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The Affordable Care Act requires contraceptive coverage without cost sharing, with limited exceptions
The Obama administration
issued clarifying guidance on May 11, 2015, reaffirming that insurance companies must cover all 18 federal Food and Drug Administration (FDA)-approved birth control methods for women without a co-pay, with limited exceptions (see the Department of Labor’s
May 2015 FAQs on coverage of preventative services, including FDA-approved contraceptives).
“Because the Departments [Health and Human Services, Labor, and Treasury] believe that their earlier guidance may have been interpreted in good faith as not requiring coverage without cost sharing of at least one form of contraceptive in each method, the Departments will only enforce this guidance with respect to plan or policy years beginning on or after 60 days from the publication of the FAQs” noted Timothy Jost, J.D., a professor at the Washington and Lee University School of Law, in a May 12
Health Affairs Blog post.
Among related issues addressed, “the FAQ clarifies that health plans and insurers must cover without cost sharing preventive services for covered dependents of enrollees as determined to be age and developmentally appropriate by the dependent’s attending provider,” Jost noted. “This includes services related to pregnancy, such as preconception and prenatal cares attending provider.”
Widespread Violations Reported
The new guidance follows reports that insurance plans were not meeting their legal obligations to provide women with contraceptive and preventative wellness services as required by the Affordable Care Act (ACA).
For instance, a May 2015 report by the nonprofit National Women’s Law Center (NWLC) delved into coverage of FDA-approved birth control methods and contended there were widespread violations of ACA requirements.
For the report
State of Birth Control Coverage: Health Plan Violations of the Affordable Care Act, the NWLC supplemented its review of plan documents with its own correspondence with insurance companies, as well as with personal stories of women gathered through its
NWLC’s CoverHer hotline, which helps women who are not receiving birth control coverage as required by law.
Women who have contacted CoverHer and used its resources “have used the information to work with their employer’s benefits staff … to fix the coverage,” according to the report. “Often, the benefits staff has been instrumental in assisting women with appeals, communicating with the issuer or third-party administrator, and ultimately fixing the coverage violation.”
America’s Health Insurance Plans, an industry group for insurers,
responded that the NWLC contraceptive study was flawed and cautioned that requiring coverage of costly brand-name contraceptive options favored by drug companies would result in needless overspending when more cost effective, and medically legitimate, methods are available.
But an April 2015
report by the Kaiser Health Foundation also concluded that “There is variation in how the contraceptive coverage provision is being interpreted and implemented by health plans. While most carriers are complying with the spirit of this requirement, there are exceptions. Because of these coverage differences some women may not have coverage without cost-sharing to the contraceptive method of their choice.”
Contraceptive Mandate: Who Gets Coverage?
The Affordable Care Act’s
contraceptive mandate took effect after August 2012 for all new health insurance plans, whether employer-provided or purchased on a public exchange or elsewhere. The federal FDA has approved 20 unique birth control methods, and the ACA requires that insurance companies cover each unique method without out-of-pocket costs.
But there are exceptions, the largest being that
grandfathered plans (those that have not been substantially altered since prior to the ACA’s enactment) do not have to comply with the contraceptive and preventative care mandates.
Also, last year in its Hobby Lobby decision, the U.S. Supreme Court ruled that closely held for-profit companies may decline to offer insurance coverage of specific birth control methods if they conflict with the owner’s religious beliefs. The Supreme Court
separately held that religious-affiliated nonprofit groups, such as the Catholic charity Little Sisters of the Poor, were temporarily exempt from the ACA’s requirements for covering birth control and other reproductive health as their cases are being adjudicated through the courts.
A companion NWLC report,
State of Women’s Coverage: Health Plan Violations of the Affordable Care Act, assessed coverage of women’s health services by analyzing coverage offered on the ACA’s public exchanges by more than 100 insurance companies in 15 states during 2014 and 2015. The report contends that more than half of the issuers were violating the ACA in issues related to maternity care, birth control and other areas of women’s health.
“Insurance companies are breaking the law by denying women coverage to which they are entitled,” alleged NWLC Vice President for Health and Reproductive Rights Gretchen Borchelt in a press release. “The Affordable Care Act has made dramatic improvements in women’s health coverage, but insurers’ failure to comply with its requirements has serious consequences that affect women every day.”
The NWLC said it has identified three major areas of health coverage noncompliance, in which some plans:
• Are not providing coverage for all FDA-approved methods of birth control, or they impose out-of-pocket costs on them.
• Will only cover generic birth control.
• Impose costs on the services associated with birth control methods.
Implications for Plan Sponsors
“Plan sponsors and their pharmacy benefit managers that currently treat all hormone-based methods as one method, or exclude any one of the FDA-approved methods, will need to make significant changes to the plan. This will likely involve discussions with both the plan’s medical administrator and pharmacy benefit administrator, as the coverage may be provided under both administrative systems,” advised a May 2015
compliance update from Segal Consulting.
The consultants further advised:
In order to assure that a plan will meet all required guidance if audited by the Department of Labor, nongrandfathered plans should review all preventive benefits currently offered against federal guidelines and assure that they are provided with no-cost sharing when offered by a network provider. The effective date for compliance is the first plan year beginning on or after July 10, 2015. While calendar-year plans have until Jan. 1, 2016, plans with August, September, October, November or December plan years will have very little time to implement the new rules. The effective date for this portion of the guidance will give plan sponsors limited time to enhance the benefit, as needed, and to develop appropriate medical-management techniques.
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter
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