[Federal Register Volume 78, Number 25 (Wednesday, February 6, 2013)]
[Proposed Rules]
[Pages 8456-8476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02420]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[REG-120391]
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 Parts 147, 148, and 156
[CMS-9968-P]
RIN 0938-AR42
Coverage of Certain Preventive Services Under the Affordable Care
Act
AGENCY: 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: Proposed rules.
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SUMMARY: This document proposes amendments to rules regarding coverage
for certain preventive services under section 2713 of the Public Health
Service Act, as added by the Patient Protection and Affordable Care
Act, as amended, and incorporated into the Employee Retirement Income
Security Act of 1974 and the Internal Revenue Code. Section 2713 of the
Public Health Service Act requires coverage without cost sharing of
certain preventive health services, including certain contraceptive
services, in non-exempt, non-grandfathered group health plans and
health insurance coverage. The proposed rules would amend the
authorization to exempt group health plans established or maintained by
certain religious employers (and group health insurance coverage
provided in connection with such plans) with respect to the requirement
to cover
[[Page 8457]]
contraceptive services. The proposed rules would also establish
accommodations for group health plans established or maintained by
eligible organizations (and group health insurance coverage offered in
connection with such plans), including student health insurance
coverage arranged by eligible organizations that are religious
institutions of higher education. This document also proposes related
amendments to regulations concerning excepted benefits and Affordable
Insurance Exchanges.
DATES: Comments are due on or before April 8, 2013.
ADDRESSES: In commenting, please refer to file code CMS-9968-P. 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 to http://www.regulations.gov. Follow the ``Submit a comment'' instructions.
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-P, P.O. Box 8013,
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-P, Mail Stop C4-26-05, 7500
Security Boulevard, Baltimore, MD 21244-1850.
4. By Hand or Courier. You may deliver (by hand or courier) your
written comments to the following addresses only:
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 Centers for Medicare & Medicaid Services 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 in 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.
Do not mail comments to the addresses indicated as appropriate for
hand or courier delivery because they may be delayed and received after
the close of the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Jacob Ackerman, Centers for Medicare &
Medicaid Services (CMS), Department of Health and Human Services (HHS),
at (410) 786-1565. Amy Turner or Beth Baum, Employee Benefits Security
Administration (EBSA), Department of Labor, at (202) 693-8335.
Karen Levin, Internal Revenue Service (IRS), Department of the
Treasury, at (202) 927-9639.
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 (www.dol.gov/ebsa). In addition, information from HHS on private health insurance
coverage can be found on CMS's Web site (www.cciio.cms.gov), and
information on health care reform can be found at www.HealthCare.gov.
SUPPLEMENTARY INFORMATION:
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:
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 4:00 p.m. To schedule an appointment to view public comments,
call (800) 743-3951.
I. Background
The Patient Protection and Affordable Care Act (Pub. L. 111-148)
was enacted on March 23, 2010, and amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152) on March 30,
2010. These statutes are referred to collectively as 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 of
1974 (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 to make them applicable to group health
plans. The PHS Act sections incorporated by these references are
sections 2701 through 2728.
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 screenings as provided for in
comprehensive guidelines supported by the Health Resources and Services
Administration (HRSA).
The Departments of Health and Human Services (HHS), Labor, and the
Treasury (collectively, the Departments) published interim final rules
with a request for comments implementing section 2713 of the PHS Act in
the July 19, 2010 Federal Register (75 FR 41726) (2010 interim final
rules). Among other things, the 2010 interim final rules provide that a
plan or issuer must provide coverage, without cost sharing, for certain
newly recommended preventive health services 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
recommendation or guideline is issued.\1\
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\1\ 26 CFR 54.9815-2713T(b)(1); 29 CFR 2590.715-2713(b)(1); 45
CFR 147.130(b)(1).
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On August 1, 2011, HRSA adopted and released guidelines for women's
preventive services based on
[[Page 8458]]
recommendations of the independent Institute of Medicine, which had
undertaken a review of the scientific and medical evidence on women's
preventive services (Women's Preventive Services: Required Health Plan
Coverage Guidelines, or HRSA Guidelines).\2\ As relevant here, the HRSA
Guidelines include all 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 health care provider (collectively, contraceptive services).\3\
Accordingly, under section 2713 of the PHS Act and the 2010 interim
final rules, non-grandfathered group health plans and health insurance
issuers offering non-grandfathered group or individual health insurance
coverage are required to provide coverage without cost sharing of
women's preventive health services, including contraceptive services,
consistent with the HRSA Guidelines in plan years (or, in the
individual market, policy years) beginning on or after August 1, 2012,
except as discussed later in this section.
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\2\ The HRSA Guidelines are available at: http://www.hrsa.gov/womensguidelines.
\3\ This excludes services relating to a man's reproductive
capacity, such as vasectomies and condoms.
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Contemporaneous with the issuance of the HRSA Guidelines, the
Departments amended the 2010 interim final rules (76 FR 46621) (2011
amended interim final rules). The amendment provided HRSA with the
authority to exempt group health plans established or maintained by
religious employers (and group health insurance coverage provided in
connection with such plans) from the requirement to cover contraceptive
services pursuant to the HRSA Guidelines.\4\ The 2011 amended interim
final rules specified that, for purposes of this exemption, 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 nonprofit organization described in section 6033(a)(1) and
(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. HRSA exercised this
authority in the HRSA Guidelines such that group health plans
established or maintained by these religious employers (and group
health insurance coverage provided in connection with such plans) are
exempt from the requirement to cover contraceptive services.
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\4\ The 2011 amended interim final rules were issued and
effective on August 1, 2011, and published on August 3, 2011.
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On February 10, 2012, the Departments issued final rules that
adopted the definition of religious employer in the 2011 amended
interim final rules for purposes of the exemption from the requirement
to cover contraceptive services (2012 final rules).\5\ Contemporaneous
with the issuance of the 2012 final rules, HHS, with the agreement of
the Departments of Labor and the Treasury, issued guidance establishing
a temporary enforcement safe harbor for group health plans established
or maintained by certain nonprofit organizations that have religious
objections to contraceptive coverage (and any group health insurance
coverage provided in connection with such plans).\6\
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\5\ The 2012 final rules were published on February 15, 2012 (77
FR 8725).
\6\ 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, issued on February 10, 2012, and reissued on August 15, 2012.
Available at: http://cciio.cms.gov/resources/files/prev-services-guidance-08152012.pdf. The guidance, as reissued on August 15, 2012,
clarifies, among other things, that group health plans that took
some action before February 10, 2012, to try, without success, to
exclude or limit contraceptive coverage are not precluded from
eligibility for the safe harbor.
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The guidance provides that, under the temporary enforcement safe
harbor, the Departments will not take any enforcement action against an
employer, group health plan, or health insurance issuer for failing to
cover some or all recommended contraceptive services in a non-
grandfathered group health plan (or any group health insurance coverage
provided in connection with such a plan) where the plan is established
or maintained by an organization meeting all of the following criteria:
The organization is organized and operates as a nonprofit
entity.
From February 10, 2012, onward, the group health plan
established or maintained by the organization has consistently not
covered all or the same subset of recommended contraceptive services,
consistent with any applicable state law, because of the religious
beliefs of the organization.
The group health plan established or maintained by the
organization (or another entity on behalf of the plan, such as a health
insurance issuer or third party administrator) provides to participants
a notice indicating that some or all contraceptive services will not be
covered under the plan for the first plan year beginning on or after
August 1, 2012, as set forth in the guidance.
The organization self-certifies that it satisfies the
foregoing three criteria and documents its self-certification, as set
forth in the guidance.
The temporary enforcement safe harbor is also available for insured
student health insurance coverage arranged by nonprofit institutions of
higher education with religious objections to contraceptive coverage
that similarly meet the four criteria.\7\
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\7\ See final rule on student health insurance coverage
published by HHS on March 21, 2012 (77 FR 16456 and 16457).
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The temporary enforcement safe harbor is in effect until the first
plan year that begins on or after August 1, 2013. The Departments
committed to rulemaking during this 1-year safe harbor period to
provide women with contraceptive coverage without cost sharing as
required by section 2713 of the PHS Act, while protecting certain
additional organizations from having to contract, arrange, pay, or
refer for any contraceptive coverage to which they object on religious
grounds.
The first step toward realizing these policy goals was an advance
notice of proposed rulemaking (ANPRM) published on March 21, 2012 (77
FR 16501). The ANPRM presented potential approaches and solicited
comments on alternative ways to fulfill the requirements of section
2713 of the PHS Act when health coverage is established or maintained
by eligible organizations, or arranged by eligible organizations that
are religious institutions of higher education,\8\ with religious
objections to contraceptive coverage. The 90-day comment period on the
ANPRM closed on June 19, 2012.
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\8\ In these proposed rules, any proposed accommodation specific
to a religious institution of higher education is intended to
accommodate the religious institution of higher education only with
respect to its arrangement of student health insurance coverage.
With respect to the establishment or maintenance of a group health
plan by a religious institution of higher education, the religious
institution of higher education is intended to be accommodated the
same way as any other religious organization that has established or
maintained a group health plan.
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These proposed rules mark the next step in the process. The
proposed rules would make two principal changes to the preventive
services coverage rules to provide women contraceptive coverage without
cost sharing, while taking into account religious objections to
contraceptive services of eligible organizations, including eligible
[[Page 8459]]
organizations that are religious institutions of higher education, that
establish or maintain or arrange health coverage. First, the proposed
rules would amend the criteria for the religious employer exemption to
ensure that an otherwise exempt employer plan is not disqualified
because the employer's purposes extend beyond the inculcation of
religious values or because the employer serves or hires people of
different religious faiths. Second, the proposed rules would establish
accommodations for health coverage established or maintained by
eligible organizations, or arranged by eligible organizations that are
religious institutions of higher education, with religious objections
to contraceptive coverage. The proposed rules also propose related
amendments to other rules, consistent with the proposed accommodations.
The Departments intend to finalize all such proposed amendments before
the end of the temporary enforcement safe harbor.
Comments are welcome on any aspect of the proposed rules, including
on how best to provide women with contraceptive coverage without cost
sharing as required by section 2713 of the PHS Act, while protecting
eligible organizations from having to contract, arrange, pay, or refer
for any contraceptive coverage to which they object on religious
grounds.
II. Overview of the Public Comments on the Advance Notice of Proposed
Rulemaking
The Departments received approximately 200,000 comments in response
to the ANPRM. Commenters represented a wide variety of stakeholders,
including religious groups; religiously affiliated educational
institutions, health care organizations, charities, and associations;
civil rights organizations; consumer groups; group health plan sponsors
and administrators; third party administrators and other plan service
providers; health insurance issuers; law and public policy
organizations; states; secular organizations; private citizens; and
women's rights and reproductive health advocacy organizations.
Comments addressed both the religious employer exemption and the
suggested accommodations, among other issues. Although the Departments
do not separately address each comment received, the significant issues
raised in the comments are summarized in this section. The Departments
considered these comments in developing the policies in these proposed
rules.
A. Comments on the Religious Employer Exemption
Some commenters asserted that the definition of religious employer
as formulated in the 2012 final rules is too narrow. Some of these
commenters expressed concern that the group health plans of a number of
religious employers, including houses of worship, do not qualify for
the exemption because the employers' purposes extend beyond the
inculcation of religious values or because the employers serve or hire
people of different religious faiths. Commenters noted that employers
may not know the religious beliefs of those they serve or hire, and
that employment discrimination laws may prohibit them from inquiring
about the religious beliefs of their employees. Other commenters
expressed concern that the definition of religious employer is not
broad enough to allow them to continue their current exclusion of
contraceptive services from coverage under their group health plans and
warned that, if the definition of religious employer is not broadened,
they could cease to offer health coverage to their employees in order
to avoid having to offer coverage to which they object on religious
grounds.
Commenters also asserted that federal laws, including the
Affordable Care Act, provide for conscience clauses and religious
exemptions broader than the religious employer exemption provided for
in the 2012 final rules. Other commenters asserted that the narrow
scope of the exemption raises concerns under the First Amendment and
the Religious Freedom Restoration Act (RFRA). Some commenters asserted
that the criteria for the religious employer exemption could result in
excessive government entanglement in religion. Several commenters
expressed concern that the definition of religious employer sets a
precedent for use in other areas of federal and state law. These
commenters urged that the definition of religious employer be broadened
such that more group health plans may qualify for the exemption.
Other commenters, however, disputed claims that the contraceptive
coverage requirement infringes on rights protected by the First
Amendment or RFRA, noting that the requirement is neutral and generally
applicable. They also explained that the requirement does not
substantially burden religious exercise and, in any event, serves
compelling governmental interests and is the least restrictive means to
achieve those interests.
Some commenters supported the inclusion of contraceptive services
in the HRSA Guidelines and urged that the Departments not broaden the
religious employer exemption. These commenters asserted that the
definition of religious employer is appropriately targeted at houses of
worship and argued that making contraceptive coverage available to as
many women as possible would enhance access to important preventive
health care services and would significantly reduce long-term health
care costs and consequences associated with unplanned pregnancies.
These commenters asserted that expanding the exemption would undermine
the benefits of the law. Some commenters believed that the exemption
should be eliminated entirely due to the importance of extending these
benefits to as many women as possible.
Several commenters requested clarification as to whether, if
employees of multiple employers are covered under a single group health
plan, each employer must independently meet the definition of religious
employer for the plan to qualify for the exemption.
