ACA News & Publications

ACA Pathways: Final Rules Issued on Coverage of Contraceptive Services Under ACA

July 15, 2015

On July 10, 2015, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (collectively, the Departments) jointly released final regulations on the Affordable Care Act (ACA)’s women’s preventive care coverage requirement. In addition, the regulations clarify certain other ACA preventive service coverage requirements.

The new rules finalize with minor changes the interim final rules from 2010 for preventive services coverage and also finalize last August’s proposed rules to provide an accommodation for certain closely held for-profit entities with religious objections to providing coverage for some or all contraceptive services, taking into consideration the U.S. Supreme Court ruling in Burwell v. Hobby Lobby Stores, Inc., as well as an interim order issued by the Court in Wheaton College v. Burwell.

The final rules are effective beginning with the first day of the first plan or policy year on or after September 12, 2015.

Exemption for Religious Employers and Accommodations for Religious-Affiliated Organizations

Religious employers, such as churches and other houses of worship, are exempt from the ACA’s requirement to cover contraceptives. Other church-affiliated institutions that object to providing contraceptive coverage on religious grounds, such as schools, charities, hospitals and universities, can be eligible for an accommodations approach.

Under the accommodation approach set forth in July 2013 final rules, and confirmed in these final rules, “eligible organizations” would not be directly involved with providing any contraceptive coverage to which they object on religious grounds. Payments for these contraceptive services will be provided by an independent third party, such as an insurance company or third-party administrator (TPA), directly and free of charge. An eligible organization is one that:

  1. On account of religious objections, opposes providing coverage for some or all of any contraceptive services otherwise required to be covered;
  2. Is organized and operates as a nonprofit entity;
  3. Holds itself out as a religious organization; and
  4. Self-certifies that it meets these criteria in accordance with the provisions of the final regulations.

Regarding the self-certification requirement, the organization must provide a copy of the self-certification to the carrier (for fully insured health plans), or the TPA (for self-funded health plans). A number of organizations challenged the self-certification requirement, arguing that it infringes on religious liberty because it makes the nonprofit organization complicit in the provision of birth control.

In response to these challenges, the Departments previously provided an alternative way for an eligible organization to provide notification of its objection to covering contraceptives: by notifying HHS in writing of its religious objection to providing contraceptive coverage instead of providing the self-certification to the plan’s issuer or TPA. This option has been confirmed in the final regulations.

Accommodation Extended to Certain Closely Held For-profit Businesses

As a result of the Hobby Lobby decision, the U.S. Supreme Court created a narrow exception to the contraceptive mandate for closely held for-profit businesses that object to providing coverage for certain types of contraceptives based on their sincerely held religious beliefs.

In light of the Supreme Court’s decision, the final regulations amend the definition of an “eligible organization” for purposes of the accommodations approach described above to include a closely held for-profit entity that has a religious objection to providing coverage for some or all of the contraceptive services otherwise required to be covered. Under the final regulations, a qualifying closely held for-profit entity will not be required to contract, arrange, pay or refer for contraceptive coverage. Instead, payments for contraceptive services provided to participants and beneficiaries in the eligible organization’s plan would be provided or arranged separately by an issuer or a TPA.

The final rules define a qualifying closely held for-profit entity based on an existing definition in the Internal Revenue Code. For this purpose, a “closely held for-profit entity” is an entity that:

  1. Is not a nonprofit entity;
  2. Has no publicly traded ownership interests; and
  3. Has more than 50 percent of the value of its ownership interest owned directly or indirectly by five or fewer individuals.

For purposes of this definition, all of the ownership interests held by members of a family are treated as being owned by a single individual. In addition, the rule provides that entities whose ownership structure is “substantially similar” to this definition can also qualify for the accommodation. An organization that is unsure about whether its ownership structure qualifies as “substantially similar” can seek guidance from HHS.

To be eligible for the accommodation, the for-profit entity’s highest governing body (such as its board of directors, board of trustees or owners, if managed directly by its owners) must adopt a resolution or similar action, under the organization’s applicable rules of governance and consistent with applicable state law, establishing that it objects to covering some or all of the contraceptive services on account of the owners’ sincerely held religious beliefs.

