EBSA
Proposed Rules
Certain Preventive Services Under the Affordable Care Act
[ 3/21/2012]
[ PDF]
Federal Register, Volume 77 Issue 55 (Wednesday, March 21, 2012)
[Federal Register Volume 77, Number 55 (Wednesday, March 21, 2012)]
[Proposed Rules]
[Pages 16501-16508]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-6689]
[[Page 16501]]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
RIN 1545-BJ60
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2590
RIN 1210-AB44
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 147
[CMS-9968-ANPRM]
RIN 0938-AR42
Certain Preventive Services Under the Affordable Care Act
AGENCIES: Internal Revenue Service, Department of the Treasury;
Employee Benefits Security Administration, Department of Labor; Centers
for Medicare & Medicaid Services, Department of Health and Human
Services.
ACTION: Advance notice of proposed rulemaking (ANPRM).
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SUMMARY: This advance notice of proposed rulemaking announces the
intention of the Departments of Health and Human Services, Labor, and
the Treasury to propose amendments to regulations regarding certain
preventive health services under provisions of the Patient Protection
and Affordable Care Act (Affordable Care Act). The proposed amendments
would establish alternative ways to fulfill the requirements of section
2713 of the Public Health Service Act and companion provisions under
the Employee Retirement Income Security Act and the Internal Revenue
Code when health coverage is sponsored or arranged by a religious
organization that objects to the coverage of contraceptive services for
religious reasons and that is not exempt under the final regulations
published February 15, 2012. This document serves as a request for
comments in advance of proposed rulemaking on the potential means of
accommodating such organizations while ensuring contraceptive coverage
for plan participants and beneficiaries covered under their plans (or,
in the case of student health insurance plans, student enrollees and
their dependents) without cost sharing.
DATES: Comments are due on or before June 19, 2012.
ADDRESSES: Written comments may be submitted as specified below. Any
comment that is submitted will be shared with the other Departments.
Please do not submit duplicate comments.
All comments will be made available to the public. Please Note: Do
not include any personally identifiable information (such as name,
address, or other contact information) or confidential business
information that you do not want publicly disclosed. All comments are
posted on the Internet exactly as received, and can be retrieved by
most Internet search engines. No deletions, modifications, or
redactions will be made to the comments received, as they are public
records. Comments may be submitted anonymously.
In commenting, please refer to file code CMS-9968-ANPRM. Because of
staff and resource limitations, the Departments cannot accept comments
by facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this ANPRM
to http://www.regulations.gov. Follow the instructions under the ``More
Search Options'' tab.
2. By regular mail. You may mail written comments to the following
address only: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-9968-ANPRM, P.O. Box 8016,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address only: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-9968-ANPRM,
Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC
20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping and retaining an extra copy of the comments being filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
call (410) 786-9994 in advance to schedule your arrival with one of our
staff members.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. The Departments post all
comments received before the close of the comment period on the
following Web site as soon as possible after they have been received:
http://www.regulations.gov. Follow the search instructions on that Web
site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately
three weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. EST. To schedule an appointment to view public comments,
call 1-800-743-3951.
FOR FURTHER INFORMATION CONTACT: Amy Turner or Beth Baum, Employee
Benefits Security Administration (EBSA), Department of Labor, at (202)
693-8335; Karen Levin, Internal Revenue Service, Department of the
Treasury, at (202) 927-9639; Jacob Ackerman, Centers for Medicare &
Medicaid Services (CMS), Department of Health and Human Services (HHS),
at (410) 786-1565.
Customer Service Information: Individuals interested in obtaining
information from the Department of Labor concerning employment-based
health coverage laws may call the EBSA Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the Department of Labor's Web site (http://www.dol.gov/ebsa). In
[[Page 16502]]
addition, information from HHS on private health insurance for
consumers can be found on the CMS Web site (www.cciio.cms.gov), and
information on health reform can be found at http://www.HealthCare.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Patient Protection and Affordable Care Act, Public Law 111-148,
was enacted on March 23, 2010; the Health Care and Education
Reconciliation Act of 2010, Public Law 111-152, was enacted on March
30, 2010 (collectively, the Affordable Care Act). The Affordable Care
Act reorganizes, amends, and adds to the provisions of part A of title
XXVII of the Public Health Service Act (PHS Act) relating to group
health plans and health insurance issuers in the group and individual
markets. The Affordable Care Act adds section 715(a)(1) to the Employee
Retirement Income Security Act (ERISA) and section 9815(a)(1) to the
Internal Revenue Code (Code) to incorporate the provisions of part A of
title XXVII of the PHS Act into ERISA and the Code, and make them
applicable to group health plans.
