By: Jen McCormick, Esq.

The Trump Administration announced an impactful change via an interim final rule, effective immediately (i.e. October 6, 2017) to the ACA’s contraceptive mandate for some self-funded plans and their third party administrators.

These new HHS regulations allow a larger pool of entities (i.e. employers) to opt out of the ACA preventive care contraception requirements. Specifically, the regulations allow (1) employers with contrary religious beliefs and (2) organizations and small businesses with objections based on their moral convictions to opt out of this women’s preventive care mandate.

Prior to October 6, 2017, this exemption was limited to certain houses of worship, nonprofits with religious affiliations and closely held for-profit entities. Now, a much broader scope of entities (i.e. nonprofit organizations, for-profit companies, publicly traded companies, and educational institutions) are permitted to claim a religious objection.  

This change will permit a much larger pool of companies to carve-out certain women’s preventive care benefit under their health plan.  Thus, with renewal season almost in full force, the applicability of this rule for self-funded plans and their administrators needs immediate clarification.

Prior to this interim final rule, the regulations required third party administrators who administered the self-funded medical plan for those entities who could opt out of the mandate (via an exemption or accommodation, etc) to otherwise arrange for these women’s preventive benefits.  While we have yet to see the finalized rules, it appears this requirement remains untouched.  As a result, it seems that this could have a big impact on groups wanting to make this modification to their current benefit structure (or even those wishing to make an immediate amendment to their plan design).  Third party administrators should be on the look-out and ensure they have processes and procedures in place to address this internally.

Note that this is still a pending issue and rescission of coverage is still not permitted under the ACA, and we do expect additional clarification and guidance.  For example, it is expected that Massachusetts Attorney General Maura Healy will push against this regulation.