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New Proposal for Contraceptive Coverage
On August 22, 2014, the Obama administration proposed new regulations to address the religious objections a number of non-profit organizations and private companies have to providing contraceptive coverage for their employees.
How the Proposal Works
Under the new proposal, a religious college or other non-profit group would inform the Department of Health and Human Services (HHS) of its religious objections and HHS would then contact insurance companies and arrange birth control coverage at no cost to the employer or employees. The newly proposed system would work by:
- Objecting institutions telling the federal government which company administers their health plan
- The federal government would then contact the institution’s administrator and ask them to arrange contraception coverage for the non-profit’s employees
- Administrators would likely turn to an insurance company to fund the benefits and the insurance company would later be reimbursed by the federal government
Previously, the objecting organizations were required to notify the insurance companies directly. This was done by completing Form 700, which transfers responsibility for paying for birth control from the employer to the insurer. Filling out this form made some organizations feel it made them complicit in providing drugs they objected to.
Form 700 Alternative
An alternative for Form 700 was part of the proposal. The Form 700 alternative will require religious non-profits to send the federal government a letter that includes:
- The organization’s name
- The type of health plan the organization offers
- The name and contact information for the company’s insurance issuers or Third Party Administrator (TPA)
- An explanation of the types of birth control objected to
- A statement that the objection is based on sincerely held beliefs
Sending this letter to the government will prompt them to instruct a non-profit’s insurer or TPA to take on the responsibility of paying for the birth control at no cost to the employer. As with Form 700, the government will reimburse insurers through credits against fees owed under other parts of the health law.
The administration’s hope is that the new accommodation will work because it creates more distance between religious non-profits and the health services they oppose, by inserting the government as a middleman between non-profits and their insurers.
For Profit Companies
The administration is proposing for the first time to allow certain for profit companies that are not publicly traded to avoid the contraception mandate if they object to it on religious grounds.
Under the newly proposed rule for private companies, owners with religious objections to providing birth control would also be able to contact the federal government to express their religious objections. The proposed rule describes two alternative approaches for defining closely held for profits:
- The entity could not be publicly traded and ownership of the entity would be limited to a certain number of owners
- The entity could not be publically traded and a minimum percentage of ownership would be concentrated among a certain number of owners
The rule for private companies will be open to public comment for 60 days and could still change. After the 60 day period, the government will decide whether to make the rule final.
What IAA has to Say
Insurance Administrator of America is keeping on top of the changes to birth control coverage. The Affordable Care Act (ACA) has brought many changes and it is clear that things will continue to change as employers find these mandates do not work for their businesses. IAA is here to help guide you on any changes that might occur due to the ACA. Remember, with IAA one call does it all.
Looking to read more blog posts on this issue? Click here and here.