Reproductive Healthcare Services," issued on July 8, 2023, in the wake of Dobbs, by expanding access to contraception for women enrolled in plans of or receiving health insurance coverage through objecting entities.

The nationwide impact of the elimination of the moral exemption and addition of the individual contraception arrangement on access to contraception may not be robust. According to the proposal, as of 2018 when the current religious and moral exemption rules were finalized, it was estimated that at most only 126,400 women may have lost contraception coverage due to the 2018 religious exemption final rules, and that only 15 women may have incurred contraception costs due to use of the 2018 moral exemption final rules by for-profit entities. The pending rulemaking seeks comments on the number of women that have been and will be impacted by past and present rulemaking in this area.

By contrast, non-compliant medical management techniques for contraception are likely to have a significantly greater impact on the cost of and access to contraception coverage than removal of the moral exemption. The Departments are seeking comments on whether further guidance or clarifications are needed with respect to the requirements of PHS Act section 2713, including further clarification on what constitutes a reasonable medical management technique to control costs and promote efficient delivery of care and what qualifies as an accessible, transparent, and expedient exceptions process to ensure coverage without cost-sharing of any Food and Drug Administration (FDA)-approved contraception. Congress and others have put a spotlight on compliance in this area following reports of the widespread imposition of cost-sharing and non-compliant medical management of contraceptives, and agency enforcement efforts looking at plan and issuer medical management and exceptions processes are underway.

The Departments also seek comments on whether issuers should no longer be deemed exempt merely because the plans, private colleges and universities they insure claim exemption from the contraception mandate. Under the current rules, the requirements of section 2713, which include the contraception coverage provisions, apply directly to both the group health plans that provide benefits through group health insurance policies and the health insurers that issue those policies, and any exemption claimed by a health plan or its sponsor extends to the issuer, even if the issuer itself has not claimed an exemption. The Departments asked for comments addressing challenges or concerns on requiring health insurance issuers that do not claim an exemption to independently provide coverage for contraception.

Comments to the proposed rule are due April 3, 2023.

For more information, please contact:

Joanne Roskey, jroskey@milchev.com, 202-626-5847

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