Vol. 78 Tuesday, 

No. 127 July 2, 2013 

Part III 

Department of the Treasury 

Internal Revenue Service 

26 CFR Part 54 

Department of Labor 

Employee Benefits Security Administration 

29 CFR Parts 2510 and 2590 

Department of Health and Human Services 

45 CFR Parts 147 and 156 

Coverage of Certain Preventive Services Under the Affordable Care Act; 

Final Rules 


emcdonald on DSK67QTVN1PROD with RULES3
39870 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

1The HRSA Guidelines exclude services relating 

to a man’s reproductive capacity, such as 

vasectomies and condoms. 

2 Interim final regulations published by the 

Departments on July 19, 2010, generally provide 

that plans and issuers must cover a newly 

recommended preventive service starting with the 

first plan year (in the individual market, policy 

year) that begins on or after the date that is one year 

after the date on which the new recommendation 

is issued. 26 CFR 54.9815–2713T(b)(1); 29 CFR 

2590.715–2713(b)(1); 45 CFR 147.130(b)(1). 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 54 

[TD–9624] 

RIN 1545–BJ60 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Parts 2510 and 2590 

RIN 1210–AB44 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Parts 147 and 156 

[CMS–9968–F] 

RIN 0938–AR42 

Coverage of Certain Preventive 

Services Under the Affordable Care 

Act 

AGENCIES: Internal Revenue Service, 

Department of the Treasury; Employee 

Benefits Security Administration, 

Department of Labor; Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services. 

ACTION: Final rules. 

SUMMARY: This document contains final 

regulations regarding coverage of certain 

preventive services under section 2713 

of the Public Health Service Act (PHS 

Act), added by the Patient Protection 

and Affordable Care Act, as amended, 

and incorporated into the Employee 

Retirement Income Security Act of 1974 

and the Internal Revenue Code. Section 

2713 of the PHS Act requires coverage 

without cost sharing of certain 

preventive health services by nongrandfathered group health plans and 

health insurance coverage. Among these 

services are women’s preventive health 

services, as specified in guidelines 

supported by the Health Resources and 

Services Administration (HRSA). As 

authorized by the current regulations, 

and consistent with the HRSA 

guidelines, group health plans 

established or maintained by certain 

religious employers (and group health 

insurance coverage provided in 

connection with such plans) are exempt 

from the otherwise applicable 

requirement to cover certain 

contraceptive services. These final 

regulations simplify and clarify the 

religious employer exemption. These 

final regulations also establish 

accommodations with respect to the 

contraceptive coverage requirement for 

group health plans established or 

maintained by eligible organizations 

(and group health insurance coverage 

provided in connection with such 

plans), as well as student health 

insurance coverage arranged by eligible 

organizations that are institutions of 

higher education. These regulations also 

finalize related amendments to 

regulations concerning Affordable 

Insurance Exchanges. 

DATES: Effective date: These final 

regulations are effective on August 1, 

2013. Applicability date: With the 

exception of the amendments to the 

religious employer exemption, which 

apply to group health plans and health 

insurance issuers for plan years 

beginning on or after August 1, 2013, 

these final regulations apply to group 

health plans and health insurance 

issuers for plan years beginning on or 

after January 1, 2014. 

FOR FURTHER INFORMATION CONTACT: For 

inquiries related to the religious 

employer exemption and eligible 

organization accommodations: Jacob 

Ackerman, Centers for Medicare & 

Medicaid Services (CMS), Department 

of Health and Human Services (HHS), at 

(410) 786–1565; Amy Turner or Beth 

Baum, Employee Benefits Security 

Administration (EBSA), Department of 

Labor, at (202) 693–8335; Karen Levin, 

Internal Revenue Service (IRS), 

Department of the Treasury, at (202) 

927–9639. 

For matters related to the Federallyfacilitated Exchange user fee 

adjustment: Ariel Novick, CMS, HHS, at 

(301) 492–4309. 

Customer Service Information: 

Individuals interested in obtaining 

information from the Department of 

Labor concerning employment-based 

health coverage laws may call the EBSA 

Toll-Free Hotline at 1–866–444–EBSA 

(3272) or visit the Department of Labor’s 

Web site (www.dol.gov/ebsa). 

Information from HHS on private health 

insurance coverage can be found on 

CMS’s Web site (www.cms.gov/cciio), 

and information on health care reform 

can be found at www.HealthCare.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Patient Protection and Affordable 

Care Act (Pub. L. 111–148) was enacted 

on March 23, 2010. The Health Care and 

Education Reconciliation Act of 2010 

(Pub. L. 111–152) was enacted on March 

30, 2010. These statutes are collectively 

known as the Affordable Care Act. The 

Affordable Care Act reorganizes, 

amends, and adds to the provisions of 

part A of title XXVII of the Public 

Health Service Act (PHS Act) relating to 

group health plans and health insurance 

issuers in the group and individual 

markets. The Affordable Care Act adds 

section 715(a)(1) to the Employee 

Retirement Income Security Act of 1974 

(ERISA) and section 9815(a)(1) to the 

Internal Revenue Code (Code) to 

incorporate the provisions of part A of 

title XXVII of the PHS Act into ERISA 

and the Code, and to make them 

applicable to group health plans and 

health insurance issuers providing 

health insurance coverage in connection 

with group health plans. The sections of 

the PHS Act incorporated into ERISA 

and the Code are sections 2701 through 

2728. 

Section 2713(a)(4) of the PHS Act, as 

added by the Affordable Care Act and 

incorporated into ERISA and the Code, 

requires that non-grandfathered group 

health plans and health insurance 

issuers offering non-grandfathered 

group or individual health insurance 

coverage provide benefits for certain 

women’s preventive health services 

without cost sharing, as provided for in 

comprehensive guidelines supported by 

the Health Resources and Services 

Administration (HRSA). On August 1, 

2011, HRSA adopted and released 

guidelines for women’s preventive 

health services (HRSA Guidelines) 

based on recommendations of the 

independent Institute of Medicine. As 

relevant here, the HRSA Guidelines 

include all Food and Drug 

Administration (FDA)-approved 

contraceptive methods, sterilization 

procedures, and patient education and 

counseling for women with 

reproductive capacity, as prescribed by 

a health care provider (collectively, 

contraceptive services).1 Except as 

discussed later in this section, nongrandfathered group health plans and 

health insurance coverage are required 

to provide coverage consistent with the 

HRSA Guidelines without cost sharing 

for plan years (in the individual market, 

policy years) beginning on or after 

August 1, 2012.2

Interim final regulations 

implementing section 2713 of the PHS 

Act were published on July 19, 2010 (75 

FR 41726) (2010 interim final 


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Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 39871 

3The 2011 amended interim final regulations 

were issued and effective on August 1, 2011, and 

published on August 3, 2011(76 FR 46621). 

4The 2012 final regulations were published on 

February 15, 2012 (77 FR 8725). 

5 Guidance on the Temporary Enforcement Safe 

Harbor for Certain Employers, Group Health Plans, 

and Group Health Insurance Issuers with Respect to 

the Requirement to Cover Contraceptive Services 

Without Cost Sharing Under Section 2713 of the 

Public Health Service Act, Section 715(a)(1) of the 

Employee Retirement Income Security Act, and 

Section 9815(a)(1) of the Internal Revenue Code, 

issued on February 10, 2012, and reissued on 

August 15, 2012. Available at: http://www.cms.gov/ 

CCIIO/Resources/Files/Downloads/prev-servicesguidance-08152012.pdf. The guidance, as reissued 

on August 15, 2012, clarifies, among other things, 

that plans that took some action before February 10, 

2012, to try, without success, to exclude or limit 

contraceptive coverage are not precluded from 

eligibility for the safe harbor. The temporary 

enforcement safe harbor is also available to insured 

student health insurance coverage arranged by 

nonprofit institutions of higher education with 

religious objections to contraceptive coverage that 

meet the conditions set forth in the guidance. See 

final rule entitled ‘‘Student Health Insurance 

Coverage’’ published March 21, 2012 (77 FR 16457). 

6Section 2713(b) of the PHS Act and the 

companion provisions of ERISA and the Code 

provide that the Secretary shall establish an interval 

of not less than one year between when new 

recommendations or guidelines under PHS Act 

section 2713(a) are issued and the first plan year (in 

the individual market, policy year) for which 

coverage of services addressed in such 

recommendations or guidelines must be in effect. 

Under the 2010 interim final regulations, the 

requirement on a non-exempt, non-grandfathered 

group health plan or group or individual health 

insurance policy to cover a newly recommended 

preventive service without cost sharing takes effect 

starting with the first plan year (in the individual 

market, policy year) that begins on or after the date 

that is one year after the new recommendation is 

issued. 26 CFR 54.9815–2713T(b)(1); 29 CFR 

2590.715–2713(b)(1); 45 CFR 147.130(b)(1). In the 

case of contraceptive services, this 1-year period 

ended on August 1, 2012, because the HRSA 

Guidelines including such services were issued on 

August 1, 2011. These final regulations do not alter 

this effective date. 

7This estimate is based on the Department of 

Labor’s analysis of Form 5500 data. 

regulations). On August 1, 2011, the 

Departments of Health and Human 

Services (HHS), Labor, and the Treasury 

(collectively, the Departments) amended 

the 2010 interim final regulations to 

provide HRSA with authority that 

would effectively exempt group health 

plans established or maintained by 

certain religious employers (and group 

health insurance coverage provided in 

connection with such plans) from the 

requirement to cover contraceptive 

services consistent with the HRSA 

Guidelines (76 FR 46621) (2011 

amended interim final regulations), and, 

on the same date, HRSA exercised this 

authority in the HRSA Guidelines such 

that group health plans established or 

maintained by these religious employers 

(and group health insurance coverage 

provided in connection with such 

plans) are exempt from the requirement 

to cover contraceptive services.3 The 

2011 amended interim final regulations 

specified that, for purposes of this 

exemption, a religious employer is one 

that: (1) Has the inculcation of religious 

values as its purpose; (2) primarily 

employs persons who share its religious 

tenets; (3) primarily serves persons who 

share its religious tenets; and (4) is a 

nonprofit organization described in 

section 6033(a)(1) and (a)(3)(A)(i) or (iii) 

of the Code. Section 6033(a)(3)(A)(i) and 

(iii) of the Code refers to churches, their 

integrated auxiliaries, and conventions 

or associations of churches, as well as 

to the exclusively religious activities of 

any religious order. Final regulations 

issued on February 10, 2012, adopted 

the definition of religious employer in 

the 2011 amended interim final 

regulations without modification (2012 

final regulations).4

Contemporaneous with the issuance 

of the 2012 final regulations, HHS, with 

the agreement of the Departments of 

Labor and the Treasury, issued guidance 

establishing a temporary safe harbor 

from enforcement of the contraceptive 

coverage requirement by the 

Departments for group health plans 

established or maintained by certain 

nonprofit organizations with religious 

objections to contraceptive coverage 

(and group health insurance coverage 

provided in connection with such 

plans).5 The guidance provided that the 

temporary enforcement safe harbor 

would remain in effect until the first 

plan year beginning on or after August 

1, 2013. The Departments committed to 

rulemaking during the 1-year safe 

harbor period to ensure more women 

broad access to recommended 

preventive services, including 

contraceptive services, without cost 

sharing, while simultaneously 

protecting certain additional nonprofit 

religious organizations with religious 

objections to contraceptive coverage 

from having to contract, arrange, pay, or 

refer for such coverage. 

On March 21, 2012, the Departments 

published an advance notice of 

proposed rulemaking (ANPRM) that 

described and solicited comments on 

possible approaches to achieve these 

goals (77 FR 16501). 

On February 6, 2013, following 

review of the comments on the ANPRM, 

the Departments published proposed 

regulations at 78 FR 8456 (proposed 

regulations). The regulations proposed 

to simplify and clarify the definition of 

religious employer for purposes of the 

religious employer exemption. The 

regulations also proposed 

accommodations for health coverage 

established or maintained or arranged 

by certain nonprofit religious 

organizations with religious objections 

to contraceptive coverage. These 

organizations were referred to as eligible 

organizations. 

The regulations proposed that, in the 

case of an insured group health plan 

established or maintained by an eligible 

organization, the health insurance issuer 

providing group health insurance 

coverage in connection with the plan 

would be required to assume sole 

responsibility, independent of the 

eligible organization and its plan, for 

providing contraceptive coverage to 

plan participants and beneficiaries 

without cost sharing, premium, fee, or 

other charge to plan participants or 

beneficiaries or to the eligible 

organization or its plan. The 

Departments proposed a comparable 

accommodation with respect to insured 

student health insurance coverage 

arranged by eligible organizations that 

are institutions of higher education. 

In the case of a self-insured group 

health plan established or maintained 

by an eligible organization, the 

proposed regulations presented 

potential approaches under which the 

third party administrator of the plan 

would arrange for a health insurance 

issuer to provide contraceptive coverage 

to plan participants and beneficiaries 

without cost sharing, premium, fee, or 

other charge to plan participants or 

beneficiaries or to the eligible 

organization or its plan. An issuer (or its 

affiliate) would be able to offset the 

costs incurred by the third party 

administrator and the issuer in the 

course of arranging and providing such 

coverage by claiming an adjustment in 

the Federally-facilitated Exchange (FFE) 

user fee. 

The Departments received over 

400,000 comments (many of them 

standardized form letters) in response to 

the proposed regulations. After 

consideration of the comments, the 

Departments are publishing these final 

regulations. With the exception of the 

amendments to the religious employer 

exemption, which apply to group health 

plans and group health insurance 

issuers for plan years beginning on or 

after August 1, 2013, these final 

regulations apply to group health plans 

and health insurance issuers for plan 

years beginning on or after January 1, 

2014, which is when the majority of 

plan years begin.6 7 Contemporaneously 

issued amendments to the HRSA 

Guidelines implementing the simplified 

and clarified religious employer 

exemption authorized by 45 CFR 

147.131(a) of these final regulations will 

be effective on August 1, 2013. 


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39872 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

8 Institute of Medicine, Clinical Preventive 

Services for Women: Closing the Gaps, Washington, 

DC: National Academy Press, 2011, at p. 16. 

9S.Amdt. 2791 to S.Amdt. 2786 to H.R. 3590 

(Service Members Home Ownership Tax Act of 

2009), December 3, 2009. 

10 Institute of Medicine, Clinical Preventive 

Services for Women: Closing the Gaps, Washington. 

DC: National Academy. Press, 2011, at p. 9; see also 

Sonfield, A., The Case for Insurance Coverage of 

Contraceptive Services and Supplies Without Cost 

Sharing, 14 Guttmacher Policy Review. 10 (2011), 

available at www.guttmacher.org/pubs/gpr/14/1/ 

gpr140107.html. See also Congressional Record, 

S12025 (Dec. 1, 2009), S12114, S12271, S12277 

(December 3, 2009) (statements of Senators B. 

Boxer, D. Feinstein, A. Franken, and B. Nelson, 

respectively). 

11 Gipson, J.D., et al., The Effects of Unintended 

Pregnancy on Infant, Child and Parental Health: A 

Review of the Literature, Studies on Family 

Planning, 2008, 39(1):18–38. 

12Conde-Aguledo, A., et al., Birth Spacing and 

Risk of Adverse Perinatal Outcomes—A MetaAnalysis, Journal of the American Medical 

Association, 295(15):1809–1823 (2006); see also 

Zhu, B., Effect of Interpregnancy Interval on Birth 

Outcomes: Findings from Recent U.S. Studies, 

International Journal of Gynecology & Obstetrics, 

89:S25–S33 (2005); Fuentes-Afflick, E., & Hessol, 

N., Interpregnancy Interval and the Risk of 

Premature Infants, Obstetrics & Gynecology, 

95(3):383–390 (2000). 

13 Institute of Medicine, Clinical Preventive 

Services for Women: Closing the Gaps, Washington, 

DC: National Academy Press, 2011, at p. 107. 

14 Institute of Medicine, Clinical Preventive 

Services for Women: Closing the Gaps, Washington, 

DC: National Academy Press, 2011, at p. 105. See 

also, Peipert, J., et al., Preventing Unintended 

Pregnancies by Providing No-Cost Contraception, 

Obstetrics & Gynecology, 120(6): 1291–1297 (2012); 

see also Bongaarts, J., & Westoff, C., The Potential 

Role of Contraception in Reducing Abortion, 

Studies in Family Planning, 31(3): 193–202 (2000). 

15Testimony of Guttmacher Inst., submitted to 

the Comm. on Preventive Servs. for Women, 

Institute of Medicine, January 12, 2012, p. 11, citing 

Bonoan, R. & Gonen, J.S., Promoting Healthy 

Pregnancies: Counseling and Contraception as the 

First Step, Washington Business Group on Health, 

Family Health in Brief, Issue No. 3. August 2000; 

see also Sonfield, A., The Case for Insurance 

Coverage of Contraceptive Services and Supplies 

Without Cost Sharing, 14 Guttmacher Pol’y Rev. 10 

(2011); Mavranezouli, I., Health Economics of 

Contraception, 23 Best Practice & Res. Clinical 

Obstetrics & Gynecology 187–198 (2009); Trussell, 

J., et al., Cost Effectiveness of Contraceptives in the 

United States, 79 Contraception 5–14 (2009); 

Trussell, J., The Cost of Unintended Pregnancy in 

the United States, 75 Contraception 168–170 (2007). 

16 Dailard, C., Special Analysis: The Cost of 

Contraceptive Insurance Coverage, Guttmacher Rep. 

on Public Policy (March 2003). 

17Sawhill, R., et al., An Ounce of Prevention: 

Policy Prescriptions to Reduce the Prevalence of 

Fragile Families, Future of Children, 20(2):133–155. 

Two additional guidance documents 

are being issued contemporaneously 

with these final regulations. First, HHS 

is issuing guidance extending the 

temporary safe harbor from enforcement 

of the contraceptive coverage 

requirement by the Departments to 

encompass plan years beginning on or 

after August 1, 2013, and before January 

1, 2014. This guidance continues to 

include a form to be used by an 

organization during this temporary 

period to self-certify that its plan 

qualifies for the temporary enforcement 

safe harbor. Second, as described in 

more detail later in this preamble, HHS 

and DOL are also issuing a selfcertification form to be executed by an 

organization seeking to be treated as an 

eligible organization for purposes of an 

accommodation under these final 

regulations. This self-certification form 

is applicable in conjunction with the 

accommodations under these final 

regulations (that is, for plan years 

beginning on or after January 1, 2014), 

after the expiration of the temporary 

enforcement safe harbor. 

II. Overview of the Final Regulations 

These final regulations promote two 

important policy goals. First, the 

regulations provide women with access 

to contraceptive coverage without cost 

sharing, thereby advancing the 

compelling government interests in 

safeguarding public health and ensuring 

that women have equal access to health 

care. Second, the regulations advance 

these interests in a narrowly tailored 

fashion that protects certain nonprofit 

religious organizations with religious 

objections to providing contraceptive 

coverage from having to contract, 

arrange, pay, or refer for such coverage. 

The regulations finalize the general 

approach described in the proposed 

regulations, with modifications in 

response to comments that are intended 

primarily to simplify administration of 

the policy. 

