Today (January 20, 2012), the U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced it is declining to broaden an exemption for mandatory contraceptive coverage required for non-grandfathered group health plans as part of the Patient Protection and Affordable Care Act (PPACA), but with a limited extension for qualifying religious organizations to delay implementation for another year— until August 1, 2013 — to allow more time for those employers to comply with the new law.
As a result of today's announcement, beginning August 1, 2012, most employers with non-grandfathered group health plans will be required to follow the HHS interim rule issued in August 2011 that requires coverage of preventive care services, including coverage under the plan for contraceptive services without charging a co-pay, co-insurance or a deductible. The interim rule includes a narrow exemption for certain non-profit religious employers to continue to not cover contraceptive services. That exemption, however, only applies to employers whose primary purpose is to inculcate religious values and that mainly employ and serve individuals who share those same values. At the time, HHS did not offer clear guidance as to which employers would qualify for this exemption, causing considerable confusion for certain employers. Many employers argued that this definition was too narrow—excluding a wide range of religious universities, hospitals and schools that do not currently offer birth control coverage. Many employers expected the HHS to broaden the exemption in its announcement today.
However, in today's announcement, the HHS declined to broaden the category of employers exempted from providing contraceptive coverage. Ms. Sebelius stated:
This rule is consistent with the laws in a majority of states which already require contraception coverage in health plans, and includes the exemption in the interim final rule allowing certain religious organizations not to provide contraception coverage. Beginning August 1, 2012, most new and renewed health plans will be required to cover these services without cost sharing for women across the country.
HHS did provide a limited extension for nonprofit employers who, based on religious beliefs, do not currently provide contraceptive coverage in their insurance plan. As a result, qualifying religious employers that do not provide contraceptive coverage today under their group health plan will be provided an additional year to comply with the new law. Employers wishing to take advantage of the additional year must certify that they qualify for the delayed implementation. No guidance has been issued as of the date of this publication regarding the process for certification to enable the delay in coverage under these most recent guidelines. Of course, grandfathered health plans will continue to be exempt from these requirements as long as grandfathered plan status can be maintained.
Keeping You Informed
The attorneys in the Polsinelli Shughart Employee Benefits group will monitor the status of today's announcement and continue to provide you with updated information.
For More Information
If you have any questions about what this ruling means for your organization, please contact any member of the Employee Benefits & Executive Compensation practice group.
