HHS Offers Contraceptive Coverage Proposals for Self-Insured Employers, Announces Rule for Student Health Plans

March 19, 2012 — HHS on Friday offered a series of proposals that would allow religiously affiliated employers that self-insure to avoid directly paying for contraceptive coverage under new federal rules, the Wall Street Journal's "Election 2012" reports.

The move marks the latest attempt by the Obama administration to assuage concerns from some religious groups over the federal contraceptive coverage rules (Radnofsky, "Election 2012," Wall Street Journal, 3/16). The rules implement a provision in the federal health reform law (PL 111-148) that requires health plans to cover preventive services without copayments or deductibles. The rules do not apply to religious institutions that have a primary purpose of inculcating religious values, but do apply to religiously affiliated employers with more general missions, such as hospitals and universities (Women's Health Policy Report, 3/15).

Amid opposition from religious and conservative groups, the Obama administration last month announced that religiously affiliated employers will not have to offer contraceptive coverage for their employees, but their insurers will have to provide it directly to women at no additional cost.

The changes did not mollify the U.S. Conference of Catholic Bishops. The bishops contend that it is impossible for self-insured employers, which provide health insurance directly to their workers and pay the health care claims themselves, to separate funding for contraceptive coverage (McCarthy, National Journal, 3/16).

Details of Proposals

In the 32-page notice released on Friday, HHS offered three possible ways to ensure contraceptive coverage for women if they work for a self-insured employer with religious objections (Alonso-Zaldivar, AP/San Jose Mercury News, 3/16). HHS encouraged stakeholders to submit other ideas and comments over the next 90 days, after which the agency will release a proposed rule (Rau, "Capsules," Kaiser Health News, 3/16).

One proposal would require the third-party administrators that self-insured plans use to manage their benefits to pay for the coverage through revenue streams that are not directly connected to the employer (Feder, Politico, 3/16). Possible revenue sources suggested by HHS include pharmaceutical company rebates and disease management program fees, according to Kaiser Health News' "Capsules."

Under a second scenario, a new reinsurance program under the health reform law would issue health plans rebates or credits to cover the cost of contraception ("Capsules," Kaiser Health News, 3/16).

A third idea involves using a separate insurance company to provide the contraceptive coverage (Politico, 3/16). The Office of Personnel Management could require or encourage private insurers to provide the coverage for a religious employer's workers, HHS Secretary Kathleen Sebelius said (Pear, New York Times, 3/16).

HHS Releases Final Rule for Student Health Plans

HHS on Friday announced that student health plans will have to comply with the contraceptive coverage rules. Religiously affiliated universities should treat their student plans the same as their employees' plans, meaning they will have not have to directly offer contraceptive coverage but must have their insurer offer it to students at no charge, HHS said (Baker, "Healthwatch," The Hill, 3/16).

Reaction

Women's groups praised Friday's announcements. Planned Parenthood President and CEO Cecile Richards said the proposals make clear "that the Obama administration is fulfilling its promise that women will have access to birth control coverage, with no costly copays and no additional hurdles, no matter where they work." She added, "Women who buy health insurance from their college or university will have access to affordable birth control, just like women who receive health insurance from their employer" (National Journal, 3/16).

The proposals for self-insured employers did not appease critics, according to the New York Times. Rep. Jeff Fortenberry (R-Neb.) -- who has introduced a bill to let employers and health plans opt out of the coverage requirements -- called the proposals an "accounting gimmick" (New York Times, 3/16). Sen. Roy Blunt (R-Mo.), author of a companion measure that failed in the Senate, said the proposals still violate "Americans' religious freedom" (Reichard, CQ HealthBeat, 3/16).