Employer-Provided Birth Control Coverage Continues To Decline

Employers should consider impact on recruitment and retention

Stephen Miller, CEBS By Stephen Miller, CEBS June 6, 2017
Employer-Provided Birth Control Coverage Continues To Decline

The share of employers that say they provide contraceptive coverage has been declining since 2014, a survey by the Society for Human Resource Management (SHRM) shows. But what this finding reveals may not be as clear-cut as it at first seems.

SHRM's 2017 Employee Benefits survey report, to be published later this month, is based on a January/February survey of randomly selected SHRM members, with 3,227 HR professionals responding. The findings on contraceptive coverage are shown in the chart below.

17-0748 contraceptive coverage graph 2.jpg

(Click on chart to view in a separate window.)

While smaller organizations are less likely than larger organizations to offer contraceptive benefits, "the decrease in this benefit offering was across the board regardless of organization size," said SHRM researcher Tanya Mulvey, the survey's project leader. Nevertheless, the decrease was statistically most significant for organizations in the 1-to-99 and 100-to-499 employee ranges, and "those organizations probably had the biggest impact on the overall results."

A Trend or a Quirk?

The Affordable Care Act (ACA) and its implementing regulations require that nongrandfathered health plans cover at least one of 18 Food and Drug Administration (FDA)-approved birth control methods. The law does not require small employers with fewer than 50 full-time employees or part-time equivalents to offer health insurance as a benefit. However, those that do must provide coverage that complies with the ACA's obligations, such as providing female employees and dependents with contraceptive coverage on a first-dollar basis (that is, with no cost sharing).

"While some small employers voluntarily offer health insurance, others opted not to offer health care once the ACA was enacted due to the high cost of implementation," said Chatrane Birbal, SHRM's senior advisor for government relations. Health care coverage among smaller employers has been falling in recent years—which could, in part, explain declining rates of contraceptive coverage. Also, "some employers are encountering difficulties implementing the ACA requirements."

Another possible explanation for the finding: Because the ACA requires most health plans to provide contraceptive coverage, "respondents may not be considering this a stand-alone coverage option" any longer, Mulvey noted, since they are not offering separate contraceptive-only insurance policies.

It's possible, for instance, that organizations that previously had offered contraceptive coverage as a separate benefit (or had to make a request to their broker to include this coverage) now don't discuss it because it's automatically covered by the standard health plan.

Future surveys may clarify whether such an interpretation of the question could have affected the results.

[SHRM members-only toolkit: Complying with and Leveraging the ACA]

Exemptions and Accommodations

Houses of worship are exempt from the ACA's so-called contraceptive mandate, and the Obama administration crafted an accommodation to allow religiously affiliated nonprofit employers to request that their insurer or third-party administrator pay for contraceptive coverage.

After the Supreme Court's June 2014 ruling in Burwell v. Hobby Lobby, the Obama administration issued a final rule in July 2015 that extended this accommodation to closely held for-profits with religious objections to providing coverage for some or all of the FDA-approved contraceptive methods.

Some employers—especially religiously affiliated nonprofits—maintain that the accommodation violates their religious beliefs because they are still complicit in the provision of contraceptives, and that the FDA-approved methods include so-called morning-after pills and certain intrauterine devices that are "abortifacients" that induce miscarriages.

In response, the Trump administration is now considering a broader exclusion that would let any employer request an exemption from the ACA requirement on moral or religious grounds. Employers seeking an exemption would not need to notify the government under the drafted but not yet released proposal, though they would have to make clear in their health plan documents that they do not cover contraception and would be required to notify their employees of any change in benefits.

In 2015, 10 percent of nonprofits with over 1,000 workers elected the accommodation, the Kaiser Family Foundation reported, and many of these larger nonprofits are likely faith-based health systems or educational institutions. The number of closely held for-private employers that have requested the accommodation since it became available in 2015 wasn't evident.

Employee Considerations

Even if allowed to do so through a broader exemption or stand-alone legislation, "it's unlikely that most employers would now choose to decline to provide contraceptive coverage," Birbal said. Looking ahead, employers should weigh "whether making these types of changes to benefits packages could have a negative impact on retention and recruitment of employees," she noted.

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