Government agency issues contraceptive coverage rule

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The Obama administration has issued a proposed rule under the federal health care law that would allow certain religious organizations to opt-out of providing mandatory contraceptive coverage to employees. But the rule also would allow employees to obtain outside coverage with no co-pays and at no cost to the organizations.

The rule comes after dozens of religious organizations filed and threatened lawsuits challenging the contraceptive mandate of the Affordable Care Act, which requires employers’ health care plans to cover contraceptives in full. The groups claim that the mandate violates their First Amendment religious freedoms.

The issue is ultimately expected to go before the U.S. Supreme Court.

The proposed rule would allow some nonprofit religious organizations, such as religiously affiliated hospitals and religious schools, to opt-out of the requirement. However, it would allow their enrollees to obtain separate contraceptive coverage with no co-pays and at no cost to the religious organization. The religious employers must either notify their insurers to provide coverage to the employees directly, or give notice to a third-party administrator to arrange no-cost contraceptive coverage through separate individual health insurance policies.

The rule provides “women across the nation with coverage of recommended preventive care at no cost, while respecting religious concerns,” said Health and Human Services Secretary Kathleen Sebelius in a statement. “We will continue to work with faith-based organizations, women’s organizations, insurers and others to achieve these goals.”

The law originally provided a religious opt-out only for churches and other houses of worship. But after organizations such as the U.S. Conference of Catholic Bishops objected to the lack of a broader exemption, the White House offered a compromise plan allowing employees of other religious non-profit groups, such as schools and hospitals, the ability to seek coverage directly from insurers.

But religious organizations said the rule did not go far enough, and filed a number of lawsuits claiming the mandate is unconstitutional. Other religiously affiliated employers, which do not qualify for the exemption, have also filed suit seeking a broader opt-out rule that would allow any employer to object to contraceptive coverage for religious reasons. Several of those suits have been dismissed, with judges finding that the issue is not yet ripe because the mandate will not be enforced until August.

But some of the groups challenging the law claimed that the new rule does not go far enough and said they would refile their lawsuits.

“[The] proposed rule does nothing to protect the religious freedom of millions of Americans,” said Kyle Duncan, General Counsel for the Becket Fund for Religious Liberty, one of the groups that challenged the law. “The administration obviously realizes that the HHS mandate puts constitutional rights at risk. There would have been an easy way to resolve this — expanding the exemption — but the proposed rule expressly rejects that option.”

The rule is open for public comment through April 8.