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Agencies issue final regulations on contraceptive coverage exemptions

Health and Benefits

By Maureen Gammon and Anu Gogna | November 26, 2018

The final regulations generally adhere to the interim final regulations, which significantly broadened exemptions from the contraceptive coverage mandate.
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The Departments of Health and Human Services (HHS), Labor (DOL) and Treasury recently issued two final rules addressing exemptions from the Affordable Care Act’s (ACA’s) contraceptive coverage mandate. The first regulation pertains to religious objections and the second to moral objections.

The final regulations generally adhere to the interim final regulations (IFRs) the departments issued last year.1 The 2017 IFRs significantly broadened the exemptions from the contraceptive coverage mandate, which sparked several lawsuits. Two federal district courts (in Pennsylvania and California) issued nationwide injunctions to block the rules from taking effect. This litigation is still ongoing.

Exempt employers that wish to provide access to contraceptive services without providing the coverage themselves may use a voluntary accommodation process in which the insurer or third-party administrator (TPA) provides the coverage.

The final regulations take effect on January 14, 2019.

Religious exemption

The first final regulation exempts certain nongovernmental employers that object to covering some or all contraceptives and related patient education and counseling based on their sincerely held religious beliefs. Specifically, eligible employers include the following:

  • For-profit corporations — whether closely held or not — and regardless of size 
  • Churches, integrated auxiliaries of a church, conventions or associations of churches, and religious orders
  • Nonprofit organizations
  • Any other nongovernmental employer

Institutions of higher education that offer student health insurance coverage and insurers offering group or individual health insurance coverage are also eligible for the exemption. The final regulation clarifies that nonexempt plan sponsors that contract with an exempt insurer are still subject to the contraceptive mandate. Exempt insurers must notify employers of their exempt status, and employers must then find another way to provide the contraceptive coverage (or switch to a nonexempt insurer). The final regulation confirms that governmental employers are not eligible for the religious exemption.

The regulation also provides an exemption for plan participants who object to coverage for contraceptive services for religious reasons, but this exemption is available only if the plan sponsor or insurer is willing to provide coverage without contraceptive services. Otherwise, the participant’s only recourse is to find other health coverage that excludes coverage for contraceptive services.

Moral exemption

The second final regulation exempts entities and individuals with sincerely held moral objections to providing contraceptive services. This exemption is available only to nonprofit organizations and for-profit entities without publicly traded ownership interests. Governmental and publicly traded for-profit entities are not eligible.

Similar to the religious exemption, institutions of higher education and health insurers may be eligible for the moral exemption. While participants with a moral objection to contraceptive services are also eligible, the exemption is available only if the plan sponsor or insurer is willing to provide coverage without contraceptive services.

Claiming the exemption

The final regulations made no changes to the way eligible employers and other entities claim the exemption. The final regulations are clear that exempt entities are not required to self-certify or provide notice of their exemption to the departments.

For an ERISA group health plan that is exempt, ERISA’s disclosure requirements will still apply. Under ERISA, plan documents and summary plan descriptions (SPDs) must identify covered and excluded benefits and services, including coverage of contraceptive services. If some or all contraceptive services are no longer covered, employers will need to amend plan documents and SPDs accordingly and inform participants.

The final regulations clarify that an exemption applies only to those contraceptive services to which the employer objects.

Accommodation process

The final regulations maintain the optional accommodation process for exempt plan sponsors that want to give participants access to contraceptive services without having to provide or pay for them. The accommodation process makes the insurer or TPA solely responsible for providing separate coverage for contraceptive services directly to participants, without cost-sharing, premiums, fees or other charges to participants or to the exempt entity or its plan.

The regulations provide a safe harbor to insurers. An insurer that relies reasonably and in good faith on an entity’s representation of being eligible for the accommodation will not be in violation of the ACA if that representation is later determined to be incorrect.

Eligible entities may discontinue the accommodation process in accordance with rules in the final regulations. The regulations provide a transition rule for exempt entities that stop using the accommodation. Specifically, if an accommodation is being used for contraceptive services on January 14, 2019, notice must be provided at least 60 days before the revocation. Alternatively, exempt entities may stop using the accommodation process as of the first day of the first plan year beginning at least 30 days after the revocation date. The latter process will be the general rule for eligible entities using the accommodation process after January 14.

Going forward

Given the ongoing litigation on the expanded exemptions — and it is not clear whether these final regulations will prompt additional lawsuits — eligible, interested employers should discuss their next move with legal counsel. Employers that decide to use the optional accommodation process will need to discuss this with their insurer or TPA.


See “Agencies expand exemptions from ACA contraceptive coverage mandate,” Willis Towers Watson Insider, October 2017.

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