B. Comments on the Suggested Accommodations for Health Coverage
Established or Maintained by Religious Organizations or Arranged by
Religious Institutions of Higher Education
Several commenters asserted that the suggested accommodations
described in the ANPRM would fail to adequately accommodate religious
objections to contraceptive coverage. These commenters emphasized that,
in their view, religious organizations would continue to be involved,
whether directly or indirectly, in providing coverage for services that
they find religiously objectionable. For example, with respect to
insured group health plans, these commenters disputed the claim that
contraceptive coverage is at least cost neutral and argued that plan
sponsors would end up funding the coverage in the form of higher
premiums or fees. These commenters generally argued that, in order to
provide adequate relief, the Departments would need to rescind the
contraceptive coverage requirement in its entirety, provide an
exemption for the group health plan of any organization with a
religious or moral objection to contraceptive coverage, or provide
government funding for provision of contraceptive services.
Other commenters recommended that the Departments expand the
suggested accommodations to encompass the group health plans of a
broader class of religiously affiliated organizations. Several
commenters stated that the rules
[[Page 8460]]
should accommodate all organizations with a religious or moral
objection to contraceptive coverage, whether the organization is
religious or secular, or nonprofit or for-profit, among other potential
distinctions. These commenters also argued that an accommodation should
be available without regard to whether an organization has covered
contraceptive services in its group health plan in the past.
Some commenters recommended using criteria in other federal laws,
such as the National Labor Relations Act, for determining whether the
group health plan of an organization qualifies for an accommodation.
Some commenters suggested accommodating the group health plans of
religiously affiliated organizations recognized as tax-exempt under an
IRS group ruling.
In contrast, other commenters urged that any accommodation apply
only to health coverage established or maintained by a limited class of
religiously affiliated organizations or arranged by a limited class of
religiously affiliated institutions of higher education. For example,
several commenters suggested limiting any accommodation to only health
coverage established or maintained by nonprofit organizations owned or
controlled by a church, association of churches, or religious order, or
arranged by nonprofit institutions of higher education owned or
controlled by a religious organization as defined for purposes of Title
IX of the Education Amendments of 1972. These commenters also generally
argued that health coverage established or maintained by for-profit
organizations or arranged by for-profit institutions of higher
education, or health coverage established or maintained by
organizations, or arranged by institutions of higher education, that
object to only some types of contraceptive services, should not qualify
for an accommodation.
A number of commenters supported a self-certification process,
similar to that used for the temporary enforcement safe harbor, for
religious organizations seeking to avail themselves of an
accommodation. Some commenters urged that the Departments adopt
appropriate oversight and enforcement mechanisms to monitor compliance
with the criteria for any accommodation and recommended self-
certification as a tool to promote transparency and support compliance
and enforcement. Other commenters suggested that the Departments
consider any such self-certification to be conclusive to avoid inquiry
into a religious organization's character, mission, or practices.
Comments were quite varied regarding the ANPRM's suggested
approaches with respect to the provision of contraceptive coverage to
participants and beneficiaries enrolled in self-insured group health
plans established or maintained by religious organizations with
religious objections to such coverage. Many commenters supported the
general approach suggested in the ANPRM of ensuring that participants
and beneficiaries enrolled in such self-insured plans receive
contraceptive coverage without cost sharing. These commenters stated
that any accommodation should not create delays in or barriers to
contraceptive benefits, and that these benefits should be provided
without participants and beneficiaries having to specifically elect
such benefits.
Concerns were raised by some commenters about an objecting
organization's ability to not administer, facilitate, or otherwise
involve itself in the provision of contraceptive coverage to such
participants and beneficiaries. Many commenters were concerned about
how third party administrators would be able to fund these benefits.
They noted that drug rebates, one suggested source of funds, often
belong to another entity (such as the plan sponsor and/or the plan
participants and beneficiaries), not the third party administrator, and
stated that, in their view, costs incurred by third party
administrators would ultimately be passed on to plan sponsors and/or
plan participants and beneficiaries unless a separate source of funding
could be found, such as some form of public funding or stand-alone
contraceptive coverage with no premium or cost sharing. Others raised
questions about the responsibility for communications regarding
contraceptive coverage. Some third party administrators were concerned
about becoming surrogate insurers, which might subject them to the
application of state insurance laws. At the same time, other commenters
believed that, with funding, notice, and adequate claims information,
contraceptive coverage could be administered effectively by third party
administrators.
III. Provisions of the Proposed Rules
A. Overview
The Departments aim to secure the protections under section 2713 of
the PHS Act that are designed to enhance coverage of important
preventive services for women without cost sharing while accommodating
the religious objections to contraceptive coverage of eligible
organizations.
The Departments propose two key changes to the preventive services
coverage rules codified in 26 CFR 54.9815-2713T, 29 CFR 2590.715-2713,
and 45 CFR 147.130 to meet these goals. First, the proposed rules would
amend the criteria for the religious employer exemption to ensure that
an otherwise exempt employer plan is not disqualified because the
employer's purposes extend beyond the inculcation of religious values
or because the employer serves or hires people of different religious
faiths. Second, the proposed rules would establish accommodations for
health coverage established or maintained by eligible organizations, or
arranged by eligible organizations that are religious institutions of
higher education, with religious objections to contraceptive coverage.
Amendments to rules concerning excepted benefits and Affordable
Insurance Exchanges (Exchanges) are also proposed in connection with
the proposed accommodations.
B. Explanation of Terms
In these proposed rules, all references to ``contraceptive
coverage'' are references to coverage of the contraceptive services
that are required to be covered without cost sharing in accordance with
the HRSA Guidelines (that is, all FDA-approved contraceptive methods,
sterilization procedures, and patient education and counseling for all
women with reproductive capacity, as prescribed by a health care
provider).
All references to ``accommodation'' are references to an
arrangement under which contraceptive coverage is provided without cost
sharing to plan participants and beneficiaries (or, in the case of
student health insurance coverage, student enrollees and their covered
dependents) independent of health coverage established or maintained or
arranged by an objecting religious organization, including an objecting
religious institution of higher education.
Finally, all references to ``religious organization'' and
``religious institution of higher education'' are references to the
class of organizations and institutions of higher education that
establish or maintain or arrange health coverage that qualifies for an
accommodation. These organizations are collectively referred to as
``eligible organizations'' in these proposed rules.
[[Page 8461]]
C. Religious Employer Exemption and Accommodations for Health Coverage
Established or Maintained or Arranged by Eligible Organizations
For purposes of organization and clarity, proposed 45 CFR
147.130(a)\9\ would provide that the requirement to provide coverage
for recommended preventive services without cost sharing is subject to
a new 45 CFR 147.131, which would establish standards and processes
related to both the religious employer exemption and the accommodations
for health coverage established or maintained or arranged by eligible
organizations, as discussed in more detail later in this section.
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\9\ For simplicity, this preamble refers only to provisions of
45 CFR 147.130. Parallel provisions to 45 CFR 147.130 are contained
in 26 CFR 54.9815-2713T and 29 CFR 2590.715-2713.
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Accordingly, the proposed rules would move to new 45 CFR
147.131\10\ the language currently in 45 CFR 147.130(a)(1)(iv)(A) and
(B) (incorporated by reference in the rules of the Departments of Labor
and the Treasury) that authorizes HRSA to exempt group health plans of
religious employers (and group health insurance coverage provided in
connection with such plans) from the contraceptive coverage requirement
and that defines religious employer for this purpose, and would amend
the authorization and definition as discussed later in this section.
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\10\ For simplicity, this preamble refers only to provisions of
45 CFR 147.131. Parallel provisions to 45 CFR 147.131 are contained
in 26 CFR 54.9815-2713A and 29 CFR 2590.715-2713A.
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1. Religious Employer Exemption
Currently, under the 2012 final rules, 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 nonprofit
organization described in section 6033(a)(1) and 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. The Departments explained in the
2011 amended interim final rules that this definition was intended to
focus the religious employer exemption on ``the unique relationship
between a house of worship and its employees in ministerial
positions.''\11\
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\11\ 76 FR 46623.
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Some commenters brought to the Departments' attention that the
group health plans of certain religious entities that meet the fourth
prong of the definition of religious employer (providing that a
religious employer is a nonprofit organization described in section
6033(a)(1) and (a)(3)(A)(i) or (iii) of the Code) may not qualify for
the exemption because those entities provide benevolent services to
their communities. For example, if a church maintains a soup kitchen
that provides free meals to low-income individuals irrespective of
their religious faiths, it could fail to satisfy the third prong of the
definition of religious employer (providing that a religious employer
primarily serves persons who share its religious tenets). The same
question could arise if a church runs a parochial school that employs
people of different religious faiths.
The Departments agree that the exemption should not exclude group
health plans of religious entities that would qualify for the exemption
but for the fact that, for example, they provide charitable social
services to persons of different religious faiths or employ persons of
different religious faiths when running a parochial school. Indeed,
this was never the Departments' intention in connection with the 2011
amended interim final rules or the 2012 final rules. Accordingly, in 45
CFR 147.131(a) (and the related rules of the Departments of Labor and
the Treasury), the Departments propose to amend the definition of
religious employer that was adopted in the 2012 final rules by
eliminating the first three prongs of the definition and clarifying the
application of the fourth. Under this proposal, an employer that is
organized and operates as a nonprofit entity and referred to in section
6033(a)(3)(A)(i) or (iii) of the Code would be considered a religious
employer for purposes of the religious employer exemption. For this
purpose, an organization that is organized and operates as a nonprofit
entity is not limited to any particular form of entity under state law,
but may include organizations such as trusts and unincorporated
associations, as well as nonprofit, not-for-profit, non-stock, public
benefit, and similar types of corporations. However, for this purpose,
an organization is not considered to be organized and operated as a
nonprofit entity if its assets or income accrue to the benefit of
private individuals or shareholders. Under this standard, it is not
necessary to determine the federal tax-exempt status of the nonprofit
entity in determining whether the religious employer exemption applies.
The Departments note that eliminating the first three prongs would
avoid any inquiry into an employer's purposes, as well as any inquiry
into the religious beliefs of its employees and the religious beliefs
of those it serves.
The Departments believe that this proposal would not expand the
universe of employer plans that would qualify for the exemption beyond
that which was intended in the 2012 final rules. As previously noted,
when the Departments first defined religious employer, the primary goal
was to exempt the group health plans of houses of worship. 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.
By restricting the exemption primarily to group health plans
established or maintained by churches, synagogues, mosques, and other
houses of worship, and religious orders, the fourth prong of the
current definition of religious employer would alone suffice to meet
the goal. By eliminating the first three prongs of the current
definition, there no longer would be any question as to whether group
health plans of houses of worship that provide educational, charitable,
or social services to their communities qualify for the exemption.
The Departments welcome comments on this proposal, including
whether it would unduly expand the universe of employer plans that
would qualify for the exemption and whether additional or different
language is needed to clarify the scope of the exemption.
2. Accommodations for Health Coverage Established or Maintained or
Arranged by Eligible Organizations
In proposed 45 CFR 147.131(b) through (e) (and the related rules of
the Departments of Labor and the Treasury) and as discussed later in
this section, the Departments propose policies relating to the
accommodation of certain group health plans and group health insurance
coverage with respect to the contraceptive coverage requirement. The
Departments propose a comparable accommodation with respect to student
health insurance coverage arranged by eligible organizations that are
religious institutions of higher education. The Departments believe
these proposed accommodations, as opposed to the exemption that is
provided to religious employers, are warranted given that participants
and beneficiaries in group health plans established or maintained by
eligible organizations, as well as student enrollees and their covered
dependents in student health insurance coverage arranged by eligible
organizations, may be less likely than participants and beneficiaries
in group health plans established or maintained
[[Page 8462]]
by religious employers to share such religious objections of the
eligible organizations. The proposed accommodations would provide such
plan participants and beneficiaries contraceptive coverage without cost
sharing while insulating their employers or institutions of higher
education from contracting, arranging, paying, or referring for such
coverage.
a. Definition of Eligible Organization
These proposed rules would provide that group health plans
established or maintained by eligible organizations with religious
objections to contraceptive coverage (and group health insurance
coverage provided in connection with such plans), and student health
insurance coverage arranged by eligible organizations that are
religious institutions of higher education with such objections, comply
with the requirement to provide coverage for contraceptive services
under section 2713 of the PHS Act if the conditions of the
accommodation are satisfied.
For purposes of these proposed rules only, the Departments propose
to define an eligible organization as an organization that meets all of
the following criteria:
The organization opposes providing coverage for some or
all of the contraceptive services required to be covered under section
2713 of the PHS Act on account of religious objections.
The organization is organized and operates as a nonprofit
entity.
The organization holds itself out as a religious
organization.
The organization self-certifies that it satisfies the
first three criteria, as described later in this section.
This proposed definition of eligible organization is intended to
allow health coverage established or maintained or arranged by
nonprofit religious organizations, including nonprofit religious
institutional health care providers, educational institutions, and
charities, with religious objections to contraceptive coverage to
qualify for an accommodation. For this purpose, an organization that is
organized and operated as a nonprofit entity is not limited to any
particular form of entity under state law, but may include
organizations such as trusts and unincorporated associations, as well
as nonprofit, not-for-profit, non-stock, public benefit, and similar
types of corporations. However, for this purpose an organization is not
considered to be organized and operated as a nonprofit entity if its
assets or income accrue to the benefit of private individuals or
shareholders.
