The Obama administration announced on June 28 that it has finalized
its regulations on the federal contraception mandate as it applies to
religious employers.
A statement by the Department of Health and Human Services said that the
final rule regarding the mandate’s application to many religious groups
“is similar to, but simpler than” a previous proposal in February.
Issued under the Affordable Care Act, the mandate requires employers to
offer health insurance plans covering contraception, including some
drugs that can cause early abortion, as well as sterilizations.
In the months that followed its release, the mandate became the subject
of lawsuits by more than 200 plaintiffs across the nation who claimed
that it forced them to violate their deeply-held religious beliefs.
Faced with a wave of protest from objecting religious organizations, the
Obama administration announced in early 2012 that it intended to modify
the mandate. It issued a one-year “safe harbor” delaying the
implementation of the mandate for these organizations while it
considered various proposals for an “accommodation” for their right to
religious liberty.
Over the following months, the administration engaged in a multi-step
process of revising the mandate. That process was completed with the
release of the final rule on June 28.
The final rule maintains the definition of “religious employer” proposed
in February, which allows a full exemption from the mandate for those
employers that fall under Internal Revenue Code, Section
6033(a)(3)(A)(i) or (iii), which “refers to churches, their integrated
auxiliaries, and conventions or associations of churches, as well as to
the exclusively religious activities of any religious order.”
The administration has said that this “would primarily include churches,
other houses of worship, and their affiliated organizations.”
Religious groups have voiced concerns that faith-based organizations –
such as soup kitchens, hospitals and schools – that are not affiliated
with a specific house of worship would not be exempt.
For these religious groups that object to the mandate but do not qualify
for the exemption, the administration has finalized an “accommodation.”
Earlier suggestions for this accommodation had involved separate health
insurance policies for contraceptive coverage that would be given for
free by the objecting organizations’ health insurance issuers.
The final rule changes this slightly, simplifying the process to instead
require insurance issuers to directly “provide payments for
contraceptive services” purchased by women working for religious
employers who oppose such products.
Self-insured religious employers will work with a third party
administrator, which will act in place of an insurance issuer to provide
or arrange for the “no-cost payments” for employees’ contraception.
“Issuers are prohibited from charging any premium, fee, or other charge
to eligible organizations or their plans, or to plan participants or
beneficiaries, for making payments for contraceptive services, and must
segregate the premium revenue collected from eligible organizations from
the monies they use to make such payments,” the rule said.
“In making such payments, the issuer must ensure that it does not use any premiums collected from eligible organizations.”
This places the burden of payment for the objectionable products on the insurance issuers themselves.
Asked during a press call how the insurance issuers would be reimbursed
for these payments, an HHS official responded that they would not need
to do so because paying for birth control is “cost-neutral” for them,
due to the resulting decline in childbirth costs and the other “health
benefits” afforded by contraception.
However, the idea that contraceptives can be offered free of cost was
rejected by pharmacy directors in a national survey shortly after the
accommodation was initially announced last year.
Religious freedom advocates initially responded to the announcement of
the final rule – which was more than 100 pages in length – by indicating
a desire to examine it more closely in order to see whether it
adequately addresses the religious freedom concerns that had been
raised.
Among these concerns was the complaint that religious employers under
the “accommodation” would still be facilitating the objectionable
coverage because the plans that they offer are necessary to “trigger”
the contraception coverage or funding.
Some critics of the mandate also warned that insurance companies would
find that contraception was not actually “cost-neutral” any may
ultimately end up funding it by raising the cost of the objecting
employers’ premiums.
The question of religious individuals running for-profit businesses had
also been discussed.
More than a dozen for-profit companies have filed
lawsuits over the mandate, including arts and crafts giant Hobby Lobby
and several other manufacturers, publishers, medical groups and other
employers.
However, the final rule does not allow any accommodation for
these employers.