HHS announces comment period on mandate accommodation

Washington D.C., Mar 16, 2012 / 16:52 pm

After repeatedly stating that it will not back down on its controversial contraception mandate, the Obama administration has announced a 90-day comment period on possible ways to implement its Feb. 10 accommodation.

Department of Health and Human Services Secretary Kathleen Sebelius said that the administration is taking the “next step” in respecting religious freedom while ensuring that women receive free contraception.

On March 16 the administration issued an advanced notice of proposed rule making as it examines several possible ways to implement its “preventive services” mandate.

The Obama administration has drawn heavy criticism over the mandate, which will require employers to offer health insurance plans that cover contraception, sterilization and abortion-inducing drugs, even if doing so violates their firmly-held religious beliefs.

The mandate includes a limited religious exemption that only applies to non-profit organizations that exist to inculcate religious values and that serve and employ primarily members of their own faith.  The narrow scope of the exemption sparked outcry because most religious groups and even some churches would fail to qualify for it.

The notice made it clear that this exemption will not be changed. Rather, it said, the current discussion will involve a second group, consisting of non-profit religious organizations that do not qualify for the exemption but still object to the mandated coverage.

This second group of religious institutions may fall under a later proposal that was announced by President Obama on Feb. 10 amid widespread protest over the regulation, it explained.

Under that scheme, religious organizations would not directly purchase the controversial coverage, but would instead be required to buy insurance plans from companies that would be required to provide the coverage for free.

Critics, including the U.S. Catholic bishops, have said that the accommodation as announced was inadequate because it failed to address the concerns of self-insured companies or religious individuals running for-profit, secular businesses.

The notice said there is a need to determine which religious organizations will qualify for the accommodation and who will administer it, as well as how to handle religious organizations that object to some but not all of the required coverage.

The administration simultaneously issued a final rule on student health plans, which will require colleges to treat student health care plans like employee plans, making them subject to the mandate as well.

Under the rule that the administration is considering proposing, insurance issuers would be required to provide “separate coverage” for contraception and would not be allowed to charge a premium for this coverage to the religious organization, plan participants or beneficiaries.

Instead, it said, the issuer would pay for the coverage from “the estimated savings” of eliminating the need for “services” that arise from not covering contraception. It did not acknowledge a recent survey of insurance companies indicating that the mandate will not actually cut costs.

For self-insured religious organizations, which were not addressed in the Feb. 10 accommodation, the notice outlined several possible approaches to having a “third-party administrator” assume responsibility for the coverage.

These suggestions included using revenue from drug rebates and service fees, credit from a reinsurance program, funds from a private non-profit organization or a contract between the Office of Personnel Management and an insurer offering a multi-state plan.

Over the next 90 days, the administration will be seeking feedback from the public through comments, all of which will be made available to the public.

After the comment period ends, the process will involve the Obama administration creating a series of rules, leading to a final rule that will be entered in the Federal Register.

The notice said that information is also being requested about the number of insurance issuers, religious organizations, plan participants and beneficiaries that would potentially be affected by the accommodation, as well as the average cost and savings of providing contraceptive coverage.

In addition, it said, the administration is seeking input on whether an exemption or accommodation should be extended to health instance issuers or third-party administrators who object to the coverage on religious grounds.

Finally, the notice observed that many states with similar mandates include wide exemptions for religious employers.

It explained that in states where religious exemptions are currently broader than the final federal regulations, “the exemptions will be narrowed to align with that in the final regulations because this will help more consumers.”