The Departments believe that the proposed definition of eligible
organization would strike an appropriate balance because it would limit
any accommodation to nonprofit organizations that hold themselves out
as religious. The Departments solicit comments on whether the proposed
definition of eligible organization would allow an appropriate universe
of nonprofit religious organizations and institutions of higher
education establishing or maintaining or arranging health coverage to
qualify for an accommodation, including comments on whether it would be
too broad or too narrow.
The Departments do not propose that the definition of eligible
organization extend to for-profit secular employers. Religious
accommodations in related areas of federal law, such as the exemption
for religious organizations under Title VII of the Civil Rights Act of
1964, are available to nonprofit religious organizations but not to
for-profit secular organizations. Accordingly, the Departments believe
it would be appropriate to define eligible organization to include
nonprofit religious organizations, but not to include for-profit
secular organizations.
b. Self-Certification
Each organization seeking accommodation under the proposed rules
would be required to self-certify that it meets the definition of
eligible organization, following a self-certification process similar
to that under the temporary enforcement safe harbor. The self-
certification would also specify the contraceptive services for which
the organization will not establish, maintain, administer, or fund
coverage. The organization would not be required to submit the self-
certification to any of the Departments. The organization would
maintain the self-certification (executed by an authorized
representative of the organization) in its records for each plan year
to which the accommodation applies and make the self-certification
available for examination upon request so that regulators, issuers,
third party administrators, and plan participants and beneficiaries may
verify that an organization has qualified for an accommodation, while
avoiding any inquiry into the organization's character, mission, or
practices. The Departments intend to specify in guidance the form to be
used for the self-certification.
c. Separate Contraceptive Coverage Without Cost Sharing for Plan
Participants and Beneficiaries
These proposed rules aim to provide women with contraceptive
coverage without cost sharing and to protect eligible organizations
from having to contract, arrange, pay, or refer for contraceptive
coverage to which they object on religious grounds.
1. Insured Plans
To achieve these goals, under HHS's authority in section 2792 of
the PHS Act to promulgate rules ``necessary or appropriate'' to carry
out the provisions of title XXVII of the PHS Act, and the parallel
authorities of the Department of Labor in section 734 of ERISA and the
Department of the Treasury in section 9833 of the Code, these proposed
rules would provide that, in the case of an insured group health plan
established or maintained by an eligible organization, the health
insurance issuer providing group coverage in connection with the plan
would assume sole responsibility, independent of the eligible
organization and its plan, for providing contraceptive coverage without
cost sharing, premium, fee, or other charge to plan participants and
beneficiaries.
The eligible organization would provide the issuer with a copy of
its self-certification. If the plan uses a separate issuer for certain
coverage, such as prescription drug coverage, the eligible organization
may also need to provide a copy of its self-certification to the
separate issuer. Nothing more would be required of the eligible
organization to qualify for the accommodation.
The proposed rules would direct the issuer receiving the copy of
the self-certification to ensure that the coverage for those
contraceptive services identified in the self-certification is not
included in the group policy, certificate, or contract of insurance;
that such coverage is not reflected in the group health insurance
premium; and that no fee or other charge in connection with such
coverage is imposed on the eligible organization or its plan.
The proposed rules would further direct the issuer receiving the
copy of the self-certification to provide contraceptive coverage under
individual policies, certificates, or contracts of insurance
(hereinafter referred to as individual health insurance policies) for
plan participants and beneficiaries without cost sharing, premium, fee,
or other charge. The coverage would not be offered by or through a
group health plan. (As discussed later in this section, the Departments
propose that this type
[[Page 8463]]
of individual health insurance policy be a new category of excepted
benefits.)
The issuer would automatically enroll plan participants and
beneficiaries in a separate individual health insurance policy that
covers recommended contraceptive services. The Departments envision
that the issuer would ensure that contraceptive coverage for plan
participants and beneficiaries is effective at the beginning of the
plan year of their group health plan, to the extent possible, to
prevent a delay or gap in contraceptive coverage. The eligible
organization would have no role in contracting, arranging, paying, or
referring for this separate contraceptive coverage. Such coverage would
be offered at no charge to plan participants and beneficiaries, that
is, the issuer would provide benefits for such contraceptive services
without the imposition of any cost sharing requirement (such as a
copayment, coinsurance, or a deductible), premium, fee, or other
charge, consistent with section 2713 of the PHS Act. The requirements
of section 2713 of the PHS Act, its implementing regulations, and other
applicable federal and state law (as well as their enforcement
mechanisms) would continue to apply with respect to such coverage. For
example, an issuer providing such coverage could use reasonable medical
management techniques consistent with 45 CFR 147.130(a)(4).
The Departments believe that, in the case of insured group health
plans, this proposed arrangement would alleviate the need for the
eligible organization to contract, arrange, pay, or refer for
contraceptive coverage while providing contraceptive coverage to plan
participants and beneficiaries at no additional cost. Actuaries,
economists, and insurers estimate that providing contraceptive coverage
is at least cost neutral, and may result in cost-savings when taking
into account all costs and benefits for the insurer.\12\ In this
instance, contraceptive coverage without cost sharing would be provided
to plan participants and beneficiaries through individual health
insurance policies, separate from the group policy through which all
other coverage would be provided to plan participants and
beneficiaries. The Departments believe that issuers generally would
find that providing such contraceptive coverage is cost neutral because
they would be they would be insuring the same set of individuals under
both policies and would experience lower costs from improvements in
women's health and fewer childbirths.
---------------------------------------------------------------------------
\12\ 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), et
al., ``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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The Departments note that a health insurance issuer providing
coverage in connection with a plan established or maintained by an
eligible organization would be held harmless under the accommodation if
a representation by the organization to the issuer that the
organization is an eligible organization on which the issuer relied in
good faith were determined later to be incorrect. Conversely, the
eligible organization and its plan would be held harmless if the issuer
were to fail to comply with the requirement that it provide separate
contraceptive coverage for plan participants and beneficiaries at no
charge.
The Departments request comments on this proposed arrangement.
2. Self-Insured Plans
The Departments are considering alternative approaches for
providing participants and beneficiaries in self-insured group health
plans established or maintained by eligible organizations with
contraceptive coverage at no additional cost, while protecting the
eligible organizations from having to contract, arrange, pay, or refer
for such coverage. Under each of these approaches, a health insurance
issuer that provides individual health insurance policies for
contraceptive coverage for plan participants and beneficiaries at no
additional cost would be able to offset the costs of providing such
coverage by claiming an adjustment in Federally-facilitated Exchange
(FFE) user fees that would reduce the amount of the such fees for the
issuer (or an affiliated issuer), as discussed later in this section.
The Departments envision that the issuer would ensure that
contraceptive coverage for plan participants and beneficiaries is
effective at the beginning of the plan year of their group health
plans, to the extent possible, to prevent a delay or gap in
contraceptive coverage. Under each of these approaches, HHS would
assist in identifying issuers offering the separate individual health
insurance policies for contraceptive coverage.
Under all approaches, if there is a third party administrator for
the self-insured group health plan of the eligible organization, the
eligible organization would provide the third party administrator with
a copy of its self-certification. If the plan uses a separate third
party administrator for certain coverage, such as prescription drug
coverage, the eligible organization would also provide a copy of its
self-certification to the separate third party administrator if the
coverage administered by the separate third party administrator
includes coverage of any contraceptive service listed in the self-
certification.
Further, under all approaches, a third party administrator
receiving a copy of the self-certification would automatically arrange
separate individual health insurance policies for contraceptive
coverage from an issuer providing such polices, as described above. The
issuer providing the coverage (or an affiliated issuer) would receive
an additional adjustment in the user fees that otherwise would be
charged by an FFE in an amount that would offset a reasonable charge by
the third party administrator for performing this service. In turn, the
issuer would be required to pass the amount of this additional
adjustment in FFE user fees on to the third party administrator as a
condition of receiving any FFE user fee adjustment, and would be
required to attest to HHS that it has in fact passed the amount of this
additional adjustment on to the third party administrator. As a
condition of payment of this amount by the issuer, the third party
administrator would not be permitted to charge any amount to the
eligible organization, its plan, or to plan participants or
beneficiaries for performing the service. The Departments note that the
issuer could either be affiliated with or be independent of the third
party administrator.
The Departments solicit comment on which of the proposed approaches
below would best provide participants and beneficiaries in self-insured
group health plans established or maintained by eligible organizations
with contraceptive coverage at no additional cost, while protecting
eligible organizations from having to contract, arrange, pay, or refer
for such coverage. The Departments also request comment on whether
there are other approaches that should be considered that would achieve
the same goals.
Under the first approach, a third party administrator receiving the
copy of the self-certification would have an economic incentive to
voluntarily arrange for the separate individual health insurance
policies for contraceptive coverage for plan participants and
beneficiaries because it would be compensated for a reasonable charge
for automatically arranging for the contraceptive coverage through
[[Page 8464]]
payment by the issuer of the contraceptive coverage. Under this
approach, in automatically arranging for the contraceptive coverage,
the third party administrator would be acting, not as the third party
administrator to the self-insured plan of the eligible organization,
but rather in its independent capacity apart from its capacity as the
agent of the plan. Under this approach, the self-insured plan of the
eligible organization would be treated as complying with the
requirement to provide contraceptive coverage based on the third party
administrator's receipt of the copy of the self-certification.
Under the second approach, coverage under the plan of the eligible
organization would comply with the requirement to provide contraceptive
coverage without cost sharing only if the third party administrator
administering coverage in connection with the plan automatically
arranges for an issuer to assume sole responsibility for providing
separate individual health insurance policies offering contraceptive
coverage without cost sharing, premium, fee, or other charge to plan
participants and beneficiaries, the eligible organization, or its plan.
As discussed above, any reasonable administrative costs of the third
party administrator in performing this service would be covered through
payment by the issuer of the contraceptive coverage. If the third party
administrator performs the services, coverage under the plan of the
eligible organization would comply with 45 CFR 147.130. While the third
party administrator would not be directly responsible for assuring
compliance with section 2713 of the PHS Act, the Departments expect
that third party administrators would seek to assist eligible
organizations such that eligible organizations would be able to avail
themselves of the proposed accommodation.
Under the third approach, the third party administrator receiving
the copy of the self-certification would be directly responsible for
automatically arranging for contraceptive coverage for plan
participants and beneficiaries. Specifically, the self-certification
would have the effect of designating the third party administrator \13\
as the plan administrator under section 3(16) of ERISA solely for the
purpose of fulfilling the requirement that the plan provide
contraceptive coverage without cost sharing. The third party
administrator would satisfy its responsibility to automatically arrange
for contraceptive coverage for plan participants and beneficiaries by
arranging for an issuer to assume sole responsibility for providing
separate individual health insurance policies offering contraceptive
coverage without cost sharing, premium, fee, or other charge to plan
participants and beneficiaries, the eligible organization, or its plan.
The Departments note that there would be no obligation on a third party
administrator to enter into or continue a third party administration
contract with an eligible organization if the third party administrator
were to object to having to carry out this responsibility. Although
this approach would place the legal responsibility for assuring
compliance with section 2713 of the PHS Act solely on the third party
administrator, it would have legal implications under ERISA's
reporting, disclosure, claims processing, and fiduciary provisions for
both the third party administrator and the eligible organization. The
Departments seek comment specifically on potential issues arising under
ERISA if the third party administrator were to become the designated
plan administrator under section 3(16) of ERISA, and therefore a plan
fiduciary, even for the limited purposes contemplated.
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\13\ To the extent the plan uses more than one third party
administrator (for example, one pharmacy benefit manager (PBM) to
handle claims administration for prescription drugs and another
entity to handle claims for inpatient and outpatient medical/
surgical benefits), each third party administrator would become the
plan administrator upon receiving the copy of the self-certification
with respect to the types of claims that it normally processes (that
is, the PBM would continue to handle claims for prescription drugs
and the other entity would continue to handle claims for inpatient
and outpatient medical/surgical benefits), and each would do so in
accordance with section 2713 of the PHS Act (even if plan terms
might otherwise provide differently) as plan administration with an
independent funding source.
---------------------------------------------------------------------------
The Departments also seek comment on whether there is a need to
provide an accommodation for self-insured plans of eligible
organizations without third party administrators, and, if so, how best
to ensure that participants and beneficiaries in such plans receive
separate contraception coverage without cost sharing. No comments were
submitted in response to the request in the ANPRM on the extent to
which there are such plans without a third party administrator. The
Departments continue to believe that there are very few, if any, self-
insured plans of eligible organizations in this circumstance.
The Departments solicit comment on these alternative approaches.
3. Notice of Availability of Contraceptive Coverage and Coordination of
Benefits
The proposed rules would direct a health insurance issuer providing
separate individual health insurance policies for contraceptive
coverage at no additional cost to participants and beneficiaries in
plans of eligible organizations to provide a written notice to plan
participants and beneficiaries regarding the availability of the
separate contraceptive coverage. Issuers providing such contraceptive
coverage would be responsible for providing the notice of availability
of such coverage to participants and beneficiaries in both insured and
self-insured group health plans of eligible organizations. The notice
would be provided directly to plan participants and beneficiaries by
the issuer, separate from but contemporaneous with (to the extent
possible) any application materials distributed in connection with
enrollment (or re-enrollment) in group coverage established,
maintained, or arranged by the eligible organization in any plan year
to which the accommodation is to apply. As such, this notice generally
would be provided annually. To satisfy the proposed notice requirement,
issuers could use the model language set forth in the proposed rules or
substantially similar language. The Departments request comments on the
proposed notice requirement, including ways to improve the proposed
model language, the timing and delivery (including electronically) of
the notice to plan participants and beneficiaries, and whether this
notice requirement could be combined with other existing notice
requirements to simplify administration for issuers.