A qualifying closely held for-profit entity seeking the accommodation may use either of the two notification options available to qualifying nonprofit entities that seek the accommodation.

Disclosure of the Decision to Assert a Religious Objection to Contraceptive Services

A for-profit entity taking advantage of the accommodation must make its self-certification or notice of objection available for examination upon request by the first day of the plan year to which the accommodation applies. The self-certification or notice of objection must be maintained consistent with ERISA’s record retention requirements.

The final regulations do not establish any additional requirements to disclose the decision. The Departments believe that the current notice and disclosure standards for health plans provide individuals with an adequate opportunity to know that the employer has elected the accommodation for its group health plan and that they are entitled to separate payment for contraceptive services from another source without cost sharing.

The current standards require that, for each plan year to which the accommodation applies, a TPA that is required to provide or arrange payments for contraceptive services and a health insurance issuer required to provide payment for these services, must provide to plan participants and beneficiaries written notice of the availability of separate payments for these services contemporaneous with (to the extent possible), but separate from, any application materials distributed in connection with enrollment or re-enrollment in health coverage.

Additional Clarifications on Coverage of Recommended Preventive Services

The final regulations also include the following clarifications related to ACA’s preventive care coverage requirement:

  • Scope of recommended preventive services: The regulations finalize the requirement to provide coverage without cost sharing with respect to the following three categories of recommendations and guidelines (in addition to those provided for in the Health Resources and Services Administration (HRSA) guidelines for women):
    1. Evidence-based items or services that have in effect a rating of “A” or “B” in the current recommendations of the U.S. Preventive Services Task Force;
    2. Immunizations for routine use that have in effect a recommendation from the CDC’s Advisory Committee on Immunization Practices; and
    3. Evidence-informed preventive care and screenings for infants, children and adolescents, provided for in guidelines supported by HRSA.
  • Office visits: The final regulations clarify that, when a recommended preventive service is not billed separately (or is not tracked as individual encounter data separately) from an office visit, plans and issuers must look to the primary purpose of the office visit when determining whether they may impose cost sharing with respect to the office visit. The Departments anticipate that the determination of the primary purpose of the visit will be resolved through normal billing and coding activities, as they are for other services.
  • Out-of-network providers: The final regulations do not require plans or issuers to provide coverage for recommended preventive services delivered by an out-of-network provider. However, the regulations clarify that a plan or issuer that does not have a provider in its network who can provide a particular recommended preventive service is required to cover the preventive service when performed by an out-of-network provider and the plan or issuer may not impose cost sharing with respect to the preventive service.
  • Reasonable medical management: Plans and issuers may use reasonable medical management techniques to determine the frequency, method, treatment or setting for required preventive coverage items or services to the extent they are not specified in the relevant recommendation or guideline. A plan or issuer may rely on the relevant clinical evidence base and established reasonable medical management techniques to determine the frequency, method, treatment or setting for coverage of a recommended preventive health service.
  • Services not described: The final regulations clarify that a plan or issuer may cover preventive services in addition to those required to be covered under the ACA. For these additional preventive services, a plan or issuer may impose cost sharing at its discretion, consistent with applicable law. A plan or issuer may also impose cost sharing for a treatment that is not a recommended preventive service, even if the treatment results from a recommended preventive service.
  • Timing: The preventive coverage requirement took effect for plan years beginning on or after September 23, 2010. Coverage pursuant to recommendations or guidelines issued after that date must be provided for plan years beginning one year after the date the recommendation or guideline is issued.

Also, required coverage must be provided through the end of the plan year, even if the recommendation or guideline changes during the plan year. This rule does not apply if a recommendation or guideline is downgraded to a “D” rating or if any related item or service is subject to a safety recall or is otherwise determined to pose a significant safety concern by an authorized federal agency.

The final regulations can be found at

The certification form for use by eligible religiously-affiliated organizations is available at

The complete list of recommendations and guidelines that are required to be covered under the final regulations can found at

For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:

Burnham Benefits

This ACA Pathways is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. The information contained in this ACA Pathways includes emerging health care news from a limited perspective and does not encompass all views. The information was selected from a wide range of sources selected on the basis of their potential impact on employers and/or their employee benefit plans. For more information, please contact Burnham Benefits.

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