Section 2713 of the PHS Act reflects 

a determination by Congress that 

coverage of recommended preventive 

services without cost sharing by nongrandfathered group health plans and 

health insurance coverage is necessary 

to achieve access to basic health care for 

more Americans. Individuals are more 

likely to use preventive services if they 

do not have to satisfy cost-sharing 

requirements (such as a copayment, 

coinsurance, or a deductible). Use of 

preventive services results in a healthier 

population and reduces health care 

costs by helping individuals avoid 

preventable conditions and receive 

treatment earlier.8 Further, Congress, by 

amending the Affordable Care Act 

during Senate consideration of the bill 

to ensure that recommended preventive 

services for women would be covered 

adequately by non-grandfathered group 

health plans and health insurance 

coverage, recognized that women have 

unique health care needs.9 Such needs 

include contraceptive services.10

Some commenters asserted that 

contraceptive services should not be 

considered preventive health services, 

arguing that they do not prevent disease 

and have been shown by some studies 

to be harmful to women’s health. The 

HRSA Guidelines are based on 

recommendations of the independent 

Institute of Medicine (IOM), which 

undertook a review of the scientific and 

medical evidence on women’s 

preventive services. As documented in 

the IOM report, ‘‘Clinical Preventive 

Services for Women: Closing the Gaps,’’ 

women experiencing an unintended 

pregnancy may not immediately be 

aware that they are pregnant, and thus 

delay prenatal care. They also may be 

less motivated to cease behaviors during 

pregnancy, such as smoking and 

consumption of alcohol, that pose 

pregnancy-related risks. Studies show a 

greater risk of preterm birth and low 

birth weight among unintended 

pregnancies.11 In addition, 

contraceptive use helps women improve 

birth spacing and therefore avoid the 

increased risk of adverse pregnancy 

outcomes that comes with pregnancies 

that are too closely spaced. Short 

interpregnancy intervals in particular 

have been associated with low birth 

weight, prematurity, and small-forgestational age births.12 Contraceptives 

also have medical benefits for women 

who are contraindicated for pregnancy, 

and there are demonstrated preventive 

health benefits from contraceptives 

relating to conditions other than 

pregnancy (for example, prevention of 

certain cancers, menstrual disorders, 

and acne).13 In addition, by reducing the 

number of unintended pregnancies, 

contraceptives reduce the number of 

women seeking abortions.14 It is for a 

woman and her health care provider in 

each particular case to weigh any risks 

against the benefits in deciding whether 

to use contraceptive services in general 

or any particular contraceptive service. 

Covering contraceptives also yields 

significant cost savings. A 2000 study 

estimated that it would cost 15 to 17 

percent more not to provide 

contraceptive coverage in employee 

health plans than to provide such 

coverage, after accounting for both the 

direct medical costs of pregnancy and 

the indirect costs, such as employee 

absence.15 Consistent with this finding, 

when contraceptive coverage was added 

to the Federal Employees Health 

Benefits Program, premiums did not 

increase because there was no resulting 

net health care cost increase.16 Specific 

to public financing of contraceptive 

services, a 2010 analysis projected that 

expanding access to family planning 

services under Medicaid saves $4.26 for 

every $1 spent.17 Additional research 


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18Frost, J., et al., Contraceptive Needs and 

Services, National and State Data, 2008 Update, 

New York: Guttmacher Institute (2010). 

19Sonfield, A., et al., U.S. Insurance Coverage of 

Contraceptives and the Impact of Contraceptive 

Coverage Mandates, Perspectives on Sexual and 

Reproductive Health 36(2):72–79, 2002. 

20Sonfield, A., et al., U.S. Insurance Coverage of 

Contraceptives and the Impact of Contraceptive 

Coverage Mandates, Perspectives on Sexual and 

Reproductive Health 36(2):72–79, 2002. 

21Claxton, G., et al., Employer Health Benefits: 

2010 Annual Survey, Menlo Park, Cal.: Kaiser 

Family Found. & Chicago, Illinois: Health Research 

& Education Trust, 2010. While many employers 

included contraceptive coverage in their group 

health plans prior to the Affordable Care Act, the 

Departments note that the contraceptive coverage 

requirement promotes the government’s interests 

with respect to even these plans’ participants and 

beneficiaries by ensuring that these plans cover 

contraceptive services without cost sharing, a 

significant financial barrier to such services that 

was prevalent before the contraceptive coverage 

requirement. Institute of Medicine, Clinical 

Preventive Services for Women: Closing the Gaps, 

Washington, DC: National Academy Press, 2011, at 

p. 107. See also Postlethwaite, D., et al., A 

Comparison of Contraceptive Procurement Pre- and 

Post-Benefit Change, 76 Contraception 360 (2007). 

22Testimony of Guttmacher Institute, submitted 

to the Comm. on Preventive Services for Women, 

Institute of Medicine, January 12, 2012, p. 6, citing 

Goldin, C. & Katz, L., Career and Marriage in the 

Age of the Pill, American Economic Review, 2000, 

90(2):461–465; Goldin, C. & Katz, L.F., The Power 

of the Pill: Oral Contraceptives and Women’s Career 

and Marriage Decisions, Journal of Political 

Economy, 2002, 110(4):730–770; Bailey, M.J., More 

Power to the Pill: The Impact of Contraceptive 

Freedom on Women’s Life Cycle Labor Supply, 

Quarterly Journal of Economics, 2006, 121(1):289– 

320. 

23Postlethwaite, D., et al., A Comparison of 

Contraceptive Procurement Pre- and Post-Benefit 

Change, 76 Contraception 360 (2007). 

24 Institute of Medicine, Clinical Preventive 

Services for Women: Closing the Gaps, Washington, 

DC: National Academy Press, 2011, p. 19. 

25See 26 CFR 54.9815–2713T(a)(3) and (4); 29 

CFR 2590.715–2713(a)(3) and (4); 45 CFR 

147.130(a)(3) and (4). Note, however, if a plan or 

issuer does not have in its network a provider who 

can provide the particular service, then the plan or 

issuer must cover the item or service when 

performed by an out-of-network provider and not 

impose cost sharing with respect to the item or 

service. See FAQs About Affordable Care Act 

Implementation (Part XII), Q3 (February 20, 2013), 

available at: http://www.dol.gov/ebsa/faqs/faqaca12.html. 

arrived at a similar conclusion and 

found that, in total, services provided at 

publicly funded family planning centers 

saved $5.1 billion in 2008.18

Further, the importance of covering 

contraceptive services has been 

recognized by many states, issuers, and 

employers. Twenty-eight states now 

have laws requiring health insurance 

issuers to cover contraceptives.19 A 

2002 study found that more than 89 

percent of insured plans covered 

contraceptives.20 And a 2010 survey of 

employers revealed that 85 percent of 

large employers and 62 percent of small 

employers offered coverage of FDAapproved contraceptives, with another 

32 percent of small employers reporting 

that they did not know whether they did 

so.21

Furthermore, in directing nongrandfathered group health plans and 

health insurance coverage to cover 

preventive services and screenings for 

women described in HRSA Guidelines 

without cost sharing, the statute 

acknowledges that both existing health 

coverage and existing preventive 

services recommendations often did not 

adequately serve the unique health 

needs of women. This disparity placed 

women in the workforce at a 

disadvantage compared to their male 

coworkers. Research shows that access 

to contraception improves the social 

and economic status of women.22

Research also shows that cost sharing 

can be a significant barrier to access to 

contraception.23 As IOM noted, women 

use preventive services more than men, 

generating significant out-of-pocket 

expenses for women.24 Thus, 

eliminating cost sharing is particularly 

critical to addressing the gender 

disparity of concern here. 

The Departments aim to advance 

these compelling public health and 

gender equity interests by providing 

more women broad access to 

recommended preventive services, 

including contraceptive services, 

without cost sharing, while 

simultaneously protecting certain 

nonprofit religious organizations with 

religious objections to contraceptive 

coverage from having to contract, 

arrange, pay, or refer for such coverage, 

as described in these final regulations. 

Moreover, through these final 

regulations, the Departments seek to 

achieve these goals in ways that take 

into account the responsibilities 

imposed on health insurance issuers 

and third party administrators. 

A. Amendments to Coverage of 

Recommended Preventive Health 

Services—26 CFR 54.9815–2713, 29 CFR 

2590.715–2713, 45 CFR 147.130 

These sections of the final regulations 

finalize technical amendments to the 

existing preventive services coverage 

regulations as proposed. The final 

regulations amend paragraph (a) of the 

existing regulations so that the general 

requirement to provide coverage for 

recommended preventive services 

without cost sharing is subject to the 

religious employer exemption and 

eligible organization accommodations 

discussed later in this section. 

The regulations also finalize proposed 

amendments to paragraph (a)(1)(iv) of 

the existing regulations. As amended, 

the authorization for HRSA to exempt 

religious employers from the 

contraceptive coverage requirement and 

the definition of religious employer are 

now located in new 45 CFR 147.131(a) 

of the HHS regulation and incorporated 

by reference in the regulations of the 

Departments of Labor and the Treasury. 

There are no other changes to the 

provisions of the 2010 interim final 

regulations related to providing 

coverage for recommended preventive 

services without cost sharing. 

Accordingly, consistent with the general 

rules for the provision of coverage for 

recommended preventive services 

without cost sharing set forth in the 

2010 interim final regulations, nothing 

prevents a plan or issuer from using 

reasonable medical management 

techniques to determine the frequency, 

method, treatment, or setting for an item 

or service to the extent not specified in 

a recommendation or guideline and 

nothing requires a plan or issuer that 

has a network of health care providers 

to provide benefits or eliminate cost 

sharing for items or services that are 

delivered out-of-network.25

B. Religious Employer Exemption and 

Accommodations for Health Coverage 

Established or Maintained or Arranged 

by Eligible Organizations—26 CFR 

54.9815–2713A, 29 CFR 2590.715– 

2713A, 45 CFR 147.131 

These sections of the final regulations 

simplify and clarify the criteria for the 

religious employer exemption from the 

contraceptive coverage requirement. 

These sections also establish 

accommodations with respect to the 

contraceptive coverage requirement for 

group health plans established or 

maintained by eligible organizations 

(and group health insurance coverage 

provided in connection with such 

plans), as well as student health 

insurance coverage arranged by eligible 

organizations that are institutions of 

higher education. 

1. Religious Employer Exemption 

Under the 2012 final regulations, 

HRSA has the authority to issue 

guidelines in a manner that exempts 

group health plans established or 

maintained by religious employers (and 

group health insurance coverage 

provided in connection with such 

plans) from any requirement to cover 

contraceptive services consistent with 

the HRSA Guidelines that would 

otherwise apply. A religious employer 

was defined for this purpose as one that: 

(1) Has the inculcation of religious 

values as its purpose; (2) primarily 

employs persons who share its religious 

tenets; (3) primarily serves persons who 


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26Similarly, whether a nonprofit entity is a 

religious employer is determined under this 

definition without regard to whether the entity files 

Form 990 with the IRS. 

share its religious tenets; and (4) is a 

nonprofit organization described in 

section 6033(a)(1) and 6033(a)(3)(A)(i) 

or (iii) of the Code. Section 

6033(a)(3)(A)(i) and (iii) of the Code 

refers to churches, their integrated 

auxiliaries, and conventions or 

associations of churches, as well as to 

the exclusively religious activities of 

any religious order. 

The Departments proposed to 

simplify and clarify the definition of 

religious employer by eliminating the 

first three prongs and clarifying the 

fourth prong of the definition. Under 

this proposal, an employer that is 

organized and operates as a nonprofit 

entity and is referred to in section 

6033(a)(3)(A)(i) or (iii) of the Code 

would be considered a religious 

employer for purposes of the religious 

employer exemption. These proposed 

amendments were intended to eliminate 

any question as to whether group health 

plans of houses of worship that provide 

educational, charitable, or social 

services to their communities qualify for 

the exemption. Specifically, they were 

intended to ensure that 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. The 

Departments also proposed to clarify 

that, for purposes of the religious 

employer exemption, an employer that 

is organized and operates as a nonprofit 

entity is not limited to any particular 

form of entity under state law. The 

Departments reiterate that, under this 

standard, it is not necessary to 

determine the federal tax-exempt status 

of the nonprofit entity in determining 

whether the religious employer 

exemption applies.26

The Departments received numerous 

comments addressing the definition of 

religious employer. Some commenters 

stated that the proposed definition of 

religious employer was too narrow and 

should be broadened to include all 

employers, both nonprofit and forprofit, that have a religious objection to 

providing contraceptive coverage in 

their group health plan. Some 

commenters requested that the 

definition of religious employer be 

expanded to exempt not only churches 

and other houses of worship, but also 

religiously affiliated hospitals and other 

health care organizations and other 

religiously affiliated ministries using the 

concepts of Code section 414(e). Other 

commenters recommended that the 

requirement to cover contraceptive 

services be rescinded altogether. 

Some commenters stated that the 

exemption for religious employers 

should be eliminated and that religious 

employers should instead be subject to 

the accommodations for eligible 

organizations so that their employees 

may also receive alternative 

contraceptive coverage without cost 

sharing. Other commenters opposed 

eliminating the first three prongs of the 

definition of religious employer, stating 

that only churches and other houses of 

worship that meet the criteria of all of 

the prongs should be subject to the 

exemption. Many commenters agreed 

with the Departments that the proposed 

definition of religious employer would 

not materially expand the universe of 

religious employers, but others felt that 

the proposed definition would unduly 

broaden it. 

Based on their review of these 

comments, the Departments are 

finalizing without change the definition 

of religious employer in the proposed 

regulations. As indicated in the 

preamble to the proposed regulations 

(78 FR 8461), the simplified and 

clarified definition of religious 

employer does not expand the universe 

of religious employers that qualify for 

the exemption beyond that which was 

intended in the 2012 final regulations, 

but only eliminates any perceived 

potential disincentive for religious 

employers to provide educational, 

charitable, and social services to their 

communities. The Departments believe 

that the simplified and clarified 

definition of religious employer 

continues to respect the religious 

interests of houses of worship and their 

integrated auxiliaries in a way that does 

not undermine the governmental 

interests furthered by the contraceptive 

coverage requirement. Houses of 

worship and their integrated auxiliaries 

that object to contraceptive coverage on 

religious grounds are more likely than 

other employers to employ people of the 

same faith who share the same 

objection, and who would therefore be 

less likely than other people to use 

contraceptive services even if such 

services were covered under their plan. 

Contemporaneous with the issuance 

of these final regulations, HRSA is 

issuing amended guidelines 

implementing the simplified and 

clarified religious employer exemption 

authorized by 45 CFR 147.131(a) of 

these final regulations (and incorporated 

by reference in 26 CFR 54.9815– 

2713(a)(1)(iv) and 29 CFR 2590.715– 

2713(a)(1)(iv)). The amendments to the 

guidelines will become effective 

beginning August 1, 2013. 

2. Accommodations for Health Coverage 

Established or Maintained or Arranged 

by Eligible Organizations 

In addition to simplifying and 

clarifying the definition of religious 

employer, these final regulations 

establish accommodations with respect 

to the contraceptive coverage 

requirement for health coverage 

established or maintained or arranged 

by eligible organizations, as defined in 

these final regulations. After meeting a 

self-certification standard, as described 

in more detail in this preamble, 

nonprofit religious organizations that 

qualify for these accommodations are 

not required to contract, arrange, pay, or 

refer for contraceptive coverage; 

however, plan participants and 

beneficiaries (or student enrollees and 

their covered dependents) will still 

benefit from separate payments for 

contraceptive services without cost 

sharing or other charge in accordance 

with section 2713 of the PHS Act and 

the companion provisions of ERISA and 

the Code. As discussed later in this 

section, the accommodations 

established under these final regulations 

do not require the issuance of a separate 

excepted benefits individual health 

insurance policy covering contraceptive 

services, as set forth in the proposed 

regulations, but instead require a 

simpler method of providing direct 

payments for contraceptive services. 

a. Definition of Eligible Organization 

The final regulations retain the 

definition of eligible organization set 

forth in the proposed regulations. 

Accordingly, under these final 

regulations, an eligible organization is 

an organization that: (1) Opposes 

providing coverage for some or all of the 

contraceptive services required to be 

covered under section 2713 of the PHS 

Act and the companion provisions of 

ERISA and the Code on account of 

religious objections; (2) is organized and 

operates as a nonprofit entity; (3) holds 

itself out as a religious organization; and 

(4) self-certifies that it satisfies the first 

three criteria (as discussed in more 

detail later in this section). 

Some commenters requested that the 

definition of eligible organization be 

broadened to include nonprofit secular 

employers and for-profit employers with 

religious objections to contraceptive 

coverage. Other commenters urged that 

the definition not be extended to forprofit employers, arguing that for-profit 

employers should not be accommodated 

because their purposes are commercial, 

not religious. Additionally, several 


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27Although not required to do so by these final 

regulations, nothing in these final regulations 

prevents a religious employer from drafting and 

executing a self-certification regarding its status as 

a religious employer and sharing the selfcertification with issuers, plan service providers, 

plan participants or beneficiaries, or others. 

commenters recommended clarifying 

how an eligible organization would 

show that it holds itself out as a 

religious organization. Specifically, 

commenters suggested clarifying that 

only organizations that prominently and 

consistently hold themselves out to the 

public as religious organizations may 

qualify for an accommodation. 

The Departments decline to adopt 

these suggestions. The definition of 

eligible organization in these final 

regulations is the same as that in the 

proposed regulations, and is intended to 

allow health coverage established or 

maintained or arranged by various types 

of nonprofit religious organizations with 

religious objections to contraceptive 

coverage to qualify for an 

accommodation. Consistent with 

religious accommodations in related 

areas of federal law, such as the 

exemption for religious organizations 

under Title VII of the Civil Rights Act 

of 1964, the definition of eligible 

organization in these final regulations 

does not extend to for-profit 

organizations. The Departments are 

unaware of any court granting a 

religious exemption to a for-profit 

organization, and decline to expand the 

definition of eligible organization to 

include for-profit organizations. 

b. Self-Certification 

Each organization seeking to be 

treated as an eligible organization under 

the final regulations, to avoid 

contracting, arranging, paying, or 

referring for contraceptive coverage, is 

required to self-certify, prior to the 

beginning of the first plan year to which 

an accommodation is to apply, that it 

meets the definition of an eligible 

organization.27 The self-certification (as 

described in these final regulations) 

needs to be executed once. A copy of 

the self-certification needs to be 

provided to a new health insurance 

issuer or a new third party administrator 

if the eligible organization changes 

issuers or third party administrators. 

Comments addressing this topic 

generally approved of the approach 

proposed by the Departments, but some 

commenters suggested that stronger 

protections were needed to promote 

oversight, enforcement, and 

transparency and to prevent abuse. For 

example, some commenters 

recommended requiring eligible 

organizations to file their selfcertifications with the Departments and 

making such records available to the 

public. Other commenters argued that 

the act of self-certification would 

infringe on the First Amendment right 

of free speech. 

The final regulations do not require 

the self-certification to be submitted to 

any of the Departments. An eligible 

organization must simply maintain the 

self-certification (executed by an 

authorized representative of the 

organization) in its records, in a manner 

consistent with the record retention 

requirements under section 107 of 

ERISA, and make the self-certification 

available for examination upon request. 

The Departments believe that the 

requirement to make the selfcertification available for examination 

upon request appropriately balances 

regulators’, issuers’, third party 

administrators’, and plan participants 

and beneficiaries’ (and student enrollees 

and their covered dependents’) interest 

in verifying compliance and eligible 

organizations’ interest in avoiding 

undue inquiry into their character, 

mission, or practices. Further, the 

Departments do not believe that the selfcertification standard infringes on 

freedom of speech. 

The proposed regulations provided 

that the self-certification would specify 

the contraceptive services for which the 

organization will not establish, 

maintain, administer, or fund coverage. 

The final regulations eliminate this 

requirement, pursuant to the standard 

exclusion policy discussed later in this 

section. Further, the final regulations 

provide that, if an organization seeks to 

be treated as an eligible organization 

under the final regulations, an issuer or 

third party administrator may not 

require any documentation from the 

organization beyond its self-certification 

as to its status as an eligible 

organization. The form to be used for 

the self-certification is being finalized 

contemporaneous with the issuance of 

these final regulations through the 

process provided for under the 

Paperwork Reduction Act of 1995. 