Section 2713 of the PHS Act, as added by the Affordable Care Act
and incorporated into ERISA and the Code, requires that non-
grandfathered group health plans and health insurance issuers offering
non-grandfathered group or individual health insurance coverage provide
benefits for certain preventive health services without the imposition
of cost sharing. These preventive health services include, with respect
to women, preventive care and screening provided for in the
comprehensive guidelines supported by the Health Resources and Services
Administration (HRSA) that were issued on August 1, 2011 (HRSA
Guidelines).\1\ As relevant here, the HRSA Guidelines require coverage,
without cost sharing, for ``[a]ll Food and Drug Administration [(FDA)]
approved contraceptive methods, sterilization procedures, and patient
education and counseling for all women with reproductive capacity,'' as
prescribed by a provider.\2\ Except as discussed below, non-
grandfathered group health plans and health insurance issuers offering
non-grandfathered group or individual health insurance coverage are
required to provide coverage consistent with the HRSA Guidelines,
without cost sharing, in plan years (or, in the individual market,
policy years) beginning on or after August 1, 2012.\3\ These guidelines
were based on recommendations of the independent Institute of Medicine,
which undertook a review of the scientific and medical evidence on
women's preventive services.
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\1\ The HRSA Guidelines are available at: http://www.hrsa.gov/womensguidelines.
\2\ Note: This excludes items and services such as vasectomies
and condoms.
\3\ The interim final regulations published by the Departments
on July 19, 2010, generally provide that plans and issuers must
cover a newly recommended preventive service starting with the first
plan year (or, in the individual market, policy year) that begins on
or after the date that is one year after the date on which the new
recommendation or guideline is issued. 26 CFR 54.9815-2713T(b)(1);
29 CFR 2590.715-2713(b)(1); 45 CFR 147.130(b)(1).
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The Departments of Health and Human Services (HHS), Labor, and the
Treasury (the Departments) published interim final regulations
implementing section 2713 of the PHS Act on July 19, 2010 (75 FR
41726). In response to comments, the Departments amended the interim
final regulations on August 1, 2011.\4\ The amendment provided HRSA
with discretion to establish an exemption for group health plans
established or maintained by certain religious employers (and any group
health insurance coverage provided in connection with such plans) with
respect to any contraceptive services that they would otherwise be
required to cover consistent with the HRSA Guidelines. The amended
interim final regulations further specified that, for purposes of this
exemption only, a religious employer is one that--(1) has the
inculcation of religious values as its purpose; (2) primarily employs
persons who share its religious tenets; (3) primarily serves persons
who share its religious tenets; and (4) is a non-profit organization
described in section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii)
of the Code. Section 6033(a)(3)(A)(i) and (iii) of the Code refers to
churches, their integrated auxiliaries, and conventions or associations
of churches, as well as to the exclusively religious activities of any
religious order. This religious exemption is consistent with the
policies in some States that currently both require contraceptive
coverage and provide for some type of religious exemption from their
contraceptive coverage requirement.
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\4\ The amendment to the interim final rules was published on
August 3, 2011, at 76 FR 46621.
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In the HRSA Guidelines, HRSA exercised its discretion under the
amended interim final regulations such that group health plans
established or maintained by these religious employers (and any group
health insurance coverage provided in connection with such plans) are
not required to cover any contraceptive services. In the final
regulations published on February 15, 2012 (77 FR 8725), the
Departments adopted the definition of religious employer in the amended
interim final regulations.
The Departments emphasize that this religious exemption is intended
solely for purposes of the contraceptive coverage requirement pursuant
to section 2713 of the PHS Act and the companion provisions of ERISA
and the Code. Whether an employer is designated as ``religious'' for
these purposes is not intended as a judgment about the mission,
sincerity, or commitment of the employer, and the use of such
designation is limited to defining the class that qualifies for this
specific exemption. The designation will not be applied with respect to
any other provision of the PHS Act, ERISA, or the Code, nor is it
intended to set a precedent for any other purpose.
In addition, we note that this exemption is available to religious
employers in a variety of arrangements. For example, a Catholic
elementary school may be a distinct common-law employer from the
Catholic diocese with which it is affiliated. If the school's employees
receive health coverage through a plan established or maintained by the
school, and the school meets the definition of a religious employer in
the final regulations, then the religious employer exemption applies.
If, instead, the same school provides health coverage for its employees
through the same plan under which the diocese provides coverage for its
employees, and the diocese is exempt from the requirement to cover
contraceptive services, then neither the diocese nor the school is
required to offer contraceptive coverage to its employees.
On February 10, 2012, when the final regulations concerning the
exemption were posted, HHS issued a bulletin entitled ``Guidance on the
Temporary Enforcement Safe Harbor for Certain Employers, Group Health
Plans and Group Health Insurance Issuers with Respect to the
Requirement to Cover Contraceptive Services Without Cost Sharing Under
Section 2713 of the Public Health Service Act, Section 715(a)(1) of the
Employee Retirement Income Security Act, and Section 9815(a)(1) of the
Internal Revenue Code.'' \5\ The bulletin established a temporary
enforcement safe harbor for group health plans sponsored by non-profit
organizations that, on and after February 10, 2012, do not provide some
or all of the contraceptive coverage otherwise required, consistent
with any
[[Page 16503]]
applicable State law, because of the religious beliefs of the
organization (and any group health insurance coverage provided in
connection with such plans). The temporary enforcement safe harbor is
in effect until the first plan year that begins on or after August 1,
2013. The bulletin confirmed that all three Departments will not take
any enforcement action against an employer, group health plan, or
health insurance issuer that complies with the conditions of the
temporary enforcement safe harbor described in the bulletin.
