By HUB’s EB Compliance Team
In a 7-2 decision, the U.S. Supreme Court ruled that the contraceptive coverage exceptions for religious and moral reasons that were released in 2017 are permitted by the Affordable Care Act (“ACA”). The nationwide injunctions that previously prevented the rules form being applied have therefore been lifted.
Background
Religious organizations and other entities which do not support the use of one or more contraceptives were made exempt from the ACA contraceptive rules based on an exemption released in late 2017. These included churches, non-profits, for profits, closely held companies, and even non-closely held companies provided they hold a religious belief against these items or services. Additionally, non-profit and closely held for-profit companies were made exempt from the requirement if they object to one or more contraceptives on non-religious, moral grounds. However, government entities and their colleges and universities are not eligible for the religious exemption.
Lawsuits quickly followed. In late December 2017, two courts put a halt to the expanded rules. Two courts issued injunctions prohibiting the federal agencies from following the new, expanded contraceptive rules. These cases left the older and less broad exemption rules in place and allowed litigation to continue. Through various appeals, the case ended up at the Supreme Court.
The Ruling
The Supreme Court ruled that the federal agencies had the authority to provide for these exemptions. The decision noted that the ACA statute passed by Congress does not expressly provide that plans are required to cover contraceptives. Instead, the ACA statute requires most health plans to cover preventive services “as provided for in comprehensive guidelines supported by the Health Resources and Services Administration,” which is part of the Department of Health and Human Services.
Five of the Justices (enough for a majority on their own) believed the language “as provided for” in ACA statute gave the agencies broad discretion to issue the exemptions. Another two of the Justices believed the ACA was ambiguous and the agencies had the ability to interpret. As a result, the exemptions were a permissible interpretation of the statute.
The Effect
Legal arguments aside, this leaves the expanded 2017 exemptions in place for now. Some commentators speculate that additional litigation is possible, so employers should keep an eye on that.
In the meantime, employers and plan sponsors who have religious or moral objections to covering contraceptives will need to review the 2017 rules carefully. If they want to exclude one or more contraceptives, they can simply exclude the items to which they object from their relevant plan materials (plan documents, summary plan descriptions, summaries of benefits and coverage, etc.). No filing with the government or anyone else is required. However, fully-insured plans may be subject to state mandates that require coverage of contraceptives and fully-insured plans will need to comply with those mandates.
Any employers or plan sponsors that exclude contraceptives may use an accommodation process to allow covered members to access contraceptives outside the plan. To use this process, a plan sponsor would essentially certify to its insurance carrier, third party administrator (“TPA”), or the Department of Health and Human Services that it has an objection to providing some or all of the contraceptives, but that it wishes to allow access to them. In that case, the insurer or TPA will provide separate coverage that will provide those contraceptives. However, because this is optional, if the plan sponsor chooses not to use it, no contraceptive coverage will be provided.
Employers and plan sponsors will need to check their plan documents and employee communications to ensure that they accurately reflect the employer’s or plan sponsor’s position. Finally, they should work with their insurers and/or third-party administrators to ensure that claims are being processed appropriately. Employers should consider the timing of any changes based on exemption’s requirements and the effect on employee relations. They should also make sure to have documentation, such as a statement of faith or moral precepts, that demonstrates the nature of their objection.
More details and steps objecting employers and plan sponsors should or may take are spelled out in our original article on these rules available here.
If you have any questions, please contact your HUB Advisor. You can also view more compliance articles in our Compliance Directory.
NOTICE OF DISCLAIMER
The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.