As discussed previously, the selfcertification form is applicable in 

conjunction with the accommodations 

under these final regulations (that is, for 

plan years beginning on or after January 

1, 2014), after the expiration of the 

temporary enforcement safe harbor. The 

self-certification standard referenced in 

these final regulations (and the form to 

be executed by an eligible organization 

to make such self-certification, which is 

being issued contemporaneously with 

these final regulations) are different 

from the standard (and the form) 

associated with the guidance regarding 

the extension of the temporary 

enforcement safe harbor, which is also 

being issued contemporaneously with 

these final regulations. 

c. Separate Payments for Contraceptive 

Services for Participants and 

Beneficiaries in Insured Group Health 

Plans 

The proposed regulations provided, in 

the case of an insured group health plan 

established or maintained by an eligible 

organization, that the health insurance 

issuer providing group coverage in 

connection with the plan be required to 

assume sole responsibility, independent 

of the eligible organization and its plan, 

for providing separate individual health 

insurance policies covering 

contraceptive services for plan 

participants and beneficiaries without 

cost sharing, premium, fee, or other 

charge to plan participants or 

beneficiaries or to the eligible 

organization or its plan. Under this 

proposal, an organization seeking to be 

treated as an eligible organization would 

need only to meet the self-certification 

standard. The issuer, in turn, would 

automatically enroll plan participants 

and beneficiaries in separate individual 

health insurance policies that cover 

contraceptive services (and notify them 

of such enrollment) without the 

imposition of any cost-sharing 

requirement (such as a copayment, 

coinsurance, or a deductible), premium, 

fee, or other charge on plan participants 

or beneficiaries or on the eligible 

organization or its plan. 

Some commenters stated that the 

Departments should not provide a 

tailored accommodation for an eligible 

organization that objects to only some 

types of contraceptive services. These 

commenters said that customizing 

individual contraceptive policies for 

participants and beneficiaries (or 

students enrollees and their covered 

dependents) in plans of eligible 

organizations based on the differing 

religious objections to contraceptive 

coverage of each eligible organization 

would create an administrative burden 

for issuers and confuse plan participants 

and beneficiaries (or student enrollees 

and their covered dependents). Some 

commenters also noted that requiring 

coordination of benefits might not be 

feasible, because many states prohibit 

coordination between individual and 

group health insurance coverage. 

In response to these comments, the 

final regulations provide that an issuer 

providing payments for contraceptive 

services in accordance with these final 

regulations may use a standard 

exclusion from a group health insurance 

policy that encompasses all 

recommended contraceptive services 


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28With respect to the accommodation for selfinsured coverage of eligible organizations under 

these final regulations, a comparable requirement to 

and not violate PHS Act section 2713 

and the companion provisions of ERISA 

and the Code with respect to the 

requirement to cover contraceptive 

services. While issuers may, at their 

option, choose to offer customized 

exclusions from group health insurance 

policies based on the differing religious 

objections to contraceptive coverage of 

each eligible organization (or offer 

several different but standardized 

exclusions from group health insurance 

policies from which eligible 

organizations may choose), they are not 

required to do so under these final 

regulations. Regardless of whether an 

issuer uses a standard or customized 

exclusion from a group health insurance 

policy, plan participants and 

beneficiaries (and student enrollees and 

their covered dependents) are assured 

that the issuer will make payments for 

any recommended contraceptive 

services excluded from the group health 

insurance policy (or student health 

insurance coverage). 

Some commenters noted that the 

proposed individual health insurance 

policies covering contraceptive services 

might not be viewed as enforceable 

contracts under state contract law 

because there would be no premium 

associated with the coverage and no 

ability for an individual to decline 

coverage. Commenters suggested that 

states would need to develop new 

regulatory processes for reviewing forms 

and rates for such policies, and noted 

that the inability to charge a premium 

for such policies could raise actuarial 

soundness and financial reserve 

concerns. Commenters also noted that 

state laws would prevent issuers 

licensed to issue group health insurance 

policies in one state from issuing 

individual health insurance policies to 

employees of an eligible organization 

residing in other states, and expressed 

concern about the cost and 

administrative complexity of issuing 

and administering individual 

contraceptive coverage policies. 

These final regulations achieve the 

same end by requiring that a health 

insurance issuer providing group health 

insurance coverage in connection with a 

group health plan established or 

maintained by an eligible organization 

assume sole responsibility for providing 

separate payments for contraceptive 

services directly for plan participants 

and beneficiaries, without cost sharing, 

premium, fee, or other charge to plan 

participants or beneficiaries or to the 

eligible organization or its plan. The 

requirement that, for plan participants 

and beneficiaries, issuers provide 

payments for contraceptive services, in 

lieu of individual health insurance 

policies that cover contraceptive 

services, represents a simpler approach 

and responds to concerns raised by 

commenters, while still ensuring that 

eligible organizations and their plans do 

not contract, arrange, pay, or refer for 

such coverage, and that contraceptive 

coverage is expressly excluded from the 

group health insurance coverage. 

Under these final regulations, as 

under the proposed regulations, the 

eligible organization need only meet the 

self-certification standard and provide 

to the issuer a copy of its selfcertification. The issuer that receives the 

copy of the self-certification from the 

eligible organization must expressly 

exclude contraceptive coverage—either 

all contraceptive coverage or coverage of 

specific contraceptive services if the 

issuer chooses to customize the 

exclusion—from the group health 

insurance coverage of the eligible 

organization. The issuer must also 

notify plan participants and 

beneficiaries, contemporaneous with (to 

the extent possible) but separate from 

any application materials distributed in 

connection with enrollment (or reenrollment) in group health coverage 

that is effective beginning on the first 

day of each applicable plan year, that 

the issuer provides payments for 

contraceptive services at no cost 

separate from the group health plan for 

so long as the participant or beneficiary 

remains enrolled in the plan, as 

discussed later in this section. Unlike 

under the proposed regulations, the 

issuer is not required to issue to plan 

participants and beneficiaries 

individual health insurance policies 

covering contraceptive services, and, 

thus, there is no need to consider such 

coverage excepted benefits, as proposed. 

Instead, under these final regulations, 

the issuer must, as a federal regulatory 

requirement, provide payments for 

contraceptive services for plan 

participants and beneficiaries, separate 

from the group health plan, without the 

imposition of cost sharing, premium, 

fee, or other charge on plan participants 

or beneficiaries or on the eligible 

organization or its plan. Under this 

simplified approach, issuers will not 

incur the associated administrative costs 

of issuing individual contraceptive 

coverage policies. 

This simpler approach to the 

accommodation for insured coverage 

does not trigger certain aspects of state 

insurance law. As the payments at issue 

derive solely from a federal regulatory 

requirement, not a health insurance 

policy, they do not implicate issues 

such as issuer licensing and product 

approval requirements under state law, 

and they minimize cost and 

administrative complexity for issuers. 

At the same time, because the payments 

for contraceptive services are not a 

group health plan benefit under this 

approach, this policy ensures that 

eligible organizations and their plans do 

not contract, arrange, pay, or refer for 

contraceptive coverage, and that such 

coverage is expressly excluded from 

their group health insurance policies. 

This approach also minimizes barriers 

in access to care because plan 

participants and beneficiaries (and their 

health care providers) do not have to 

have two separate health insurance 

policies (that is, the group health 

insurance policy and the individual 

contraceptive coverage policy). 

Furthermore, Small Business Health 

Insurance Options Programs (SHOPs) 

(the small group market Exchanges) do 

not need to make operational changes as 

a result of the accommodation. Small 

employers that are eligible organizations 

purchasing coverage through a SHOP 

can simply provide a copy of their selfcertification to the issuer (rather than 

provide it to the SHOP) to ensure that 

their small group market policy is 

provided in a manner consistent with 

these final regulations. 

Although these payments for 

contraceptive services are not benefits 

under a health insurance policy, to 

fulfill an issuer’s responsibilities under 

section 2713 of the PHS Act and the 

companion provisions of ERISA and the 

Code and consistent with the proposed 

regulations, an issuer must make them 

available in a way that meets minimum 

standards for consumer protection, 

which would ordinarily accompany 

coverage of recommended preventive 

health services without cost sharing 

under section 2713 of the PHS Act and 

the companion provisions of ERISA and 

the Code. Thus, issuers, in order to 

satisfy their regulatory obligations under 

these final regulations, must make these 

payments for contraceptive services in a 

manner consistent with the 

requirements under the following 

provisions of the PHS Act and the 

companion provisions of ERISA and the 

Code (and their implementing 

regulations): PHS Act sections 2706 

(non-discrimination in health care), 

2709 (coverage for individuals 

participating in approved clinical trials), 

2711 (no lifetime or annual limits), 2713 

(coverage of preventive health services), 

2719 (appeals process), and 2719A 

(patient protections), as incorporated by 

reference into ERISA section 715 and 

Code section 9815.28 Consistent with 


emcdonald on DSK67QTVN1PROD with RULES3
Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 39877 

provide separate payments for contraceptive 

services consistent with these consumer protections 

is not explicitly placed on the third party 

administrator. This is because, as the plan 

administrator for contraceptive coverage, the third 

party administrator is already required to comply 

with these consumer protections, as well as all 

other provisions of ERISA that are applicable to 

group health plans, including ERISA sections 104 

and 503, and the requirements of Part 7 of ERISA. 

29See 26 CFR 54.9815–2713T(a)(3) and (4); 29 

CFR 2590.715–2713(a)(3) and (4); 45 CFR 

147.130(a)(3) and (4). 

30Bertko, J., Glied, S., et al. The Cost of Covering 

Contraceptives Through Health Insurance (February 

9, 2012), http://aspe.hhs.gov/health/reports/2012/ 

contraceptives/ib.shtml; Washington Business 

Group on Health, Promoting Healthy Pregnancies: 

Counseling and Contraception as the First Step, 

Report of a Consultation with Business and Health 

Leader (September 20, 2000), http:// 

www.businessgrouphealth.org/pdfs/ 

healthypregnancy.pdf; Campbell, K.P., Investing in 

Maternal and Child Health: An Employer’s Toolkit, 

National Business Group on Health http:// 

www.businessgrouphealth.org/healthtopics/ 

maternalchild/investing/docs/mch_toolkit.pdf; 

Trussell, J., et al. The Economic Value of 

Contraception: A Comparison of 15 Methods, 

American Journal Public Health, 1995; 85(4):494– 

503, Revenues of H.R. 3162, the Children’s Health 

and Medicare Protection Act, for the Rules 

Committee (August 1, 2007) http://www.cbo.gov/ 

ftpdocs/85xx/doc8519/HR3162.pdf. 

31The Departments believe that these same cost 

savings found by issuers of group health insurance 

would also be found by issuers of student health 

insurance coverage. 

32One commenter cited two studies disputing the 

cost effectiveness of preventive health services, but 

these studies are not specific to contraceptive 

services. Further, these studies find that preventive 

care is not cost effective when a large population 

receives the preventive service but only a small 

fraction of that population would have developed 

the condition being prevented, a circumstance not 

presented here. See Cohen, J., et al., New England 

Journal of Medicine. 2008, 358:661–663 (February 

14, 2008) http://www.nejm.org/toc/nejm/358/7; 

CBO Letter to Congressman Nathan Deal, (August 

7, 2009). http://www.cbo.gov/sites/default/files/ 

cbofiles/ftpdocs/104xx/doc10492/08-07- 

prevention.pdf. 

33http://www.nahu.org/consumer/Group

Insurance.cfm. 

34http://www.actuary.org/files/Draft_Large_

Group_Medical_Business_Practice_Note_Jan_

2013.pdf. 

these standards and as described in the 

2010 interim final regulations, an issuer 

may apply reasonable medical 

management techniques and may 

require that contraceptive services be 

obtained in-network (if an issuer has a 

network of providers) in order for plan 

participants and beneficiaries to obtain 

such services without cost sharing.29

Issuers are prohibited from charging 

any premium, fee, or other charge to 

eligible organizations or their plans, or 

to plan participants or beneficiaries, for 

making payments for contraceptive 

services, and must segregate the 

premium revenue collected from 

eligible organizations from the monies 

they use to make such payments. In 

making such payments, the issuer must 

ensure that it does not use any 

premiums collected from eligible 

organizations. Issuers have flexibility in 

how to structure these payments, 

provided that the payments in no way 

involve the eligible organization, and 

provided that issuers are able to account 

for this segregation of funds in 

accordance with applicable, generally 

accepted accounting and auditing 

standards. 

The Departments stated in the 

preamble of the proposed regulations 

that issuers would find that providing 

contraceptive coverage is at least cost 

neutral because they would be insuring 

the same set of individuals under both 

the group health insurance policies and 

the separate individual contraceptive 

coverage policies and, as a result, would 

experience lower costs from 

improvements in women’s health, 

healthier timing and spacing of 

pregnancies, and fewer unplanned 

pregnancies. The Departments continue 

to believe, and have evidence to 

support, that, with respect to the 

accommodation for insured coverage 

established under these final 

regulations, providing payments for 

contraceptive services is cost neutral for 

issuers. Several studies have estimated 

that the costs of providing contraceptive 

coverage are balanced by cost savings 

from lower pregnancy-related costs and 

from improvements in women’s 

health.30 31 The Departments are 

unaware of any studies to the 

contrary.32

Some commenters raised specific 

premium rating and accounting issues 

related to the proposed regulations’ 

approach to the cost neutrality of issuers 

providing contraceptive coverage. These 

commenters generally asserted that the 

cost savings due to lower pregnancyrelated costs and improvements in 

women’s health would flow to 

employers through reduced premiums, 

thereby leaving issuers uncompensated 

for the cost of providing contraceptive 

coverage. Further, commenters stated 

that, in the case of a group health 

insurance policy in the small group 

market, the small employer’s reduced 

claims experience attributable to 

contraceptive coverage (not including 

the issuer’s direct costs of contraceptive 

coverage) would be spread across the 

issuer’s single risk pool for the entire 

small group market in a state and result 

in a lower index rate for pricing all of 

the issuer’s small group market 

products. Thus, according to these 

commenters, in both the large and small 

group markets, issuers would not reap 

the cost savings attributable to 

contraceptive coverage, and would need 

to fund the costs of a free-standing 

contraceptive coverage policy from 

some other source. 

One commenter suggested that it 

would be possible to view the provision 

of contraceptive coverage as cost neutral 

if an issuer were to set the premium 

otherwise charged to an eligible 

organization as though plan participants 

and beneficiaries did not have separate 

contraceptive coverage. Other 

commenters argued that the rationale for 

providing Federally-facilitated 

Exchange (FFE) user fee adjustments in 

connection with the accommodation for 

self-insured group health plans of 

eligible organizations was equally 

applicable in the context of insured 

group health plans of eligible 

organizations and recommended that 

issuers be permitted to charge a 

premium or otherwise be compensated 

for providing contraceptive coverage. 

In response to these comments, the 

Departments continue to believe that 

issuers have various options for 

achieving cost neutrality, 

notwithstanding that they must make 

payments for contraceptive services 

without cost sharing, premium, fee, or 

other charge to the eligible organization, 

the group health plan, or plan 

participants or beneficiaries. 

Issuers of large group insured 

products have an option by which they 

can ensure that they accrue the cost 

savings from reduced pregnancy-related 

expenses and other health care costs. 

For large group market products, issuers 

base premiums on an employer’s prior 

year claims cost (that is, experience 

rating) and other factors.33 Some 

commenters asserted that this rating 

practice means that any cost savings 

from fewer pregnancies and childbirths 

and improvements in women’s health 

will be passed to the employer in the 

large group insured market. Given that 

there appears to be no legal requirement 

that issuers use this particular rating 

practice, and that this practice often 

entails adding costs to premiums that 

are not based solely on the experience 

of the employer’s group,34 issuers 

reasonably could set the premium for an 

eligible organization’s large group 

policy as if no payments for 

contraceptive services had been 

provided to plan participants and 

beneficiaries—reflecting the actual 

terms of the group policy, which 

expressly excludes contraceptive 

coverage. This approach would be 

consistent with pricing methodologies 

currently used in the health insurance 

industry. 


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39878 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

35Bluhm, W., ed., Group Insurance, 5th Ed. 

2007), 459–460. 

36 2011 MLR–A data, submitted to CMS in July 

2012. 

37Office of Assistant Secretary for Planning and 

Evaluation, U.S. Department of Health and Human 

Services, ‘‘Cost-Neutrality of Contraceptive 

Coverage.’’ 

38See 45 CFR Part 158 for standards related to the 

medical loss ratio and 45 CFR Part 153 Subpart F 

for standards related to the risk corridor program. 

39The same is true with respect to the 

accommodation for self-insured coverage of eligible 

organizations under these final regulations, given 

that third party administrators similarly are not 

required to arrange for individual contraceptive 

coverage policies at all. 

Another option is to treat the cost of 

payments for contraceptive services for 

women enrolled in insured group health 

plans established or maintained by 

eligible organizations as an 

administrative cost that is spread across 

the issuer’s entire risk pool, excluding 

plans established or maintained by 

eligible organizations given that issuers 

are prohibited from charging any 

premium, fee, or other charge to eligible 

organizations or their plans for 

providing payments for contraceptive 

services. In the small group market, 

issuers are required beginning in 2014 

to treat all of their non-grandfathered 

business within a state as a single risk 

pool, and administrative costs may be 

spread evenly across all plans in the 

single risk pool (although issuers are 

permitted to apply them on a plan 

basis). In the large group market, while 

there is no single risk pool requirement, 

issuers generally spread administrative 

costs across their entire book of 

business.35 In 2011, health insurance 

issuers earned approximately $290 

billion in premiums in the insured 

small and large group markets.36 If the 

cost of providing payments for 

contraceptive services for participants 

and beneficiaries in insured group 

health plans established or maintained 

by eligible organizations were treated as 

an administrative cost spread across an 

issuer’s entire book of business 

(excluding plans established or 

maintained by eligible organizations), 

the cost of providing such payments 

would result in an imperceptible 

increase in administrative load.37 These 

changes in premiums would be 

negligible and effectively cost neutral to 

issuers, even before considering any 

reductions in claims costs that accrue to 

the issuer. 

Under either option, after meeting the 

self-certification standard, the eligible 

organization would not contract, 

arrange, pay, or refer for contraceptive 

coverage. 

HHS intends to clarify in guidance 

that an issuer of group health insurance 

coverage that makes payments for 

contraceptive services under these final 

regulations may treat those payments as 

an adjustment to claims costs for 

purposes of medical loss ratio and risk 

corridor program calculations.38 This 

adjustment compensates for any 

increase in incurred claims associated 

with making payments for contraceptive 

services. 

Several commenters expressed 

concern that participants and 

beneficiaries in plans of eligible 

organizations would be automatically 

enrolled in individual contraceptive 

coverage policies and recommended 

providing an opt-out for plan 

participants and beneficiaries who 

object to contraceptive coverage on 

religious grounds. Other commenters 

stated that allowing participants and 

beneficiaries to opt out of such 

contraceptive coverage would create an 

administrative burden on issuers and 

privacy concerns for individuals 

because the issuers would know which 

individuals opted in or opted out of 

such coverage. The simplified approach 

described in these final regulations 

eliminates this issue altogether, because 

issuers are not required to issue 

individual contraceptive coverage 

policies at all.39 Rather, they are 

required only to provide payments for 

contraceptive services for those plan 

participants and beneficiaries who opt 

to use such services. Nothing in these 

final regulations compels any plan 

participant or beneficiary to use such 

services, and nothing causes 

participants or beneficiaries to be 

automatically enrolled in contraceptive 

coverage; therefore, these concerns are 

addressed without the need for an optout mechanism. Moreover, nothing in 

these final regulations precludes 

employers or others from expressing any 

opposition to the use of contraceptives 

or requires health care providers to 

prescribe or provide contraceptives, if 

doing so is against their religious 

beliefs. 

The Departments explained in the 

preamble of the proposed regulations 

that a health insurance issuer providing 

group health insurance coverage in 

connection with a group health plan 

established or maintained by an eligible 

organization would be held harmless if 

the issuer relied in good faith on a 

representation by the organization as to 

its eligibility for the accommodation 

and such representation was later 

determined to be incorrect. The 

Departments also explained that an 

eligible organization and its plan would 

be held harmless if the issuer were to 

fail to comply with the requirement to 

provide separate payments for 

contraceptive services for plan 

participants and beneficiaries at no cost. 

Some commenters requested that the 

Departments codify this policy in 

regulation text. Accordingly, this policy 

is now codified in paragraph (e) of 26 

CFR 54.9815–2713A, 29 CFR 2590.715– 

2713A, and 45 CFR 147.131 of these 

final regulations. 

To summarize, the following are the 

key elements of the accommodation that 

is being made for eligible organizations 

with insured group health plans: 

• An organization seeking to be 

treated as an eligible organization needs 

only to self-certify that it is an eligible 

organization, provide the issuer with a 

copy of the self-certification, and satisfy 

the recordkeeping and inspection 

requirements of the self-certification 

standard. 