The Departments also seek comment on whether there are efficient
ways to limit the benefits provided under the separate individual
health insurance policies for contraceptive coverage to match the
contraceptive benefits identified in the self-certification or whether
the separate individual health insurances policies for contraceptive
coverage should simply cover the full set of recommended contraceptive
services. One option would be to require coordination of benefits such
that the contraceptive coverage is secondary to the coverage provided
by the group health plan established or maintained by the eligible
organization (and any group health insurance coverage provided in
connection with the plan). The Departments solicit comment on this
issue.
[[Page 8465]]
d. Adjustments of Federally-Facilitated Exchange (FFE) User Fees
To fund contraceptive coverage for participants and beneficiaries
in self-insured plans established or maintained by eligible
organizations at no cost to plan participants or beneficiaries, HHS
proposes that the existing proposed FFE user fee calculation, set forth
in the December 7, 2012 proposed rule titled ``Patient Protection and
Affordable Care Act; HHS Notice of Benefit and Payment Parameters for
2014'' (77 FR 73213), take into account that an issuer that offers a
qualified health plan (QHP) through an FFE (or an affiliated issuer in
a state without an FFE) provides such contraceptive coverage by
reducing the amount of the user fee.
Consistent with Office of Management and Budget (OMB) Circular No.
A25-R, the proposed revised FFE user fee calculation (which would
result in an adjustment of the FFE user fee) would facilitate the
proposed accommodation of self-insured plans established or maintained
by eligible organizations by ensuring that plan participants and
beneficiaries have separate individual health insurance policies for
contraceptive coverage at no additional cost such that eligible
organizations are not required to administer or fund such coverage. It
would thereby support many of the goals of the Affordable Care Act,
including improving the health of the population, reducing health care
costs, providing access to health coverage, encouraging eligible
organizations to continue to offer health coverage, and ensuring access
to affordable QHPs via efficiently operated Exchanges. Moreover, as
described in the 2012 final rules and the ANPRM, there are significant
benefits associated with contraceptive coverage without cost sharing.
Such contraceptive coverage significantly furthers the governmental
interests in promoting public health and in promoting gender equality.
Under this proposal, the FFE user fee calculation would take into
account contraceptive coverage that is provided by an issuer in a state
without an FFE so long as the issuer is affiliated with an issuer that
offers a QHP through an FFE.\14\ The affiliated issuer would not be
required to be a QHP issuer. An issuer that provides contraceptive
coverage in a state without an FFE could offset the estimated cost of
such coverage through an affiliated QHP issuer in a state with an FFE.
This would encourage issuers to provide this type of coverage widely,
to meet the goal of providing all plan participants and beneficiaries
of self-insured plans established or maintained by eligible
organizations with separate contraceptive coverage without cost
sharing.
---------------------------------------------------------------------------
\14\ For simplicity, the discussion that follows uses the
shorthand ``contraceptive coverage'' to refer to contraceptive
coverage for participants and beneficiaries in self-insured plans
established or maintained by eligible organizations at no cost to
plan participants or beneficiaries.
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HHS proposes that, in order for the FFE user fee calculation to
take into account that a QHP issuer (or an affiliated issuer) provides
contraceptive coverage, the issuer providing coverage for contraceptive
services for the plan participants and beneficiaries of a self-insured
plan established or maintained by an eligible organization must provide
coverage for all recommended contraceptive services identified in the
self-certification of the eligible organization, and do so without cost
sharing, premiums, fees, or other costs to the plan participants and
beneficiaries. It also must pay the reasonable charge of third party
administrators. The contraceptive coverage would be subject to all
applicable federal and state laws, including state filing and rate
review requirements. HHS seeks comment on ways to streamline the
regulatory processes for, and minimize the costs of, obtaining approval
of such coverage in all states.
HHS further proposes that, if an issuer provides contraceptive
coverage to plan participants and beneficiaries of self-insured plans
of eligible organizations at no additional cost, and it, or another
issuer in the same issuer group, is required to pay an FFE user fee, an
adjustment in the FFE user fee may be sought for the estimated cost of
the contraceptive coverage. HHS would use the definition of issuer
group proposed at 45 CFR 156.20 for this purpose. That section proposes
that issuer group means all entities treated under section 52(a) or (b)
of the Code as a member of the same controlled group of corporations as
(or under common control with) a health insurance issuer, or issuers
affiliated by the common use of a nationally licensed service mark. HHS
seeks comment on whether this definition would provide the appropriate
amount of flexibility in calculating the FFE user fee to correctly
reflect the costs of issuers in states without an FFE, and on the
advantages and disadvantages of permitting an adjustment in the FFE
user fee with respect to unaffiliated issuers.
Under this proposal, the issuer providing the contraceptive
coverage would provide certain information and documentation (jointly
with the affiliated QHP issuer if applicable) to HHS. First, monthly
data on the number of individuals for whom the contraceptive coverage
is being provided would be submitted, along with an attestation that a
copy of the self-certification of the eligible organization was
provided by the third party administrator that arranged for the
coverage for the plan participants and beneficiaries. Second, the
issuer(s) would be required to provide an attestation that coverage for
all recommended contraceptive services identified in the self-
certification of the eligible organization is being provided, and being
provided without cost sharing, premiums, fee, or other costs to the
plan participants or beneficiaries. The issuer also would attest to HHS
that it passed the portion of its adjustment attributable to reasonable
charges by third party administrators on to those parties. Third, the
issuer(s) would be required to identify the QHP(s) being offered
through an FFE with respect to which the FFE user fee adjustment is to
be made. In addition, if the issuer providing the contraceptive
coverage is not the QHP issuer for which the adjustment in the FFE user
fee is being sought, HHS proposes to require an attestation that the
issuers are from the same issuer group. Finally, the issuer(s) would be
required to submit to HHS an estimate of the cost of the contraceptive
coverage, along with data or documentation supporting that estimate.
HHS approval of the cost estimate would be required before a QHP issuer
could receive an FFE user fee adjustment. HHS solicits comment on
whether additional information or attestations should be required of
issuers, for example, whether issuers should be required to attest that
they provided the required notice of availability of contraceptive
coverage to plan participants and beneficiaries.
HHS is considering two approaches to ensuring that the cost
estimate reasonably reflects the cost of the contraceptive coverage.
One approach would require the issuer(s) to submit to HHS the estimated
per capita cost of the contraceptive coverage, as well as an actuarial
memorandum prepared by a member of the American Academy of Actuaries in
accordance with generally accepted actuarial principles and
methodologies validating the estimate. HHS seeks comment on appropriate
standards to guide such calculations. Under this approach, HHS expects
that, in 2016 and beyond, the estimated cost of providing the
contraceptive coverage would be based on the issuer's experience in
previous years.
[[Page 8466]]
HHS also proposes that the estimate of the cost of the
contraceptive coverage could include a reasonable charge for the
issuer's administrative costs, including the costs of obtaining
regulatory approval of the contraceptive coverage policy in the
applicable state as well as a third party administrator's charge. HHS
seeks comment on the magnitude of a reasonable administrative charge.
HHS recognizes that the contraceptive coverage that issuers would
provide under this proposed accommodation could see limited enrollment
in a particular state. Given the potentially narrow markets available
to the issuers of the contraceptive coverage, the per capita cost of
administering this type of coverage may be higher than that for major
medical coverage or other excepted benefits. On the other hand, given
that a third party administrator would be connecting the plan
participants and beneficiaries with the issuer, and there would
therefore be reduced marketing costs, the administrative costs could be
lessened. HHS seeks comment on the appropriate magnitude of these
administrative costs generally, as well as ways of minimizing the
administrative costs. In particular, HHS notes the issues associated
with reimbursing for fixed costs, including the cost of obtaining
regulatory approval for the policy in the applicable state. Fixed
administrative costs could be amortized across the expected life of the
policy, or could be reimbursed in the first year of operation. HHS
seeks comment on the appropriate manner of compensating for such costs.
HHS also seeks comment on whether HHS should limit the number of
issuers providing the contraceptive coverage in each state with respect
to which an FFE user fee adjustment may be made. If HHS were to modify
its proposal in this way, HHS would add that an issuer must be willing
and have the ability to offer the contraceptive coverage to any
participant or beneficiary in a self-insured plan of an eligible
organization who resides in the state.
HHS notes that the estimate of the cost of the contraceptive
coverage could include a reasonable margin. HHS seeks comment on the
magnitude of a reasonable margin, and notes that the proposed HHS
Notice of Benefit and Payment Parameters for 2014 proposes a presumed
margin of 3 percent within allowable administrative costs for the risk
corridors program.
The proposed inclusion of reasonable administrative costs and
margin in the estimate of the cost of the contraceptive coverage is
intended to ensure that issuers receive reasonable compensation for
providing the contraceptive coverage, as they would expect to receive
in their other commercial businesses. HHS would review the submission
by the issuer(s) to ensure that the cost estimate reflects reasonable
assumptions and was calculated in accordance with applicable standards
and generally accepted actuarial principles and methodologies. HHS
would multiply the estimated per capita cost of the contraceptive
coverage by the number of individuals being provided the contraceptive
coverage each month in order to determine the magnitude of the FFE user
fee adjustment. The amount should also take into account the reasonable
administrative charges of third party administrators.
Alternatively, HHS could provide a national per capita estimate for
the cost of the contraceptive coverage, which would also include
adjustments for reasonable administrative costs and margin. This
estimate could then be multiplied by the monthly enrollment in the
contraceptive coverage in order to determine the magnitude of the FFE
user fee adjustment for each QHP issuer concerned. This latter approach
would provide for a more standardized approach, but could result in FFE
user fee adjustments that do not fund the entire cost of the
contraceptive coverage for some issuers, or that overcompensate other
issuers. The former approach, however, would place a greater
administrative burden on issuers, and would require a more in-depth
review by HHS. HHS seeks comment on these two approaches, as well as
alternative approaches for determining the estimated cost of the
contraceptive coverage.
In both approaches to establishing an estimated cost of providing
the contraceptive coverage described above, HHS seeks comment on the
appropriate manner of accounting for a third party administrator's
administrative costs of arranging for the contraceptive coverage in the
issuer's estimated cost of the contraceptive coverage. For example, a
flat administrative fee approved by HHS could be included in that
estimated cost--with that flat administrative fee including an
appropriate margin for the third party administrator. However, such an
approach risks providing over- or under-incentives to the third party
administrator for arranging for the contraceptive coverage, if the flat
administrative fee is too high or too low. Alternatively, the third
party administrator's actual reasonable charge, or actual reasonable
administrative costs, for arranging the contraceptive coverage could be
included in the estimated cost of the contraceptive coverage. HHS seeks
comment on these and other approaches to estimating the third party
administrator's administrative costs, and how HHS may ensure that they
reflect reasonable administrative costs.
HHS proposes that, if the information described previously is
provided and the cost estimate is approved, the FFE user fee will be
reduced for the issuer of the identified QHP(s) by the amount of the
approved estimate of the cost of the contraceptive coverage (multiplied
by enrollment in the coverage for the month). While a highly unlikely
occurrence given the relatively small population under consideration,
HHS proposes that, if the amount of the adjustment is greater than the
amount of the obligation to pay the FFE user fee in a particular month,
the issuer of the identified QHP(s) will be provided a credit for the
FFE user fee charged in succeeding months in the amount of the excess,
consistent with OMB Circular No. A25-R. HHS seeks comment on whether a
QHP issuer's FFE user fee should be adjusted for any excess in
succeeding months at all; whether, if a QHP issuer's FFE user fee is
adjusted for any excess in succeeding months, any time limit should be
placed on how much later the adjustment should take place; and
alternative methods of compensating an issuer with greater
contraceptive coverage costs than its (or its affiliated QHP issuer's)
FFE user fees.
HHS also proposes that an issuer providing contraceptive coverage
for which the FFE user fee has been adjusted (whether the adjustment
was provided to the issuer or an affiliated QHP issuer) must maintain
for 10 years and make available to HHS upon request: documentation
demonstrating that the contraceptive coverage was provided to
participants or beneficiaries in a self-insured plan of an eligible
organization, as evidenced by the copy of the self-certification that
was provided by the third party administrator that arranged for such
coverage; documentation demonstrating that the contraceptive coverage
was provided without the imposition of any cost sharing, premium, fee,
or other charge; documentation or data supporting the estimate of the
cost of the contraceptive coverage; and documentation or data on the
actual cost of providing the contraceptive coverage. This record-
keeping requirement is consistent with timeframes under the False
Claims Act, 31 U.S.C. 3729-3733. HHS is considering mechanisms for
ensuring program integrity with respect to the provision of the
contraceptive coverage under this proposed accommodation.
[[Page 8467]]
These mechanisms may include requiring cooperation with audits and
investigations, and requiring corrective action. HHS seeks comment on
the oversight requirements that should be implemented with respect to
the contraceptive coverage under this proposal.
