Comments Sought on Proposed Accommodation for Contraceptive Coverage

Will new procedures for employers with religious objections prove adequate?

By Stephen Miller, CEBS Aug 26, 2014

updated 8/27/2014

Responding to the U.S. Supreme Court’s controversial decision in Burwell v. Hobby Lobby earlier this year and related judicial actions, the Departments of Health and Human Services (HHS), Labor, and Treasury have issued a proposed rule and an interim final rule to accommodate employers that have religious objections to providing employees with contraceptive coverage with no cost-sharing, as mandated by the Affordable Care Act (ACA). The rules were published in the Federal Register on Aug. 27, 2014.

A fact sheet on the rules also was released, as was a proposed notice on the revision of the form used to collect information on religious objections to contraceptive coverage.

The proposed rule would allow certain closely held for-profit organizations to qualify as “eligible organizations” that may claim the same accommodation as nonprofit religious organizations. The interim final rule provides nonprofit religious organizations with an alternative to accommodations earlier proposed by HHS.

The administration's action “reinforces our commitment to providing women with access to coverage for contraception, while respecting religious considerations raised by nonprofit organizations and closely held for-profit companies,” said Health and Human Services Secretary Sylvia Burwell in a released statement.

Not everyone agreed. “What we see here is another revised attempt to settle issues of religious conscience with accounting maneuvers,” commented Russell Moore, president of the Ethics & Religious Liberty Commission of the Southern Baptist Convention. Added Lori Windham, senior counsel for the Becket Fund for Religious Liberty, which represents some of the employers suing HHS over the contraceptive mandate, “The government issued over 70 pages of regulations when all it needed to do was read the First Amendment.” She said her group would be reviewing the new regulations before deciding on a course of action.

But an advocate on the other side of the issue, Judy Waxman, vice president for health and reproductive rights at the National Women’s Law Center, praised the new rules, saying they “underscore the administration's commitment to protect women's ability to get the birth control they need at no additional cost, even when their employer will not be providing coverage for it.” She added, however, that “Congress must also support women's health by passing the Not My Boss's Business Act. The bottom line is that millions of women must have access to this basic and essential health care without interference from their bosses.”

Interim Final Rule for Nonprofits

The ACA requires eligible employers to provide full-time female employees with coverage for all Food and Drug Administration-approved contraceptive services prescribed by a health care provider without cost-sharing.

In July 2013, the administration published a final rule exempting houses of worship from the contraceptive requirement and offering an accommodation to religiously affiliated nonprofit organizations, such as charities and hospitals. Under the accommodation, these nonprofit organizations did not have to offer plans that included contraceptive coverage to which they objected on religious grounds, but insurers that provide employer-sponsored health plans on behalf of these employers were required to separately cover contraceptive services at no cost. The accommodation did not extend to private employers who said purchasing contraceptive coverage violated their religious beliefs.

Many religious nonprofits have since sued HHS, claiming the forms they are required to fill out to receive the accommodation involve giving consent to contraceptive coverage, among other objections, and on July 3, 2014, the Supreme Court issued an injunction in Wheaton College v. Burwell stating that, pending appeal, the college “need not use the form prescribed by the Government, EBSA Form 700, and need not send copies to health insurance insurers or third-party administrators” in order to receive the exemption.

The new interim final regulations lay out an additional way for eligible nonprofit organizations to provide notice of their religious objection to providing contraceptive coverage. The rule allows these organizations to notify HHS in writing of their religious objection to providing contraception coverage. HHS and the Department of Labor will then notify insurers and third party administrators (TPAs) so that enrollees in plans of such organizations receive separate coverage for contraceptive services, with no additional cost to the enrollee or the employer. The interim final rule solicits comments, but goes into effect on publication.

Proposed Rule for Closely Held Companies

The proposed rule would apply to closely held for-profit entities (those with a small number of shareholders) whose owners hold sincere religious beliefs, such as the firms that sued HHS in the case decided by the Supreme Court in June—Hobby Lobby, an arts and crafts chain that says it is run on biblical principles, and Conestoga Wood Specialties, a Pennsylvania cabinet-making company owned by a Mennonite family.

The proposal would extend to such firms the same accommodation available to nonprofit religious organizations, so they would not have to directly contract or pay for contraceptive coverage.

The proposal seeks comment on how to define a closely held for-profit company and whether other steps might be appropriate to implement this policy.

An Adequate Accommodation?

It is “not clear that the plaintiffs in the 100 or so lawsuits raising the contraceptive coverage issue will find the accommodation adequate,” commented Timothy Jost, a professor at the Washington and Lee University School of Law, in an analysis posted Aug. 22 on the Health Affairs Blog. “Some entities may argue that the fact that the TPAs and insurers that cover their employees or students provide contraceptives in some way implicates them in wrongful conduct. It would seem, however, that at some point the causal link must be broken, and the courts must acknowledge that the government has provided the least restrictive means of achieving its otherwise compelling interest.”

Comment Deadlines

Comments are being accepted on the proposed rule through Oct. 21, 2014, and should address potential changes to the definition of “eligible organization” entitled to the accommodation under federal regulations and any additional steps the government should take to help ensure coverage of the full range of FDA-approved contraceptives without cost-sharing.

Although the interim final rule is effective immediately, comments are being accepted through Oct. 27, 2014.

In addition, the Employee Benefits Security Administration is soliciting comments on the revision of the EBSA Form 700 information collection request through Oct. 27, 2014.

The document links above provide detailed information on submitting comments.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.​

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