• The issuer that receives a selfcertification must then expressly 

exclude contraceptive coverage from the 

eligible organization’s group health 

insurance coverage. 

• The issuer must, contemporaneous 

with (to the extent possible), but 

separate from, any application materials 

distributed in connection with 

enrollment (or re-enrollment) in group 

health coverage that is effective 

beginning on the first day of each 

applicable plan year, notify plan 

participants and beneficiaries that the 

issuer provides separate payments for 

contraceptive services at no cost for so 

long as the participant or beneficiary 

remains enrolled in the plan. 

• The issuer must segregate premium 

revenue collected from the eligible 

organization from the monies used to 

make payments for contraceptive 

services. When it makes payments for 

contraceptive services used by plan 

participants and beneficiaries, the issuer 

must do so without imposing any 

premium, fee, or other charge, or any 

portion thereof, directly or indirectly, 

on the eligible organization, its group 

health plan, or its plan participants or 

beneficiaries. In making such payments, 

the issuer must ensure that it does not 

use any premiums collected from 

eligible organizations. Issuers have 

flexibility in how to structure these 

payments, but must be able to account 

for this segregation of funds, subject to 

applicable, generally accepted 

accounting and auditing standards. 

Thus, an eligible organization need not 

contract, arrange, pay or refer for 

contraceptive coverage. 


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Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 39879 

40Third party administrators are hired by plan 

sponsors to process claims and administer other 

administrative aspects of employee benefit plans. In 

some cases, a plan hires different third party 

administrator to administer claims for different 

classifications of benefits. (For example, one plan 

may contract with a pharmacy benefit manager 

(PBM) to handle claims administration for 

prescription drugs and another third party 

administrator to handle claims for inpatient and 

outpatient medical/surgical benefits.) To the extent 

the plan hires more than one third party 

administrator, each third party administrator would 

become the section 3(16) plan administrator with 

respect to the types of claims it normally processes 

(that is, the PBM would continue to handle claims 

for prescription drugs and the other third party 

administrator would continue to handle claims for 

inpatient and outpatient medical/surgical benefits); 

each would do so in accordance with section 2713 

of the PHS Act and the companion provisions of 

ERISA and the Code (even if plan terms might 

otherwise provide differently) as plan 

administration that may be funded in accordance 

with 45 CFR 156.50(d). 

• Plan participants and beneficiaries 

may refuse to use contraceptive 

services. 

• An eligible organization and its 

group health plan are considered to 

comply with the contraceptive coverage 

requirement even if the issuer fails to 

comply with the requirement to provide 

separate payments for contraceptive 

services for plan participants and 

beneficiaries at no cost. 

d. Separate Payments for Contraceptive 

Services for Participants and 

Beneficiaries in Self-Insured Group 

Health Plans 

Comments varied as to which of the 

three proposed approaches to providing 

separate contraceptive coverage without 

cost sharing for participants and 

beneficiaries in self-insured plans of 

eligible organizations should be 

finalized. Some commenters suggested 

that none of the proposed approaches 

would enable objecting employers to 

separate themselves completely from 

the administration of contraceptive 

coverage. These commenters requested 

an unqualified exemption from the 

contraceptive coverage requirement for 

such employers. Other commenters 

stated that none of the proposed 

approaches would sufficiently ensure 

that participants and beneficiaries in 

self-insured plans of eligible 

organizations would receive separate 

contraceptive coverage without cost 

sharing. These commenters requested 

that the final regulations require that 

objecting employers retain legal 

responsibility for any failure on the part 

of issuers or third party administrators 

to provide such coverage. 

A number of commenters expressed 

concern about the responsibilities that 

one or more of the proposed approaches 

would impose on third party 

administrators. Some of these 

commenters suggested that the proposed 

requirement that third party 

administrators arrange for separate 

contraceptive-only coverage through an 

issuer would convert third party 

administrators into health insurance 

brokers. Others suggested that third 

party administrators would not be 

willing to assume the responsibility of 

arranging for separate contraceptiveonly coverage. These commenters also 

suggested that, even if a third party 

administrator were willing to assume 

such responsibility, it would pass along 

the resultant increase in its 

administrative costs to the employer. 

Other commenters expressed concern 

about an approach that would require 

third party administrators to become 

plan administrators and fiduciaries 

under section 3(16) of ERISA for the 

sole purpose of arranging contraceptive 

coverage. These commenters suggested 

that requiring third party administrators 

to serve as fiduciaries would increase 

their exposure to legal liability and also 

create conflicts of interest with their 

plan sponsor clients given that many 

agreements between third party 

administrators and plan sponsors 

prohibit third party administrators from 

serving as fiduciaries. 

A number of commenters questioned 

the Department of Labor’s legal 

authority to designate a third party 

administrator as the plan administrator 

for contraceptive coverage by virtue of 

the eligible organization providing a 

copy of its self-certification to the third 

party administrator. These commenters 

suggested that the self-certification of 

the eligibility of the organization for the 

accommodation would be insufficient to 

act as a designation under ERISA 

section 3(16)(A)(i), and questioned 

whether the self-certification could be 

defined as an instrument under which 

the plan is operated. 

After reviewing the comments on the 

three proposed approaches, the 

Departments are finalizing the third 

approach under which the third party 

administrator becomes an ERISA section 

3(16) plan administrator and claims 

administrator solely for the purpose of 

providing payments for contraceptive 

services for participants and 

beneficiaries in a self-insured plan of an 

eligible organization at no cost to plan 

participants or beneficiaries or to the 

eligible organization. The Departments 

have determined that the ERISA section 

3(16) approach most effectively enables 

eligible organizations to avoid 

contracting, arranging, paying, or 

referring for contraceptive coverage after 

meeting the self-certification standard, 

while also creating the fewest barriers to 

or delays in plan participants and 

beneficiaries obtaining contraceptive 

services without cost sharing. 

Under this approach, as set forth in 

these final regulations, with respect to 

the contraceptive coverage requirement, 

an eligible organization is considered to 

comply with section 2713 of the PHS 

Act and the companion provisions in 

ERISA and the Code if it provides to all 

third party administrators with which it 

or its plan has contracted a copy of its 

self-certification, consistent with the 

requirements of these final 

regulations.40 The self-certification 

must: (1) State that the eligible 

organization will not act as the plan 

administrator or claims administrator 

with respect to contraceptive services or 

contribute to the funding of 

contraceptive services; and (2) cite 29 

CFR 2510.3–16 and 26 CFR 54.9815– 

2713A and 29 CFR 2590.715–2713A, 

which explain the obligations of the 

third party administrator. Upon receipt 

of the copy of the self-certification, the 

third party administrator may decide 

not to enter into, or remain in, a 

contractual relationship with the 

eligible organization to provide 

administrative services for the plan. 

As relevant here, a plan administrator 

is defined in ERISA section 3(16)(A)(i) 

as ‘‘the person specifically so designated 

by the terms of the instrument under 

which the plan is operated.’’ As a 

document notifying the third party 

administrator(s) that the eligible 

organization will not provide, fund, or 

administer payments for contraceptive 

services, the self-certification is one of 

the instruments under which the 

employer’s plan is operated under 

ERISA section 3(16)(A)(i). The selfcertification will afford the third party 

administrator notice of obligations set 

forth in these final regulations, and will 

be treated as a designation of the third 

party administrator(s) as plan 

administrator and claims administrator 

for contraceptive benefits pursuant to 

section 3(16) of ERISA. Additional 

conditions the eligible organization 

must meet in order to be considered to 

comply with PHS Act section 2713 and 

the companion provisions in ERISA and 

the Code include prohibitions on: 

(1) Directly or indirectly interfering with 

a third party administrator’s efforts to 

provide or arrange separate payments 

for contraceptive services for 

participants or beneficiaries in the plan 

and (2) directly or indirectly seeking to 

influence a third party administrator’s 


emcdonald on DSK67QTVN1PROD with RULES3
39880 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

41Nothing in these final regulations prohibits an 

eligible organization from expressing its opposition 

to the use of contraceptives. 

decision to provide or arrange such 

payments.41

A third party administrator that 

receives a copy of the self-certification 

and that agrees to enter into or remain 

in a contractual relationship with the 

eligible organization to provide 

administrative services for the plan 

must provide or arrange separate 

payments for contraceptive services for 

participants and beneficiaries in the 

plan without cost sharing, premium, fee, 

or other charge to plan participants or 

beneficiaries, or to the eligible 

organization or its plan. The third party 

administrator can provide such 

payments on its own, or it can arrange 

for an issuer or other entity to provide 

such payments. In either case, like the 

payments for contraceptive services 

under the accommodation for insured 

plans of eligible organizations discussed 

previously, the payments are not health 

insurance policies. Moreover, in either 

case, the third party administrator can 

make arrangements with an issuer 

offering coverage through an FFE to 

obtain reimbursement for its costs 

(including an allowance for 

administrative costs and margin). As 

discussed later in this section, the issuer 

offering coverage through the FFE can 

receive an adjustment to the FFE user 

fee, and the issuer is required to pass on 

a portion of that adjustment to the third 

party administrator to account for the 

costs of providing or arranging 

payments for contraceptive services. A 

third party administrator that provides 

or arranges the payments is entitled to 

retain reimbursement for its costs for the 

period during which it reasonably and 

in good faith relied on a representation 

by the eligible organization that it was 

eligible for the accommodation. This is 

so even if the organization’s 

representation was later determined to 

be incorrect. 

The third party administrator must 

provide plan participants and 

beneficiaries with notice of the 

availability of the separate payments for 

contraceptive services contemporaneous 

with (to the extent possible), but 

separate from, any application materials 

distributed in connection with 

enrollment (or re-enrollment) in 

coverage that is effective beginning on 

the first day of each applicable plan year 

(as discussed in more detail later in this 

section). Third party administrators 

must also take on the statutory 

responsibilities of a plan administrator 

under ERISA, including setting up and 

operating a claims procedure under 

ERISA section 503, providing plan 

participants and beneficiaries with 

disclosures required under ERISA 

section 104, and complying with the 

requirements of Part 7 of ERISA. The 

Departments note that there is no 

obligation for a third party administrator 

to enter into or remain in a contract 

with the eligible organization if it 

objects to any of these responsibilities. 

The Departments believe that this 

approach most successfully addresses 

both the desire of some commenters for 

plan participants and beneficiaries to 

receive contraceptive coverage without 

cost sharing without delays or other 

barriers, and the desire of other 

commenters for objecting employers to 

be separated from contracting, 

arranging, paying, or referring for 

contraceptive coverage. The third party 

administrator serving as the plan 

administrator for contraceptive benefits 

ensures that there is a party with legal 

authority to arrange for payments for 

contraceptive services and administer 

claims in accordance with ERISA’s 

protections for plan participants and 

beneficiaries. At the same time, the 

approach enables objecting employers, 

after providing third party 

administrators with a copy of the selfcertification (as described previously), 

to separate themselves from contracting, 

arranging, paying, or referring for 

contraceptive coverage. Additionally, by 

substituting payments for contraceptive 

services for health insurance policies, 

this approach avoids the complications 

that would be presented by requiring 

the creation of a contraceptive-only 

health insurance product, and allows 

third party administrators to avoid 

potentially becoming health insurance 

brokers. Accordingly, while the 

Departments appreciate commenters’ 

concerns about the responsibilities that 

third party administrators must assume 

under this accommodation, they believe 

that this approach best ensures that plan 

participants and beneficiaries receive 

contraceptive coverage without cost 

sharing, and without the objecting 

employers paying for or administering 

such coverage. 

Moreover, none of the comments 

changed the Department of Labor’s view 

that it has legal authority to require the 

third party administrator to become the 

plan administrator under ERISA section 

3(16) for the sole purpose of providing 

payments for contraceptive services if 

the third party administrator agrees to 

enter into or remain in a contractual 

relationship with the eligible 

organization to provide administrative 

services for the plan. The Department of 

Labor has broad rulemaking authority 

under Title I of ERISA, which includes 

the ability to interpret the definition of 

plan administrator under ERISA section 

3(16)(A)(i). The Department of Labor’s 

interpretation of the self-certification 

described herein as one of the 

‘‘instruments under which the plan is 

operated’’ is consistent with the plain 

meaning of the term because it identifies 

the limited set of plan benefits (that is, 

contraceptive coverage) that the 

employer refuses to provide and that the 

third party administrator must therefore 

provide or arrange for an issuer or 

another entity to provide. 

e. Self-Insured Group Health Plans 

Without Third Party Administrators 

Although some commenters 

addressed the solicitation for comments 

on whether and how to provide an 

accommodation for self-insured group 

health plans established or maintained 

by eligible organizations that do not use 

the services of a third party 

administrator, no comments indicated 

that such plans actually exist. 

Accordingly, the Departments continue 

to believe that there are no self-insured 

group health plans in this circumstance. 

However, to allow for the possibility 

that such a self-insured group health 

plan does exist, the Departments will 

provide any such plan with a safe 

harbor from enforcement of the 

contraceptive coverage requirement, 

contingent on: (1) the plan submitting to 

HHS information (as described later in 

this section) showing that it does not 

use the services of a third party 

administrator; and (2) if HHS agrees that 

the plan does not use the services of a 

third party administrator, the plan 

providing notice to plan participants 

and beneficiaries in any application 

materials distributed in connection with 

enrollment (or re-enrollment) in 

coverage that is effective beginning on 

the first day of each applicable plan 

year, indicating that it does not provide 

benefits for contraceptive services. 

Such plans must submit to HHS at 

least 60 days prior to the first day of the 

first applicable plan year all of the 

following information: 

• Identifying information for the plan, 

the eligible organization that acts as the 

plan sponsor, and an authorized 

representative of the organization, along 

with the authorized representative’s 

telephone number and email address. 

• A listing of the five most highly 

compensated non-clinical plan service 

providers (other than employees of the 

plan or plan sponsor), including contact 

information for each plan service 

provider, a concise description of the 

nature of the services provided by each 

service provider to the plan, and the 

annual amount of compensation paid to 


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Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 39881 

42Furthermore, as discussed previously, with 

respect to self-insured coverage, third party 

administrators that are plan administrators must 

operate in accordance with Part 1 of ERISA, 

including ERISA section 104, which generally 

requires certain disclosures regarding plan benefits 

and limitations. 

43 45 CFR 147.147 (77 FR 16453). 

each plan service provider (examples of 

plan services include claims processing 

and adjudication, appeals management, 

provider network development, and 

pharmacy benefit management). 

• An attestation (executed by an 

authorized representative of the 

organization) that the plan is established 

or maintained by an eligible 

organization, and is operated in 

compliance with all applicable 

requirements of part A of title XXVII of 

the PHS Act, as incorporated into ERISA 

and the Code. 

Such information must be submitted 

electronically to 

marketreform@cms.hhs.gov. 

If any such submission demonstrates 

that a self-insured group health plan 

established or maintained by an eligible 

organization does not use the services of 

a third party administrator, the 

Departments will provide a safe harbor 

from enforcement of the contraceptive 

coverage requirement while an 

additional accommodation is 

considered. If the Departments discover 

through any such submission that a selfinsured group health plan established or 

maintained by an eligible organization 

does in fact use the services of a third 

party administrator, the eligible 

organization must either follow the 

procedures described in these final 

regulations to obtain an accommodation 

or otherwise comply with the 

contraceptive coverage requirement. 

f. Notice of Availability of Separate 

Payments for Contraceptive Services 

Consistent with the proposed 

regulations, the final regulations direct 

that, for any plan year to which an 

accommodation is to apply, a health 

insurance issuer providing separate 

payments for contraceptive services 

pursuant to the accommodation, or a 

third party administrator arranging or 

providing such payments (or its agent), 

must provide timely written notice 

about this fact to plan participants and 

beneficiaries in insured or self-insured 

group health plans (or student enrollees 

and their covered dependents in student 

health insurance coverage) of eligible 

organizations. 

Under the proposed regulations, this 

notice would be provided by the issuer 

contemporaneous with (to the extent 

possible) but separate from any 

application materials distributed in 

connection with enrollment (or reenrollment) in health coverage 

established or maintained or arranged 

by the eligible organization. 

Commenters noted that employers, not 

issuers, typically distribute plan 

enrollment (or re-enrollment) materials 

to employees and that providing this 

notice contemporaneous with plan 

enrollment (or re-enrollment) materials 

would not be possible because issuers 

typically do not receive enrollee 

information prior to enrollment. 

Consistent with the simplified 

approach described previously, these 

final regulations provide that this notice 

must be provided by either the issuer 

providing separate payments for 

contraceptive services under the 

accommodation, or a third party 

administrator arranging or providing 

such payments (or its agent). The notice 

must be provided contemporaneous 

with (to the extent possible), but 

separate from, any application materials 

distributed in connection with 

enrollment (or re-enrollment) in 

coverage that is effective beginning on 

the first day of each plan year to which 

the accommodation applies, and it must 

indicate that the eligible organization 

does not fund or administer 

contraceptive benefits, but that the 

issuer or third party administrator will 

provide separate payments for 

contraceptive services at no cost. The 

Departments believe that the direction 

that the notice be provided 

contemporaneous with application 

materials ‘‘to the extent possible’’ 

provides sufficient flexibility to address 

the concerns raised by commenters 

about the timing of the notice. 

The final regulations continue to 

provide model language that may be 

used to satisfy this notice requirement. 

Substantially similar language may also 

be used to satisfy the notice 

requirement. Some commenters 

suggested additions or modifications to 

the model language. Other commenters 

stated that the Departments should not 

allow the use of substantially similar 

language. Additionally, some 

commenters recommended the 

Departments set standards to ensure that 

the notice is accessible to persons with 

limited English proficiency and person 

with disabilities. The Departments 

believe that the model language in the 

final regulations, along with existing 

guidance concerning civil rights 

obligations, provide sufficient notice. 

The Departments also believe that the 

flexibility afforded by the final 

regulations to use substantially similar 

language is generally consistent with 

other federal notice requirements. 

The notice must include contact 

information for the issuer or third party 

administrator in the event plan 

participants and beneficiaries (or 

student enrollees and their covered 

dependents) have questions or 

complaints. The Departments note that 

issuers and third party administrators 

may find it useful to provide additional 

written information concerning how to 

obtain reimbursement for contraceptive 

services, appeals procedures, provider 

and pharmacy networks, prescription 

drug formularies, medical management 

procedures, and similar issues.42

g. Student Health Insurance Coverage 

Consistent with the HHS proposed 

regulation, paragraph (f) of the HHS 

final regulation provides that an 

accommodation applies to student 

health insurance coverage arranged by 

an eligible organization that is an 

institution of higher education in a 

manner comparable to that in which it 

applies to group health insurance 

coverage provided in connection with a 

group health plan established or 

maintained by an eligible organization 

that is an employer. For this purpose, 

any reference to plan participants and 

beneficiaries is a reference to student 

enrollees and their covered dependents. 

Several commenters supported 

treating student health insurance like 

employer-sponsored group health 

insurance for purposes of these final 

regulations. Other commenters 

suggested that an accommodation 

should not extend to institutions of 

higher education that arrange student 

health insurance coverage, because 

student health insurance coverage is 

considered a type of individual rather 

than group health insurance coverage 

under federal law.43 One commenter 

recommended that issuers offering 

coverage through the Exchanges be 

required to provide separate 

contraceptive coverage at no cost to 

students enrolled in nonprofit religious 

institutions of higher education with 

religious objections to contraceptive 

coverage (and their dependents). 

Student health insurance coverage is 

administered differently than other 

individual health insurance coverage. 

Whereas most individual health 

insurance coverage is issued under a 

contract between an individual 

policyholder and a health insurance 

issuer, student health insurance 

coverage is available to student 

enrollees and their covered dependents 

pursuant to a written agreement 

between an institution of higher 

education and a health insurance issuer. 

Some religiously affiliated colleges and 

universities object to signing a written 

agreement or providing financial 


emcdonald on DSK67QTVN1PROD with RULES3
39882 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

44The FFE user fee was established in the March 

11, 2013 final rule entitled ‘‘Patient Protection and 

Affordable Care Act; HHS Notice of Benefit and 

Payment Parameters for 2014’’ (78 FR 15410) (2014 

Payment Notice). 