Finally, HHS is proposing that a QHP issuer that is to receive an
FFE user fee adjustment as described above prior to January 1, 2014,
will be provided a credit in the amount of the adjustment beginning in
January 2014. HHS seeks comment on issuers' ability to fund the
contraceptive coverage under the proposal between the end of the
temporary enforcement safe harbor and December 31, 2013, if HHS is not
able to provide the FFE user fee adjustment until January 2014.
The Departments also seek comment on alternative ways to finance
separate contraceptive coverage without cost sharing with respect to
participants and beneficiaries in self-insured plans of eligible
organizations.
e. Treatment of Multiple Employer Group Health Plans
The Departments recognize that, in some instances, several
affiliated employers--only some of which are eligible organizations or
religious employers--offer health coverage to their employees and their
covered dependents through a single group health plan. The Departments
considered allowing all employers in such instances to qualify for an
accommodation or the religious employer exemption if any single
employer met the definition of eligible organization or religious
employer. Alternatively, the Departments considered precluding all
employers in such instances from qualifying for an accommodation or the
religious employer exemption if any single employer failed to meet the
definition of eligible organization or religious employer.
The Departments propose to make the accommodation or the religious
employer exemption available on an employer-by-employer basis. That is,
each employer would have to independently meet the definition of
eligible organization or religious employer in order to take advantage
of the accommodation or the religious employer exemption with respect
to its employees and their covered dependents. Conversely, an employer
that did not meet the definition of eligible organization or religious
employer could not take advantage of the accommodation or the religious
employer exemption with respect to its employees and their covered
dependents. This approach would prevent what could be viewed as a
potential way for employers that are not eligible for the accommodation
or the religious employer exemption to avoid the contraceptive coverage
requirement by offering coverage in conjunction with an eligible
organization or religious employer through a common plan. The
Departments seek comment on this approach, including comments on the
extent to which an employer-by-employer approach would pose
administrative challenges for plans and issuers, as well as comments on
alternative approaches.
f. Student Health Insurance Coverage
Many institutions of higher education administer programs that
provide students and their dependents with access to health coverage.
Some institutions of higher education sponsor self-insured student
health plans, but the vast majority of student health plans are
insured, meaning that a health insurance issuer contracts with the
institution of higher education to issue a blanket health insurance
policy, from which students can buy coverage. Under final rules
published by HHS on March 21, 2012, student health insurance coverage
is a type of individual health insurance coverage offered to students
and their covered dependents under a written agreement between an
institution of higher education and an issuer.\15\
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\15\ Because student health plans are not employment-based, they
are not group health plans under federal law. Section 2791(a)(1) of
the PHS Act defines ``group health plan'' as an employee welfare
benefit plan as defined in section 3(1) of ERISA to the extent that
the plan provides medical care to employees and their dependents
directly or through insurance, reimbursement, or otherwise.
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Some religiously affiliated colleges and universities object to
signing a written agreement for student health insurance coverage that
provides benefits for contraceptive services. Such colleges and
universities sometimes include funding for student health plans in
their student financial aid packages and object to funding student
health plans that include coverage for contraceptive services.
The proposed rules would provide for an accommodation for student
health insurance coverage arranged by a nonprofit religious institution
of higher education with religious objections to contraceptive coverage
comparable to the proposed accommodation for group health insurance
coverage provided in connection with a group health plan established or
maintained by a nonprofit religious organization with religious
objections to contraceptive coverage. Accordingly, among other things,
upon receiving a copy of the self-certification from an institution of
higher education that meets the criteria for being an eligible
organization, an issuer offering student health insurance coverage
would provide contraceptive coverage, without cost sharing or
additional premium, fee, or other charge, directly to student enrollees
and their covered dependents, independent of the issuer's written
agreement with the institution of higher education to offer the student
health plan. The Departments solicit comments on this proposal.
g. Contraceptive-Only Excepted Benefits
In order to implement the proposed accommodations, it would be
necessary and appropriate to establish a new contraceptive-only
excepted benefits category. Sections 2722(c)(2) and 2763(b) of the PHS
Act provide that the requirements of parts A and B of title XXVII of
the PHS Act do not apply to any individual health insurance coverage in
relation to its provision of excepted benefits described in section
2791(c)(2) of the PHS Act if the benefits are provided under a separate
policy, certificate, or contract of insurance. Section 2791(c)(2) of
the PHS Act provides that this category of excepted benefits includes
limited scope dental or vision benefits, as well as benefits for long-
term care, nursing home care, home health care, or community-based
care, or any combination thereof. The law authorizes similar limited
benefits to be specified in rule as excepted benefits. Additionally,
section 2792 of the PHS Act authorizes HHS to promulgate such rules as
may be necessary or appropriate to carry out the provisions of title
XXVII of the PHS Act. Parallel provisions in section 734 of ERISA and
section 9833 of the Code do the same with respect to the Departments of
Labor and the Treasury.
Pursuant to the authority in section 2791(c)(2) of the PHS Act (and
companion provisions in ERISA and the Code), the proposed rules would
provide that benefits for contraceptive services only, when provided
under a separate individual market health insurance policy,
certificate, or contract of insurance constitute excepted benefits
(subject to the conditions discussed later in this section). The
Departments propose to establish this new category of excepted benefits
to ensure that individual health insurance policies providing
contraceptive coverage offered by an issuer pursuant to the proposed
accommodations are not subject to certain generally applicable PHS Act
and Affordable Care Act
[[Page 8468]]
requirements, such as guaranteed availability (section 2702 of the PHS
Act) given the unique nature of this coverage. Thus, for example, while
issuers would offer this coverage to plan participants and
beneficiaries in plans established or maintained by eligible
organizations, issuers would not be required to make this coverage
available to all other individuals in a state. These proposed
amendments are reflected in proposed 45 CFR 148.220(b).
Notwithstanding this proposed excepted benefits status, the
Departments believe that a core set of basic consumer protection
requirements should apply to individual health insurance policies
providing contraceptive-only coverage. This core set of consumer
protection requirements would be drawn from the broader set of
requirements applicable to individual health insurance coverage under
the PHS Act. This core set would include the requirements regarding
guaranteed renewability of coverage (section 2703 of the PHS Act), the
prohibition against lifetime and annual dollar limits on benefits
(section 2711 of the PHS Act), the prohibition against rescissions of
coverage (section 2712 of the PHS Act), and internal appeals and
external review rights (section 2719 of the PHS Act). Accordingly,
pursuant to the authority in section 2792 of the PHS Act to promulgate
rules that are ``necessary or appropriate'' to carry out section 2713
of the PHS Act (and companion provisions in ERISA and the Code), the
proposed rules would require compliance with these provisions of
federal law as a condition of excepted benefits status. The Departments
welcome comments on which requirements of the PHS Act, ERISA, and the
Code should or should not apply to individual health insurance policies
that provide contraceptive-only coverage. We also seek comments on how
to simplify the establishment of these products and how best to ensure
their availability in all states, including alternatives to excepted
benefits in any state without any such product.
D. No Effect on Other Law
The religious employer exemption and accommodations in these
proposed rules are intended to have meaning solely with respect to the
contraceptive coverage requirement under section 2713 of the PHS Act
and the companion provisions of ERISA and the Code. Whether an employer
or organization (including an institution of higher education) is
designated as ``religious'' for these purposes is not intended as a
judgment about the mission, sincerity, or commitment of the employer or
organization (including an institution of higher education), or
intended to differentiate among the religious merits, commitment,
mission, or public or private standing of religious entities. The use
of such designation is limited solely to defining the class of
employers or organizations (including institutions of higher education)
that would qualify for the religious employer exemption and
accommodations under these proposed rules. The definition of religious
employer or eligible organization in these proposed rules is not being
proposed to apply with respect to, or relied upon for the
interpretation of, any other provision of the PHS Act, ERISA, the Code,
or any other provision of federal law, nor is it intended to set a
precedent for any other purpose. For example, nothing in these proposed
rules should be construed as affecting the interpretation of federal or
state civil rights statutes, such as Title VII of the Civil Rights Act
of 1964 or Title IX of the Education Amendments of 1972.
Furthermore, nothing in these proposed rules would preclude
employers or others from expressing their opposition, if any, to the
use of contraceptives; require anyone to use contraceptives; or require
health care providers to prescribe contraceptives if doing so is
against their religious beliefs.
Finally, the provisions of these proposed rules would not prevent
states from enacting stronger consumer protections than these minimum
standards. Federal health insurance regulation generally establishes a
federal floor to ensure that individuals in every state have certain
basic protections. State health insurance laws requiring coverage for
contraceptive services that provide more access to contraceptive
coverage than the federal standards would therefore continue under the
proposed rules. The Departments solicit comment on the interaction
between state law and these proposed rules.
IV. Economic Impact and Paperwork Burden
A. Executive Orders 12866 and 13563--Department of Health and Human
Services and Department of Labor
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, and public
health and safety effects; distributive impacts; and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a rule:
(1) Having an annual effect on the economy of $100 million or more in
any one year, or adversely and materially affecting a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or state, local, or tribal governments or communities
(also referred to as ``economically significant''); (2) creating a
serious inconsistency or otherwise interfering with an action taken or
planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order.
A regulatory impact analysis must be prepared for major rules with
economically significant effects ($100 million or more in any one
year), and an ``economically significant'' regulatory action is subject
to review by the Office of Management and Budget (OMB). The Departments
have concluded that these proposed rules are not likely to have
economic impacts of $100 million or more in any one year, and therefore
do not meet the definition of ``economically significant'' under
Executive Order 12866.
1. Need for Regulatory Action
As stated earlier in this preamble, the Departments previously
issued amended interim final rules authorizing an exemption for group
health plans established or maintained by religious employers (and any
group health insurance coverage provided in connection with such plans)
from certain coverage requirements under section 2713 of the PHS Act
(76 FR 46621, August 3, 2011). The amended interim final rules were
finalized on February 15, 2012 (77 FR 8725). The Departments are
proposing in these proposed rules to amend the definition of religious
employer in the HHS rule at 45 CFR 147.130(a)(1)(iv)(B) (incorporated
by reference in the rules of the Departments of Labor and the Treasury)
by eliminating the first three prongs of the definition of religious
employer that was established in the 2012 final rules and clarifying
the fourth prong. Under this proposal, an employer that is an
organization that is organized and operates as a nonprofit entity and
[[Page 8469]]
is referred to in section 6033(a)(3)(A)(i) or (iii) of the Code would
be considered a religious employer and its group health plan would
qualify for the exemption from the requirement to cover contraceptive
services. In addition, the proposed rules would establish
accommodations for health coverage established or maintained or
arranged by eligible organizations, which have religious objections to
contraceptive coverage, while providing women contraceptive coverage
without cost sharing.
2. Anticipated Effects
The Departments expect that these proposed rules would not result
in any additional significant burden on or costs to the affected
entities.
B. Special Analyses--Department of the Treasury
For purposes of the Department of the Treasury, it has been
determined that this notice of proposed rulemaking is not a significant
regulatory action as defined in Executive Order 12866, as amended by
Executive Order 13563. Therefore, a regulatory assessment is not
required. It has also been determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to
this proposed rule. It is hereby certified that the collections of
information contained in this notice of proposed rulemaking would not
have a significant impact on a substantial number of small entities.
Accordingly, a regulatory flexibility analysis under the Regulatory
Flexibility Act (5 U.S.C. chapter 6) is not required.
The proposed rules would require each organization seeking
accommodation under the proposed rules to self-certify that it meets
the definition of eligible organization in the proposed rules. Each
organization must self-certify that: (1) On account of religious
objections, it opposes providing coverage for some or all of the
contraceptive items or services that it would otherwise be required to
provide; (2) it is organized and operates as a nonprofit entity; and
(3) it holds itself out as a religious organization. The self-
certification must be executed by an authorized representative of the
organization. The organization must maintain the self-certification in
its records for each plan year to which the accommodation is to apply
and make it available for examination upon request. The proposed rules
would also require each eligible organization that establishes or
maintains an insured group health plan to provide a copy of its self-
certification to the group health insurance issuer. If the group health
plan of the eligible organization is self-insured, the proposed rules
would direct the eligible organization to provide a copy of its self-
certification to the third party administrator.
The Departments intend to specify in guidance the form to be used
for the self-certification, similar to the form previously prescribed
in guidance for the temporary enforcement safe harbor. The Departments
are unable to estimate the number of eligible organizations that would
seek an accommodation. The Departments seek comment on the likely
number of eligible organizations seeking an accommodation. Of the
eligible organizations, some would likely be small entities. It is
estimated that each eligible organization would need only approximately
50 minutes of labor (30 minutes of clerical labor at a cost of $30.64
per hour, 10 minutes for a manager at a cost of $55.22 per hour, 5
minutes for legal counsel at a cost of $83.10 per hour, and 5 minutes
for a senior executive at a cost of $112.43 per hour) each year to
prepare and provide the information in the self-certification. This
would not be a significant economic impact. For these reasons, this
information collection requirement would not have a significant impact
on a substantial number of small entities.
The proposed rules also would require health insurance issuers
providing separate contraceptive coverage to provide written notice to
plan participants and beneficiaries regarding the availability of the
contraceptive coverage. The notice would be provided separate from but
contemporaneous with (to the extent possible) any application materials
distributed in connection with enrollment (or re-enrollment) in group
coverage established, maintained, or arranged by the eligible
organization in any plan year to which the accommodation is to apply.
