Details on August 2014 Contraception Mandate Exemption

August 22nd, 2014

CMS has posted a Fact Sheet discussing the two new accommodations to the contraception mandate.

First, non-profits like Wheaton College will not have to fill out a form, but will only have to notify HHS that they object.

In August 2014, in light of the Supreme Court’s recent interim order in a case involving Wheaton College, interim final regulations were published to establish another option for an eligible organization to avail itself of the accommodation. Under the interim final regulations, an eligible organization may notify the Department of Health and Human Services (HHS) in writing of its religious objection to contraception coverage. HHS will then notify the insurer for an insured health plan, or the Department of Labor will notify the TPA for a self-insured plan, that the organization objects to providing contraception coverage and that the insurer or TPA is responsible for providing enrollees in the health plan separate no-cost payments for contraceptive services for as long as they remain enrolled in the health plan. 

However, the fact sheet makes clear that the same duty is triggered regardless of whether a form is filled out or HHS is notified:

Regardless of whether the eligible organization self-certifies in accordance with the July 2013 final rules, or provides notice to HHS in accordance with the August 2014 IFR, the obligations of insurers and/or TPAs regarding providing or arranging separate payments for contraceptive services are the same, as discussed in this Fact Sheet. The interim final rule solicits comments but is effective on date of publication in the Federal Register.

Second, this new non-profit exemption is extended to certain for-profit entities.

Also in August 2014, in response to the Supreme Court’s recent decision, in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014), proposed rules were published that solicit comments on expanding the availability of the accommodation to include a closely held for-profit entity that has a religious objection to providing coverage for some or all contraceptive services. 

The majority opinion in Hobby Lobby went out of its way *not* to define what a closely-held corporation is, for purposes of RFRA. The proposed rule offers to alternatives, both limited to non-publicly traded companies. The first concerns the number of owners.

The proposed rules describe two alternative approaches for defining such an entity. Under one approach, the entity could not be publicly traded, and ownership of the entity would be limited to a certain number of owners. 

Or the second concerns the concentration of ownership:

The proposed rules describe two alternative approaches for defining such an entity. Under one approach, the entity could not be publicly traded, and ownership of the entity would be limited to a certain number of owners. 

Also, corporate law scholars should take an interest in how a corporation can take action to object to the mandate:

he rule also solicits comments on other possible approaches and on documentation and disclosure of a closely held for-profit entity’s decision not to provide contraceptive coverage. The proposed rules further provide that valid corporate action taken in accordance with the entity’s governing structure, in accordance with state law, stating its owners’ religious objection can serve to establish that the entity objects to providing contraceptive coverage on religious grounds. Comments on these proposed rules are being accepted for 60 days after publication in the Federal Register

As I noted in a previous post, ACLJ is already on record opposing both proposals, though I am doubtful they can raise successful RFRA arguments here.