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\5\ The bulletin can be found at: http://cciio.cms.gov/resources/files/Files2/02102012/20120210-Preventive-Services-Bulletin.pdf.
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At the same time, the Departments announced plans to expeditiously
develop and propose changes to the final regulations implementing
section 2713 of the PHS Act that would meet two goals--accommodating
non-exempt, non-profit religious organizations' religious objections to
covering contraceptive services and assuring that participants and
beneficiaries covered under such organizations' plans receive
contraceptive coverage without cost sharing. The Departments intend to
finalize these amendments to the final regulations such that they are
effective by the end of the temporary enforcement safe harbor; that is,
the amended final regulations would apply to plan years starting on or
after August 1, 2013. This advance notice of proposed rulemaking
(ANPRM) is the first step toward promulgating these amended final
regulations. Following the receipt of public comment, a notice of
proposed rulemaking (NPRM) will be published, which will permit
additional public comment, followed by amended final regulations.
II. Overview of Intended Regulations
On February 10, 2012, the Departments committed to working with
stakeholders to develop alternative ways of providing contraceptive
coverage without cost sharing in order to accommodate non-exempt, non-
profit religious organizations with religious objections to such
coverage. Specifically, the Departments indicated their plans for a
rulemaking to require issuers to offer group health insurance coverage
without contraceptive coverage to such an organization (or its plan
sponsor) and simultaneously to provide contraceptive coverage directly
to the participants and beneficiaries covered under the organization's
plan with no cost sharing. Under this approach, the Departments would
require that, in this circumstance, there be no premium charge for the
separate contraceptive coverage. Actuaries and experts have found that
coverage of contraceptives is at least cost neutral, and may save
money, when taking into account all costs and benefits for the
issuer.\6\ If the cost of coverage is reduced, savings may accrue to
employers, plan participants and beneficiaries, and the health care
system. The Departments indicated their intent to develop policies to
achieve the same goals with respect to self-insured group health plans
sponsored by non-exempt, non-profit religious organizations with
religious objections to contraceptive coverage.
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\6\ Bertko, John, F.S.A., M.A.A.A., Director of Special
Initiatives and Pricing, Center for Consumer Information and
Insurance Oversight, Centers for Medicare & Medicaid Services,
Glied, Sherry, Ph.D., Assistant Secretary for Planning and
Evaluation, Department of Health and Human Services (ASPE/HHS),
Miller, Erin, MPH, ASPE/HHS, Wilson, Lee, ASPE/HHS, Simmons, Adelle,
ASPE/HHS, ``The Cost of Covering Contraceptives Through Health
Insurance,'' (February 9, 2012), available at: http://aspe.hhs.gov/health/reports/2012/contraceptives/ib.shtml.
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In the time since this announcement, the Departments have met with
representatives of religious organizations, insurers, women's groups,
insurance experts, and other interested stakeholders. These initial
meetings were used to help identify issues relating to the
accommodation to be developed with respect to non-exempt, non-profit
religious organizations with religious objections to contraceptive
coverage. These consultations also began to provide more detailed
information on how health coverage arrangements are currently
structured, how religious accommodations work in States with
contraceptive coverage requirements, and the landscape with respect to
religious organizations that offer health benefits today. These
discussions have informed this ANPRM.
As the consultations with interested parties continue, this ANPRM
presents questions and ideas to help shape these discussions as well as
an early opportunity for any interested stakeholder to provide advice
and input into the policy development relating to the accommodation to
be made with respect to non-exempted, non-profit religious
organizations with religious objections to contraceptive coverage. The
Departments welcome all points of view on how to provide women access
to the important preventive services at issue without cost sharing
while accommodating religious liberty interests.
The starting point for this policy development includes two goals
and several ideas about how to achieve them. First, the Departments aim
to maintain the provision of contraceptive coverage without cost
sharing to individuals who receive coverage through non-exempt, non-
profit religious organizations with religious objections to
contraceptive coverage in the simplest way possible. Second, the
Departments aim to protect such religious organizations from having to
contract, arrange, or pay for contraceptive coverage. As described
below, the Departments intend to propose a requirement that health
insurance issuers providing coverage for insured group health plans
sponsored by such religious organizations assume the responsibility for
the provision of contraceptive coverage without cost sharing to
participants and beneficiaries covered under the plan, independent of
the religious organization, as a means of meeting these goals. HHS also
intends to propose a comparable requirement with respect to student
health insurance plans arranged by such religious organizations. For
such religious organizations that sponsor self-insured plans, the
Departments intend to propose that a third-party administrator of the
group health plan or some other independent entity assume this
responsibility. The Departments suggest multiple options for how
contraceptive coverage in this circumstance could be arranged and
financed in recognition of the variation in how such self-insured plans
are structured and different religious organizations' perspectives on
what constitutes objectionable cooperation with the provision of
contraceptive coverage. The Departments seek input on these options,
particularly how to enable religious organizations to avoid such
objectionable cooperation when it comes to the funding of contraceptive
coverage, as well as new ideas to inform the next stage of the
rulemaking process.
