Released August 29, 2014 I Download as a PDF
Implementation Update: Women’s Preventive Health Services
The women’s health services component of the Affordable Care Act’s (ACA) preventive services mandate continues to evolve.  As background, the ACA requires non-grandfathered plans to provide specified preventive services at no cost to plan participants.  These preventive services require coverage of certain women’s health services including contraceptive coverage.   

The requirement to cover contraceptive services has been challenged by many organizations.  Two of these challenges have reached the Supreme Court:

• Burwell v. Hobby Lobby et al. [No. 13-354 (U.S. June 30, 2014)] wherein the Court held that  a closely held corporation is protected by the Religious Freedom and Restoration Act; and thus not obligated to cover the contraceptive benefit mandated by the ACA (see  CBIZ Health Reform Bulletin, Preventive Services - Contraceptive Mandate, 7/2/14).

• Wheaton College v. Burwell [134 S. Ct. 2806 (2014)] wherein a religiously affiliated college sought an injunction to relieve it from the obligation of filing an exemption to the contraceptive mandate by way of the EBSA Form 700.  As background, regulations issued in July 2013 provided for an accommodation for certain eligible organizations such that they would not be required to arrange or pay for the objectionable benefit by filing a self-certification Form 700 (see Women’s Health Services Mandate Final Regulations – Exemption for Religious Employers and Non-Profit Religious Organizations, 7/5/13).  In this methodology, the insurer or third party administrator (TPA) of a self-funded plan would then independently make the benefits available to plan participants.  Wheaton College found the process of filing the Form 700 to be objectionable. 

In response to these challenges, the Departments of Health and Human Services, Labor and Treasury (governing agencies) issued interim final and proposed regulations in an effort to ensure that women have access to the services prescribed by the law in a manner that is palatable to the challenging organizations.

The interim final rules continue to sanction the self-certification methodology but also provide an alternative process of compliance pursuant to which the eligible organization can notify HHS in writing of its objections.  HHS provides a model notice that can be used for this purpose. The type of information to provide in the notice includes:

• Name, contact information and type of the organization;

• Service provider information include plan name, contact information, category (insurer or TPA) and plan type (church or student plan); and

• A description of the contraceptive services or subset of services to which the eligible organization objects.

Once HHS receives the notification, it will then notify the insurer or TPA associated with the notification who would make the objectionable services available to plan participants.  The insurer or TPA would be reimbursed the costs of services from the fees paid by insurers to participate in the federal marketplace.

Effective Date

The interim final regulations are effective on August 27, 2014.  Comments on these rules may be submitted to the Agencies by October 27, 2014. 

As a result of the Hobby Lobby decision referenced above, the ACA’s governing agencies issued proposed regulations which would amend the definition of eligible organization to include a closely held for-profit entity whose shareholders have sincerely held religious beliefs in contravention of some or all of the contraceptive services.  HHS is seeking comments on whether the definition of closely held corporation would be based on the number of shareholders or concentration of ownership. The closely held organization would pursue the certification method described above.  It is important to note that this definition would not extend to a publicly traded corporation.

Effective Date

Comments on the proposed rules must be received by October 21, 2014.

About the Author:  Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc.  She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law.  Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.