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Update: New Employer Accommodations on Contraceptive Coverage Proposed
In August 2014, federal agencies issued
a proposed rule and
an interim final rule to better accommodate the religious objections of employers to providing coverage for contraceptive services. A
fact sheet on the rules was also released, as was
a notice on the revision of the form used to collect information on religious objections to contraceptive coverage. To learn more, see the
SHRM Online article
Proposed Accommodation for Contraceptive Coverage.
In the wake of the U.S. Supreme Court’s
Hobby Lobby ruling, the U.S. Department of Labor (DOL) is reminding employers that timely notice must be provided to health plan participants of reductions in coverage.
The Supreme Court ruled in June that closely held for-profit companies may refuse to offer insurance coverage of specific
birth control methods required under the Affordable Care Act if they conflict with the owner’s religious beliefs. The ruling was restricted to closely held companies (those with a small number of shareholders) whose owners hold sincere religious beliefs, such as the firms that sued the Department of Health and Human Services in this case: 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.
New guidance, posted online in question-and-answer format by the DOL on July 17, 2014, states that closely held for-profit companies that cease providing coverage for some or all contraceptive services based on religious objections
must notify plan participants and beneficiaries within 60 days.
The DOL’s longstanding regulations covering health plans subject to the Employee Retirement Income Security Act (ERISA) require that summary plan descriptions (SPDs) include the extent to which preventive services (including contraceptive services) are covered under the plan. The new guidance reaffirms, “if an ERISA plan excludes all or a subset of contraceptive services from coverage under its group health plan, the plan's SPD must describe the extent of the limitation or exclusion of coverage. For plans that reduce or eliminate coverage of contraceptive services after having provided such coverage, expedited disclosure requirements for material reductions in covered services or benefits apply.”
Disclosure generally must be made no later than 60 days after the date of adoption of a modification or change to the plan that is a material reduction in covered services or benefits, the guidance notes. State disclosure requirements may also apply.
The new guidance “references a ‘closely held for-profit company,’ which pretty clearly indicates that the DOL is applying a very narrow reading of the court’s decision, and non-closely held companies would be in for a fight later” if they eliminate coverage of Food and Drug Administration-approved contraceptive methods,
commented Keith R. McMurdy, a partner at Fox Rothchild LLP, in a post on the law firm’s Employee Benefits Legal Blog.
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter
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