Health Plans Dropping Contraceptive Coverage Required to Notify Plan Participants

Author: Gloria Ju

July 24, 2014

Closely held, for-profit corporations that choose to drop some or all contraceptive coverage from their health plans must notify plan participants and beneficiaries of the change, according to an FAQ published by the US Departments of Labor, Health and Human Services and the Treasury (the Departments). The Departments released the regulatory guidance on this notification requirement in light of the Supreme Court's decision in Burwell v. Hobby Lobby.

The FAQ specifically applies to closely held, for-profit corporations and to plans subject to the Employee Retirement Income Security Act (ERISA). ERISA requires Summary Plan Descriptions (SPDs) to include a description of the extent to which a health plan covers preventive services (including contraceptive services). If a group health plan excludes some or all contraceptives, the SPD must describe the extent of the limitation or exclusion of coverage. If a plan reduces or eliminates contraceptive coverage that had been provided, ERISA requires expedited disclosure requirements for material reductions in covered services or benefits. Participants and beneficiaries generally must be notified within 60 days after the adoption of the change.

The Departments warn that other disclosure requirements may apply, such as under a state insurance law applicable to health insurance issuers.

The Departments published the FAQ after the Supreme Court held in Hobby Lobby that closely held, for-profit corporations are not required to comply with the Affordable Care Act's contraceptive coverage mandate if they have religious objections. A bill countering the decision fell in the Senate the day before the FAQ was released.