Healthcare Business News
HHS Secretary Kathleen Sebelius

Rules aim to ease religious concerns on mandatory birth control coverage

By Rich Daly
Posted: February 1, 2013 - 12:30 pm ET

Proposed rules issued Friday aim to resolve a controversy over mandatory employer coverage of birth control, sterilization and post-fertilization drugs by having insurers pick up the costs.

The rules seek to address religious objections of some employers to covering health services that violate their core beliefs by requiring insurance companies to cover the full cost of such services for qualifying organizations. Insurance companies that incur the cost of providing such coverage would receive a reduction in the fee they will pay for plans that are sold on coming federally run health insurance exchanges.

The proposed rules were issued by the Treasury, Labor and HHS departments.

“Today, the administration is taking the next step in providing women across the nation with coverage of recommended preventive care at no cost, while respecting religious concerns,” HHS Secretary Kathleen Sebelius said in a news release. “We will continue to work with faith-based organizations, women's organizations, insurers and others to achieve these goals.”

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The new rules are the latest effort to resolve a controversy that erupted in February 2012 when the Obama administration first proposed details of the birth control coverage employers were required to provide as a “preventive service” under the 2010 healthcare overhaul.

Many Catholic hospitals and universities objected that they did not appear to qualify for an exception to the birth control coverage, the use of which runs counter to Roman Catholic moral teachings.

The proposed rule would require not-for-profit religious organizations to self-certify that they have religious objections, submit that information to their insurer and the insurer would have to obtain a separate birth control-only policy for any of its plan members that wanted such coverage.

In the case of self-insured plans used by many religious hospitals, the rule would require any third-party administrator to obtain and provide such policies for any plan members who wanted it.

There was no provision for self-insured religious employers without third-party administrators.

Additionally, the proposed rules sought to clarify the definition of “religious employer”; under the rules a “religious employer” will be exempt from the coverage requirement by limiting the requirement to entities that qualify as churches or houses of worship under the IRS code.

More than 200,000 comments

The highly controversial birth control rules elicited more than 200,000 comments, according to HHS.

The proposed rules are open for public comment through April 8. A final rule is expected “sometime this summer,” an HHS official said.

In response to the proposed regulations, Cardinal Timothy Dolan of New York, president of the United States Conference of Catholic Bishops, said his organization will “study the proposed regulations closely” and issue comments later. The Catholic Health Association similarly is studying the proposed rule, according to a spokesman, and did not plan an immediate response to its specific provisions.

The rule drew praise from some supporters of the birth control mandate, such as Sen. Tom Harkin (D-Iowa).

“I believe that today's announcement strikes the right balance; providing women with access to contraceptive coverage while respecting the concerns of religious organizations,” he said in a news release.

Many of the specifics of the scheme laid out to pay for the cost of the coverage were not yet determined, according to HHS officials. For instance, the proposed rules did not include the amount of the offset in federal exchange fees for insurers that provide the coverage nor were there any estimates for the plan's cost.

Lingering details

Additionally, it remained unclear who would ultimately pay for the cost of the coverage, since the rule proposed reducing exchange fees without specifying who would cover that loss in the exchanges' budgets.

“Whoever is running the exchange is receiving less in user fees,” Chiquita Brooks-LaSure, deputy director of policy and regulation at HHS' Center for Consumer Information and Insurance Oversight, said in a call with reporters.

Brooks-LaSure was adamant that neither federal taxpayers nor the federal government would cover that loss.

HHS officials declined to address whether the proposed rule would have any effect on the 44 legal challenges that the earlier HHS rules on birth control coverage had spawned.

The rule could have the biggest consequences among for-profit employers because it barred them from seeking any exemption, regardless of the religious beliefs of owners or employees. Among the 14 for-profit employers that are suing HHS over the mandate, 10 have received injunctive relief, according to the Becket Fund for Religious Liberty, which is representing many of those plaintiffs.

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