One component of the Patient Protection and Affordable Care Act that has been hotly contested is the provision of birth control expenses and its impact on religious-affiliated groups opposed to contraception. New proposed rules and a fact sheet have been issued that are apparently an effort to quell some of the debate.
The new regulations propose to have insurers who sell the coverage to pick up the cost of the contraceptives. Now, there is a proposal that applies to religious institutions that self-insure which obligates the administrator of the plan to find a policy that would cover contraceptives.
The insurer would be compensated for that coverage through a reduction in the fees it pays to the state-based marketplaces, or exchanges, being established to provide coverage to individuals and small businesses. Under the proposed rule, women employed by nonprofit religious organizations opposed to contraceptives, such as Catholic hospitals or colleges and student health plans, are entitled to get contraceptive services and products without a co-payment. Since the organization is not required to bear the cost of the service, the insurer of the organization has to notify workers that it will provide the coverage through separate individual health insurance policies.
For self-insured plans, the administrator of the plan (typically an insurance company) would provide a separate individual policy and then offset the costs of those policies through an “adjustment” in the fees that will be charged to insurers participating in the health marketplaces. Of course this does not explain what will happen if the plan is administered through an entity that is not an insurer and there is also no explanation about what will happen when those in the marketplace bearing the additional cost start complaining about paying extra to subsidize the cost of contraceptive coverage.
All in all, it is fairly clear that the Supreme Court will ultimately have to sort out this contraceptive issue. While the proposed regulations may appear to have implemented some type of fix, it may prove to be illusory and unworkable when practical market realities intrude.
Keith R. McMurdy focuses on labor and employment issues at Fox Rothschild. He can be reached at firstname.lastname@example.org or 212-878-7919.
This alert is intended for general information and should not be taken as specific legal advice.
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