Accommodations for Contraception Coverage Exemptions Replace Subsidies As The ACA Story of the Week

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In recent months, the main event in the challenges against the Affordable Care Act centered on the subsidies provisions in the ACA. The Supreme Court decided this matter in King v. Burwell. In July 2015, there were two additional key developments related to the provision requiring employers to provide contraception coverage.

On July 14, 2015, the 10th Circuit Court of Appeals in Little Sisters of the Poor Home v. Burwell held that the self-certifying procedure in place for religious not-for-profits to take advantage of a religious exemption to mandatory contraception coverage requirement is not overly burdensome. That same day, the Department of Health and Human Services published a final regulation that provides accommodations for certain for-profit entities also wishing to claim a religious exemption to the contraception coverage requirement. This regulation was passed in response to the Supreme Court decision in Burwell v. Hobby Lobby.

Both of these events focus on the sensitive and contentious provisions in the ACA requiring employers to provide contraception coverage for their employees. This was a particular concern to religious employers and other employers who had religious objections to contraception. Initially, the focus was on religious entities. In response to these concerns, the government implemented an exemption for religious employers which generally referred to churches, their auxiliaries and activities.

However, religious entities expressed concern that the definition did not extend to religious not-for-profits. A subsequent regulation simplified the definition of a religious employer and created a separate definition of a religious non-profit organization that did not meet the definition of religious employer but crafted a separate accommodation for the non-profit. Among its requirements, the non-profit had to self-certify that it met the definition of a religious non-profit.

To self-certify, initially, a religious non-profit was required to fill out a standard form and submit it to their health insurance provider or third-party administrator. However, this accommodation was expanded to also include the option of providing notice of self-certification to HHS via letter or email. This notice had to include specific provisions that were considered the minimum necessary administrative purposes. The ultimate question for the court in the Little Sisters case is whether this accommodation constituted a substantial burden on the religious exercise of the non-profit. The court held that, given the ease of the self-certification process, it did not create a substantial burden on religious exercise.

The regulation issued that same day created a similar accommodation for for-profit companies that object on religious grounds to providing contraception coverage. Under this accommodation, these companies must self-certify to their health insurance provider or to HHS in a similar fashion to the religious non-profits and it is limited to companies where over 50 percent of the company is owned by no more than five individuals (or a substantially similar structure) on the date of self-certification. If a company is exempt, the regulation still requires the company’s insurer to provide the contraception coverage to employees who request it and the insurer can be reimbursed by the government.