The proposed rules contain model language for issuers to use to satisfy
the notice requirement. There are 446 issuers in the individual and
group markets. It is believed that very few, if any, of them are small
entities. Moreover, the cost for preparation and distribution of the
notice would not be significant. It is estimated that each issuer would
need approximately 1 hour of clerical labor (at $31.64 per hour) and 15
minutes of management review (at $55.22 per hour) to prepare the
notices for a total cost of approximately $44. It is estimated that
each notice would require $0.46 in postage and $0.05 in materials cost
(paper and ink) and the total postage and materials cost for each
notice sent via mail would be $0.51. For these reasons, these
information collection requirements would not have a significant impact
on a substantial number of small entities.
HHS is soliciting public comment on each of these issues for
purposes of the following section as well.
Pursuant to section 7805(f) of the Code, this proposed rule has
been submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
C. Paperwork Reduction Act--Department of Health and Human Services
Under the Paperwork Reduction Act of 1995, HHS is required to
provide 60-day notice in the Federal Register and solicit public
comment before an information collection requirement (ICR) is submitted
to the Office of Management and Budget (OMB) for review and approval.
These proposed rules contain proposed ICRs that are subject to review
by OMB. A description of these provisions is given in the following
paragraphs with an estimate of the annual burden. In order to fairly
evaluate whether an ICR should be approved by OMB, section
3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that HHS
solicit public comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of HHS.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
HHS is soliciting public comment on each of these issues for the
following sections of these proposed rules that contain proposed ICRs.
Average labor costs (including fringe benefits) used to estimate the
costs are calculated using data available from the Bureau of Labor
Statistics.
1. Self-Certification (Sec. Sec. 147.131(b)(4), 147.131(c)(1),
147.131(c)(2))
Each organization seeking accommodation under the proposed rules
would be required to self-certify that it meets the definition of an
eligible organization. The self-certification would be executed by an
authorized representative of the organization and would also specify
the contraceptive services for which the organization will not
establish, maintain, administer, or fund coverage. The self-
certification would not be submitted to any of the Departments. The
form that would be
[[Page 8470]]
used by organizations for their self-certification would be specified.
This form is available for inspection at http://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html. The organization would maintain the self-certification in
its records for each plan year to which the accommodation is to apply.
The eligible organization would need to provide a copy of its self-
certification to a health insurance issuer (for insured group health
plans or student health insurance coverage) or to a third party
administrator (for self-insured group health plans).
HHS does not have an estimate for how many organizations would seek
an accommodation. HHS seeks comment on the likely number of
organizations seeking an accommodation or the number of participants
and beneficiaries in the plans of such organizations. Therefore, the
burden for only one eligible organization, as opposed to all eligible
organizations in total, is estimated. It is assumed that, for each
eligible organization, clerical staff would gather and enter the
necessary information, send the self-certification electronically to
the issuer or third party administrator, and retain a copy for record-
keeping, a manager and legal counsel would review it, and a senior
executive would execute it. HHS estimates that an organization would
need approximately 50 minutes (30 minutes of clerical labor at a cost
of $30.64 per hour, 10 minutes for a manager at a cost of $55.22 per
hour, 5 minutes for legal counsel at a cost of $83.10 per hour, and 5
minutes for a senior executive at a cost of $112.43 per hour) to
execute the self-certification. Therefore, the total annual burden for
preparing and providing the information in the self-certification would
be approximately $41 for each eligible organization.
With respect to self-insured plans of eligible organizations, the
third party administrator would provide a health insurance issuer a
copy of the self-certification of the eligible organization. The third
party administrator would be able to provide a copy of the self-
certification to the issuer electronically at minimal cost.
2. Notice of Availability of Contraceptive Coverage (Sec. 147.131(d))
The proposed rules would direct a health insurance issuer providing
separate individual contraceptive coverage at no additional cost to
participants and beneficiaries in insured plans of eligible
organizations (or to student enrollees and covered dependents in
student health insurance coverage arranged by eligible organizations)
and to participants and beneficiaries in self-insured plans of eligible
organizations whose coverage is automatically arranged for them by a
third party administrator to provide a written notice to such plan
participants and beneficiaries (or to such student enrollees and
covered dependents) regarding the separate contraceptive coverage. The
notice would be separate from but contemporaneous with (to the extent
possible) any application materials distributed in connection with
enrollment (or re-enrollment) in group coverage of the eligible
organization in any plan year to which the accommodation is to apply
and would be provided annually. To satisfy the proposed notice
requirement, issuers could use the model language set forth in the
proposed rules or substantially similar language.
It is unknown how many issuers provide health insurance coverage in
connection with insured plans of eligible organizations or how many
third party administrators provide services to self-insured plans of
eligible organizations or how many issuers would provide separate
individual contraceptive coverage to plan participants and
beneficiaries of self-insured plans of eligible organizations.
Therefore, the burden for only one issuer, as opposed to all issuers in
total, is estimated. It is estimated that each issuer would need
approximately 1 hour of clerical labor (at $31.64 per hour) and 15
minutes of management review (at $55.22 per hour) to prepare the
notices for a total cost of approximately $44. It is estimated that
each notice would require $0.46 in postage and $0.05 in materials cost
(paper and ink) and the total postage and materials cost for each
notice sent via mail would be $0.51.
3. FFE User Fee Adjustments (Sec. 156.50(d))
In order for a QHP issuer to be eligible for the proposed FFE user
fee adjustment, the proposed rules would provide that the issuer
providing the contraceptive coverage would provide certain information
and documentation (jointly with the affiliated QHP issuer for which the
reduction in the FFE user fee is being sought, if the issuers are not
the same) to HHS. First, monthly data on the number of individuals for
whom the contraceptive coverage is being provided would be required,
along with an attestation that a copy of the self-certification of the
eligible organization was provided by the third party administrator
that arranged for the coverage for the plan participants and
beneficiaries. Second, the issuer would provide an attestation that
coverage for all recommended contraceptive services identified in the
self-certification of the eligible organization is being provided, and
being provided without cost sharing, premiums, fee, or other costs to
the plan participants or beneficiaries. The issuer also would attest to
HHS that it passed the portion of its adjustment attributable to
reasonable charges by third party administrators on to those parties.
Third, the issuer(s) would identify the QHP(s) being offered through an
FFE with respect to which the FFE user fee reduction is to be applied.
In addition, where the issuer providing the contraceptive coverage is
not the QHP issuer for which the reduction in the FFE user fee is being
sought, an attestation that the issuers are from the same issuer group
would be submitted. Finally, the issuer(s) would submit to HHS an
estimate of the cost of the contraceptive coverage, along with data or
documentation supporting that estimate. HHS approval of the cost
estimate would be required before a QHP issuer could receive an FFE
user fee adjustment.
Although the number of QHP issuers that would seek an FFE user fee
adjustment is unknown at this point, HHS anticipates that a small
number of issuer groups would provide such contraceptive coverage
nationwide, and that, for purposes of efficiency, those issuer groups
would consolidate their applications for FFE user fee adjustments with
fewer than 9 issuers of QHPs on FFEs. Collections from fewer than 10
persons are exempt from the Paperwork Reduction Act under 44 U.S.C.
3502(3)(A)(i). Therefore, HHS does not plan to seek OMB approval for
this proposed ICR. However, in the event that, by the time of the
issuance of the final rules, HHS believes that the number of QHP
issuers that would seek an FFE user fee adjustment would be greater
than 9, HHS would seek OMB approval for this proposed ICR.
To obtain copies of the supporting statement and any related forms
for the proposed ICRs referenced above, access CMS's web site at http://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html or email your request,
including your address, phone number, OMB number, and CMS document
identifier, to [email protected], or call the Reports Clearance
Office at (410) 786-1326.
If you comment on these proposed ICRs, please do either of the
following:
1. Submit your comments electronically as specified in the
[[Page 8471]]
ADDRESSES section of these proposed rules; or
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
9968-P, FAX: (202) 395-5806, or email: [email protected].
D. Paperwork Reduction Act--Department of Labor and Department of the
Treasury
As noted above, each organization seeking accommodation under the
proposed rules would be required to self-certify that it meets the
definition of an eligible organization. This proposed requirement,
which is the same in all three sets of proposed rules, is set out in
proposed 26 CFR 54.9815-2713A(b)(4) and proposed 29 CFR 2590.715-
2713A(b)(4). The Departments are soliciting public comments for 60 days
concerning this record-keeping requirement. The Departments will submit
a copy of these proposed rules to OMB in accordance with 44 U.S.C.
3507(d) for review of the proposed ICRs. The Departments and OMB are
particularly interested in comments that:
Evaluate whether the collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
Evaluate the accuracy of the agency's estimate of the
burden of the collection of information, including the validity of the
methodology and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology, for example, by
permitting electronic submission of responses.
Comments should be sent to the Office of Information and Regulatory
Affairs, Attention: Desk Officer for the Employee Benefits Security
Administration either by Fax to (202) 395-5806 or by email to oira_
[email protected]. A copy of the proposed ICRs may be obtained by
contacting the PRA addressee: G. Christopher Cosby, Office of Policy
and Research, Department of Labor, Employee Benefits Security
Administration, 200 Constitution Avenue NW., Room N-5718, Washington,
DC 20210; telephone: (202) 693-8410; Fax: (202) 219-4745 (please note
that these numbers are not toll-free numbers); email: [email protected].
Proposed ICRs submitted to OMB also are available at www.reginfo.gov
(http://www.reginfo.gov/public/do/PRAMain).
Consistent with the HHS analysis presented above, the Departments
do not have an estimate for how many organizations would seek an
accommodation. The Departments seek comment on the likely number of
organizations seeking an accommodation and the number of participants
and beneficiaries in the plans of such organizations. The Departments
rely on the same estimates noted above: 50 minutes per organization to
execute the self-certification (i.e., approximately $41 for each
eligible organization).
With respect to self-insured plans of eligible organizations, the
third party administrator would provide a health insurance issuer a
copy of the self-certification of the eligible organization. The third
party administrator would be able to provide a copy of the self-
certification to the issuer electronically at minimal cost.
The Departments note that persons are not required to respond to,
and generally are not subject to any penalty for failing to comply
with, an ICR unless the ICR has a valid OMB control number. The
paperwork burden estimates are summarized as follows:
Type of Review: New collection.
Agencies: Employee Benefits Security Administration, Department of
Labor; Internal Revenue Service, Department of the Treasury.
Title: Self-Certification; Preventive Services Coverage.
OMB Number: XXXX-XXXX; XXXX-XXXX.
Affected Public: Business or other for-profit; not-for-profit
institutions.
Total Respondents: Unknown.
Total Responses: Unknown.
Frequency of Response: Once.
Estimated Total Annual Burden Hours: 50 minutes per respondent.
Estimated Total Annual Burden Cost: Unknown.
V. Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), as well as Executive Order 12875, these proposed rules do not
include any proposed federal mandate that may result in expenditures by
state, local, or tribal governments, nor does it include any proposed
federal mandates that may impose an annual burden of $100 million,
adjusted for inflation, or more on the private sector.\16\
---------------------------------------------------------------------------
\16\ In early 2013, that threshold level is approximately $139
million.
---------------------------------------------------------------------------
VI. Federalism--Department of Health and Human Services and Department
of Labor
Executive Order 13132 outlines fundamental principles of
federalism, and requires the adherence to specific criteria by federal
agencies in the process of their formulation and implementation of
policies that have ``substantial direct effects'' on states, the
relationship between the federal government and states, or the
distribution of power and responsibilities among the various levels of
government. Federal agencies promulgating rules that have these
federalism implications must consult with state and local officials,
and describe the extent of their consultation and the nature of the
concerns of state and local officials in the preamble to the rules.
In the Departments' view, these proposed rules have federalism
implications, but the federal implications are substantially mitigated
because, with respect to health insurance issuers, 15 states have
enacted specific laws, rules, or bulletins that meet or exceed the
federal standards requiring coverage of specified preventive services
without cost sharing. The remaining states which provide oversight for
these federal law requirements are doing so using their general
authority to enforce these federal standards. Therefore, the proposed
rules are not likely to require substantial additional oversight of
states by HHS.
In general, section 514 of ERISA provides that state laws are
superseded to the extent that they relate to any covered employee
benefit plan, and preserves state laws that regulate insurance,
banking, or securities. ERISA also prohibits states from regulating a
covered plan as an insurance or investment company or bank. HIPAA added
a new preemption provision to ERISA (as well as to the PHS Act)
narrowly preempting state requirements for group health insurance
coverage. States may continue to apply state law requirements but not
to the extent that such requirements prevent the application of the
federal requirement that group health insurance coverage provided in
connection with group health plans provide coverage for specified
preventive services without cost sharing. HIPAA's Conference Report
states that the conferees intended the narrowest preemption of state
laws with regard to health insurance issuers (H.R. Conf. Rep. No. 104-
736, 104th Cong. 2d Session 205, 1996). State insurance laws that are
more stringent
[[Page 8472]]
than the federal requirement are unlikely to ``prevent the application
of'' the preventive services coverage provision, and therefore are not
preempted. Accordingly, states have significant latitude to impose
requirements on health insurance issuers that are more restrictive than
those in federal law.
Guidance conveying this interpretation was published in the Federal
Register on April 8, 1997 (62 FR 16904), and December 30, 2004 (69 FR
78720), and these proposed rules would clarify and implement the
statute's minimum standards and would not significantly reduce the
discretion given the states by the statute.