45Under 45 CFR 156.50(a), a participating issuer 

includes QHP issuers, issuers of multi-state plans, 

and issuers of stand-alone dental plans. We note 

that an issuer of a Consumer Operated and Oriented 

Plan (CO–OP) offered on an FFE is also considered 

to be a participating issuer for the purpose of the 

FFE user fee adjustment. 

assistance for student health insurance 

coverage that provides benefits for 

contraceptive services. For these 

reasons, HHS believes that it is 

appropriate to take into account 

religious objections to contraceptive 

coverage of eligible organizations that 

are institutions of higher education and 

is finalizing the provision applicable to 

student health insurance coverage as 

proposed. HHS notes that it does not 

have the authority to require issuers 

offering coverage through the Exchanges 

to provide separate contraceptive 

coverage at no cost to students (and 

their dependents). 

The Departments note that any 

accommodation specific to a nonprofit 

religious institution of higher education 

is intended to accommodate the 

nonprofit religious institution of higher 

education only with respect to its 

arrangement of student health insurance 

coverage for its students and their 

covered dependents. With respect to the 

establishment or maintenance of a group 

health plan by a nonprofit religious 

institution of higher education for its 

employees and their dependents, the 

nonprofit religious institution of higher 

education is intended to be 

accommodated in the same manner as 

that in which any other eligible 

organization that has established or 

maintained a group health plan for its 

employees and their dependents is to be 

accommodated. 

C. Adjustments of Federally-Facilitated 

Exchange User Fees—45 CFR 156.50(d) 

and 156.80(d) 

These sections of the final HHS 

regulation set forth processes and 

standards to fund the payments for the 

contraceptive services that are provided 

for participants and beneficiaries in selfinsured plans of eligible organizations 

under the accommodation described 

previously, at no cost to plan 

participants or beneficiaries, eligible 

organizations, third party 

administrators, or issuers, through an 

adjustment in the FFE user fee payable 

by an issuer participating in an FFE.44

In response to the proposed 

regulations, some commenters 

questioned HHS’s authority to establish 

the FFE user fee adjustment. 

Commenters also recommended that 

HHS ensure that the adjustments to user 

fee collections not undermine FFE 

operations. Commenters stated that the 

FFE user fee should not be increased to 

offset the user fee adjustment. 

Commenters further stated that the FFE 

user fee adjustment must be adequate to 

provide financial incentives to ensure 

that women in self-insured plans of 

eligible organizations receive 

contraceptive coverage at no cost. 

Commenters suggested that the FFE user 

fee adjustment may not be an adequate 

long-term funding source as more states 

establish Exchanges over time, reducing 

the number of FFEs and therefore 

available FFE user fee revenue. 

Office of Management and Budget 

(OMB) Circular No. A–25R establishes 

federal policy regarding these types of 

user fees. Consistent with that Circular, 

the revised FFE user fee calculation 

(which will result in an adjustment of 

the FFE user fee) will facilitate the 

accommodation of self-insured plans 

established or maintained by eligible 

organizations by ensuring that plan 

participants and beneficiaries are 

provided contraceptive coverage at no 

cost so that eligible organizations are 

not required to administer or fund such 

coverage. By financing the 

accommodation for self-insured plans of 

eligible organizations through the FFE 

user fee adjustment, participants and 

beneficiaries in such plans can retain 

their existing coverage, while gaining 

access to separate payments for 

contraceptive services at no cost. HHS 

does not believe that the adjustment to 

FFE user fee collections, as 

contemplated under this final 

regulation, will materially undermine 

FFE operations. 

HHS notes that it is not raising the 

FFE user fee finalized in the 2014 

Payment Notice to offset the FFE user 

fee adjustments, and estimates that 

payments for contraceptive services will 

represent only a small portion of total 

FFE user fees. 

The FFE user fee adjustments support 

many of the goals of the Affordable Care 

Act, including improving the health of 

the population, reducing health care 

costs, providing access to health 

coverage, encouraging eligible 

organizations to continue to offer health 

coverage, and ensuring access to 

affordable qualified health plans (QHPs) 

via efficiently operated Exchanges. 

Moreover, as described earlier in these 

final regulations, there are significant 

benefits associated with contraceptive 

coverage without cost sharing. Such 

coverage significantly furthers the 

governmental interests in promoting 

public health and gender equality, and 

promotes the underlying goals of the 

Exchanges and the Affordable Care Act 

more generally. 

In § 156.50(d) of the proposed 

regulations, HHS specified that, if an 

issuer were to provide contraceptive 

coverage to participants and 

beneficiaries in self-insured plans of 

eligible organizations at no cost, and the 

issuer offers coverage through an FFE, 

the issuer would be able to seek an 

adjustment to the FFE user fee for the 

estimated cost of the contraceptive 

coverage. Moreover, HHS proposed that, 

if the issuer providing the contraceptive 

coverage did not offer coverage through 

an FFE—either because it was not a 

QHP issuer, or because it was a QHP 

issuer but operated in a state without an 

FFE—an issuer in the same issuer group 

that offered coverage through an FFE 

would have been able to seek an 

adjustment to the FFE user fee on behalf 

of the issuer providing the contraceptive 

coverage. HHS proposed to use the 

definition of issuer group in 45 CFR 

156.20, that is, all entities treated under 

subsection (a) or (b) of section 52 of the 

Code as a member of the same 

controlled group of corporations as (or 

under common control with) a health 

insurance issuer, or issuers affiliated by 

the common use of a nationally licensed 

service mark. Several commenters 

expressed concern that not every issuer 

seeking to provide contraceptive 

coverage to participants and 

beneficiaries in self-insured plans of 

eligible organizations would be in the 

same issuer group as an issuer that 

offers coverage through an FFE. 

Commenters further noted that, even if 

the issuer providing the contraceptive 

coverage and the issuer offering 

coverage through an FFE were in the 

same issuer group, the issuers might 

incur significant administrative costs in 

establishing the necessary arrangements. 

In response to these comments, and to 

account for the payments for 

contraceptive services for participants 

and beneficiaries in self-insured group 

health plans of eligible organizations 

under the accommodation described 

previously, HHS is finalizing a 

modification of the proposed policy. In 

§ 156.50(d)(1), a participating issuer 

(defined at 45 CFR 156.50(a) 45) offering 

a plan through an FFE may qualify for 

an adjustment to the FFE user fee to the 

extent that the participating issuer 

either: (i) made payments for 

contraceptive services on behalf of a 

third party administrator pursuant to 26 

CFR 54.9815–2713A(b)(2)(ii) or 29 CFR 

2590.715–2713A(b)(2)(ii); or (ii) seeks 

an adjustment to the FFE user fee with 

respect to a third party administrator 


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that, following receipt of a copy of the 

self-certification referenced in 26 CFR 

54.9815–2713A(a)(4) or 29 CFR 

2590.715–2713A(a)(4), made or arranged 

for payments for contraceptive services 

pursuant to 26 CFR 54.9815– 

2713A(b)(2)(i) or (ii) or 29 CFR 

2590.715–2713A(b)(2)(i) or (ii). Under 

the final regulation, neither the third 

party administrator, nor the 

participating issuer, nor any entity 

providing payments for contraceptive 

services (if neither the third party 

administrator nor the participating 

issuer is providing such payments) is 

required to be part of the same issuer 

group or otherwise affiliated. This 

modification allows greater flexibility in 

the arrangements among third party 

administrators, issuers, and other 

entities, while still ensuring that eligible 

organizations are not required to 

contract, arrange, pay, or refer for 

contraceptive coverage. Consistent with 

the proposed regulations, an allowance 

for administrative costs and margin in 

the FFE user fee adjustment accounts for 

the costs of arrangements among the 

third party administrator, the 

participating issuer, and any other 

entity providing payments for 

contraceptive services (if neither the 

third party administrator nor the 

participating issuer is providing such 

payments). 

In § 156.50(d)(1) through (4) of the 

proposed regulations, HHS set forth a 

process through which an issuer seeking 

an FFE user fee adjustment would 

submit information to HHS to 

demonstrate the provision of 

contraceptive coverage and estimate the 

cost of such coverage. HHS further 

proposed that it would review this 

information and provide an adjustment 

to the issuer’s monthly obligation to pay 

the FFE user fee in an amount equal to 

the approved estimated cost of the 

contraceptive coverage. HHS suggested 

that the cost of the contraceptive 

coverage, including administrative costs 

and margin, could be estimated on a per 

capita basis by either the issuer or HHS 

using either actuarial principles and 

methodologies or, for 2016 and beyond, 

previous experience. The per capita rate 

would then be multiplied by the 

monthly enrollment in the contraceptive 

coverage in order to calculate the total 

FFE user fee adjustment. 

HHS sought comments on this 

proposed process for collecting 

information, calculating the cost of the 

contraceptive coverage, and applying 

the FFE user fee adjustment. HHS 

received several comments suggesting 

that issuers should be required to 

submit information only on an annual 

basis, rather than a monthly basis, to 

reduce the administrative burden. 

Commenters also noted that it would 

likely be difficult to estimate the cost of 

the contraceptive coverage accurately, 

particularly in the initial years, given 

that the prohibition on cost sharing 

could affect utilization. In addition, 

commenters noted that costs would 

likely vary considerably based on 

differences in utilization patterns and 

administrative processes. 

In response to these comments, HHS 

is making certain modifications to the 

process described previously. Rather 

than using a monthly process, the final 

regulation at § 156.50(d)(2) requires a 

participating issuer seeking an FFE user 

fee adjustment to submit to HHS, in the 

year following the calendar year in 

which the contraceptive services for 

which payments were made under the 

accommodation described previously 

were provided, for each self-insured 

plan, the total dollar amount of the 

payments for contraceptive services that 

were provided during the applicable 

calendar year. The issuer will then 

receive an adjustment to its obligation to 

pay the FFE user fee equal to the cost 

of the contraceptive services that were 

provided during the previous year, plus 

an allowance, as specified by HHS, for 

administrative costs and margin. For 

example, HHS expects that issuers 

seeking an FFE user fee adjustment for 

payments for contraceptive services that 

were provided in calendar year 2014 

will be required to submit to HHS by 

July 15, 2015, the total dollar amount of 

the payments. This timing will allow 

adequate time for claims run-out and 

data collection. The FFE user fee 

adjustment will be applied starting in 

October 2015. Although this approach 

delays the application of the FFE user 

fee adjustment, it significantly reduces 

the administrative burden on issuers, 

third party administrators, and HHS. 

HHS believes that tying the FFE user fee 

adjustment to the actual costs of 

payments for contraceptive services, 

plus an allowance for administrative 

costs and margin, will provide 

reasonable assurance that the 

adjustment is adequate to cover the full 

costs of the payments for contraceptive 

services, furthering the goal of providing 

contraceptive coverage without cost 

sharing, as required by PHS Act section 

2713 and the companion provisions in 

ERISA and the Code. 

As discussed later in this section, 

HHS is also directing third party 

administrators to submit to HHS a 

notification that the third party 

administrator intends for a participating 

issuer to seek an FFE user fee 

adjustment. This notification must be 

provided by the later of January 1, 2014, 

or the 60th calendar day following the 

date on which the third party 

administrator receives a copy of a selfcertification from an eligible 

organization. The notification must be 

provided whether it is intended that the 

participating issuer will provide 

payments for contraceptive services on 

behalf of the third party administrator, 

or whether it is intended that the 

participating issuer will seek an 

adjustment to the FFE user fee with 

respect to such payments made or 

arranged for by the third party 

administrator. HHS will provide 

guidance on the manner of submission 

of the notification, as well as guidance 

on the application for the FFE user fee 

adjustment, through the process 

provided for under the Paperwork 

Reduction Act of 1995. 

HHS is also modifying the standards 

proposed at § 156.50(d) to align with the 

final regulations regarding the 

accommodation for self-insured group 

health plans of eligible organizations. 

As discussed previously, under these 

final regulations, the third party 

administrator may make the payments 

for contraceptive services itself, or it 

may arrange for an issuer (including an 

issuer that does not offer coverage 

through an FFE) or another entity to 

make the payments on its behalf. Under 

either scenario, a third party 

administrator that seeks to offset the 

costs of such payments through an FFE 

user fee adjustment must enter into an 

arrangement with a participating issuer 

offering coverage through an FFE. The 

participating issuer and the third party 

administrator must each submit 

information to HHS, as described in 

§ 156.50(d)(2) of the final regulation, to 

verify that the payments for 

contraceptive services were provided in 

accordance with these final regulations. 

Specifically, in § 156.50(d)(2)(i), HHS 

finalizes submission standards for a 

participating issuer to receive the FFE 

user fee adjustment. The participating 

issuer must submit to HHS, in the 

manner and timeframe specified by 

HHS, in the year following the calendar 

year in which the contraceptive services 

were provided: (A) Identifying 

information for the participating issuer 

and each third party administrator that 

received a copy of the self-certification 

with respect to which the participating 

issuer seeks an adjustment in the FFE 

user fee (whether or not the 

participating issuer was the entity that 

made the payments for contraceptive 

services); (B) identifying information for 

each self-insured group health plan with 

respect to which a copy of the selfcertification was received by a third 

party administrator and with respect to 


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46No personally identifiable information will be 

collected from participating issuers or third party 

administrators pursuant to § 156.50(d)(2). 

which the participating issuer seeks an 

adjustment in the FFE user fee; and (C) 

for each such self-insured group health 

plan, the total dollar amount of the 

payments for contraceptive services that 

were provided during the applicable 

calendar year under the accommodation 

described previously. If such payments 

were made by the participating issuer 

directly, the total dollar amount should 

reflect the amount of the payments 

made by the participating issuer; if the 

third party administrator made or 

arranged for such payments, the total 

dollar amount should reflect the amount 

reported to the participating issuer by 

the third party administrator. Similarly, 

in § 156.50(d)(2)(ii) and (iii), HHS 

finalizes submission standards for the 

third party administrator with respect to 

which the participating issuer seeks an 

adjustment in the FFE user fee. In 

paragraph (d)(2)(ii), HHS finalizes a 

standard under which the third party 

administrator must notify HHS, by the 

later of January 1, 2014, or the 60th 

calendar day following the date on 

which it receives the applicable copy of 

the self-certification, that it intends to 

arrange for a participating issuer to seek 

an FFE user fee adjustment. HHS will 

provide guidance on the manner of this 

submission through the process 

provided for under the Paperwork 

Reduction Act of 1995. This notification 

is necessary to allow HHS to coordinate 

the development of the systems for 

administering the FFE user fee 

adjustment. In paragraphs (d)(2)(iii)(A) 

through (E), HHS specifies several other 

standards under which the third party 

administrator must submit to HHS, in 

the year following the calendar year in 

which the contraceptive services for 

which payments were made under the 

accommodation described previously 

were provided, the following 

information: (A) Identifying information 

for the third party administrator and the 

participating issuer; (B) identifying 

information for each self-insured group 

health plan with respect to which the 

participating issuer seeks an adjustment 

in the FFE user fee; (C) the total number 

of participants and beneficiaries in each 

self-insured group health plan during 

the applicable calendar year; 46 (D) for 

each self-insured group health plan with 

respect to which the third party 

administrator made payments for 

contraceptive services, the total dollar 

amount of such payments that were 

provided during the applicable calendar 

year under the accommodation 

described previously (if such payments 

were made by the participating issuer 

directly, the total dollar amount should 

reflect the amount reported to the third 

party administrator by the participating 

issuer; if the third party administrator 

made or arranged for such payments, 

the total dollar amount should reflect 

the amount of the payments made by or 

on behalf of the third party 

administrator); and (E) an attestation 

that the payments for contraceptive 

services were made in compliance with 

26 CFR 54.9815–2713A(b)(2) or 29 CFR 

2590.715–2713A(b)(2). If the third party 

administrator does not meet these 

standards, the participating issuer may 

not receive an FFE user fee adjustment 

to offset the costs of the payments for 

contraceptive services incurred by or on 

behalf of the third party administrator. 

HHS believes that it is necessary to 

collect this information directly from 

the third party administrator that has 

the duty to ensure that the payments for 

contraceptive services are made to 

ensure the accuracy of the data 

provided, without requiring the 

participating issuer to attest to 

information to which it may not have 

access or over which it has little control. 

In § 156.50(d)(3), HHS establishes the 

process by which a participating issuer 

will be provided a reduction in its 

obligation to pay the FFE user fee. As 

long as an authorizing exception under 

OMB Circular No. A–25R is in effect, 

the reduction will be calculated as the 

sum of the total dollar amount of the 

payments for contraceptive services 

submitted by the applicable third party 

administrators, as described in 

paragraph (d)(2)(iii)(D), and an 

allowance, specified by HHS, for 

administrative costs and margin. In the 

proposed regulations, HHS requested 

comments on the appropriate method 

for determining the administrative costs 

associated with providing the 

contraceptive coverage, as well as a 

margin to ensure that issuers receive 

appropriate compensation for providing 

the contraceptive coverage. Commenters 

agreed with the proposal to reimburse 

for administrative costs and to provide 

a margin. Commenters noted that 

administrative costs would be incurred 

because of the complexities inherent in 

arrangements between entities seeking 

the FFE user fee adjustment and entities 

providing the contraceptive coverage, 

particularly when the entities operate in 

different states. In addition, commenters 

stated that administrative costs incurred 

by the third party administrators could 

vary because of variations in billing 

processes. 

As finalized in this regulation, for the 

initial years of this policy, HHS will 

specify an allowance for administrative 

costs and margin, which will be 

incorporated into the FFE user fee 

adjustment, rather than request the third 

party administrator or the participating 

issuer to submit to HHS an estimate of 

the third party administrator and the 

participating issuer’s administrative 

costs. This approach is consistent with 

the general approach in these final 

regulations to simplify administration of 

the accommodations for eligible 

organizations, while still ensuring that 

no eligible organization is required to 

contract, arrange, pay, or refer for 

contraceptive coverage. HHS notes that 

it intends to review the methodology for 

determining reimbursement for 

administrative costs and margin in 

future years to ensure that HHS is 

accurately capturing these costs. HHS 

will establish the allowance as a 

percentage of the cost of the payments 

for contraceptive services because HHS 

believes that the majority of 

administrative costs will be related to 

processing of payments to providers for 

contraceptive services, and because 

HHS believes that it is reasonable to 

measure margin on this business as a 

percentage of the cost of the 

contraceptive services. HHS will 

establish the allowance at no less than 

ten percent of such cost, and will 

specify the allowance for a particular 

calendar year in the annual HHS notice 

of benefit and payment parameters. The 

specific allowance for the 2014 calendar 

year will be proposed for public 

comment in the HHS Notice of Payment 

and Benefit Parameters for 2015 (which 

is scheduled to be published in the fall 

of 2013). This approach will allow HHS 

to provide for a reasonable allowance 

for administrative expenses for the third 

party administrator, the participating 

issuer, and any other entity providing 

the payments for contraceptive services 

on behalf of the third party 

administrator, as well as a margin for 

each entity. HHS welcomes feedback 

from third party administrators, 

participating issuers, and other relevant 

stakeholders on the allowance for 

administrative costs and margin, 

including the appropriate percentage 

and alternative methods for future 

determination of the allowance for 

administrative costs and margin. 

Section 156.50(d)(4) is similar to the 

corresponding proposed provision, and 

specifies that, as long as an exception 

under OMB Circular No. A–25R is in 

effect, if the amount of the reduction 

under paragraph (d)(3) is greater than 

the amount of the obligation to pay the 

FFE user fee in a particular month, the 

participating issuer will be provided a 

credit in succeeding months in the 


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amount of the excess. HHS notes that 

the likelihood of this occurring will 

depend on the relative magnitudes of 

the cost of payments for contraceptive 

services and the FFE user fee, the 

number of participants and beneficiaries 

in self-insured plans with respect to 

which the participating issuer seeks an 

adjustment in the FFE user fee, and the 

number of individuals enrolled in 

coverage offered by the issuer through 

the FFE. HHS also notes that it intends 

to provide a monthly report, for the 

initial month in which the FFE user fee 

adjustment for a particular calendar year 

is applied, and for succeeding months 

until the credit is fully applied, to 

issuers that receive an FFE user fee 

adjustment. HHS contemplates that this 

monthly report will include information 

on the issuer’s user fee obligation for the 

month, its total adjustment for the 

applicable calendar year, the user fee 

adjustment applied to date, and the 

value of the adjustment to be credited to 

future months (so long as the exception 

under OMB Circular No. A–25R is in 

effect). Additionally, HHS intends to 

provide a monthly report to each 

applicable third party administrator 

detailing any FFE user fee adjustment 

that will be provided to a participating 

issuer with respect to the costs for 

contraceptive services incurred by or on 

behalf of the third party administrator, 

as well as the portion of the user fee 

adjustment applied to date. 

