The Obama administration on Friday finalized new rules clarifying how women covered by most private health plans will have contraceptive coverage without cost-sharing as guaranteed under the Affordable Care Act (ACA), while addressing objections by some religious employers. The new rules are consistent with what the administration had previously outlined, providing an exemption for a narrow group of religious employers closely tied to houses of worship and an accommodation for a broader group of self-declared religious nonprofit organizations. The administration also affirmed that owners of private, for-profit businesses cannot claim to be religious employers and are therefore not exempted from providing contraceptive coverage.

Exemption for religious employers

Since mid-2011, when it first released rules to address this issue, the administration has resisted pressure for an overly broad definition of what constitutes a religious employer that is fully exempt from the contraceptive coverage requirement. The final rule uses a definition tied to the Internal Revenue Code which, the administration has asserted, will "not materially expand the universe" of employer plans that would qualify for this exemption beyond what the administration originally intended.

Keeping the definition of exempted religious employers as narrow as possible is critical, since employees working for these organizations will be denied the health and financial benefits of contraceptive coverage, regardless of whether they share their employer’s objection to contraceptive use. Indeed, the opposition to contraceptive use by some religious leaders does not reflect the beliefs or actions of their laity: Contraceptive use by Catholics and evangelicals—including those who attend religious services most frequently—is the overwhelming norm in U.S. society.

Accommodation for religiously affiliated nonprofits

As the administration outlined in 2012, the final rules also spell out various aspects of an accommodation for a broader range of nonprofit organizations (such as universities, hospitals or social relief agencies) that object to contraception on religious grounds. The rules set up a mechanism so that employees of organizations that qualify for the accommodation (unlike employees of organizations exempted entirely) will have seamless coverage of contraceptive services without out-of-pocket costs. This coverage will be arranged through a third-party insurer and, as the administration puts it, "an eligible organization need not contract, arrange, pay or refer for contraceptive coverage" to which they object on religious grounds. Actuarial and research evidence indicates that full coverage of contraception should not raise insurance costs and may actually reduce costs, since contraceptive use averts costs from unplanned pregnancies.

The rules provide additional details for how this arrangement will work for organizations that object to covering contraceptives but have self-insured health plans (meaning that they do not purchase coverage from an outside insurance company). Employees of such organizations will automatically be provided with contraceptive coverage at no additional cost through separate policies arranged by the health plan’s third-party administrator. Since the insurer providing this contraceptive coverage will not be able to offset its costs with the savings from preventing unplanned pregnancies, the rules set up a mechanism by which the federal government will absorb the cost for the contraceptive coverage.

The administration also reaffirmed that for-profit employers are not eligible for the exemption or accommodation, and that their health plans will continue to be required to cover contraceptives without additional cost-sharing by employees.

A significant gain for women’s health, but controversy likely to continue

Contraception is basic preventive health care for women. Broadening access to contraceptives for millions of women by eliminating the daunting barrier that cost can pose to effective contraceptive use is a significant gain for women’s health and the health of their families. Removing that barrier for women covered by private health plans not only makes it easier for them to use contraceptives generally, but will also allow them to use the most effective methods, like the IUD, which they might not previously have been able to afford.

To that end, the administration came out with additional guidance on the preventive services rule in February, making it clear that plans must cover the "the full range" of contraceptive methods approved by the Food and Drug Administration (FDA). That would include not only a range of oral contraceptive pills, but also rings, patches, injectables, implants, hormonal and copper IUDs, barrier methods and female sterilization procedures. The guidance also addresses other key implementation aspects, including details related to over-the-counter products, drug formularies and follow-up care.

Despite the new rules, some socially conservative groups continue to oppose the contraceptive coverage guarantee. These groups argue that anything less than a broad exemption for any nonprofit or for-profit employer with objections to contraception would constitute religious discrimination. With dozens of lawsuits making their way through the federal courts, it is likely that this issue will eventually head to the U.S. Supreme Court.

For more information:

Video: Benefits of Contraceptive Use
Infographic: Contraception is Highly Effective
Analysis: The Case for Insurance Coverage of Contraceptive Services and Supplies Without Cost-Sharing
U.S. Department of Labor FAQs about Affordable Care Act implementation
Research: Contraceptive Use Is the Norm Among Religious Women
Fact sheet: Contraceptive Use in the United States