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Birth control benefits: The feds try again

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Federal agencies want to let more nonprofit employers get out of paying for birth control benefits, but the workers would still receive “first dollar” coverage for birth control.

“For-profit, secular employers” could not qualify for an exemption from the birth control benefits mandate.

The agencies — the Internal Revenue Service (IRS), an arm of the U.S. Treasury Department; the Employee Benefits Security Administration (EBSA), an arm of the U.S. Labor Department; and the U.S. Department of Health and Human Services (HHS) — have described their latest approach to the mandate in a new batch of proposed rules, “Coverage of Certain Preventive Services Under the Affordable Care Act” (CMS-9968-P) (RIN 00938-AR42).

“Religious accommodations in related areas of federal law, such as the exemption for religious organizations under Title VII of the Civil Rights Act of 1964, are available to nonprofit religious organizations but not to for-profit secular organizations,” officials at the agencies said in the preamble to the proposed regulations. “Accordingly, the departments believe it would be appropriate to define eligible organization to include nonprofit religious organizations, but not to include for-profit secular organizations.”

The agencies are simplifying a definition of “religious employer” that was included in an earlier final rule. Originally, a fully exempt employer included houses of worship and religious convocations. Those religious employers had to have the purpose of “inculcating religious values,” primarily employ people sharing its tenets, primarily serve people who share its religion, and be a nonprofit employer.

In the latest version, the agencies would change the definition to refer to nonprofit employers that simply meet the IRS definition of a religious employer.

The agencies hope the change will “ensure that an otherwise exempt employer plan is not disqualified because the employer’s purposes extend beyond the inculcation of religious values or because the employer serves or hires people of different religious faiths,” officials said. 

“The departments agree that the exemption should not exclude group health plans of religious entities that would qualify for the exemption but for the fact that, for example, they provide charitable social services to persons of different religious faiths or employ persons of different religious faiths when running a parochial school,” officials said.

The definition that the agencies are proposing would eliminate the need to ask about an employer’s purposes or the religious beliefs of its employees or the people the employer serves, officials said.

The agencies also would define a second category of nonprofit employers — “eligible organizations,” such as schools and hospitals organized under religious auspices. When those employers offer health plans, the insurer or administrator of the plan, not the employer sponsor, would provide and pay for birth control benefits, officials said.

The workers in the plans of nonprofit “eligible organization” employers would still get the same kinds of other birth control benefits that workers in most other plans get, officials said.

The agencies developed the draft regulations in an effort to implement preventive services coverage requirements in the Patient Protection and Affordable Care Act of 2010 (PPACA).

The draft regulations are set to appear in the Federal Register Wednesday. Comments would be due 60 days after the official publication date.

Preventive services package
PPACA calls for insurers and employer-sponsored plans to cover a basic package of preventive services on a “first dollar” basis — without imposing deductibles, co-payment requirements, coinsurance requirements, or other cost-sharing requirements on the plan enrollees.

The idea behind the provision, outlined in Section 2713 of the federal Public Health Services Act, is that having insurers pay for every dollar spent on high-value preventive services will reduce overall U.S. expenditures on health care.

More on this topic

The HHS Health Resources and Services Administration (HRSA) recommended that HHS Secretary Kathleen Sebelius put contraceptive services in the basic preventive services package. Sebelius added a contraceptive coverage mandate to the package in February 2012.

The mandate does not include coverage for surgical abortions, but it does include coverage for birth control pills, birth control devices and the “morning after pill,” which can end newly established pregnancies. 

Sebelius exempted churches, other houses of worship, and groups of houses of worship from the mandate to pay for the benefits and she also provided a “temporary enforcement safe harbor” that gave other types of nonprofit employers that were not providing contraceptive coverage until August 2013 to comply with the requirement.

Since then, many religious employers, nonprofit employers affiliated with organizations such as the Catholic Church, and for-profit employers owned or controlled by executives who oppose birth control, or certain types of contraception, on moral, ethical or religious grounds have filed suits in federal court in effort to kill the mandate or get their organizations excluded from the scope of the mandate.

Federal courts have refused to hear some cases and delayed action on others because of the judges’ desire to see what kind of rules federal agencies might include in the final birth control mandate regulations.

The agencies get a few dozen comments on some major draft PPACA implementation regulations and typically get a few hundred or a few thousand comments in response to the more controversial draft regulations.

The agencies are reporting in the preamble to the new draft regulations that they have received about 200,000 comments in response to earlier versions.

Maureen Martin, an analyst at the Heartland Institute, a group that bills itself as promoting libertarian principles, said she believes the new proposal would not be much of a compromise from the perspective of employers opposed to the birth control mandate, because insurers would still provide the benefits for the employees.

“To pay for this coverage, the insurers would get a credit against fees they will owe for offering their policies for sale on federal insurance exchanges,” Martin said in a commentary distributed by the Heartland Institute.

Letting the government define what organizations are entitled to a “religious” exemption may violate the First Amendment of the U.S. Constitution, and inserting a “third party” between a religious employer and an insurer does not seem to give the religious employer a genuine exemption from having to comply with the birth control mandate, Martin said.

Failing to make exemption arrangements for for-profit employers seems to be discriminatory, Martin said.

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