Section 156.50(d)(5) specifies that, 

within 60 calendar days of receipt of 

any adjustment in the FFE user fee, a 

participating issuer must pay each third 

party administrator with respect to 

which it received any portion of such 

adjustment an amount no less than the 

portion of the adjustment attributable to 

the total dollar amount of the payments 

for contraceptive services submitted by 

the third party administrator, as 

described in paragraph (d)(2)(iii)(D). 

HHS expects that the participating 

issuer will also agree to pay each third 

party administrator a portion of such 

allowance (and that the apportionment 

will be negotiated between the entities); 

HHS does not specify such payment in 

this final regulation, as HHS expects the 

entities to work out an arrangement that 

best fits their situation. Finally, HHS 

notes that this provision does not apply 

if the participating issuer made the 

payments for contraceptive services on 

behalf of the third party administrator, 

as described in paragraph (d)(1)(i), or is 

in the same issuer group (as defined in 

45 CFR 156.20) as the third party 

administrator. 

In § 156.50(d)(6) and (7), HHS 

establishes standards relating to 

documentation and program integrity, 

similar to those proposed in 

§ 156.50(d)(5), but modified slightly to 

align with the other changes in this final 

regulation. In paragraph (d)(6), HHS 

specifies that a participating issuer 

receiving an adjustment in the FFE user 

fee under this section for a particular 

calendar year must maintain for 10 

years following that year, and make 

available upon request to HHS, the HHS 

Office of the Inspector General, the 

Comptroller General, and their 

designees, documentation 

demonstrating that it timely paid each 

third party administrator, with respect 

to which it received such adjustment, 

any amount required under paragraph 

(d)(5). In paragraph (d)(7), HHS specifies 

documentation standards for third party 

administrators with respect to which an 

FFE user fee adjustment is received 

under this section for a particular 

calendar year. Third party 

administrators must maintain for 10 

years following the applicable calendar 

year, and make available upon request 

to HHS, the HHS Office of the Inspector 

General, the Comptroller General, and 

their designees, all of the following: (i) 

A copy of the self-certification provided 

by the eligible organization for each selfinsured plan with respect to which an 

adjustment is received; (ii) 

documentation demonstrating that the 

payments for contraceptive services 

were made in compliance with 26 CFR 

54.9815–2713A(b)(2) or 29 CFR 

2590.715–2713A(b)(2); and (iii) 

documentation supporting the total 

dollar amount of the payments for 

contraceptive services submitted by the 

third party administrator, as described 

in paragraph (d)(2)(iii)(D). Although a 

commenter argued that the 

documentation retention standards 

should be shortened from 10 years to 6 

years, to align with ERISA standards, we 

believe that the finalized standard is 

appropriate as it aligns with timeframes 

under the False Claims Act, 31 U.S.C. 

3729–3733, and standards used for other 

Exchange programs. HHS notes that a 

participating issuer or a third party 

administrator may satisfy these 

standards by archiving these records 

and ensuring that they are accessible if 

needed in the event of an investigation, 

audit, or other review. 

To summarize, costs of payments 

made for contraceptive services for 

participants and beneficiaries in selfinsured group health plans of eligible 

organizations under the accommodation 

described previously will be reimbursed 

through an adjustment in FFE user fees 

as follows: 

• The adjustment will be made to the 

FFE user fees of a participating issuer, 

if that participating issuer made the 

payments for the contraceptive services 

under the accommodation on behalf of 

the third party administrator, or if it 

seeks the adjustment with respect to 

such payments made or arranged for by 

the third party administrator. 

• A third party administrator must 

notify HHS that it intends for a 

participating issuer to seek the 

adjustment by the later of January 1, 

2014, or the 60th calendar day following 

the date on which it received the copy 

of the applicable self-certification. 

• For the participating issuer to 

receive the adjustment, the third party 

administrator and the participating 

issuer must notify HHS of the total 

amount of the payments made for the 

contraceptive services under the 

accommodation, and provide certain 

other information and documentation, 

including an attestation by the third 

party administrator that the payments 

for the contraceptive services were 

provided in compliance with 26 CFR 

54.9815–2713A(b)(2) or 29 CFR 

2590.715–2713A(b)(2), by July 15 of the 

year following the calendar year in 

which the contraceptive services were 

provided. 

• If the necessary conditions are met, 

and if an exception under OMB Circular 

No. A–25R is in effect, the participating 

issuer will receive an adjustment to its 

FFE user fee obligation equal to the total 

amount of the payments for the 

contraceptive services provided under 

the accommodation, plus an allowance 

for administrative costs and margin. If 

the adjustment exceeds the FFE user 

fees owed in the month of the initial 

adjustment, any excess adjustment will 

be carried over to later months, for so 

long as the exception under OMB 

Circular No. A–25R is in effect. 

• The allowance, which will be at 

least ten percent of the costs of the 

payments for the contraceptive services 

under the accommodation, will be 

specified by HHS in the annual HHS 

notice of benefit and payment 

parameters. 

• Within 60 days of receipt of any 

adjustment, the participating issuer 

must pay the third party administrator 

the portion of the adjustment 

attributable to payments for 

contraceptive services made by the third 

party administrator. No payment is 

required with respect to the allowance 

for administrative costs and margin, 

although it is expected that the 

participating issuer will agree to pay 

each third party administrator a portion 

of such allowance. In addition, no 

payment is required if the participating 

issuer made the payments for the 

contraceptive services under the 

accommodation on behalf of the third 


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39886 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

47Code section 52(a) generally provides that all 

employees of all corporations that are members of 

the same controlled group of corporations, 

including corporations that are at least 50 percent 

controlled by a common parent corporation, are 

treated as employed by a single employer. Code 

section 52(b) generally provides that all employees 

of trades or businesses (whether or not 

incorporated) that are under common control are 

treated as employed by a single employer. 

48RFRA provides that the federal government 

generally may not ‘‘substantially burden a person’s 

exercise of religion, even if the burden results from 

a rule of general applicability,’’ unless the burden: 

‘‘(1) Is in furtherance of a compelling governmental 

interest; and (2) is the least restrictive means of 

furthering that compelling governmental interest,’’ 

42 U.S.C. 2000bb–1. 

party administrator, or if the 

participating issuer and third party 

administrator are in the same issuer 

group. 

Lastly, in response to comments 

received, HHS is finalizing a provision 

clarifying that participating issuers may 

add any amounts paid out to a third 

party administrator or incurred by or for 

the participating issuer in contraceptive 

claims costs under the accommodation 

for self-insured group health plans of 

eligible organizations provided in these 

final regulations, plus the allowance for 

administrative costs and margin 

provided under 45 CFR 156.50(d)(3)(ii), 

to their net FFE user fee paid to HHS, 

in calculations relating to the index rate 

for the single risk pool under 45 CFR 

156.80(d), the medical loss ratio under 

45 CFR part 158, and the risk corridors 

program under 45 CFR 153 subpart F. 

Several commenters noted that 

improperly incorporating the FFE user 

fee adjustment provided for under the 

final regulation into these calculations 

could lead to unintended consequences. 

For example, if a participating issuer 

were required to incorporate the FFE 

user fee adjustment into the calculation 

of the medical loss ratio, but not 

allowed to incorporate the cost of the 

accommodation for self-insured group 

health plans of eligible organizations, 

the adjustment would reduce the 

amount reported as licensing and 

regulatory fees (as described in 45 CFR 

158.161(a)). This would result in a 

lower medical loss ratio. HHS agrees 

that such a result would not accurately 

reflect the ratio of claims to premiums, 

as estimated by the medical loss ratio, 

for the participating issuer’s insurance 

business, because the FFE user fee 

adjustment occurs due to activity not 

directly related to the participating 

issuer’s insurance business. Indeed, 

under § 156.50(d)(5), the participating 

issuer is required in many 

circumstances to pay out the greater 

share of the FFE user fee adjustments to 

third party administrators responsible 

for making (or arranging for another 

entity to make) the payments for 

contraceptive services. Therefore, HHS 

clarifies that, for purposes of the 

medical loss ratio and the risk corridors 

program, participating issuers should 

report the sum of: (1) The net FFE user 

fee paid to HHS; (2) any amounts paid 

out to a third party administrator or 

incurred by or for the participating 

issuer in contraceptive claims costs 

under the accommodation for selfinsured group health plans of eligible 

organizations provided in these final 

regulations; and (3) the allowance for 

administrative costs and margin 

provided under 45 CFR 156.50(d)(3)(ii), 

as licensing and regulatory fees 

referenced in 45 CFR 158.161(a), or 

taxes and regulatory fees in the case of 

the risk corridors program. For similar 

reasons, HHS is modifying the provision 

at 45 CFR 156.80(d) to clarify that, for 

the purpose of establishing a single risk 

pool index rate for a state market, any 

market-wide adjustments to the index 

rate for expected Exchange user fees 

should include: (1) The expected net 

FFE user fee to be paid to HHS; (2) any 

amounts paid out to a third party 

administrator or incurred by or for the 

participating issuer in contraceptive 

claims costs under the accommodation 

for self-insured group health plans of 

eligible organizations expected to be 

credited against user fees payable for 

that state market; and (3) the allowance 

for administrative costs and margin 

provided under 45 CFR 156.50(d)(3)(ii) 

expected to be credited against user fees 

payable for that state market. 

HHS clarifies that, if an issuer 

provides payments for contraceptive 

services on behalf of a third party 

administrator, such payments are not 

directly linked to any of the health 

insurance coverage provided by the 

issuer, and the issuer should not 

incorporate the cost of such payments 

into their calculations for the numerator 

with respect to the medical loss ratio or 

the risk corridors program. 

D. Treatment of Multiple Employer 

Group Health Plans 

In the case of several employers 

offering coverage through a single group 

health plan, the Departments proposed 

that each employer be required to 

independently meet the definition of 

religious employer or eligible 

organization in order to avail itself of 

the exemption or an accommodation 

with respect to its employees and their 

covered dependents. Several 

commenters supported the proposed 

approach of applying the exemption and 

the accommodation on an employer-byemployer basis. Other commenters 

favored a plan-based approach, allowing 

any employer offering coverage through 

the same group health plan as a 

religious employer or eligible 

organization to qualify for the 

exemption or the accommodation, citing 

administrative challenges to an 

employer-by-employer approach. A few 

commenters recommended criteria for 

determining whether an employer is 

affiliated with a religious employer or 

eligible organization with which it 

offers coverage through a single group 

health plan, such as the control 

standards in Code section 52(a) and (b), 

and therefore qualified for the 

exemption or an accommodation.47

The final regulations continue to 

provide that the availability of the 

exemption or an accommodation be 

determined on an employer-byemployer basis, which the Departments 

continue to believe best balances the 

interests of religious employers and 

eligible organizations and those of 

employees and their dependents. The 

Departments are clarifying that, for 

purposes of these final regulations, any 

nonprofit organization with religious 

objections to contraceptive coverage that 

is part of the same controlled group of 

corporations or part of the same group 

of trades or businesses under common 

control (each within the meaning of 

section 52(a) or (b) of the Code) with a 

religious employer and/or an eligible 

organization, and that offers coverage 

through the same group health plan as 

such religious employer and/or eligible 

organization, is considered to hold itself 

out as a religious organization and 

therefore qualifies for an 

accommodation under these final 

regulations. Each such organization 

must independently satisfy the selfcertification standard. 

E. Religious Freedom Restoration Act 

and Other Federal Law 

Some commenters expressed concerns 

about the proposed accommodations for 

eligible organizations under the 

Religious Freedom Restoration Act 

(RFRA) (Pub. L. 103–141) 107 Stat. 1488 

(1993) (codified at 42 U.S.C. 2000bb1).48 All such concerns were considered. 

But the accommodations for group 

health plans established or maintained 

by eligible organizations (and group 

health insurance coverage provided in 

connection with such plans), or student 

health insurance coverage arranged by 

eligible organizations that are 

institutions of higher education, are not 

required under RFRA. In addition, the 

accommodations for eligible 

organizations under these final 

regulations do not violate RFRA because 


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49For example, the Affordable Care Act’s 

grandfathering provision is only transitional in 

effect, and it is expected that a majority of plans 

will lose their grandfathered status by the end of 

2013. (75 FR 34552; June 17, 2010); see also Kaiser 

Family Found. & Health Res. & Ed. Trust, Employer 

Health Benefits 2012 Annual Survey at 7–8, 190, 

available at http://ehbs.kff.org/pdf/2012/8345.pdf. 

Moreover, small employers that elect to offer nongrandfathered health coverage to their employees 

are not exempt from the requirement under the 

preventive health services coverage regulations to 

provide coverage for recommended preventive 

health services, including contraceptive services, 

without cost sharing (subject to the religious 

employer exemption and eligible organization 

accommodations in these final regulations). While 

the Affordable Care Act excludes small employers 

from the possibility of tax liability under the 

employer shared responsibility provision at Code 

section 4980H, it encourages such employers to 

offer health coverage to their employees by 

establishing new group health insurance options 

through the SHOPs, as well as new tax incentives 

to exercise such options. With respect to employees 

of small employers that do not offer health coverage 

to their employees, the Affordable Care Act 

establishes new individual health insurance options 

through the Exchanges, as well as new tax credits 

to assist the purchase of such insurance; such 

insurance will cover recommended preventive 

services, including contraceptive services, without 

cost sharing. 

they do not substantially burden 

religious exercise, and they serve 

compelling government interests and 

moreover are the least restrictive means 

to achieve those interests. 

First, some commenters asserted that 

the proposed accommodations would 

substantially burden their exercise of 

religion by requiring their involvement 

in providing coverage of medical 

services to which they object on 

religious grounds. These final 

regulations do not require eligible 

organizations that provide selfcertifications to their issuers or third 

party administrators to provide health 

coverage that includes benefits for 

contraceptive services, or to contract, 

arrange, pay, or refer for such coverage 

or services. Issuers and third party 

administrators cannot pass along the 

costs because these final regulations 

specifically prohibit an issuer or third 

party administrator from charging any 

premium or otherwise passing on any 

cost relating to payments for 

contraceptive services to an eligible 

organization. Thus, there is no burden 

on any religious exercise of the eligible 

organization. And even if the 

accommodations were found to impose 

some minimal burden on eligible 

organizations, any such burden would 

not be substantial for the purposes of 

RFRA because a third party pays for the 

contraceptive services and there are 

multiple degrees of separation between 

the eligible organization and any 

individual’s choice to use contraceptive 

services. 

One commenter contended that the 

mere act of self-certification would 

facilitate access to contraception, 

resulting in violation of its religious 

beliefs. But the self-certification under 

these final regulations simply confirms 

that an eligible organization is a 

nonprofit religious organization with 

religious objections to contraceptive 

coverage and so informs the issuer or 

third party administrator. Even prior to 

the proposed regulations, because 

contraceptive benefits are typically in 

standard product designs, many eligible 

organizations directed their issuers and 

third party administrators not to make 

payments for claims for medical 

services to which they object on 

religious grounds. In any event, in order 

for a burden on religious exercise to be 

‘‘substantial’’ under RFRA, its effects on 

the objecting person cannot be as 

indirect and attenuated as they are here. 

Under these final regulations, third 

parties, not eligible organizations, 

provide the payments for contraceptive 

services, at no cost to eligible 

organizations. And whether such 

services will be utilized is the result of 

independent choices by employees or 

students and their dependents, who 

have distinct interests and may have 

their own religious views that differ 

from those of the eligible organization. 

Second, some commenters claimed 

that the proposed accommodations 

would force them to fund or subsidize 

contraceptive coverage because issuers 

or third party administrators would pass 

on the costs of such coverage to eligible 

organizations. Again, however, these 

final regulations specifically prohibit an 

issuer or third party administrator from 

charging any premium, or otherwise 

passing on any cost, to an eligible 

organization with respect to the 

payments for contraceptive services. 

Third, some commenters asserted that 

the contraceptive coverage requirement 

fails to serve any compelling 

government interest. As noted 

previously, however, the contraceptive 

coverage requirement serves two 

compelling governmental interests. The 

contraceptive coverage requirement 

furthers the government’s compelling 

interest in safeguarding public health by 

expanding access to and utilization of 

recommended preventive services for 

women. HHS tasked IOM with 

conducting an independent, sciencebased review of the available literature 

to determine what preventive services 

are necessary for women’s health and 

well-being. IOM included in its 

recommendations for comprehensive 

guidelines for women’s preventive 

services all FDA-approved contraceptive 

methods, sterilization procedures, and 

patient education and counseling for 

women with reproductive capacity. IOM 

determined that lack of access to 

contraceptive services has proven in 

many cases to have serious negative 

health consequences for women and 

newborn children. 

The government also has a compelling 

interest in assuring that women have 

equal access to health care services. 

Women would be denied the full 

benefits of preventive care if their 

unique health care needs were not 

considered and addressed. For example, 

prior to the implementation of the 

preventive services coverage provision, 

women of childbearing age spent 68 

percent more on out-of-pocket health 

care costs than men, and these costs 

resulted in women often forgoing 

preventive care. The IOM found that 

this disproportionate burden on women 

imposed financial barriers that 

prevented women from achieving health 

outcomes on an equal basis with men. 

The contraceptive coverage requirement 

helps remedy this problem by helping to 

equalize the provision of preventive 

health care services to women and, as a 

result, helping women contribute to 

society to the same degree as men. 

Fourth, some commenters suggested 

that certain provisions of the Affordable 

Care Act that, in their view, leave some 

women without contraceptive coverage 

with no cost sharing demonstrate that 

the government interests in providing 

such coverage cannot be truly 

compelling. But these commenters 

misunderstand the effect of these 

provisions.49

Nor do the exemption for religious 

employers and the accommodations for 

eligible organizations undermine the 

government’s compelling interests. With 

respect to the religious employer 

exemption, houses of worship and their 

integrated auxiliaries that object to 

contraceptive coverage on religious 

grounds are more likely than other 

employers to employ people who are of 

the same faith and/or adhere to the same 

objection, and who would therefore be 

less likely than other people to use 

contraceptive services even if such 

services were covered under their plan. 

Under the eligible organization 

accommodations, individuals in plans 

of eligible organizations, who are less 

likely than individuals in plans of 

religious employers to share their 

employer’s (or institution of higher 

education’s) faith and objection to 

contraceptive coverage on religious 

grounds, will still benefit from 

payments for contraceptive services, 

even though such payments will not be 

provided, funded, or subsidized by their 

employer (or institution of higher 

education). 


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Fifth, some commenters asserted that 

the contraceptive coverage requirement 

is not the least restrictive means of 

advancing these compelling interests, 

and proposed various alternatives to 

these regulations. All of these proposals 

were considered, and it was determined 

that they were not feasible and/or would 

not advance the government’s 

compelling interests as effectively as the 

mechanisms established in these final 

regulations and the preventive services 

coverage regulations more generally. For 

example, some commenters suggested 

that the government could provide 

contraceptive services to all women free 

of charge (through Medicaid or another 

program), establish a governmentfunded health benefits program for 

contraceptive services, or force drug and 

device manufacturers to provide 

contraceptive drugs and devices to 

women for free. The Departments lack 

the statutory authority and funding to 

implement these proposals. Moreover, 

the Affordable Care Act contemplates 

providing coverage of recommended 

preventive services through the existing 

employer-based system of health 

coverage so that women face minimal 

logistical and administrative obstacles. 