The PHS Act provides that the states may enforce the provisions of
title XXVII of the PHS Act as they pertain to issuers, but that the
Secretary of HHS will enforce any provisions that a state does not have
authority to enforce or that a state has failed to substantially
enforce. When exercising its responsibility to enforce provisions of
the PHS Act, HHS works cooperatively with the state for the purpose of
addressing the state's concerns and avoiding conflicts with the
exercise of state authority.\17\ HHS has developed procedures to
implement its enforcement responsibilities, and to afford states the
maximum opportunity to enforce the PHS Act's requirements in the first
instance. In compliance with Executive Order 13132's requirement that
agencies examine closely any policies that may have federalism
implications or limit the policymaking discretion of states, the
Departments have engaged in numerous efforts to consult and work
cooperatively with affected state and local officials.
---------------------------------------------------------------------------
\17\ This authority applies to insurance issued with respect to
group health plans generally, including plans covering employees of
church organizations. Thus, this discussion of federalism applies to
all group health insurance coverage that is subject to the PHS Act,
including those church plans that provide coverage through a health
insurance issuer (but not to church plans that do not provide
coverage through a health insurance issuer).
---------------------------------------------------------------------------
In conclusion, throughout the process of developing these proposed
rules, to the extent feasible within the specific preemption provisions
of ERISA and the PHS Act, the Departments have attempted to balance
states' interests in regulating health plans and health insurance
issuers, and the rights of those individuals that Congress intended to
protect in the PHS Act.
VII. Statutory Authority
The Department of the Treasury regulations are proposed to be
adopted pursuant to the authority contained in sections 7805 and 9833
of the Code.
The Department of Labor regulations are proposed to be adopted
pursuant to the authority contained in 29 U.S.C. 1002(16), 1027, 1059,
1135, 1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1185d,
1191, 1191a, 1191b, and 1191c; sec. 101(g), Public Law 104-191, 110
Stat. 1936; sec. 401(b), Public Law 105-200, 112 Stat. 645 (42 U.S.C.
651 note); sec. 512(d), Public Law 110-343, 122 Stat. 3881; sec. 1001,
1201, and 1562(e), Public Law 111-148, 124 Stat. 119, as amended by
Public Law 111-152, 124 Stat. 1029; Secretary of Labor's Order 3-2010,
75 FR 55354 (September 10, 2010).
The Department of Health and Human Services regulations are
proposed to be adopted pursuant to the authority contained in sections
2701 through 2763, 2791, and 2792 of the PHS Act (42 U.S.C. 300gg
through 300gg-63, 300gg-91, and 300gg-92), as amended; and Title I of
the Affordable Care Act, sections 1301-1304, 1311-1312, 1321-1322,
1324, 1334, 1342-1343, 1401-1402, and 1412, Public Law 111-148, 124
Stat. 119 (42 U.S.C. 18021-18024, 18031-18032, 18041-18042, 18044,
18054, 18061, 18063, 18071, 18082, 26 U.S.C. 36B, and 31 U.S.C. 9701).
List of Subjects
26 CFR Part 54
Excise taxes, Health care, Health insurance, Pensions, Reporting
and recordkeeping requirements.
29 CFR Part 2590
Continuation coverage, Disclosure, Employee benefit plans, Group
health plans, Health care, Health insurance, Medical child support,
Reporting and recordkeeping requirements.
45 CFR Part 147
Health care, Health insurance, Reporting and recordkeeping
requirements, and State regulation of health insurance.
45 CFR Part 148
Administrative practice and procedure, Health care, Health
insurance, Penalties, and Reporting and recordkeeping requirements.
45 CFR Part 156
Administrative practice and procedure, Advertising, Advisory
committees, Brokers, Conflict of interest, Consumer protection, Grant
programs--health, Grants administration, Health care, Health insurance,
Health maintenance organization (HMO), Health records, Hospitals,
American Indian/Alaska Natives, Individuals with disabilities, Loan
programs--health, Organization and functions (Government agencies),
Medicaid, Public assistance programs, Reporting and recordkeeping
requirements, State and local governments, Sunshine Act, Technical
assistance, Women, and Youth.
Department of the Treasury
Internal Revenue Service
Accordingly, 26 CFR part 54 is proposed to be amended as follows:
PART 54--PENSION EXCISE TAXES
0
Paragraph 1. The authority citation for part 54 continues to read in
part as follows:
Authority: 26 U.S.C. 7805. * * *
0
Par. 2. Section 54.9801-2 is amended by revising the definition of
excepted benefits as follows:
Sec. 54.9801-2 Definitions.
* * * * *
Excepted benefits means the benefits described as excepted in Sec.
54.9831(c), or 45 CFR Sec. 148.220 (describing when individual health
insurance policies constitute excepted benefits).
* * * * *
0
Par. 3. Section 54.9815-2713 is amended by adding paragraph (a)(1)
introductory text and revising paragraph (a)(1)(iv) to read as follows:
Sec. 54.9815-2713 Coverage of preventive health services.
(a) Services--(1) In general. Beginning at the time described in
paragraph (b) of this section and subject to Sec. 54.9815-2713A, a
group health plan, or a health insurance issuer offering group health
insurance coverage, must provide coverage for all of the following
items and services, and may not impose any cost sharing requirement
(such as a copayment, coinsurance, or a deductible) with respect to
those items and services:
* * * * *
(iv) With respect to women, to the extent not described in
paragraph (a)(1)(i) of this section, evidence-informed preventive care
and screenings provided for in binding comprehensive health plan
coverage guidelines supported by the Health Resources and Services
Administration, in accordance with 45 CFR 147.131(a).
* * * * *
0
Par. 4. Section 54.9815-2713A is added to read as follows:
Sec. 54.9815-2713A Accommodations in connection with coverage of
preventive health services.
(a) Eligible organizations. An eligible organization is an
organization that
[[Page 8473]]
satisfies all of the following requirements:
(1) The organization opposes providing coverage for some or all of
any contraceptive services required to be covered under Sec. 54.9815-
2713(a)(1)(iv) on account of religious objections.
(2) The organization is organized and operates as a nonprofit
entity.
(3) The organization holds itself out as a religious organization.
(4) The organization maintains in its records a self-certification,
made in the manner and form specified by the Secretary of Health and
Human Services, for each plan year to which the accommodation is to
apply, executed by a person authorized to make the certification on
behalf of the organization, indicating that the organization satisfies
the criteria in paragraphs (a)(1) through (3) of this section, and,
specifying those contraceptive services for which the organization will
not establish, maintain, administer, or fund coverage, and makes such
certification available for examination upon request.
(b) Contraceptive coverage--self-insured group health plan
coverage. [Reserved.]
(c) Contraceptive coverage--insured group health plan coverage--(1)
A group health plan established or maintained by an eligible
organization and that provides benefits through one or more issuers
complies with any requirement under Sec. 54.9815-2713(a)(1)(iv) to
provide contraceptive coverage if the eligible organization or plan
administrator furnishes each issuer that would otherwise provide
coverage for any contraceptive services required to be covered under
Sec. 54.9815-2713(a)(1)(iv) with a copy of the self-certification
described in paragraph (a)(4) of this section.
(2) A group health insurance issuer that receives a copy of the
self-certification described in paragraph (a)(4) of this section with
respect to a plan for which the issuer would otherwise provide coverage
for any contraceptive services required to be covered under Sec.
54.9815-2713(a)(1)(iv) must automatically provide health insurance
coverage for any contraceptive services required to be covered by Sec.
54.9815-2713(a)(1)(iv) and identified in the self-certification,
through a separate health insurance policy that is excepted under 45
CFR 148.220(b)(7), for each plan participant and beneficiary. The
issuer providing the individual market excepted benefits policy may not
impose any cost sharing requirement (such as a copayment, coinsurance,
or a deductible) with respect to coverage of those services, or impose
any premium, fee, or other charge, or portion thereof, directly or
indirectly, on the eligible organization, its group health plan, or
plan participants or beneficiaries with respect to coverage of those
services.
(d) Notice of availability of contraceptive coverage. An issuer
providing contraceptive coverage arranged pursuant to paragraph (b) or
(c) of this section must provide to plan participants and beneficiaries
written notice of the availability of the contraceptive coverage,
separate from but contemporaneous with (to the extent possible)
application materials distributed in connection with enrollment (or re-
enrollment) in group coverage of the eligible organization for any plan
year to which this paragraph applies. The following model language, or
substantially similar language, may be used to satisfy the notice
requirement of this paragraph: ``The organization that establishes and
maintains, or arranges, your health coverage has certified that your
group health plan qualifies for an accommodation with respect to the
federal requirement to cover all Food and Drug Administration-approved
contraceptive services for women, as prescribed by a health care
provider, without cost sharing. This means that your health coverage
will not cover the following contraceptive services: [contraceptive
services specified in self-certification]. Instead, these contraceptive
services will be covered through a separate individual health insurance
policy, which is not administered or funded by, or connected in any way
to, your health coverage. You and any covered dependents will be
enrolled in this separate individual health insurance policy at no
additional cost to you. If you have any questions about this notice,
contact [contact information for health insurance issuer].''
Department of Labor
Employee Benefits Security Administration
For the reasons stated in the preamble, the Department of Labor
proposes to amend 29 CFR part 2590 as follows:
PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS
0
1. The authority citation for part 2590 continues to read as follows:
Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1185c, 1185d, 1191, 1191a,
1191b, and 1191c; sec. 101(g), Public Law 104-191, 110 Stat. 1936;
sec. 401(b), Public Law 105-200, 112 Stat. 645 (42 U.S.C. 651 note);
sec. 512(d), Public Law 110-343, 122 Stat. 3881; sec. 1001, 1201,
and 1562(e), Public Law 111-148, 124 Stat. 119, as amended by Public
Law 111-152, 124 Stat. 1029; Secretary of Labor's Order 3-2010, 75
FR 55354 (September 10, 2010).
0
2. Section 2590.701-2 is amended by revising the definition of Excepted
benefits as follows:
Sec. 2590.701-2 Definitions.
* * * * *
Excepted benefits means the benefits described as excepted in Sec.
2590.732(c), or 45 CFR Sec. 148.220 (describing when individual health
insurance policies constitute excepted benefits).
* * * * *
0
3. Section 2590.715-2713 is amended by revising paragraphs (a)(1)
introductory text and (a)(1)(iv) to read as follows:
Sec. 2590.715-2713 Coverage of preventive health services.
(a) Services--(1) In general. Beginning at the time described in
paragraph (b) of this section and subject to Sec. 2590.715-2713A, a
group health plan, or a health insurance issuer offering group health
insurance coverage, must provide coverage for all of the following
items and services, and may not impose any cost sharing requirement
(such as a copayment, coinsurance, or a deductible) with respect to
those items and services:
* * * * *
(iv) With respect to women, to the extent not described in
paragraph (a)(1)(i) of this section, evidence-informed preventive care
and screenings provided for in binding comprehensive health plan
coverage guidelines supported by the Health Resources and Services
Administration, in accordance with 45 CFR 147.131(a).
* * * * *
0
4. A new Sec. 2590.715-2713A is added to read as follows:
Sec. 2590.715-2713A Accommodations in connection with coverage of
preventive health services.
(a) Eligible organizations. An eligible organization is an
organization that satisfies all of the following requirements:
(1) The organization opposes providing coverage for some or all of
any contraceptive services required to be covered under Sec. 2590.715-
713(a)(1)(iv) on account of religious objections.
(2) The organization is organized and operates as a nonprofit
entity.
(3) The organization holds itself out as a religious organization.
[[Page 8474]]
(4) The organization maintains in its records a self-certification,
made in the manner and form specified by the Secretary of Health and
Human Services, for each plan year to which the accommodation is to
apply, executed by a person authorized to make the certification on
behalf of the organization, indicating that the organization satisfies
the criteria in paragraphs (a)(1) through (3) of this section, and,
specifying those contraceptive services for which the organization will
not establish, maintain, administer, or fund coverage, and makes such
certification available for examination upon request.
(b) Contraceptive coverage--self-insured group health plan
coverage. [Reserved.]
(c) Contraceptive coverage--insured group health plan coverage. (1)
A group health plan established or maintained by an eligible
organization and that provides benefits through one or more issuers
complies with any requirement under Sec. 2590.715-2713(a)(1)(iv) to
provide contraceptive coverage if the eligible organization or plan
administrator furnishes each issuer that would otherwise provide
coverage for any contraceptive services required to be covered under
Sec. 2590.715-2713(a)(1)(iv) with a copy of the self-certification
described in paragraph (a)(4) of this section.
(2) A group health insurance issuer that receives a copy of the
self-certification described in paragraph (a)(4) of this section with
respect to a plan for which the issuer would otherwise provide coverage
for any contraceptive services required to be covered under Sec.
2590.715-2713(a)(1)(iv) must automatically provide health insurance
coverage for any contraceptive services required to be covered by Sec.
2590.715-2713(a)(1)(iv) and identified in the self-certification,
through a separate health insurance policy that is excepted under 45
CFR 148.220(b)(7), for each plan participant and beneficiary. The
issuer providing the individual market excepted benefits policy may not
impose any cost sharing requirement (such as a copayment, coinsurance,
or a deductible) with respect to coverage of those services, or impose
any premium, fee, or other charge, or portion thereof, directly or
indirectly, on the eligible organization, its group health plan, or
plan participants or beneficiaries with respect to coverage of those
services.
