During the writing of the Affordable Care Act, lawmakers recognized the importance of access to care, and the current cost-barriers to access. To lower those barriers they instructed the federal Department of Health and Human Services (HHS) to write the regulations of what preventive services should be covered by all insurance plans without out-of-pocket costs. HHS took advice from the independent Institute of Medicine, who recommended that all preventative services, as advised by the FDA, be covered with no additional costs to men and women through healthcare reform. Birth control, which is used by 99% of women at some point in their lives, was covered under this recommendation. Even though control over reproduction is vital to health and necessary, over half of women struggle to afford this healthcare throughout their lives. However, some religious organizations (both non-profits and for-profit businesses) protested the requirement to cover all forms of contraception, which set the stage for a conflict, which resulted in a compromise in the shape of final regulations published in June, 2013.
The controversy surrounding the contraception mandate resulted in the creation of two categories of religious organizations: those who are exempt and those that are accommodated.
In February 2012, the Obama Administration issued the first compromise for religious organizations in the form of a religious exemption. Religious entities encompassed in this rule had to fulfill a multi-step test in order to be exempt, including:
- have the inculcation of religious values as its purpose,
- primarily employ persons who share its religious tenets, &
- primarily serve persons who share its religious tenets.[i]
However, in the final regulations released in June 2013, this test was simplified; the definition of “religious employers” who are exempt is now based on the IRS definition, which is essentially churches and other houses of worship. Women who are employed by these exempt religious entities may not have access to contraception with no out-of-pocket costs through employer-provided insurance.
The narrow definition originally set forth in early 2012 did not include many organizations (both non- and for-profit) that had religious objections to providing contraceptive benefits to female employees. The federal Department of Health and Human Services sought to appease these organizations by providing a safe harbor from prosecution for not providing contraceptive coverage while an official religious accommodation was created for an additional sub-group of religious entities.
The final June 2013 ruling allows non-profit religious organizations (such as religious-based universities) that are not otherwise exempt to “self-certify” that they fulfill the following requirements for a religious accommodation:
- on account of religious objections, opposes providing coverage for some or all of any contraceptive services otherwise required to be covered,
- is organized and operates as a non-profit entity, &
- holds itself out as a religious organization[ii].
Religious organizations falling into this second category will not pay for contraception for their employees, but their insurance companies will still provide it to women free of cost, as long as they prove that none of the organizations’ money goes towards coverage.
In addition, self-insured organizations will contract with a Third Party Administrator (TPA) to provide their female employees with contraception. Women will pay into these third party insurers in a way similar to eye and dental coverage plans.
Bottom Line: Women working for religiously-affiliated employers will have access to preventive services, including all forms of contraception, without out-of-pocket costs.
Insurance companies essentially “absorb” the cost of providing no-cost contraception to women employed by an accommodated religious entity. However, the federal administration has determined that providing these preventative services will be a cost-neutral act, because of the unintended pregnancies prevented. However, women employed by self-insured religious entities will have their contraception covered by a Third Party Administrator (TPA), who will be in turn reimbursed by the Federally Facilitated Exchanges (regardless of whether their state is facilitating their own health insurance exchange or has an FFE). The reason TPAs will receive reimbursements is because these entities only deal with providing contraception, and therefore do not reap the financial benefits of not paying for pregnancies and birth.
Yet, it is problematic that the safe harbor that was established in 2012 will be extended through January 1, 2014. There will likely be a significant number of women whose new employer-provided insurance plan cycle begins before that date, and who will go another year without coverage free of co-pays. In addition, the final regulations do not require an organization with a religious accommodation to publicly state or inform employees that they do not provide contraceptive coverage to their employees.
The final federal ruling has implications for the state of Wisconsin as well. Assembly Bill 216 (fact sheet) was only passed by the Assembly in June and could theoretically be taken up by the Senate and passed once the next session commences in the fall. However, with the release of the final DHHS rules, AB216 no longer complies with the federal regulations, because its definition of those exempted from providing female employees with contraception is much broader than that allowed by the federal government. In addition, it violates contraceptive equity laws[iii]. It is therefore unnecessary, and here at the Wisconsin Alliance for Women’s Health we hope that the representatives in the Assembly and Senate use their time to work on more relevant and necessary legislation.
Here at the Wisconsin Alliance for Women’s Health we are happy with the federal administration’s effort to prioritize women’s health under the circumstances, and that they are fighting to stand with evidence-based women’s health practices. It makes economic sense for employers, insurers, and women. Contraceptive coverage gives women power over their bodies and lives!