Imposing additional barriers to women 

receiving the intended coverage (and its 

attendant benefits), by requiring them to 

take steps to learn about, and to sign up 

for, a new health benefit, would make 

that coverage accessible to fewer 

women. The same concern undermines 

the effectiveness of other commenters’ 

suggestion that the government require 

the multi-state plans on the Exchanges 

to offer a stand-alone, contraceptiveonly benefit to all women without 

charge. 

For another example, some 

commenters suggested that the 

government should establish tax 

incentives for women to use 

contraceptive services. Again, the 

Departments lack the statutory authority 

to implement such proposal. Reliance 

only on tax incentives would also 

depart from the existing employer-based 

system of health coverage, would 

require women to pay out of pocket for 

their care in the first instance, and 

would not benefit women who do not 

have sufficient income to be required to 

file a tax return. Such barriers would 

make a tax incentive structure less 

effective than the employer-based 

system of health coverage in advancing 

the government’s compelling interests. 

Finally, some commenters expressed 

concern that the final regulations violate 

the Religion Clauses of the First 

Amendment or certain federal 

restrictions relating to abortion. The 

regulations do not violate the Free 

Exercise Clause because they are neutral 

and generally applicable. The 

regulations do not target religiously 

motivated conduct, but rather, are 

intended to improve women’s access to 

preventive health care and lessen the 

disparity between men’s and women’s 

health care costs. And the regulations 

are generally applicable because they do 

not pursue their purpose only against 

conduct motivated by religious belief. 

The exemption and accommodations set 

forth in the regulations serve to 

accommodate religion, not to disfavor it. 

The final regulations also do not 

violate the Establishment Clause. The 

exemption and accommodations set 

forth in the regulations are not restricted 

to organizations of a particular 

denomination or denominations. 

Instead, they are available on an equal 

basis to religious organizations affiliated 

with any and all religions. 

Finally, the regulations do not violate 

federal restrictions relating to abortion 

because FDA-approved contraceptive 

methods, including Plan B, Ella, and 

IUDs, are not abortifacients within the 

meaning of federal law. (62 FR 8611; 

February 25, 1997) (‘‘Emergency 

contraceptive pills are not effective if 

the woman is pregnant[.]’’); 45 CFR 

46.202(f) (‘‘Pregnancy encompasses the 

period of time from implantation until 

delivery.’’). Further, these regulations 

do not require nonprofit religious 

organizations that object to such 

contraceptive methods to contract, 

arrange, pay, or refer for such services. 

F. No Effect on Other Law 

The religious employer exemption 

and eligible organization 

accommodations under these final 

regulations are intended to have 

meaning solely with respect to the 

contraceptive coverage requirement 

under section 2713 of the PHS Act and 

the companion provisions of ERISA and 

the Code. Whether an employer or 

organization (including an institution of 

higher education) is designated as 

religious for this purpose is not 

intended as a judgment about the 

mission, sincerity, or commitment of the 

employer or organization (including an 

institution of higher education), or 

intended to differentiate among the 

religious merits, mission, sincerity, 

commitment, or public or private 

standing of religious entities. The use of 

such designation is limited solely to 

defining the class of employers or 

organizations (including institutions of 

higher education) that qualify for the 

religious employer exemption and 

eligible organization accommodations 

under these final regulations. The 

definition of religious employer or 

eligible organization in these final 

regulations should not be construed to 

apply with respect to, or relied upon for 

the interpretation of, any other 

provision of the PHS Act, ERISA, the 

Code, or any other provision of federal 

law, nor is it intended to set a precedent 

for any other purpose. For example, 

nothing in these final regulations should 

be construed as affecting the 

interpretation of federal or state civil 

rights statutes, such as Title VII of the 

Civil Rights Act of 1964 or Title IX of 

the Education Amendments of 1972. 

Furthermore, nothing in these final 

regulations precludes employers or 

others from expressing any opposition 

to the use of contraceptives; requires 

anyone to use contraceptives; or 

requires health care providers to 

prescribe or provide contraceptives if 

doing so is against their religious 

beliefs. 

The Departments received several 

comments requesting clarification about 

whether the religious employer 

exemption and eligible organization 

accommodations in these final 

regulations supersede state laws that 

require health insurance issuers to 

provide contraceptive coverage. The 

preemption provisions of section 731 of 

ERISA and section 2724 of the PHS Act 

(implemented at 29 CFR 2590.731(a) 

and 45 CFR 146.143(a)) apply such that 

the requirements of part 7 of ERISA and 

title XXVII of the PHS Act are not to be 

‘‘construed to supersede any provision 

of state law which establishes, 

implements, or continues in effect any 

standard or requirement solely relating 

to health insurance issuers in 

connection with group or individual 

health insurance coverage except to the 

extent that such standard or 

requirement prevents the application of 

a requirement’’ of federal law. With 

respect to issuers subject to state law, 

insurance laws that provide greater 

access to contraceptive coverage than 

federal standards are unlikely to 

‘‘prevent the application of’’ the 

preventive services coverage provision, 

and therefore are unlikely to be 

preempted by these final regulations. 

On the other hand, in states with 

broader religious exemptions and 

accommodations with respect to health 

insurance issuers than those in the final 

regulations, the exemptions and 

accommodations will be narrowed to 

align with those in the final regulations. 

This is consistent with the application 

of other federal health insurance 

standards. 


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50See Guidance on the Temporary Enforcement 

Safe Harbor for Certain Employers, Group Health 

Plans, and Group Health Insurance Issuers with 

Respect to the Requirement to Cover Contraceptive 

Services Without Cost Sharing Under Section 2713 

of the Public Health Service Act, Section 715(a)(1) 

of the Employee Retirement Income Security Act, 

and Section 9815(a)(1) of the Internal Revenue 

Code, issued on February 10, 2012, and reissued on 

August 15, 2012. 

G. Applicability Dates and Transitional 

Enforcement Safe Harbor 

These final regulations generally 

apply to group health plans and health 

insurance issuers for plan years 

beginning on or after January 1, 2014, 

except the amendments to the religious 

employer exemption apply to group 

health plans and health insurance 

issuers for plan years beginning on or 

after August 1, 2013. 

The Departments are extending the 

current safe harbor from enforcement of 

the contraceptive coverage requirement 

by the Departments to encompass plan 

years beginning on or after August 1, 

2013, and before January 1, 2014. This 

transitional enforcement safe harbor is 

intended to maintain the status quo 

with respect to organizations that 

qualify for the current safe harbor 

during the period that exists between 

the expiration of the current safe 

harbor 50 and the applicability date of 

the accommodations under these final 

regulations. This period is designed to 

provide issuers and third party 

administrators with sufficient time to 

prepare to implement the 

accommodations under these final 

regulations. Organizations that qualify 

under the current safe harbor are not 

required to execute another selfcertification if one has already been 

executed, but are required to provide 

another notice to plan participants and 

beneficiaries in connection with plan 

years beginning on or after August 1, 

2013, and before January 1, 2014. The 

guidance extending the current safe 

harbor can be found at: www.cms.gov/ 

cciio and www.dol.gov/healthreform. 

IV. Economic Impact and Paperwork 

Burden 

A. Executive Orders 12866 and 13563— 

Department of Health and Human 

Services and Department of Labor 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, and public health and 

safety effects; distributive impacts; and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, 

reducing costs, harmonizing rules, and 

promoting flexibility. 

Section 3(f) of Executive Order 12866 

defines a ‘‘significant regulatory action’’ 

as an action that is likely to result in a 

regulation: (1) Having an annual effect 

on the economy of $100 million or more 

in any one year, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local, or tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) creating a serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

A regulatory impact analysis must be 

prepared for major rules with 

economically significant effects ($100 

million or more in any one year), and 

an ‘‘economically significant’’ 

regulatory action is subject to review by 

the Office of Management and Budget 

(OMB). The Departments have 

concluded that these final regulations 

are not likely to have economic impacts 

of $100 million or more in any one year, 

and therefore do not meet the definition 

of ‘‘economically significant’’ under 

Executive Order 12866. 

1. Need for Regulatory Action 

As stated earlier in this preamble, the 

Departments previously issued 

amended interim final regulations 

authorizing an exemption for group 

health plans established or maintained 

by religious employers (and group 

health insurance coverage provided in 

connection with such plans) from 

certain coverage requirements under 

section 2713 of the PHS Act (76 FR 

46621, August 3, 2011). The amended 

interim final regulations were finalized 

on February 15, 2012 (77 FR 8725). In 

these final regulations, the Departments 

are amending the definition of religious 

employer in the HHS regulation at 45 

CFR 147.131(a) (incorporated by 

reference in the regulations of the 

Departments of Labor and the Treasury) 

by eliminating the first three prongs of 

the definition of religious employer that 

was established in the 2012 final 

regulations and clarifying the fourth 

prong. Accordingly, an employer that is 

organized and operates as a nonprofit 

entity and is referred to in section 

6033(a)(3)(A)(i) or (iii) of the Code is a 

religious employer, and its group health 

plan qualifies for the exemption from 

the requirement to cover contraceptive 

services. In addition, the final 

regulations establish accommodations 

that provide women with access to such 

services, without cost sharing, while 

simultaneously protecting certain 

nonprofit religious organizations with 

religious objections to contraceptive 

coverage from having to contract, 

arrange, pay, or refer for such coverage 

(as detailed herein). 

2. Anticipated Effects 

The Departments expect that these 

final regulations will not result in any 

additional significant burden on or costs 

to the affected entities. 

B. Special Analyses—Department of the 

Treasury 

For purposes of the Department of the 

Treasury, it has been determined that 

this Treasury decision is not a 

significant regulatory action as defined 

in Executive Order 12866, as amended 

by Executive Order 13563. Therefore, a 

regulatory assessment is not required. It 

has also been determined that section 

553(b) of the Administrative Procedure 

Act (5 U.S.C. chapter 5) does not apply 

to this final regulation. It is hereby 

certified that the collections of 

information contained in this final 

regulation do not have a significant 

impact on a substantial number of small 

entities. Accordingly, a regulatory 

flexibility analysis under the Regulatory 

Flexibility Act (5 U.S.C. chapter 6) is 

not required. 

These final regulations require each 

organization seeking to be treated as an 

eligible organization under the final 

regulations to self-certify that it meets 

the definition of eligible organization in 

the final regulations. The selfcertification must be executed by an 

authorized representative of the 

organization. The organization must 

maintain the self-certification in its 

records in a manner consistent with 

ERISA section 107 and make it available 

for examination upon request. The final 

regulations also direct each eligible 

organization to provide a copy of its 

self-certification to the group health 

insurance issuer or third party 

administrator (as applicable) to avail 

itself of an accommodation. The 

Departments are unable to estimate the 

number of organizations that will seek 

to be treated as eligible organizations. Of 

the eligible organizations, some will 

likely be small entities. It is estimated 

that each eligible organization will need 

only approximately 50 minutes of labor 

to prepare and provide the information 


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in the self-certification. This will not be 

a significant economic impact. For these 

reasons, this information collection 

requirement will not have a significant 

impact on a substantial number of small 

entities. 

These final regulations also require 

health insurance issuers providing 

payments for contraceptive services, or 

third party administrators arranging or 

providing such payments (or their 

agents), to provide written notice to 

plan participants and beneficiaries 

regarding the availability of such 

payments. The notice will be provided 

contemporaneous with (to the extent 

possible) but separate from any 

application materials distributed in 

connection with enrollment (or reenrollment) in health coverage 

established, maintained, or arranged by 

the eligible organization in any plan 

year to which the accommodation is to 

apply. The final regulations contain 

model language for issuers and third 

party administrators to use to satisfy the 

notice requirement. It is unknown how 

many issuers provide health insurance 

coverage in connection with insured 

plans of eligible organizations or how 

many third party administrators provide 

plan services to self-insured plans of 

eligible organizations. However, the cost 

of preparation and distribution of the 

notices will not be significant. It is 

estimated that each issuer or third party 

administrator will need approximately 1 

hour of clerical labor (at $31.64 per 

hour) and 15 minutes of management 

review (at $55.22 per hour) to prepare 

the notices for a total cost of 

approximately $44. It is estimated that 

each notice will require $0.46 in postage 

and $0.05 in materials cost (paper and 

ink) and the total postage and materials 

cost for each notice sent via mail will be 

$0.51. For these reasons, these 

information collection requirements 

will not have a significant impact on a 

substantial number of small entities. 

Pursuant to section 7805(f) of the 

Code, the notice of proposed rulemaking 

preceding this final regulation was 

submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small businesses. 

C. Paperwork Reduction Act— 

Department of Health and Human 

Services 

These final regulations contain 

information collection requirements 

(ICRs) that are subject to review by the 

Office of Management and Budget 

(OMB). A description of these 

provisions is given in the following 

paragraphs with an estimate of the 

annual burden. Average labor costs 

(including fringe benefits) used to 

estimate the costs are calculated using 

data available from the Bureau of Labor 

Statistics. 

HHS sought comments in the 

proposed regulations, but did not 

receive any information that would 

allow for an estimate of the number of 

organizations that would seek to be 

treated as eligible organizations, or an 

estimate of the number of health 

insurance issuers that would provide 

separate payments for contraceptive 

services. HHS is, nevertheless, seeking 

OMB approval for the following ICRs 

consistent with the Paperwork 

Reduction Act of 1995. The burden 

estimates will be updated in the future 

when more information is available. 

1. Self-Certification (§§ 147.131(b)(4) 

and 147.131(c)(1)) 

Each organization seeking to be 

treated as an eligible organization under 

the final regulations must self-certify 

that it meets the definition of an eligible 

organization. The self-certification must 

be executed by an authorized 

representative of the organization. The 

self-certification will not be submitted 

to any of the Departments. The form that 

will be used by organizations for their 

self-certification was made available 

during the comment period for the 

proposed regulations at http:// 

www.cms.gov/Regulations-andGuidance/Legislation/ 

PaperworkReductionActof1995/PRAListing.html. HHS is finalizing this form 

with updated instructions and notes, 

and eliminating the proposed field for 

listing the contraceptive services for 

which the organization will not 

establish, maintain, administer, or fund 

coverage. The organization must 

maintain the self-certification in its 

records in a manner consistent with 

ERISA section 107 and make it available 

for examination upon request. The 

eligible organization must provide a 

copy of its self-certification to a health 

insurance issuer for insured group 

health plans or student health insurance 

coverage. 

HHS is unable to estimate the number 

of organizations that will seek to be 

treated as eligible organizations under 

the final regulations. Therefore, the 

burden for only one eligible 

organization, as opposed to all eligible 

organizations in total, is estimated. It is 

assumed that, for each eligible 

organization, clerical staff will gather 

and enter the necessary information, 

send the self-certification electronically 

to the issuer, and retain a copy for 

record-keeping; a manager and legal 

counsel will review it; and a senior 

executive will execute it. HHS estimates 

that an organization will need 

approximately 50 minutes (30 minutes 

of clerical labor at a cost of $30.64 per 

hour, 10 minutes for a manager at a cost 

of $55.22 per hour, 5 minutes for legal 

counsel at a cost of $83.10 per hour, and 

5 minutes for a senior executive at a cost 

of $112.43 per hour) to execute the selfcertification. The certification may be 

electronically transmitted to the issuer 

at minimal cost. Therefore, the total 

annual burden for preparing and 

providing the information in the selfcertification is estimated to be 

approximately $41 for each eligible 

organization. 

2. Notice of Availability of Separate 

Payments for Contraceptive Services 

(§ 147.131(d)) 

The proposed regulations sought 

comment on a notice of availability of 

contraceptive coverage. The final 

regulations instead direct a health 

insurance issuer providing payments for 

contraceptive services for participants 

and beneficiaries in insured plans (or 

student enrollees and covered 

dependents in student health insurance 

coverage) of eligible organizations to 

provide a written notice to such plan 

participants and beneficiaries (or such 

student enrollees and covered 

dependents) informing them of the 

availability of such payments. The 

notice must be provided 

contemporaneous with (to the extent 

possible) but separate from any 

application materials distributed in 

connection with enrollment (or reenrollment) in group health coverage 

that is effective on the first day of each 

applicable plan year, and must specify 

that contraceptive coverage will not be 

funded or administered by the eligible 

organization but that the issuer provides 

separate payments for contraceptive 

services. The notice must also provide 

contact information for the issuer for 

questions and complaints. To satisfy the 

notice requirement, issuers may use the 

model language set forth in the final 

regulations or substantially similar 

language. 

It is unknown how many issuers 

provide health insurance coverage in 

connection with insured plans of 

eligible organizations. In the proposed 

regulations, HHS estimated that each 

issuer would need approximately 1 hour 

of clerical labor (at $31.64 per hour) and 

15 minutes of management review (at 

$55.22 per hour) to prepare the notices 

for a total cost of approximately $44. It 

was estimated that each notice would 

require $0.46 in postage and $0.05 in 

materials cost (paper and ink) and the 

total postage and materials cost for each 

notice sent via mail would be $0.51. 


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51 In 2013, that threshold level is approximately 

$141 million. 

52This authority applies to insurance issued with 

respect to group health plans generally, including 

plans covering employees of church organizations. 

Thus, this discussion of federalism applies to all 

group health insurance coverage that is subject to 

the PHS Act, including those church plans that 

provide coverage through a health insurance issuer 

(but not to church plans that do not provide 

coverage through a health insurance issuer). 

One commenter stated that the cost of 

preparing and sending these notices 

may be greater than estimated, but did 

not provide an estimate. HHS believes 

that using the model language provided 

in the final regulations will help 

minimize costs and declines to revise 

the estimate. 

3. Collections for FFE User Fee 

Adjustment (§ 156.50(d)) 

The final HHS regulation describes 

information collections with respect to 

the FFE user fee adjustment under 

§ 156.50(d). The information collection 

instruments are under development, 

and HHS will seek public comments 

and OMB approval on the instruments 

at a later date, consistent with the 

Paperwork Reduction Act of 1995. 

4. Collections for Self-Insured Group 

Health Plans Without Third Party 

Administrators 

The final regulations provide that a 

self-insured group health plan 

established or maintained by an eligible 

organization that does not use the 

services of a third party administrator 

will be provided a safe harbor from 

enforcement of the contraceptive 

coverage requirement by the 

Departments contingent on, among 

other things: (1) the plan providing 

certain information to HHS; and (2) the 

plan providing participants and 

beneficiaries with notice that it does not 

provide benefits for contraceptive 

services. As noted earlier in these final 

regulations, the Departments believe 

that there are no self-insured group 

health plans in this circumstance. 

Therefore, because the number of 

respondents is likely to be fewer than 

10, HHS is not seeking OMB approval 

for this collection. 

D. Paperwork Reduction Act— 

Department of Labor and Department of 

the Treasury 

As noted previously, as under the 

proposed regulations, each organization 

seeking to be treated as an eligible 

organization under the final regulations 

must self-certify that it meets the 

definition of an eligible organization. 

This requirement is set out at 26 CFR 

54.9815–2713A(a)(4) and 29 CFR 

2590.715–2713A(a)(4) of the final 

regulations of the Departments of Labor 

and the Treasury. 

In addition, the final regulations 

include a notice of availability of 

separate payments for contraceptive 

services. This notice requirement is 

identical to that set forth in 45 CFR 

147.131(d), but it applies to third party 

administrators in connection with 

disclosures to participants and 

beneficiaries in self-insured group 

health plans of eligible organizations, 

instead of applying to health insurance 

issuers in connection with disclosures 

to participants and beneficiaries in 

insured group health plans of eligible 

organizations. Therefore, we are seeking 

OMB approval for this notice, relying on 

the same estimates noted previously. 

V. Unfunded Mandates Reform Act 

For purposes of the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), as well as Executive Order 

12875, these final regulations do not 

include any federal mandate that may 

result in expenditures by state, local, or 

tribal governments, nor do they include 

any federal mandates that may impose 

an annual burden of $100 million, 

adjusted for inflation, or more on the 

private sector.51

VI. Federalism—Department of Health 

and Human Services and Department of 

Labor 

Executive Order 13132 outlines 

fundamental principles of federalism, 

and requires the adherence to specific 

criteria by federal agencies in the 

process of their formulation and 

implementation of policies that have 

‘‘substantial direct effects’’ on states, the 

relationship between the federal 

government and states, or the 

distribution of power and 

responsibilities among the various 

levels of government. Federal agencies 

promulgating regulations that have 

these federalism implications must 

consult with state and local officials, 

and describe the extent of their 

consultation and the nature of the 

concerns of state and local officials in 

the preamble to the regulation. 

