This is the 37th in a series of WorkCite articles concerning the Patient Protection and Affordable Care Act and its companion statute, the Health Care and Education Reconciliation Act of 2010 (referred to collectively as the Act).
Recently, the Departments of Labor, Health and Human Services and the Treasury issued final regulations (the Regulations) addressing the contraceptive coverage rules under the Act’s preventive services requirements. The Regulations generally apply to non-grandfathered group health plans for plan years beginning on or after Jan. 1, 2014.
The Act generally requires non-grandfathered group health plans and insurance policies to cover the cost of contraceptives. The Regulations completely exempt from this requirement religious employers that organize and operate as nonprofit entities and are referenced in Internal Revenue Code Section 6033(a)(3)(A)(i) or (iii), i.e., churches; their integrated auxiliaries; conventions or associations of churches; and the exclusively religious activities of any religious order. The Regulations also provide an accommodation to organizations that (i) organize and operate as nonprofit entities; (ii) hold themselves out as religious organizations (e.g., religious hospitals, charities and universities); and (iii) oppose providing coverage for some or all of the contraceptive services required under the Regulations on account of religious objections (collectively, eligible organizations).
To qualify for the accommodation, an eligible organization must self-certify using EBSA Form 700 that it is eligible and must provide a copy of the certification to its insurer or third-party administrator (TPA). The certification need only be provided once and prior to the beginning of the first plan year that the accommodation is requested. Once received, insurers and TPAs may not require further affirmations or documentation regarding the eligible organization’s certification. The insurer or TPA then has sole responsibility to provide separate coverage for contraceptive services, without cost-sharing, premiums, fees or other changes to plan participants and beneficiaries.
For fully-insured plans, the issuer must pay for contraceptive coverage outside the eligible organization’s group health policy, but the Regulations do not require insurers to issue a separate individual policy covering the benefits. Self-insured plans of eligible organizations must contract with a TPA to provide contraceptive services, which in turn can fulfill its contractual obligations either directly or by making arrangements with an issuer or other entity. The TPA will serve as both the ERISA plan administrator and the claims administrator for the contraceptive coverage.
For any plan year that the accommodation applies for a particular group health plan, the insurer or TPA must notify participants and beneficiaries that it will provide separate payments for contraceptive services without cost and that the eligible organization itself is not funding or administering these benefits.
For further information, please contact either of the authors, Elizabeth A. Diller and G. William Tysse, or any other member of the McGuireWoods employee benefits team.