Friday, February 01, 2013

Last year's contraceptive compromise completed: Federal government will pick up tab for contraceptive coverage at religious nonprofits with self-funded insurance plans

Today, HHS answers a question that arose last February when the administration announced its compromise regarding insurance coverage for contraception at faith-based nonprofits that objected to the coverage on moral grounds (places of worship do not have to provide contraceptive coverage at all). Here is the question as I framed it last February: 
Under the  compromise,
  • Religious organizations will not be required to subsidize the cost of contraception.
  • Contraception coverage will be offered to women by their employers’ insurance companies directly [and free of charge], with no role for religious employers who oppose contraception.
Question: more than half of Americans who get their health coverage from their employers are in self-funded plans -- that is, plans in which the employer sets aside funds to cover the cost of health care, usually hiring a third party administrator (TPA) to handle the claims process, as well as a stop-loss insurer to cover costs above a certain level.  So: who will "provide contraception coverage" in self-funded plans?   If it's the self-funded entity, then the employer is paying for it. Would the TPA somehow absorb the cost -- or a stop-loss insurer under some special rider? If so, surely either would find a way to pass the cost back? 
And lo, here is the answer, published today by HHS:

With respect to self-insured group health plans, the eligible organization would notify the third party administrator, which in turn would automatically work with a health insurance issuer to provide separate, individual health insurance policies at no cost for participants.  The costs of both the health insurance issuer and third party administrator would be offset by adjustments in Federally-facilitated Exchange user fees that insurers pay.
Indirectly, the federal government is picking up the tab.

HHS also simplified its definition of a religious organization that is completely exempt from the contraceptive mandate. Details at the page linked to above .

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