Coverage of Contraceptive Services

Under the Affordable Care Act, certain preventive services are required to be covered without cost-sharing. In August 2011, HHS released expanded guidelines for plans and insurers focusing on women’s health issues. For plan years beginning on or after August 1, 2012, non-grandfathered group health plans (fully insured and self-insured) and health insurance carriers offering group or individual health insurance coverage must cover, among other things, all FDA approved contraceptive methods for women at 100%. Although 28 states currently require insurance plans sold in the state to cover contraceptives to varying degrees, self-insured plans will be impacted by this new law since the state mandates generally do not apply to self-insured plans.

The 2011 regulations mentioned above allows churches, other houses of worship and similar organizations an exemption from covering contraception on the basis of their religious objections. In addition to this exemption, a final rule has been recently issued that applies to a larger set of religiously-affiliated organizations (such as faith-based hospitals and universities) and allows them a one-year grace period where they do not have to comply with this law. During this grace period, it is expected that the IRS, DOL and HHS will develop rules requiring that where religiously-affiliated organizations choose not to provide contraceptive coverage, it must be provided by the insurance company directly, free of charge, without involving the employer. We expect to get additional details on this, including how this will impact self-insured plans, during the transition year.

This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. ©2012 Emerson, Reid & Co. All Rights Reserved.