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November 6, 2017 FOCUS: Employee Benefits

Trump admin. allows employers to opt out of ACA’s contraception mandate

Alisha N. Sullivan Lawyer, Robinson & Cole
Virginia E. McGarrity Lawyer, Robinson & Cole

While the Republican-controlled Congress has tried and failed to repeal and replace the Affordable Care Act (ACA), the Trump Administration has continued its war on the ACA through a series of executive orders and regulatory changes.

Most recently, the U.S. departments of the Treasury, Labor, and Health and Human Services issued final rules that immediately broaden exceptions to the ACA's contraceptive coverage mandate.

The mandate requires birth control pills and other contraceptives to be covered by insurance as part of preventive care, at no cost to patients.

The contraception mandate has been a controversial topic, heralded by many religious organizations as a violation of their religious beliefs and it quickly resulted in numerous lawsuits.

That litigation resulted in a closely divided Supreme Court ruling that said corporations with religious owners can't be required to pay insurance coverage for contraception.

The final rules recently released by the Trump administration greatly expand the contraception mandate exemption to employers who may claim to have a “moral conviction” against providing such coverage.

Organizations that may now claim either a religious or moral exemption include nonprofit and for-profit organizations, higher-education institutions that arrange for insurance for their students, individuals employed by companies open to providing a plan option that would not provide contraceptive coverage, and health insurers.

Publicly traded companies may also now claim a religious exemption, but not a moral conviction.

Previously, there was also an accommodation process available to religious organizations claiming an exemption. Under the accommodation, an eligible employer did not have to contract, arrange, pay or refer their employees for contraceptive coverage.

Instead, the religious employer notified the insurer of their objection and the insurer was then required to arrange for such coverage at no further cost to the employee or the objecting employer. This accommodation process will remain available to employers seeking a religious exemption and is further expanded to companies seeking a moral exemption, and will be available on a strictly voluntary basis.

It is important to note that under the new rule, employers are not required to notify employees of any religious or moral objection to providing contraception coverage.

Executive orders

This issue was revisited in response to several presidential executive orders.

The first one, executive order 13765, was issued on Jan. 20, and required that the secretary of the Department of Health and Human Services and others take action to essentially delay the implementation or requirements of the Affordable Care Act that would impose a financial burden on states, individuals, families, healthcare providers, or makers of medical devices, products or medication.

Several months later, on May 4, President Trump issued the Promoting Free Speech and Religious Liberty Order, which called for the federal departments to issue regulations that address conscience-based objections to contraceptives being considered preventive care. The departments understood the order to include moral convictions, not just religious beliefs.

While the new rules recognize the increase in lawsuits brought by religious organizations since the contraceptive mandate was put in place by the Affordable Care Act, they state that there is still some uncertainty with respect to how big an impact this change will have.

By removing the religious element from the exemption, however, it is possible that the number of employers who claim an exemption from the requirement to provide contraception coverage will increase.

It is important to note that the interim rules do not provide employers claiming an exemption based on moral convictions with a “blanket exemption”; in other words, employers who oppose certain types of contraception may only be exempt from not covering those methods and would still be subject to the contraceptive coverage mandate rules for other methods of contraception they do not claim an exemption for based on a moral conviction.

As a result, employers seeking an exemption under these rules may want to do so cautiously to avoid any potential lawsuits.

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