The following sections set forth questions the Departments believe
will help inform the development of proposed regulations, including the
policy options the Departments are considering and potential language
related to such options. Throughout this ANPRM, the term
``accommodation'' is used to refer to an arrangement under which
contraceptive coverage is provided without cost sharing to participants
and beneficiaries covered under a plan independent of the objecting
religious organization that sponsors the plan, which would effectively
exempt the religious organization from the requirement to cover
contraceptive services. The term ``religious organization'' is used to
describe the class of organizations that qualifies for the
accommodation. An ``independent entity'' is an issuer, third-party
administrator, or other provider of contraceptive coverage that is not
a
[[Page 16504]]
religious organization. And ``contraceptive coverage'' means the
contraceptive coverage required under the HRSA Guidelines.
The Departments note that a number of questions have been raised
about the scope and application of the contraceptive coverage
requirement more generally (that is, questions apart from the religious
accommodation). The Departments' interim final regulations implementing
section 2713 of the PHS Act provide that ``[n]othing prevents a plan or
issuer from using reasonable medical management techniques to determine
the frequency, method, treatment, or setting for an item or service * *
* to the extent not specified in the recommendation or guideline.''\7\
The preamble to the interim final regulations further provides:
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\7\ 26 CFR 54.9815-2713T(a)(4), 29 CFR 2590.715-2713(a)(4), and
45 CFR 147.130(a)(4).
``The use of reasonable medical management techniques allows
plans and issuers to adapt these recommendations and guidelines to
coverage of specific items and services where cost sharing must be
waived. Thus, under these interim final regulations, a plan or
issuer may rely on established techniques and the relevant evidence
base to determine the frequency, method, treatment, or setting for
which a recommended preventive service will be available without
cost sharing requirements to the extent not specified in a
recommendation or guideline.'' (75 FR 41728-29).\8\
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\8\ See also the Departments' guidance in FAQ-8 at http://www.dol.gov/ebsa/pdf/faq-aca2.pdf and FAQ-1 at http://www.dol.gov/ebsa/pdf/faq-aca5.pdf.
This policy applies to contraceptive coverage. The Departments plan
to issue further guidance on section 2713 of the PHS Act more
generally.
A. Who qualifies for the accommodation?
As previously described, group health plans sponsored by certain
religious employers (and any group health insurance coverage provided
in connection with such plans) are exempt from the requirement to offer
coverage of contraceptive services that would otherwise be required
under the HRSA Guidelines for plan years beginning on or after August
1, 2012. A second set of organizations qualifies for a temporary
enforcement safe harbor: group health plans sponsored by non-exempt,
non-profit organizations, that, consistent with any applicable State
law, do not, on or after February 10, 2012 (the date of the posting of
the final regulations), cover some or all forms of contraceptives due
to the organization's religious objections to them (and any group
health insurance coverage provided in connection with such plans). The
temporary enforcement safe harbor also applies to student health
insurance plans arranged by non-profit institutions of higher education
that meet comparable criteria. The temporary enforcement safe harbor
applies for plan years beginning on or after August 1, 2012, and before
August 1, 2013.
On February 10, 2012, the Departments also announced their
intention to provide an accommodation with respect to non-exempt, non-
profit religious organizations with religious objections to
contraceptive coverage. The final regulation concerning student health
insurance plans, published elsewhere in this issue of the Federal
Register, states that this intention extends to student health
insurance plans arranged by non-profit religious institutions of higher
education with such objections. This accommodation would apply to some
or all organizations that qualify for the temporary enforcement safe
harbor, and possibly to additional organizations. Thus, a question for
purposes of the intended regulations is: What entities should be
eligible for the new accommodation (that is, what is a ``religious
organization'')? \9\
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\9\ Note that, even if the definition of religious organization
for purposes of the accommodation were to include religious
employers eligible for the exemption, nothing in the proposed
regulations would limit eligibility of religious employers for the
exemption.
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One approach would be to adopt the definition of religious
organization used in another statute or regulation. For example, the
definition used in one or more State laws to afford a religious
exemption from a contraceptive coverage requirement could be adopted.
Alternatively, the intended regulations could base their definition on
another Federal law, such as section 414(e) the Code and section 3(33)
of ERISA, which set forth definitions for purposes of ``church plans.''
A definition based on these provisions may include organizations such
as hospitals, universities, and charities that are exempt from taxation
under section 501 of the Code and that are controlled by or associated
with a church or a convention or association of churches. In developing
a definition of religious organization, we are cognizant of the
important role of ministries of churches and, as such, seek to
accommodate their religious objections to contraceptive coverage. The
Departments seek comment on which religious organizations should be
eligible for the accommodation and whether, as some religious
stakeholders have suggested, for-profit religious employers with such
objections should be considered as well.
The Departments underscore, as we did with respect to the
definition of religious employer in the final regulations, that
whatever definition of religious organization is adopted will not be
applied with respect to any other provision of the PHS Act, ERISA, or
the Code, nor is it intended to set a precedent for any other purpose.
