CMS Releases Proposed Rule Providing an Exemption to Group Health Plan Contraceptive Coverage for Eligible Religious Organizations

On January 30, 2013, the Department of Health and Human Services (HHS) announced a proposed rule to provide women with coverage for recommended preventative care, including contraceptives, without charging the beneficiary a co-pay or deductible. A prior proposed rule regarding contraceptive coverage was issued in March 2012, followed by a public comment period. The recently released proposed rule reflects the various feedback and comments submitted by the public to HHS.

In addition to providing women with preventative care, without cost-sharing, the proposed rule also seeks to accommodate religious objections to contraceptive coverage by religious organizations. First, the proposed rules would simplify the criteria defining a “religious employer” so that it follows an Internal Revenue Code definition and primarily includes churches, other houses of worship, and their affiliated organizations. As such, eligible religious organizations, such as religious nonprofit hospitals, may be exempt from providing coverage for contraceptives. In order to be considered an eligible religious organization, the proposed rule requires that an organization must:

1. Oppose providing coverage for some or all of any contraceptive services required to be covered under Section 2713 of the PHS Act, on account of religious objections;
2. Be organized and operate as a nonprofit entity;
3. Hold itself out as a religious organization; and
4. Self-certify that it meets these criteria and specify the contraceptive services for which it objects to providing coverage.

If eligible, the religious nonprofit hospital would not have to contract, arrange, pay or refer for any contraceptive services in which the organization has objections to on religious grounds. Meanwhile, participants of the health plan would be afforded contraceptive coverage through separate individual health insurance policies, without cost-sharing.

For eligible nonprofit hospitals that provide insured group plans, the hospital would submit the self-certification to the health insurance issuer and, thereafter, the plan participant would automatically be provided separate contraceptive coverage through an individual market at no additional cost. With respect to nonprofit hospitals that provide self-insured health plans, the hospital would notify the third party administrator, after which, the administrator would work with a health insurance issuer to provide separate contraceptive coverage for the plan participant.

Currently, HHS is seeking public comments on the newly proposed rule. The deadline for submitting comments is April 8, 2013.

As discussed above, a religious nonprofit hospital must be considered eligible in order to fall under the exemptions to providing contraceptive coverage for its plan participants. If you have questions regarding eligibility requirements, need assistance with self-certifying, or have any concerns pertaining to the proposed rule and/or the exemptions, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.