CMS Provides Guidance for Employers with Religious or Moral Objections to Contraceptive Coverage

On Nov. 30, 2017, CMS issued a memorandum related to coverage for women’s contraceptive services. As background, PPACA requires all non-grandfathered group health plans to provide coverage for certain preventive care services with no cost-sharing. Those services include all FDA-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity as prescribed by a health care provider. There had previously been an exemption in place for plans sponsored by religious employers, such as churches and synagogues. There was also an accommodation process in place for religiously affiliated nonprofit organizations that didn’t qualify for the exemption and also for closely held, for-profit entities with religious objections. Under the accommodation process, the plan would still provide contraceptive coverage to participants, but the services would be provided directly by the insurer without involvement or payment by the employer plan sponsor.

On Oct. 13, 2017, HHS, DOL and the Treasury Department jointly issued interim final rules that extend the exemption to all employers (except non-federal governmental employers) and health insurance issuers that have a sincerely held religious objection to providing some or all contraceptive benefits. The exemption was also extended to nonprofit employers (except for non-federal governmental employers), for-profit employers that aren’t publicly traded, and health insurance issuers that have a sincerely held moral objection to providing some or all contraceptive benefits. The accommodation process is also available to employers with religious or moral objections. These rules were covered in detail in the Oct. 17, 2017, edition of Compliance Corner.

The newly issued memorandum provides guidance related to the notice that must be provided by plans that take advantage of the exemption or accommodation. If the plan previously took advantage of the accommodation and now wishes to take advantage of the exemption, the insurance issuer, the plan, the employer plan sponsor or the third-party administrator must provide notice to the plan’s participants. The notice must be provided at least 30 days prior to the beginning of the plan year. If the 30-day notice isn’t distributed prior to the beginning of the plan year or if the change is made in the middle of the plan year, the notice must be provided at least 60 days prior to the effective date of the exemption (as required under the SBC notification rules).

Employers with sincerely held religious or moral objections to providing contraceptive coverage that wish to pursue the exemption or accommodation are encouraged to work with outside counsel and their insurer before implementation.

CMS Memorandum »