The IRS, DOL and HHS have released two interim final rules that implement President Trump’s executive order exempting certain employers from the ACA’s contraceptive coverage mandate. The interim final rules identify the employers eligible for the exemption and the reasons they may claim the exemption.
Facts. Under the ACA’s preventive services requirements, non-grandfathered employer-sponsored group health plans must provide participants and beneficiaries with contraceptive services at no out-of-pocket cost. Pursuant to this mandate, non-exempt (i.e., non-grandfathered) employer-sponsored group health plans must cover all FDA-approved contraception, which includes medications and devices that may act as abortifacients as well sterilization procedures.
Earlier this year, President Trump issued an executive order to provide an exemption from the ACA’s contraceptive services mandate to a limited class of employers that objected to it because of sincerely-held religious beliefs. In the wake of this executive order, the Trump Administration directed the Agencies to promulgate rules to “address conscience-based objections to the [ACA’s] preventive-care mandate.”
Guidance. The interim final rules implement President Trump’s executive order by providing certain nongovernmental employers with two grounds for claiming an exemption from the contraceptive services mandate. One interim final rule provides the exemption on the basis of sincerely-held religious beliefs and the other on sincerely-held moral convictions. While the exemption is available to both non-profit and for-profit employers, the “moral convictions” exemption may only be claimed by nonprofit employers and for-profit employers that are not publicly traded. The exemption is also available to private colleges and universities for their student health plans.
Both interim final rules explain that the exemption is only applicable to the extent of the employer’s objection to the contraceptive services mandate. Thus, if an eligible employer has religious objections to contraceptives it believes are abortifacients, but not other types of contraceptives, the exemption would only apply to those abortifacients.
The regulations state that the term, “contraceptive,” generally includes contraceptives, sterilization, and related patient education and counseling.
To claim the exemption, an employer need not provide any specific notice to its employees or certification to the government. Instead, employers may notify plan participants and beneficiaries about the exemption with summary plan descriptions and summaries of material reductions that explain exactly what services are covered by their group health plan. The interim final rules each provide that eligible employers may begin claiming the exemption immediately.
A draft copy of the interim final rule regarding the “religious beliefs” exemption is available at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-21851.pdf
A draft copy of the interim final rule concerning the “moral conviction” exemption is available at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-21852.pdf