(d) Notice of availability of contraceptive coverage. An issuer
providing contraceptive coverage arranged pursuant to paragraph (b) or
(c) of this section must provide to plan participants and beneficiaries
written notice of the availability of the contraceptive coverage,
separate from but contemporaneous with (to the extent possible)
application materials distributed in connection with enrollment (or re-
enrollment) in group coverage of the eligible organization for any plan
year to which this paragraph applies. The following model language, or
substantially similar language, may be used to satisfy the notice
requirement of this paragraph: ``The organization that establishes and
maintains, or arranges, your health coverage has certified that your
group health plan qualifies for an accommodation with respect to the
federal requirement to cover all Food and Drug Administration-approved
contraceptive services for women, as prescribed by a health care
provider, without cost sharing. This means that your health coverage
will not cover the following contraceptive services: [contraceptive
services specified in self-certification]. Instead, these contraceptive
services will be covered through a separate individual health insurance
policy, which is not administered or funded by, or connected in any way
to, your health coverage. You and any covered dependents will be
enrolled in this separate individual health insurance policy at no
additional cost to you. If you have any questions about this notice,
contact [contact information for health insurance issuer].''
Department of Health and Human Services
For the reasons stated in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR Subtitle A parts 147, 148,
and 156 as follows:
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
INDIVIDUAL HEALTH INSURANCE MARKETS
0
1. The authority citation for part 147 continues to read as follows:
Authority: 2701 through 2763, 2791, and 2792 of the Public
Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and
300gg-92), as amended.
0
2. Section 147.130 is amended by revising paragraphs (a)(1)
introductory text and (a)(1)(iv) to read as follows:
Sec. 147.130 Coverage of preventive health services.
(a) Services--(1) In general. Beginning at the time described in
paragraph (b) of this section and subject to Sec. 147.131, a group
health plan, or a health insurance issuer offering group or individual
health insurance coverage, must provide coverage for all of the
following items and services, and may not impose any cost sharing
requirement (such as a copayment, coinsurance, or a deductible) with
respect to those items and services:
* * * * *
(iv) With respect to women, to the extent not described in
paragraph (a)(1)(i) of this section, evidence-informed preventive care
and screenings provided for in binding comprehensive health plan
coverage guidelines supported by the Health Resources and Services
Administration.
* * * * *
0
2. A new Sec. 147.131 is added to read as follows:
Sec. 147.131 Exemption and accommodations in connection with coverage
of preventive health services.
(a) Religious employers. In issuing guidelines under Sec.
147.130(a)(1)(iv), the Health Resources and Services Administration may
establish an exemption from such guidelines with respect to a group
health plan established or maintained by a religious employer (and
health insurance coverage provided in connection with a group health
plan established or maintained by a religious employer) with respect to
any requirement to cover contraceptive services under such guidelines.
For purposes of this paragraph (a), a ``religious employer'' is an
organization that is organized and operates as a nonprofit entity and
is referred to in section 6033(a)(3)(A)(i) or (a)(3)(A)(iii) of the
Internal Revenue Code of 1986, as amended.
(b) Eligible organizations. An eligible organization is an
organization that satisfies all of the following requirements:
(1) The organization opposes providing coverage for some or all of
any contraceptive services required to be covered under Sec.
147.130(a)(1)(iv) on account of religious objections.
(2) The organization is organized and operates as a nonprofit
entity.
(3) The organization holds itself out as a religious organization.
(4) The organization maintains in its records a self-certification,
made in the manner and form specified by the Secretary of Health and
Human Services, for each plan year to which the accommodation is to
apply, executed by a person authorized to make the certification on
behalf of the organization, indicating that the organization satisfies
the criteria in paragraphs (b)(1) through (3) of this section, and,
specifying those contraceptive services for which the
[[Page 8475]]
organization will not establish, maintain, administer, or fund
coverage, and makes such certification available for examination upon
request.
(c) Contraceptive coverage--insured group health plan coverage. (1)
A group health plan established or maintained by an eligible
organization and that provides benefits through one or more issuers
complies with any requirement under Sec. 147.130(a)(1)(iv) to provide
contraceptive coverage if the eligible organization or plan
administrator furnishes each issuer that would otherwise provide
coverage for any contraceptive services required to be covered under
Sec. 147.130(a)(1)(iv) with a copy of the self-certification described
in paragraph (b)(4) of this section.
(2) A group health insurance issuer that receives a copy of the
self-certification described in paragraph (b)(4) of this section with
respect to a plan for which the issuer would otherwise provide coverage
for any contraceptive services required to be covered under Sec.
147.130(a)(1)(iv) must automatically provide health insurance coverage
for any contraceptive services required to be covered by Sec.
147.130(a)(1)(iv) and identified in the self-certification, through a
separate health insurance policy that is excepted under Sec.
148.220(b)(7) of this subtitle, for each plan participant and
beneficiary. The issuer providing the individual market excepted
benefits policy may not impose any cost sharing requirement (such as a
copayment, coinsurance, or a deductible) with respect to coverage of
those services, or impose any premium, fee, or other charge, or portion
thereof, directly or indirectly, on the eligible organization, its
group health plan, or plan participants or beneficiaries with respect
to coverage of those services.
(d) Notice of availability of contraceptive coverage. An issuer
providing contraceptive coverage arranged pursuant to paragraph (c) of
this section must provide to plan participants and beneficiaries
written notice of the availability of the contraceptive coverage,
separate from but contemporaneous with (to the extent possible)
application materials distributed in connection with enrollment (or re-
enrollment) in group coverage of the eligible organization for any plan
year to which this paragraph applies. The following model language, or
substantially similar language, may be used to satisfy the notice
requirement of this paragraph: ``The organization that establishes and
maintains, or arranges, your health coverage has certified that your
[group health plan/student health insurance coverage] qualifies for an
accommodation with respect to the federal requirement to cover all Food
and Drug Administration-approved contraceptive services for women, as
prescribed by a health care provider, without cost sharing. This means
that your health coverage will not cover the following contraceptive
services: [contraceptive services specified in self-certification].
Instead, these contraceptive services will be covered through a
separate individual health insurance policy, which is not administered
or funded by, or connected in any way to, your health coverage. You and
any covered dependents will be enrolled in this separate individual
health insurance policy at no additional cost to you. If you have any
questions about this notice, contact [contact information for health
insurance issuer].''
(e) Application to student health insurance coverage. The
provisions of this section apply to student health insurance coverage
arranged by an eligible organization that is an institution of higher
education in a manner comparable to that in which they apply to group
health insurance coverage provided in connection with a group health
plan established or maintained by an eligible organization that is an
employer. In applying this section in the case of student health
insurance coverage, a reference to ``plan participants and
beneficiaries'' is a reference to student enrollees and their covered
dependents.
PART 148--REQUIREMENTS FOR THE INDIVIDUAL HEALTH INSURANCE MARKET
0
3. The authority citation for part 148 continues to read as follows:
Authority: Secs. 2741 through 2763, 2791, and 2792 of the
Public Health Service Act (42 U.S.C. 300gg-41 through 300gg-63,
300gg-91, and 300gg-92).
0
4. Section 148.220 is amended as follows:
0
a. In the introductory text of paragraph (b), the reference ``(b)(6)''
is removed and the reference ``(b)(7)'' is added in its place.
0
b. Adding paragraph (b)(7).
The addition reads as follows:
Sec. 148.220 Excepted benefits.
* * * * *
(b) * * *
(7) Individual health insurance coverage that provides coverage
only for contraceptive services pursuant to Sec. 147.131(c) of this
subtitle, 26 CFR 54.9815-2713A(b) or (c), or 29 CFR 2590.715-2713A(b)
or (c), but only if such coverage complies with the requirements in the
following provisions:
(i) Section 2703 of the PHS Act (relating to guaranteed
renewability of coverage).
(ii) Section 2711 of the PHS Act (relating to the prohibition on
lifetime and annual dollar limits on benefits).
(iii) Section 2712 of the PHS Act (relating to the prohibition on
rescissions of coverage).
(iv) Section 2719 of the PHS Act (relating to internal appeals and
external review).
PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES
0
5. The authority citation for part 156 continues to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301-
1304, 1311-1312, 1321-1322, 1324, 1334, 1342-1343, 1401-1402, and
1412, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 18021-18024, 18031-
18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, 26
U.S.C. 36B, and 31 U.S.C. 9701).
0
6. Section 156.150 is amended by adding paragraph (d) to read as
follows:
Sec. 156.50 Financial support.
* * * * *
(d) Adjustment of Federally-facilitated Exchange user fee. If a QHP
issuer (or another issuer in the same issuer group) provides individual
health insurance coverage consisting of coverage for any contraceptive
services required to be covered under Sec. 147.130(a)(1)(iv) of this
subchapter, and identified in the self-certification referenced in
Sec. 147.131(b)(4) of this subchapter, to any plan participant or
beneficiary with respect to whom the QHP issuer receives the written
notice referenced in 26 CFR 54.9815-2713A(b) or 29 CFR 2590.715-
2713A(b), the QHP issuer may qualify for a reduction in the user fee
for a Federally-facilitated Exchange specified in paragraph (c) as
described in this paragraph (d).
(1) In order for a QHP issuer to be eligible for the Federally-
facilitated Exchange user fee reduction, in providing such
contraceptive coverage to such individuals, the QHP issuer (or another
issuer in the same issuer group) may not impose any cost-sharing
requirement (such as a copayment, coinsurance, or a deductible), or
impose any premium, fee, or other charge, directly or indirectly, with
respect to such contraceptive coverage, and must satisfy the other
conditions set forth in this section.
(2) If an issuer provides such contraceptive coverage to such
individuals, and it, or another issuer in the same issuer group, is
required to pay
[[Page 8476]]
the Federally-facilitated Exchange user fee, a reduction in that user
fee may be sought for the HHS-approved estimated cost of such
contraceptive coverage.
(3) In order for a QHP issuer to be eligible for the Federally-
facilitated Exchange user fee reduction, the issuer of such
contraceptive coverage to such individuals must (jointly with the
issuer seeking the reduction in the Federally-facilitated Exchange user
fee, if not the same issuers) do all of the following:
(i) Provide monthly data on the number of individuals to whom the
contraceptive coverage is being provided, and provide an attestation by
the issuer providing the contraceptive coverage that the issuer
received a copy of the written notice referenced in 26 CFR 54.9815-
2713A(b) or 29 CFR 2590.715-2713A(b) with respect to each plan
participant or beneficiary.
(ii) Provide an attestation by the issuer providing the
contraceptive coverage that the issuer provided contraceptive coverage
in accordance with paragraph (d) of this section and that the issuer
passed the portion of the reduction in the Federally-facilitated
Exchange user fee attributable to reasonable charges by third party
administrators on to the third party administrators.
(iii) Identify the QHP(s) being offered through a Federally-
facilitated Exchange with respect to which the user fee reduction is to
be applied, and, if the issuer providing the contraceptive coverage is
not the issuer seeking the user fee reduction, provide an attestation
by the issuer providing the contraceptive coverage that both the issuer
providing the contraceptive coverage and the issuer seeking the user
fee reduction belong to the same issuer group.
(iv) Submit an estimate of the cost of the contraceptive coverage
to HHS for approval, in the manner and timeframe specified by HHS,
concurrent with documentation or data supporting that estimate.
(4) If the information specified under paragraphs (d)(3)(i) through
(iii) of this section is provided and the estimate specified under
paragraph (d)(3)(iv) of this section is submitted and approved by HHS,
the issuer of the identified QHP(s) will be provided a reduction in its
obligation to pay the Federally-facilitated Exchange user fee specified
in paragraph (c) in an amount equal in value to the approved estimated
cost of the contraceptive coverage, as long as an exception from OMB
Circular No. A-25 is in effect. If the amount of the reduction is
greater than the amount of the obligation to pay the Federally-
facilitated Exchange user fee in a particular month, the issuer of the
identified QHP(s) will be provided a credit in succeeding months in the
amount of the excess. An issuer that is eligible for a user fee
reduction in accordance with this paragraph (d) prior to January 1,
2014, will be provided a credit in the amount of the user fee reduction
beginning January 2014.
(5) An issuer providing contraceptive coverage for which a
reduction in the Federally-facilitated Exchange user fee has been
provided under paragraph (d)(4) of this section (whether the reduction
was provided to the issuer or another issuer in the same issuer group)
must maintain for 10 years and make available to HHS upon request all
of the following:
(i) Documentation demonstrating that the contraceptive coverage was
provided to plan participants or beneficiaries with respect to whom the
issuer received a copy of the written notice referenced in 26 CFR
54.9815-2713A(b) or 29 CFR 2590.715-2713A(b).
(ii) Documentation demonstrating that the contraceptive coverage
was provided in accordance with paragraph (d) of this section.
(iii) Documentation or data supporting the estimate of the cost of
the contraceptive coverage.
(iv) Documentation or data on the actual cost of providing the
contraceptive coverage.
Signed this 30th day of January 2013.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement, Internal Revenue
Service.
Signed this 30th day of January 2013.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
Dated: January 29, 2013.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: January 29, 2013.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2013-02420 Filed 2-1-13; 11:15 am]
BILLING CODE 4830-01; 4510-029; 4120-01; 6325-64-P