And, while the participants and beneficiaries covered under the health
plans offered by a ``religious employer'' compared to those covered
under the health plans offered by a ``religious organization'' will
have differential access to contraceptive coverage, nothing in the
final regulations or the forthcoming regulations is intended to
differentiate among the religious merits, commitment, mission, or
public or private standing of the organizations themselves.
Regardless of the definition of religious organization that is
proposed, the Departments are considering proposing the same or a
similar process for self-certification that will be used for the
temporary enforcement safe harbor referenced in the final regulations.
Under that process, an individual authorized by the organization
certifies that the organization satisfies the eligibility criteria, and
the self-certification is made available for examination. The
Departments expect that, for purposes of the proposed accommodation,
religious organizations would make a similar self-certification, and
similarly make the self-certification available for examination. The
self-certification would be used to put the independent entity
responsible for providing contraceptive coverage on notice that the
religious organization has invoked the accommodation. The future
rulemaking would require that the independent entity be responsible for
providing the contraceptive coverage in this case.
Under the temporary enforcement safe harbor, an organization that
self-certifies must also provide (or arrange to provide) notice to plan
participants and beneficiaries that its plan qualifies for the one-year
enforcement safe harbor. As the Departments noted in the bulletin
establishing the temporary enforcement safe harbor, nothing precludes
any organization or individual from expressing opposition, if any, to
the regulations or to the use of contraceptives. The Departments do not
anticipate that religious organizations would be required to provide
such notice to plan participants and beneficiaries beyond the one-year
transition period because the
[[Page 16505]]
responsibility to provide notice to plan participants and beneficiaries
about the contraceptive coverage would be assumed by the independent
entity. The Departments seek comment on how this notice should be
provided.
The Departments also intend to propose an accommodation for
religious organizations that are non-profit institutions of higher
education with religious objections to contraceptive coverage with
respect to the student health insurance plans that they arrange. In the
final regulation published elsewhere in this issue of the Federal
Register, ``student health insurance coverage'' is defined as a type of
individual market health insurance coverage offered to students and
their dependents under a written agreement between an institution of
higher education and an issuer. Some non-profit religious colleges and
universities object to signing a written agreement providing for
student health insurance coverage that includes contraceptive coverage.
Some non-profit religious colleges and universities include funding for
their student health insurance plans in their student aid packages and
would object if contraceptive coverage were included in the student
health insurance plan. The preamble to the final regulation on student
health insurance plans provides that the temporary enforcement safe
harbor announced on February 10, 2012, with respect to certain non-
exempt, non-profit organizations with religious objections to
contraceptive coverage extends on comparable terms to student health
insurance plans if offered through non-profit institutions of higher
education with such objections. After the one-year transition period,
the Departments would propose to treat student health insurance plans
arranged by non-profit religious institutions of higher education that
object to contraceptive coverage on religious grounds in a manner
comparable to that in which insured group health plans sponsored by
religious organizations eligible for the accommodation are treated.
This means that the issuer of the student health insurance plan would,
independent of the agreement with the institution of higher education,
provide student enrollees and their dependents with contraceptive
coverage without cost sharing and without charge.
The Departments seek comment on whether the definition of religious
organization should include religious organizations that provide
coverage for some, but not all, FDA-approved contraceptives consistent
with their religious beliefs. That is, under the forthcoming proposed
regulations, the Departments could allow religious organizations to
continue to provide coverage for some forms of contraceptives without
cost sharing, and allow them to qualify for the accommodation with
respect to other forms of contraceptives consistent with their
religious beliefs.
B. Who administers the accommodation?
The accommodation aims to simultaneously fulfill the requirement
that plan participants and beneficiaries be offered contraceptive
coverage without cost sharing and without charge, and protect a non-
profit religious organization that objects on religious grounds from
having to provide contraceptive coverage. To achieve these goals, an
independent entity is needed to assume certain functions. This entity
would, separate from the religious organization and as directed by
regulations and guidance, notify plan participants and beneficiaries of
the availability of separate contraceptive coverage, provide this
coverage automatically to participants and beneficiaries covered under
the organization's plan (for example, without an application or
enrollment process), and protect the privacy of participants and
beneficiaries covered under the plan who use contraceptive services.
Today, in most instances, an independent entity either provides or
administers health coverage for group health plans. Such group coverage
falls into two categories: Insured coverage and self-insured coverage.
A group that buys insured coverage pays a premium to a State-licensed
and State-regulated health insurance issuer which bears the risk of
claims for that coverage. A group that self-insures its coverage does
not pay premiums to a health insurance issuer; instead, employer and/or
employee contributions fund the health claims of participants and
beneficiaries covered under the plan. Typically, self-insured plans
contract with a third-party administrator, under a fee arrangement, for
administrative services, such as network contracting, managed care
services, and payment of claims. Insured group health plans and self-
insured group health plans that are not church plans or governmental
plans are generally subject to Title I of ERISA. Because there is no
insurance provided by a health insurance issuer, self-insured plans are
not subject to State insurance laws.
The Departments intend to propose that, when offering insured
coverage to a religious organization that self-certifies as qualifying
for the accommodation, a health insurance issuer may not include
contraceptive coverage in that organization's insured coverage. This
means that contraceptive coverage would not be included in the plan
document, contract, or premium charged to the religious organization.
