Federal Agencies Issue Final ACA Contraceptive Mandate Rules
Author: Marta Moakley, XpertHR Legal Editor
July 13, 2015
The Departments of Health and Human Services (HHS), Treasury and Labor have issued final rules regarding coverage under the Affordable Care Act (ACA) for contraceptive services. The coverage was debated in the 2014 Supreme Court Hobby Lobby ruling. The rules are scheduled to be published in the July 14, 2015 Federal Register, and will become effective 60 days later, or September 14, 2015.
In Hobby Lobby, the Supreme Court held that owners of closely held for-profit corporations with religious objections to the ACA's contraceptive mandate were protected under the Religious Freedom Restoration Act of 1993 (RFRA). However, not all of an employer's religious objections would be so protected, such as objections with respect to vaccinations or blood transfusions.
The final rules apply the Hobby Lobby ruling and other applicable orders and finalize the provisions of the:
- Interim final regulations issued in August 2014 related to the process an eligible organization uses to provide notice of its religious objection to the coverage of contraceptive services;
- Proposed regulations issued in August 2014 related to the definition of eligible organization, which would have expanded to for-profit corporations the set of entities that may avail themselves of a religious accommodation with respect to the contraceptive mandate; and
- Interim final regulations issued in July 2010 related to the coverage of preventive services.
Over 75,000 comments were submitted during the proposed rules' comment period.
The final regulations provide that, by definition, a closely held for-profit entity:
- Is not a nonprofit entity;
- Is not publicly traded;
- Must have more than 50% of the value of its ownership interests owned directly or indirectly by five or fewer individuals, or must have an ownership structure that is substantially similar; and
- Objects to providing contraceptive coverage based on its owners' religious beliefs.
The regulations use a more flexible definition of closely held corporation than the tax law does. In addition, like nonprofit organizations eligible for an accommodation, eligible for-profit organizations may provide notice of a need for accommodation at any time.
Both nonprofit and closely held for-profit institutions of higher education, with respect to their insured student health plans, may qualify as eligible organizations under the final regulations.
An entity may seek further information regarding whether it qualifies for the accommodation by sending a letter describing its ownership structure to HHS (using the procedure required by HHS).
The final regulations continue to allow an eligible organization that needs a religious accommodation with respect to the contraceptive mandate to choose between:
- Using EBSA Form 700 for self-certification; or
- Notifying HHS in writing of its religious objection to coverage of all or a subset of contraceptive services. The notice must include the:
- Name of the eligible organization and the basis on which it qualifies for an accommodation;
- Objection to coverage based on sincerely held religious beliefs;
- Plan name and type (i.e., student health insurance plan or church plan); and
- Name and contact information of any of the plan's third party administrators and health insurance issuers.
The final rules apply beginning on the first day of the first plan year (or, for individual health insurance coverage, the first day of the first policy year) that begins on or after the final rules' effective date.
The Department of Labor, Employment Benefits Security Administration; HHS, Center for Medicare & Medicaid Services; and the Healthcare.gov website provide additional information regarding implementation of the final rules.