ACA News & Publications

ACA Pathways: Agencies Issue Final Regulations on Contraceptive Coverage and Religious Organizations

July 11, 2013

The Department of Health and Human Services, Department of Labor and Department of U.S. Treasury (collectively, the "Agencies") recently published final rules regarding the requirement under the Patient Protection and Affordable Care Act ("Affordable Care Act") to cover certain contraceptive services.

The rules finalize the general approach described in previously issued rules with respect to providing an exemption for religious employers who oppose birth control due to religious beliefs. They do not differ substantially from proposed regulations issued earlier this year. In addition, the final rules establish accommodations for non-profit religious hospitals and colleges and certain other non-profit religious organizations that object to providing some or all contraceptive services coverage. These accommodations include establishing a process in which employees receive separate payments for contraceptive services directly from insurers (fully insured group health plans) or third-party administrators (self-insured group health plans).


The Affordable Care Act requires non-grandfathered group health plans to cover certain contraceptive services without cost-sharing. In general, under previous regulations, coverage must be provided for plan years beginning on or after August 1, 2012. In order to develop rules for certain non-profit religious affiliated organizations with objections to providing contraceptive coverage to comply with these requirements, these organizations were granted a temporary moratorium from complying with these rules until the first plan year beginning on or after August 1, 2013. Services required to be covered include all Food and Drug Administration ("FDA") approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity, to the extent prescribed by a health care provider. Religious employers, primarily houses of worship, may exclude contraceptive coverage from their health plans for their employees and their dependents.

Full Exemption For Religious Employers

"Religious employers" are fully exempt from the Affordable Care Act's requirement to provide contraceptive services and may exclude contraceptive coverage from their health plans for employees and their dependents. Under the final regulations, the definition of what constitutes a religious employer has been simplified and clarified to eliminate any question as to whether group health plans of houses of worship that also provide educational, charitable, or social services to their communities can qualify for the exemption. Specifically, a religious employer is defined as an employer that is organized and operates as a non-profit entity and is referred to in section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code. The requirements that religious organizations have the inculcation of religious values as its purpose, or that they have to primarily employ or serve persons who share their religious tenets, have been eliminated. Thus, for a religious employer to be exempt from the contraceptive services coverage requirement, it only has to be a nonprofit entity and be a house of worship, an integrated auxiliary of the church, or a convention or association of churches.

Accommodations for Health Coverage Provided by Eligible Organizations

Certain nonprofit religious-affiliated organizations ("Eligible Organizations"), such as hospitals, colleges, and charities are not fully exempt from the federal requirement to cover contraceptive services. The final regulations set forth an accommodation so that an Eligible Organization does not have to contract, arrange, pay or refer for contraceptive coverage. However, coverage will still be separately provided to women enrolled in its health plans at no cost.

The final regulations adopt the same definition of an Eligible Organization as set forth in previously proposed regulations:

  1. The organization opposes providing coverage for some or all of any contraceptive services required to be covered under the Affordable Care Act on account of religious objections.
  2. The organization is organized and operates as a nonprofit entity (thus, this accommodation does not extend to for-profit institutions).
  3. The organization holds itself out as a religious organization.
  4. The organization self-certifies that it satisfies the above three criteria, and makes the self-certification available for examination upon request by the first day of the first plan year to which the accommodation applies. The self-certification needs only to be executed one time and is not required to be submitted to any of the Agencies, but must be maintained in the Eligible Organization's own records for a period of time, consistent with its record retention requirements under the Employee Retirement Income Security Act ("ERISA"). A self-certification form prepared by the Agencies is available at:

The following is a general description of how the accommodation process is intended to work:

  1. An Eligible Organization must complete a self-certification form and provide the health insurance issuer (if fully insured) or third-party administrator ("TPA") (if self-insured) with a copy of the self-certification, effectively putting the issuer or TPA on notice that contraceptive coverage will be expressly excluded from the Eligible Organization's group health plan.
  2. The insurer, or TPA, as applicable, will be responsible for informing the participants that it is providing contraceptive services at no cost. The communication must be provided separately from other group plan materials.
  3. The issuer, or TPA, as applicable, must segregate revenue collected from the Eligible Organization from the monies used to make payments for contraceptive services. When it makes payments for contraceptive services used by plan participants and beneficiaries, the issuer/TPA must do so without imposing any premium, fee, or other charge, or any portion thereof, directly or indirectly, on the eligible organization, its group health plan, or its plan participants or beneficiaries.
  4. According to the Agencies, with respect to fully insured group health plans, the insurers should be able to recoup the costs of covering contraceptive services from savings as a result of reduced pregnancies and improved women's health.
  5. With respect to self-insured group health plans, the costs of these payments made by TPAs for contraceptive services can be offset by adjustments in Federally-facilitated Exchange user fees paid by a health insurance issuer with whom the TPA has an arrangement. The reduction in user fees would reflect the cost of contraceptive services, as well as an allowance for profit. TPAs would be required to provide detailed information about the payments they made or arranged.

Effective Date

The simplified definition of "religious employer" becomes effective beginning with plan years on or after August 1, 2013. An Eligible Organization has until its first plan year beginning on or after January 1, 2014 to comply.

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:

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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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