Instead, the issuer would be required to provide participants and
beneficiaries covered under the plan separate coverage for
contraceptive services, potentially as excepted benefits, without cost
sharing, and notify plan participants and beneficiaries of its
availability. The issuer could not charge a premium to the religious
organization or plan participants or beneficiaries for the
contraceptive coverage. To incorporate this proposal into regulations
with respect to insured group health plans (comparable regulatory
language would be developed with respect to student health insurance
plans), the Departments are considering proposing new language in the
existing preventive services regulations at 45 CFR 147.130, 29 CFR
2590.715-2713 and 26 CFR 54.9815-2713 providing: ``In the case of an
insured group health plan established or maintained by a religious
organization--
The group health plan established or maintained by the
religious organization (and the group health insurance coverage
provided in connection with the plan) need not comply with any
requirement under this section to provide coverage for contraceptive
services with respect to the insured group coverage if all of the
following conditions are satisfied:
[cir] The organization provides the issuer with written notice that
the organization is a religious organization, and will not act as the
designated plan administrator or claims administrator with respect to
claims for contraceptive benefits.
[cir] The issuer has access to information necessary to communicate
with the plan's participants and beneficiaries and to act as a claims
administrator and plan administrator with respect to contraceptive
benefits.
An issuer that receives the notice described above must
offer to the religious organization group health insurance coverage
that does not include coverage for contraceptive services otherwise
required to be covered under this section. The issuer must additionally
provide to the participants and beneficiaries covered under the plan
separate health insurance coverage consisting solely of coverage for
contraceptive services required to be covered under this section. The
issuer must make such health insurance coverage for
[[Page 16506]]
contraceptive services available without any charge to the
organization, group health plan, or plan participants or beneficiaries.
The issuer must notify plan participants and beneficiaries of the
availability of such coverage for contraceptive services in accordance
with guidance issued by the Secretary. The issuer must not impose any
cost sharing requirements (such as a copayment, coinsurance, or a
deductible) on such coverage for contraceptive services and must comply
with all other requirements of this section with respect to coverage
for contraceptive services.''
Additionally, to ensure that contraceptive coverage offered by a
health insurance issuer under these circumstances does not confront
obstacles due to other Federal requirements (such as the guaranteed
issue requirement under section 2702 of the PHS Act, the single risk
pool requirement under section 1312(c) of the Affordable Care Act, and
the essential health benefits requirement under section 2707 of the PHS
Act), the Departments are considering adding by regulation
contraceptive coverage to the types of excepted benefits in the
individual market at 45 CFR 148.220(b). In so doing, the Departments
would consider preserving certain PHS Act protections such as appeals
and grievances rights while ensuring relief from others such as the
requirement to provide essential health benefits. The Departments seek
comment on whether and how to structure such a change to the excepted
benefits regulations, and what PHS Act protections should (or should
not) continue to apply. In addition, the Departments seek comment on
ways to structure the contraceptive-only benefit as a benefit separate
from the insured group coverage other than as an excepted benefit.
Issuers would pay for contraceptive coverage from the estimated
savings from the elimination of the need to pay for services that would
otherwise be used if contraceptives were not covered. Typically,
issuers build into their premiums projected costs and savings from a
set of services. Premiums from multiple organizations are pooled in a
``book of business'' from which the issuer pays for services. To the
extent that contraceptive coverage lowers the draw-down for other
health care services from the pool, funds would be available to pay for
contraceptive services without an additional premium charged to the
religious organization or plan participants or beneficiaries.
Actuaries, insurers, and economists estimate that covering
contraceptive services is at least cost neutral.
For a religious organization that sponsors a self-insured group
health plan, the Departments aim to similarly shield it from
contracting, arranging, paying, or referring for contraceptive
coverage. The Departments intend to propose, and invite comments on,
having the third-party administrator of an objecting religious
organization fulfill such responsibility. For ERISA plans,\10\ the
Departments are considering proposing that the self-certification of
the religious organization, described above, would serve as a notice to
the third-party administrator that the requirement to provide
contraceptive coverage will not be fulfilled by the religious
organization. The proposed regulations, in this circumstance, would set
forth the circumstances and criteria under which the third-party
administrator would be designated as the plan administrator for ERISA
plans solely for the purpose of fulfilling the requirement to provide
contraceptive coverage. As prescribed by the proposed regulations, the
third-party administrator would provide or arrange for such coverage in
such circumstances. The third-party administrator would notify plan
participants and beneficiaries of this coverage. The religious
organization would take no action other than self-certification.
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\10\ A church plan as defined under section 3(33) of ERISA is
exempt from ERISA's requirements under section 4(b) of ERISA, and,
therefore, any proposed ERISA regulations would not apply to church
plans. Comments are sought on potential options for church plans.
