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Regs expand exemptions from Affordable Care Act’s contraceptive mandate

IRS, the Department of Health and Human Services (HHS), and the Department of Labor (DOL; collectively, the Departments) have issued final interim, temporary and proposed regs on the coverage of certain preventive services under the Affordable Care Act (ACA or Obamacare). Specifically, the regs expand the exemptions for entities and individuals with objections based on religious beliefs to the ACA’s contraceptive mandate. The regs also add an exemption to protect moral convictions for entities and individuals with objections, based on those beliefs, to the ACA’s contraceptive mandate.

Background. Under the ACA, non-grandfathered, nonexcepted group health plans are required to provide certain contraceptive coverage without cost-sharing (the so-called “contraceptive mandate”). Qualifying religious employers are exempt from this rule, and an accommodation process is provided for certain nonprofit employers, and closely held for-profit employers with religious objections to this rule. Among other things, regs on the accommodation process require an eligible organization to self-certify its objection to its insurer, third-party administrator, or HHS (see Weekly Alert ¶  4  07/16/2015).

For this purpose, a “religious employer” is one that is a nonprofit organization under Code Sec. 6033(a)(1) (regarding exempt organizations required to file information returns) and under either Code Sec. 6033(a)(3)(A)(i) (regarding churches, integrated auxiliaries, and conventions or associations of churches) or Code Sec. 6033(a)(3)(A)(iii) (regarding religious orders). Thus, an otherwise exempt plan is not disqualified because the employer’s purposes extend beyond the inculcation of religious values, or because the employer hires or serves people of different religious faiths.

Expanded entities and exemptions. The Departments have now issued two sets of temporary regs (also issued in proposed form) related to the contraceptive mandate.

The first set of temporary regs expands the exemptions to protect entities and individuals with objections based on religious beliefs if their health plans are subject to the contraceptive mandate. Thus, the expanded exemption encompasses non-governmental plan sponsors and institutions of higher education with student health plans that object based on sincerely held religious beliefs.

Along with the accommodation for exempt entities, the regs provide an exemption for individuals who have objected to the contraceptive coverage under their employer’s plan. The individual exemption will only apply where the employer and insurer are willing to offer a policy accommodating the objecting individual.

The second set of temporary regs expands the exemption to the contraceptive mandate to protect certain entities and individuals that object to coverage of some or all contraceptives based on sincerely held moral convictions, but not religious beliefs. These regs make these exempt entities eligible for accommodations concerning the contraceptive mandate.

Effective date. These interim final rules and temporary regs are effective on Oct. 6, 2017. The temporary regs will expire on Oct. 6, 2020.

References: For exemption for religious employers from providing contraceptive care under the preventive health care requirements, see FTC 2d/FIN ¶  H-1325.60N; United States Tax Reporter ¶  98,154.13.

T.D. 9827, 10/06/2017; T.D. 9828, 10/06/2017; Reg. § 54.9815-2713; Reg. § 54.9815-2713T; Prop Reg § 54.9815-2713 ; Prop Reg § 54.9815-2713T; Reg. § 54.9815-2713A; Reg. § 54.9815-2713AT ; Prop Reg § 54.9815-2713AT; Labor Reg. 2590.715-2713; Labor Reg. 2590.715-2713A ; 47 CFR 147.130; 47 CFR 147.131; 47 CFR 147.132