Proposed Rule to Provide a New Pathway to Cost-Free Contraceptive Services Under the ACA

• May 11, 2023

• Caitlin S. Bell-Butterfield , Hall Render Killian Heath & Lyman PC

In February 2023, the Department of Health and Human Services (HHS), the Department of Labor (DOL) and the Department of the Treasury (Treasury) issued a notice of proposed rulemaking intended to amend regulations related to coverage of contraceptive services under the Patient Protection and Affordable Care Act (ACA). The proposed rule keeps in place religious exemptions for entities but rescinds moral objections and creates an alternative pathway under which individuals enrolled in plans sponsored by entities with religious exemptions may access no-cost contraceptives from a willing provider or facility, which would then be reimbursed by entering into an arrangement with an Exchange plan.

Background

Under the ACA, non-grandfathered health plans are required to cover preventative services, including certain prescription contraceptives, at no out-of-pocket cost to beneficiaries. When the ACA was initially implemented, only “religious employers”—defined as non-profit entities with a primarily religious purpose and that primarily employ persons of the religion—were eligible for exemption from the contraceptive coverage requirement.[1] However, in 2015, following the U.S. Supreme Court’s decision in Burwell v. Hobby Lobby Stores,[2] new rules were enacted that allowed for closely-held entities whose owners objected to covering contraception on the basis of “sincerely held religious beliefs” to access the religious exemption.[3]

In 2018, final rules established by the Trump administration again expanded the religious exemption to non-closely held for-profit entities and all other non-governmental employers and institutions of higher education that “object[], based on [their] sincerely held religious belief” to providing contraceptive coverage.[4] The 2018 rules also created a new category under which entities could be exempted from the contraceptive coverage mandate on the basis of “sincerely held moral convictions.”[5] The Trump administration estimated that 70,500 to 126,400 beneficiaries would immediately lose access to cost-free contraceptive coverage upon implementation of the 2018 rules.[6]

Proposed Rulemaking

In June 2022, the U.S. Supreme Court issued its decision in Dobbs v. Jackson Women’s Health Organization,[7] which overruled Roe v. Wade[8] and Planned Parenthood of Southeastern Pa. v. Casey[9] and returned regulation of abortion and all related issues to the states. In the wake of the Dobbs decision, the Biden administration focused on expanding access to reproductive health care, identifying “promoting awareness of and access to the full range of contraceptive services” as a particular action area.[10] The February 2023 rulemaking comes on the heels of other actions taken to expand and ensure access to contraceptive services—for example, on June 27, 2022, the Secretaries of the DOL, HHS, and the Treasury issued a letter to health plan sponsors and issuers reminding them of their obligation to provide cost-free coverage of certain contraceptive services,[11] and in July 2022, the DOL, HHS, and the Treasury issued guidance regarding coverage of contraption under the ACA.[12]

The proposed rulemaking would modify current rules as follows: First, the new rule would rescind the exemption based on moral objections while leaving in place the religious exemption.[13] According to the Biden administration, relatively few entities have availed themselves of the moral objection exemption, and, unlike in the case of the religious exemption, there is no legal requirement to provide an exemption based on moral objection.[14]

Second, the proposed rule would establish a new pathway by which beneficiaries enrolled in plans provided by entities exempt from the contraceptive coverage requirement on the basis of religious objection could obtain no-cost access to contraceptives. Under the new pathway, the following steps will allow for beneficiaries of plans maintained by entities with religious objections to the provision of contraception to obtain cost-free contraception:

1. The beneficiary of a health plan established or maintained by a religiously exempt entity (eligible individual) initiates election of an individual contraceptive arrangement with a provider or facility (including clinicians, pharmacies, and health care facilities) that furnishes contraceptive services (provider of contraceptive services).
2. The eligible individual confirms eligibility status to the provider of contraceptive services;
3. The provider of contraceptive services furnishes contraceptive services to the beneficiary at no cost to the beneficiary;
4. The provider of contraceptive services seeks and obtains payment from a health plan on the federally-facilitated Exchange or a state Exchange on the federal platform (participating issuer); and
5. The participating issuer seeks an adjustment in the relevant Exchange user fee with respect to the provider of contraceptive services.[15]

While the proposed individual pathway is intended to fill the gap created by religious exemptions to the contraceptive coverage requirement of the ACA, a number of factors will influence the success of this gap-fill. These include:

Beneficiary Participation

Eligible individuals will need to be educated on the availability of the pathway, and the requisite eligibility confirmation will need to be facilitated such that it does not comprise an insurmountable barrier for such beneficiaries.

In the proposed rulemaking, the Biden administration also acknowledges that eligible individuals may need to seek contraceptive services from a provider outside their usual network and who they have not previously seen, which “not only adds inconvenience, but also could lead to disruptions in care.”[16]

Provider Participation

In order to increase the pool of providers eligible to obtain reimbursement under the proposed pathway, the Biden administration has defined “provider of contraceptive services” broadly, to include contraceptive services provided by telehealth or mail. Nevertheless, it is unclear how many providers would be willing to participate in the pathway, particularly given the difficulties raised in states that operate their own marketplace, where providers would need to contract with out-of-state issuers.

Issuer Participation

In order to obtain reimbursement, providers of contraceptive services must contract with issuers. To incentivize issuer participation, the Biden administration has stated that the user fee adjustment obtained by such an issuer would include not only reimbursement for the contraceptive services but also administrative costs incurred by participation in the proposed pathway.[17]

Takeaways

While the new rule is an effort to address a gap in coverage in reproductive health care, it is not a perfect solution as it will not provide seamless coverage. There will be many moving parts to effectively implement. Pending implementation of a final rule, health care providers and plans should be aware of these potential changes and consider whether they are interested in and positioned to participate in the proposed pathway. Interested providers, particularly those in states with state-run marketplaces, should consider whether relationships with new issuers will be necessary for successful participation.

ARTICLE TAGS

• Payers, Plans, and Managed Care Practice Group
• Reproductive Health Law Hub
• Health Policy and Administration