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To incorporate this proposal into regulations with respect to self-
insured group health plans, the Departments are considering proposing
new language in the existing preventive services regulations at 29 CFR
2590.715-2713 and 26 CFR 54.9815-2713 providing that: ``A religious
organization maintaining a self-insured group health plan is not
responsible for compliance with any requirement under this section to
provide coverage for contraceptive services if all of the following
conditions are satisfied:
The plan contracts with one or more third parties for
processing of benefit claims,
Before entering into each such contract, the employer
provides each third party administrator (TPA) with written notice that
the employer: (1) Is a religious organization, (2) will not act as the
designated plan administrator or claims administrator with respect to
claims for contraceptive services, (3) will not contribute to the
funding of contraceptive services, and (4) will not participate in
claims processing with respect to claims for contraceptive services.
With respect to contraceptive benefits, the TPAs have
authority and control over the funds available to pay the benefit,
authority to act as a claims administrator and plan administrator, and
access to information necessary to communicate with the plan's
participants and beneficiaries.''
In addition, with respect to ERISA plans, the Department of Labor
is considering proposing a new regulation at 29 CFR 2510.3-16
providing: ``In the case of a group health plan established or
maintained by a religious organization that is not responsible for
compliance with any requirement under Sec. 2590.715-2713 of this part
to provide coverage for contraceptive services, the required notice
from the religious organization provided to a third party administrator
(TPA) of the religious organization's refusal to provide and fund such
benefits shall be an instrument under which the plan is operated and
shall have the effect of designating such TPA as the plan administrator
under section 3(16) of ERISA for those contraceptive benefits for which
that TPA processes claims in its normal course of business. A TPA that
becomes a plan administrator pursuant to this section shall be
responsible for--
The plan's compliance with section 2713 of the Public
Health Service Act (as incorporated into section 715 of ERISA and Sec.
2590.715-2713 of this part) as to those categories of contraceptive
benefits for which the TPA processes claims in its normal course of
business (for example, surgical procedures, non-surgical procedures,
patient education and counseling, prescription benefits and non-
prescription benefits).
Establishing and operating a procedure for determining
such claims for contraceptive benefits in accordance with Sec.
2560.503-1 of this title.
Complying with disclosure requirements and other
requirements under Title I of ERISA for such benefits to participants
and beneficiaries.''
We note that there is no obligation for a TPA to enter into such a
contract if it objects to these terms.
Providing for an independent entity to assume responsibility for
plan-related functions when other plan sponsors or officials fail or
refuse to do so would not be unique to the instant context. For
example, where certain retirement savings plans have been abandoned by
their sponsors, Department of Labor regulations authorize asset
custodians to
[[Page 16507]]
distribute plan benefits and wind up the plan's affairs. 29 CFR 2578.1.
The Departments seek comment on the following possible approaches
that a third-party administrator could use to fund the contraceptive
coverage without using funds provided by the religious organization.
The third-party administrator could use revenue that is not already
obligated to plan sponsors such as drug rebates, service fees, disease
management program fees, or other sources. These funds may inure to the
third-party administrator rather than the plan or its sponsor and drug
rebates, for example, could be larger if contraceptive coverage were
provided. Additionally, nothing precludes a third-party administrator
from receiving funds from a private, non-profit organization to pay for
contraceptive services for the participants and beneficiaries covered
under the plan of a religious organization. Comments should address the
ways in which third-party administrators generally receive funding to
pay benefits, other flows of funds, the extent to which funding from
other sources may be available for payment of claims, and the
monitoring responsibilities and oversight that would be associated with
such arrangements.
Another option under consideration would be to have the third-party
administrator receive a credit or rebate on the amount that it pays
under the reinsurance program under Affordable Care Act section 1341 in
order to fund contraceptive coverage for participants and beneficiaries
covered under the plan of a religious organization that sponsors a
self-insured plan. Section 1341 of the Affordable Care Act creates a
reinsurance program to balance out risk selection from 2014 through
2016. Payments from health insurance issuers and third-party
administrators on behalf of group health plans will be made to a
reinsurance entity. Payments are used, among other things, to offset
the cost of reinsurance for health insurance issuers. While the
reinsurance program does not provide payments to group health plans, it
collects payments from third-party administrators to support the
program. Under this proposal, a third-party administrator that funds
contraceptive coverage separate from a religious organization could
offset the amount of this cost with a credit or rebate against its
assessments under the reinsurance program. Such a policy could help
advance the goals of the reinsurance program, which is one of many in
the Act designed to make health insurance affordable, accessible,
meaningful, and stable. The Departments seek comments on such an
interpretation of Affordable Care Act section 1341and on ideas of
alternative sources of funding once this temporary program ends.
An additional option would have the third-party administrator
separately arrange for contraceptive coverage. In this case, an
additional independent entity other than a third-party administrator
would be needed. The Departments are considering having the Office of
Personnel Management (OPM) identify a private insurer to provide this
coverage. Under section 1334 of the Affordable Care Act, OPM is
responsible for contracting with at least two insurers to offer multi-
State plans in each Exchange in each State to promote choice,
competition, and access to health services. The OPM Director, in
consultation with the HHS Secretary, has the authority to impose
appropriate requirements on the insurers that offer multi-State plans.
