Under health care reform, group health plans must offer preventive health services to women without cost-sharing. Those preventive services include contraceptive coverage.
In 2011, guidance was released exempting "religious employers" from the mandate to cover contraceptive services. Religious employers were defined as certain non-profit employers whose purpose was the "inculcation of religious values." To be eligible for the exemption, a religious employer had to primarily employ and serve persons with the same religious tenets.
Religious groups thought that the exception was too narrow. In 2012, an enforcement safe harbor was released which said that the government would not enforce the mandate to cover contraception until the first plan year beginning on or after August 1, 2013 for nonprofit organizations that had not covered contraceptive services under a plan since February 10, 2012 due to religious beliefs and had notified participants that contraceptive services would not be covered.
A few weeks ago, additional guidance in the form of a proposed rule was issued which, if finalized, would broaden the exemption. The proposed rule expands the definition of religious employer to include all churches, church-related auxiliaries, houses of worship, conventions/associations of churches and affiliated organizations of any religious order, regardless of who they employ or serve.
In addition, a non-profit faith-based group (such as a non-profit religious hospital or school of higher education) that objects to contraceptive coverage for religious reasons, but does not qualify for the religious exemption, may receive an accommodation that provides participants separate contraceptive coverage with no co-pays, but at no cost to the organization. This opt out does not apply to for-profit groups.
To take advantage of the opt-out, the organization must self-certify (annually) that it objects to providing contraceptive coverage based on religious reasons, is organized and operates as a non-profit religious organization, and specifies the contraceptive services it will not cover. For an insured plan, the religious employer would provide notice, through a copy of the self-certification, to the insurer. The insurer would have to offer a separate individual policy covering contraceptives at no cost to plan participants, and provide notice of the availability of the special coverage option. The recent guidance did not go into as much detail on self-funded plans, but it is expected that religious employers with self-funded plans would provide notice to their third-party administrator. The third-party administrator would work with an insurer to arrange no-cost contraceptive coverage through individual policies.
The proposed guidance is intended to provide participants with the contraceptive coverage required under health care reform, while relieving the religious employer of the obligation to directly provide the coverage.
