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Final Regulations Expand Exemptions From the Contraceptive Mandate

Monday, November 19, 2018
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Of all the components of the Affordable Care Act (ACA), the contraceptive mandate has probably caused the most controversy. It has certainly inspired a number of lawsuits. These legal challenges alleged that the mandate violates certain employers’ religious liberty. The government created exceptions for certain employers who objected to the contraceptive mandate based on religious or moral beliefs. However, some employers believed that those exceptions didn’t go far enough and filed more lawsuits.

In an effort to end the litigation over this mandate, the U.S. Department of Labor, Department of Health and Human Services and Department of the Treasury issued two new regulations that expand the religious and moral exemptions. The rules were finalized Nov. 7, 2018.

To employers, it may seem like health insurance regulations change every other week, especially since the ACA went into effect. And, if they haven’t changed, there’s at least someone threatening to change them. Many employers find it impossible to keep up. That’s where you come in.

The employers on your client roster depend on you, their insurance broker, to help them stay in compliance. Let’s take a look at this latest change. We’ll walk you through it, so you can walk your clients through it later.

What Are the New Rules for the Contraceptive Mandate?

Like we mentioned above, the government issued two new rules that expand exemptions to the contraceptive mandate based on the employer’s religious or moral objections.

The Religious Exemption

Before these new rules took effect, there was a narrower religious exemption in place that applied only to churches and other houses of worship.

A heated public debate ensued. Certain church-affiliated institutions—such as schools, charities, hospitals, and universities—believed that they should also be exempt from the contraceptive mandate as well. But many other people feared that extending the exemption further would reduce access to contraception coverage for too many women.

As a compromise, the government came up with the “accommodations approach.” Under this rule, church-affiliated institutions would not have to provide contraception coverage. Instead, women insured under these plans could receive payments for contraceptive services from an independent third party.

In addition, a Supreme Court ruling created another narrow exemption to the contraceptive mandate for closely held for-profit businesses.

Under the new rules, the religious exemption is expanded in the following ways:

  • Entities and individuals that have sincerely held religious beliefs against providing contraceptive or sterilization coverage are now exempt from the mandate. In addition to churches, these entities and individuals may include:
    • Integrated church auxiliaries, conventions or associations of churches or religious orders
    • Religious nonprofit organizations
    • Private or publicly traded for-profit entities
    • Colleges and universities
    • Individuals with respect to their own coverage
    • Health insurance issuers when they provide coverage to an exempt plan sponsor or individual
    • Any other non-governmental employers
  • The accommodations approach is now optional, meaning that these employers no longer have to allow their female employees to obtain payment for contraceptive services through a third party. It also means that those female employees are no longer entitled to contraceptive coverage.

The “Moral Beliefs” Exemption

The second of these new rules provide an exemption to the contraceptive mandate for employers who object on nonreligious, moral grounds.

This exemption is narrower than the exemption based on religious objections. It only applies to certain non-governmental employers who have sincerely held moral objections to contraceptive coverage, including:

  • Nonprofit organizations
  • Privately held for-profit entities
  • Colleges and universities
  • Health insurance issuers with respect to plans that are otherwise exempt
  • Individuals with respect to their own coverage

The “moral beliefs” exemption does NOT apply to publicly held for-profit entities and non-federal governmental employers, such as county hospitals or schools.

A health insurance policy can be confusing for employers. It’s up to you to help them stay in compliance. We hope this walkthrough has helped you understand the new contraceptive mandate rules for religious and moral objections.

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