Accordingly, OPM could incentivize or require one or more of the
insurers offering a multi-State plan also to provide, at no additional
charge, contraceptive coverage to participants and beneficiaries
covered under religious organizations' self-insured plans. The third-
party administrator would send a copy of the religious organization's
self-certification to OPM along with information on plan participants
and beneficiaries. One option for covering the cost of the
contraceptive coverage would be a credit against any user fees such an
insurer would be required to pay in order to offer coverage on the
Exchanges. The Departments seek comment on the impact of this proposal
on the multi-State plan program, ways to administer it, and additional
funding ideas.
If adopted, the reinsurance program and multi-State plan options
may require amendments to the regulations and guidance governing those
programs. In addition, these programs start on January 1, 2014. There
may be some religious organizations with plan years that begin on or
after August 1, 2013, but before those programs begin, so, should the
Departments propose these options, we would also propose a means of
resolving this gap in relief. The Departments seek input on such means
as well as how many religious organizations have plan years that start
between August 1 and December 31.
The Departments welcome ideas on other options for the source of
funds for contraceptive coverage. Some religious stakeholders have
suggested, for example, the use of tax-preferred accounts that
employees may in their discretion use for a range of medical services
that neither precludes nor obligates funds to be used for contraceptive
services. A number of religious stakeholders have also suggested that
public funding to support coverage of contraceptive services is not
objectionable. The Departments seek comment on these and other
proposals. Comments are also requested on additional considerations
that should be taken into account with respect to these and other
proposals and on suggestions for structuring the implementation of the
proposals in light of these considerations.
The Departments expect that the third-party administrator could use
these sources of funds individually or in combination. The Departments
also note that nothing precludes a religious organization from
switching from a self-insured plan to an insured plan such that a
health insurance issuer rather than a third-party administrator is
responsible for providing the contraceptive coverage.
The Departments also seek information on coordination when there
are multiple third-party administrators and on the prevalence of multi-
year contracts as well as options for addressing the application of
these proposals in such instances. The Departments invite comment on
the extent to which there are self-insured health plans without a
third-party administrator as well as options for how the accommodation
would work in these rare circumstances. One option would be to have a
religious organization send its self-certification to OPM, which would
be directed to independently arrange for contraceptive coverage through
a private insurer. The Departments seek comment on the prevalence and
number of participants and beneficiaries of health plans sponsored by
religious organizations without a third-party administrator.
C. Additional Questions
To inform the notice of proposed rulemaking, the Departments seek
information on several additional questions. One question that has
arisen from religious stakeholders is whether an exemption or
accommodation should be made for certain religious health insurance
issuers or third-party administrators with respect to contraceptive
coverage. The Departments have little information about the number and
location of such issuers and administrators and whether and how such
issuers operate in the 28 States with contraceptive coverage
requirements.
The Departments also recognize that various denominations may offer
coverage to institutions affiliated with those denominations. For
example, their
[[Page 16508]]
plans may be offered as ``church plans'' (described above) to
individual churches as a means of pooling their risk. The Departments
seek comment on whether different accommodations are needed for such
plans.
In addition, the Departments are aware that 28 States have adopted
laws requiring that certain health insurance issuers provide
contraceptive coverage. Some of these laws contain exemptions related
to religious organizations, but the scope of the exemptions varies
among the States. Generally, Federal health insurance coverage
regulation creates a floor to which States may add consumer
protections, but may not subtract. This means that, in States with
broader religious exemptions than that in the final regulations, the
exemptions will be narrowed to align with that in the final regulations
because this will help more consumers. Organizations that qualify for
an exemption under State law but do not qualify for the exemption under
the final regulations may be eligible for the temporary enforcement
safe harbor. During this transition period, State laws that require
contraceptive coverage with narrower or no religious exemptions will
continue. The Departments seek comment on the interaction between these
State laws and the intended regulations on which we are seeking comment
in this notice and on the extent to which there is a need for
consistency between any Federal regulations and these State laws.
Similarly, the Departments solicit comment on what other Federal or
State laws or accounting rules governing funding and accounting could
affect the proposed options described herein.
In addition, the Departments solicit information on the number of
potentially affected issuers and religious organizations as well as
their plan participants and beneficiaries; the administrative cost of
providing separate contraceptive coverage, including details regarding
the nature of the costs (for example, one-time systems changes or
ongoing administrative costs); and the average costs and savings to
health plans, plan participants and beneficiaries, and the public of
providing contraceptive coverage.
D. Additional Input
The 90-day comment period is designed to encourage maximum input
into the development of an accommodation for religious organizations
with religious objections to providing contraceptive coverage while
ensuring the availability of contraceptive coverage without cost
sharing for plan participants and beneficiaries. The Departments seek
comments on the ideas and questions outlined in this ANPRM as well as
new suggestions to achieve its goals. The Departments also intend to
hold listening sessions to ensure all voices are heard. This will not
be the only opportunity for comment. The subsequent notice of proposed
rulemaking will also include a public comment period. The Departments
aim to ensure that the final accommodation is fully vetted and
published in advance of the expiration of the temporary enforcement
safe harbor.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement, Internal Revenue
Service.
Signed this day of March 14, 2012.
Phyllis C. Borzi.
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
Dated: March 15, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: March 15, 2012.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2012-6689 Filed 3-16-12; 4:15 pm]
BILLING CODE 4120-01-P
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