In the Departments’ view, these final 

regulations have federalism 

implications, but the federal 

implications are substantially mitigated 

because, with respect to health 

insurance issuers, 15 states have 

enacted specific laws, regulations, or 

bulletins that meet or exceed the federal 

standards requiring coverage of 

specified preventive services without 

cost sharing. The remaining states, 

which provide oversight for these 

federal law requirements, do so using 

their general authority to enforce these 

federal standards. Therefore, the final 

regulations are not likely to require 

substantial additional oversight of states 

by HHS. 

In general, section 514 of ERISA 

provides that state laws are superseded 

to the extent that they relate to any 

covered employee benefit plan, and 

preserves state laws that regulate 

insurance, banking, or securities. ERISA 

also prohibits states from regulating a 

covered plan as an insurance or 

investment company or bank. The 

Health Insurance Portability and 

Accountability Act of 1996 (HIPAA) 

added a new preemption provision to 

ERISA (as well as to the PHS Act) 

narrowly preempting state requirements 

on group health insurance coverage. 

States may continue to apply state law 

requirements but not to the extent that 

such requirements prevent the 

application of the federal requirement 

that group health insurance coverage 

provided in connection with group 

health plans provide coverage for 

specified preventive services without 

cost sharing. HIPAA’s Conference 

Report states that the conferees intended 

the narrowest preemption of state laws 

with regard to health insurance issuers 

(H.R. Conf. Rep. No. 104–736, 104th 

Cong. 2d Session 205, 1996). State 

insurance laws that are more stringent 

than the federal requirement are 

unlikely to ‘‘prevent the application of’’ 

the preventive services coverage 

provision, and therefore are unlikely to 

be preempted. Accordingly, states have 

significant latitude to impose 

requirements on health insurance 

issuers that are more restrictive than 

those in federal law. 

Guidance conveying this 

interpretation was published in the 

Federal Register on April 8, 1997 (62 FR 

16904) and December 30, 2004 (69 FR 

78720), and these final regulations 

implement the preventive services 

coverage provision’s minimum 

standards and do not significantly 

reduce the discretion given to states 

under the statutory scheme. 

The PHS Act provides that states may 

enforce the provisions of title XXVII of 

the PHS Act as they pertain to issuers, 

but that the Secretary of HHS will 

enforce any provisions that a state does 

not have authority to enforce or that a 

state has failed to substantially enforce. 

When exercising its responsibility to 

enforce provisions of the PHS Act, HHS 

works cooperatively with the state to 

address the state’s concerns and avoid 

conflicts with the state’s exercise of its 

authority.52 HHS has developed 

procedures to implement its 


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enforcement responsibilities, and to 

afford states the maximum opportunity 

to enforce the PHS Act’s requirements 

in the first instance. In compliance with 

Executive Order 13132’s requirement 

that agencies examine closely any 

policies that may have federalism 

implications or limit the policymaking 

discretion of states, the Departments 

have engaged in numerous efforts to 

consult and work cooperatively with 

affected state and local officials. 

In conclusion, throughout the process 

of developing these final regulations, to 

the extent feasible within the specific 

preemption provisions of ERISA and the 

PHS Act, the Departments have 

attempted to balance states’ interests in 

regulating health coverage and health 

insurance issuers, and the rights of 

those individuals whom Congress 

intended to protect in the PHS Act, 

ERISA, and the Code. 

VII. Statutory Authority 

The Department of the Treasury 

regulations are adopted pursuant to the 

authority contained in sections 7805 

and 9833 of the Code. 

The Department of Labor regulations 

are adopted pursuant to the authority 

contained in 29 U.S.C. 1002(16), 1027, 

1059, 1135, 1161–1168, 1169, 1181– 

1183, 1181 note, 1185, 1185a, 1185b, 

1185d, 1191, 1191a, 1191b, and 1191c; 

sec. 101(g), Public Law 104–191, 110 

Stat. 1936; sec. 401(b), Public Law 105– 

200, 112 Stat. 645 (42 U.S.C. 651 note); 

sec. 512(d), Public Law 110–343, 122 

Stat. 3881; sec. 1001, 1201, and 1562(e), 

Public Law 111–148, 124 Stat. 119, as 

amended by Public Law 111–152, 124 

Stat. 1029; Secretary of Labor’s Order 3– 

2010, 75 FR 55354 (September 10, 

2010). 

The Department of Health and Human 

Services regulations are adopted 

pursuant to the authority contained in 

sections 2701 through 2763, 2791, and 

2792 of the PHS Act (42 U.S.C. 300gg 

through 300gg–63, 300gg–91, and 

300gg–92), as amended; and Title I of 

the Affordable Care Act, sections 1301– 

1304, 1311–1312, 1321–1322, 1324, 

1334, 1342–1343, 1401–1402, and 1412, 

Pub. L. 111–148, 124 Stat. 119 (42 

U.S.C. 18021–18024, 18031–18032, 

18041–18042, 18044, 18054, 18061, 

18063, 18071, 18082, 26 U.S.C. 36B, and 

31 U.S.C. 9701). 

List of Subjects 

26 CFR Part 54 

Excise taxes, Health care, Health 

insurance, Pensions, Reporting and 

recordkeeping requirements. 

29 CFR Part 2510 

Employee benefit plans, Pensions. 

29 CFR Part 2590 

Continuation coverage, Disclosure, 

Employee benefit plans, Group health 

plans, Health care, Health insurance, 

Medical child support, Reporting and 

recordkeeping requirements. 

45 CFR Part 147 

Health care, Health insurance, 

Reporting and recordkeeping 

requirements, and State regulation of 

health insurance. 

45 CFR Part 156 

Administrative practice and 

procedure, Advertising, Advisory 

committees, Brokers, Conflict of 

interest, Consumer protection, Grant 

programs—health, Grants 

administration, Health care, Health 

insurance, Health maintenance 

organization (HMO), Health records, 

Hospitals, American Indian/Alaska 

Natives, Individuals with disabilities, 

Loan programs—health, Organization 

and functions (Government agencies), 

Medicaid, Public assistance programs, 

Reporting and recordkeeping 

requirements, State and local 

governments, Sunshine Act, Technical 

assistance, Women, and Youth. 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

Accordingly, 26 CFR part 54 is 

amended as follows: 

PART 54—PENSION EXCISE TAXES 

■ Paragraph 1. The authority citation 

for part 54 continues to read, in part, as 

follows: 

Authority: 26 U.S.C. 7805. * * * 

■ Par. 2. Section 54.9815–2713 is 

amended by revising paragraphs (a)(1) 

introductory text and (a)(1)(iv) to read as 

follows: 

§ 54.9815–2713 Coverage of preventive 

health services. 

(a) * * * 

(1) In general. Beginning at the time 

described in paragraph (b) of this 

section and subject to § 54.9815–2713A, 

a group health plan, or a health 

insurance issuer offering group health 

insurance coverage, must provide 

coverage for all of the following items 

and services, and may not impose any 

cost-sharing requirements (such as a 

copayment, coinsurance, or a 

deductible) with respect to those items 

and services: 

* * * * * 

(iv) With respect to women, to the 

extent not described in paragraph 

(a)(1)(i) of this section, evidenceinformed preventive care and screenings 

provided for in binding comprehensive 

health plan coverage guidelines 

supported by the Health Resources and 

Services Administration, in accordance 

with 45 CFR 147.131(a). 

* * * * * 

■ Par. 3. Section 54.9815–2713A is 

added to read as follows: 

§ 54.9815–2713A Accommodations in 

connection with coverage of preventive 

health services. 

(a) Eligible organizations. An eligible 

organization is an organization that 

satisfies all of the following 

requirements: 

(1) The organization opposes 

providing coverage for some or all of 

any contraceptive services required to 

be covered under § 54.9815– 

2713(a)(1)(iv) on account of religious 

objections. 

(2) The organization is organized and 

operates as a nonprofit entity. 

(3) The organization holds itself out as 

a religious organization. 

(4) The organization self-certifies, in a 

form and manner specified by the 

Secretaries of Health and Human 

Services and Labor, that it satisfies the 

criteria in paragraphs (a)(1) through (3) 

of this section, and makes such selfcertification available for examination 

upon request by the first day of the first 

plan year to which the accommodation 

in paragraph (b) or (c) of this section 

applies. The self-certification must be 

executed by a person authorized to 

make the certification on behalf of the 

organization, and must be maintained in 

a manner consistent with the record 

retention requirements under section 

107 of ERISA. 

(b) Contraceptive coverage—selfinsured group health plans—(1) A group 

health plan established or maintained 

by an eligible organization that provides 

benefits on a self-insured basis complies 

for one or more plan years with any 

requirement under § 54.9815– 

2713(a)(1)(iv) to provide contraceptive 

coverage if all of the requirements of 

this paragraph (b)(1) of this section are 

satisfied: 

(i) The eligible organization or its plan 

contracts with one or more third party 

administrators. 

(ii) The eligible organization provides 

each third party administrator that will 

process claims for any contraceptive 

services required to be covered under 

§ 54.9815–2713(a)(1)(iv) with a copy of 

the self-certification described in 

paragraph (a)(4) of this section, which 

shall include notice that— 

(A) The eligible organization will not 

act as the plan administrator or claims 

administrator with respect to claims for 

contraceptive services, or contribute to 


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the funding of contraceptive services; 

and 

(B) Obligations of the third party 

administrator are set forth in 29 CFR 

2510.3–16 and 26 CFR 54.9815–2713A. 

(iii) The eligible organization must 

not, directly or indirectly, seek to 

interfere with a third party 

administrator’s arrangements to provide 

or arrange separate payments for 

contraceptive services for participants 

or beneficiaries, and must not, directly 

or indirectly, seek to influence the third 

party administrator’s decision to make 

any such arrangements. 

(2) If a third party administrator 

receives a copy of the self-certification 

described in paragraph (a)(4) of this 

section, and agrees to enter into or 

remain in a contractual relationship 

with the eligible organization or its plan 

to provide administrative services for 

the plan, the third party administrator 

shall provide or arrange payments for 

contraceptive services using one of the 

following methods— 

(i) Provide payments for contraceptive 

services for plan participants and 

beneficiaries without imposing any costsharing requirements (such as a 

copayment, coinsurance, or a 

deductible), or imposing a premium, 

fee, or other charge, or any portion 

thereof, directly or indirectly, on the 

eligible organization, the group health 

plan, or plan participants or 

beneficiaries; or 

(ii) Arrange for an issuer or other 

entity to provide payments for 

contraceptive services for plan 

participants and beneficiaries without 

imposing any cost-sharing requirements 

(such as a copayment, coinsurance, or a 

deductible), or imposing a premium, 

fee, or other charge, or any portion 

thereof, directly or indirectly, on the 

eligible organization, the group health 

plan, or plan participants or 

beneficiaries. 

(3) If a third party administrator 

provides or arranges payments for 

contraceptive services in accordance 

with either paragraph (b)(2)(i) or (ii) of 

this section, the costs of providing or 

arranging such payments may be 

reimbursed through an adjustment to 

the Federally-facilitated Exchange user 

fee for a participating issuer pursuant to 

45 CFR 156.50(d). 

(4) A third party administrator may 

not require any documentation other 

than the copy of the self-certification 

from the eligible organization regarding 

its status as such. 

(c) Contraceptive coverage—insured 

group health plans—(1) General rule. A 

group health plan established or 

maintained by an eligible organization 

that provides benefits through one or 

more group health insurance issuers 

complies for one or more plan years 

with any requirement under § 54.9815– 

2713(a)(1)(iv) to provide contraceptive 

coverage if the eligible organization or 

group health plan furnishes a copy of 

the self-certification described in 

paragraph (a)(4) of this section to each 

issuer that would otherwise provide 

such coverage in connection with the 

group health plan. An issuer may not 

require any documentation other than 

the copy of the self-certification from 

the eligible organization regarding its 

status as such. 

(2) Payments for contraceptive 

services—(i) A group health insurance 

issuer that receives a copy of the selfcertification described in paragraph 

(a)(4) of this section with respect to a 

group health plan established or 

maintained by an eligible organization 

in connection with which the issuer 

would otherwise provide contraceptive 

coverage under § 54.9815–2713(a)(1)(iv) 

must— 

(A) Expressly exclude contraceptive 

coverage from the group health 

insurance coverage provided in 

connection with the group health plan; 

and 

(B) Provide separate payments for any 

contraceptive services required to be 

covered under § 54.9815–2713(a)(1)(iv) 

for plan participants and beneficiaries 

for so long as they remain enrolled in 

the plan. 

(ii) With respect to payments for 

contraceptive services, the issuer may 

not impose any cost-sharing 

requirements (such as a copayment, 

coinsurance, or a deductible), or impose 

any premium, fee, or other charge, or 

any portion thereof, directly or 

indirectly, on the eligible organization, 

the group health plan, or plan 

participants or beneficiaries. The issuer 

must segregate premium revenue 

collected from the eligible organization 

from the monies used to provide 

payments for contraceptive services. 

The issuer must provide payments for 

contraceptive services in a manner that 

is consistent with the requirements 

under sections 2706, 2709, 2711, 2713, 

2719, and 2719A of the PHS Act, as 

incorporated into section 9815. If the 

group health plan of the eligible 

organization provides coverage for some 

but not all of any contraceptive services 

required to be covered under § 54.9815– 

2713(a)(1)(iv), the issuer is required to 

provide payments only for those 

contraceptive services for which the 

group health plan does not provide 

coverage. However, the issuer may 

provide payments for all contraceptive 

services, at the issuer’s option. 

(d) Notice of availability of separate 

payments for contraceptive services— 

self-insured and insured group health 

plans. For each plan year to which the 

accommodation in paragraph (b) or (c) 

of this section is to apply, a third party 

administrator required to provide or 

arrange payments for contraceptive 

services pursuant to paragraph (b) of 

this section, and an issuer required to 

provide payments for contraceptive 

services pursuant to paragraph (c) of 

this section, must provide to plan 

participants and beneficiaries written 

notice of the availability of separate 

payments for contraceptive services 

contemporaneous with (to the extent 

possible), but separate from, any 

application materials distributed in 

connection with enrollment (or reenrollment) in group health coverage 

that is effective beginning on the first 

day of each applicable plan year. The 

notice must specify that the eligible 

organization does not administer or 

fund contraceptive benefits, but that the 

third party administrator or issuer, as 

applicable, provides separate payments 

for contraceptive services, and must 

provide contact information for 

questions and complaints. The 

following model language, or 

substantially similar language, may be 

used to satisfy the notice requirement of 

this paragraph (d): ‘‘Your employer has 

certified that your group health plan 

qualifies for an accommodation with 

respect to the federal requirement to 

cover all Food and Drug 

Administration-approved contraceptive 

services for women, as prescribed by a 

health care provider, without cost 

sharing. This means that your employer 

will not contract, arrange, pay, or refer 

for contraceptive coverage. Instead, 

[name of third party administrator/ 

health insurance issuer] will provide or 

arrange separate payments for 

contraceptive services that you use, 

without cost sharing and at no other 

cost, for so long as you are enrolled in 

your group health plan. Your employer 

will not administer or fund these 

payments. If you have any questions 

about this notice, contact [contact 

information for third party 

administrator/health insurance issuer].’’ 

(e) Reliance—insured group health 

plans—(1) If an issuer relies reasonably 

and in good faith on a representation by 

the eligible organization as to its 

eligibility for the accommodation in 

paragraph (c) of this section, and the 

representation is later determined to be 

incorrect, the issuer is considered to 

comply with any requirement under 

§ 54.9815–2713(a)(1)(iv) to provide 

contraceptive coverage if the issuer 


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39894 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

complies with the obligations under this 

section applicable to such issuer. 

(2) A group health plan is considered 

to comply with any requirement under 

§ 54.9815–2713(a)(1)(iv) to provide 

contraceptive coverage if the plan 

complies with its obligations under 

paragraph (c) of this section, without 

regard to whether the issuer complies 

with the obligations under this section 

applicable to such issuer. 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

For the reasons stated in the 

preamble, the Department of Labor 

amends 29 CFR parts 2510 and 2590 as 

follows: 

PART 2510—DEFINITION OF TERMS 

USED IN SUBCHAPTERS C, D, E, F, G 

AND L OF THIS CHAPTER 

■ 1. The authority citation for part 2510 

is revised to read as follows: 

Authority: 29 U.S.C. 1002(2), 1002(16), 

1002(21),1002(37), 1002(38), 1002(40), 1031, 

and 1135; Secretary of Labor’s Order 1–2003, 

68 FR 5374; Sec. 2510.3–101 also issued 

under sec. 102 of Reorganization Plan No. 4 

of 1978, 43 FR 47713, 3 CFR, 1978 Comp., 

p. 332 and E.O. 12108, 44 FR 1065, 3 CFR, 

1978 Comp., p. 275, and 29 U.S.C. 1135 note. 

Sec. 2510.3–102 also issued under sec. 102 

of Reorganization Plan No. 4 of 1978, 43 FR 

47713, 3 CFR, 1978 Comp., p. 332 and E.O. 

12108, 44 FR 1065, 3 CFR, 1978 Comp., p. 

275. Sec. 2510.3–38 is also issued under sec. 

1, Pub. L. 105–72, 111 Stat. 1457. 

■ 2. Section 2510.3–16 is added to read 

as follows: 

§ 2510.3–16 Definition of ‘‘plan 

administrator.’’ 

(a) In general. The term ‘‘plan 

administrator’’ or ‘‘administrator’’ 

means the person specifically so 

designated by the terms of the 

instrument under which the plan is 

operated. If an administrator is not so 

designated, the plan administrator is the 

plan sponsor, as defined in section 

3(16)(B) of ERISA. 

(b) In the case of a self-insured group 

health plan established or maintained 

by an eligible organization, as defined in 

§ 2590.715–2713A(a) of this chapter, the 

copy of the self-certification provided 

by the eligible organization to a third 

party administrator (including notice of 

the eligible organization’s refusal to 

administer or fund contraceptive 

benefits) in accordance with 

§ 2590.715–2713A(b)(1)(ii) of this 

chapter shall be an instrument under 

which the plan is operated, shall be 

treated as a designation of the third 

party administrator as the plan 

administrator under section 3(16) of 

ERISA for any contraceptive services 

required to be covered under 

§ 2590.715–2713(a)(1)(iv) of this chapter 

to which the eligible organization 

objects on religious grounds, and shall 

supersede any earlier designation. A 

third party administrator that becomes a 

plan administrator pursuant to this 

section shall be responsible for— 

(1) The plan’s compliance with 

section 2713 of the Public Health 

Service Act (42 U.S.C. 300gg–13) (as 

incorporated into section 715 of ERISA) 

and § 2590.715–2713 of this chapter 

with respect to coverage of 

contraceptive services. To the extent 

that the plan contracts with different 

third party administrators for different 

classifications of benefits (such as 

prescription drug benefits versus 

inpatient and outpatient benefits), each 

third party administrator is responsible 

for providing contraceptive coverage 

that complies with section 2713 of the 

Public Health Service Act (as 

incorporated into section 715 of ERISA) 

and § 2590.715–2713 of this chapter 

with respect to the classification or 

classifications of benefits subject to its 

contract. 

(2) Establishing and operating a 

procedure for determining such claims 

for contraceptive services in accordance 

with § 2560.503–1 of this chapter. 

(3) Complying with disclosure and 

other requirements applicable to group 

health plans under Title I of ERISA with 

respect to such benefits. 

PART 2590—RULES AND 

REGULATIONS FOR GROUP HEALTH 

PLANS 

■ 3. The authority citation for part 2590 

is revised to read as follows: 

Authority: 29 U.S.C. 1027, 1059, 1135, 

1161–1168, 1169, 1181–1183, 1181 note, 

1185, 1185a, 1185b, 1185d, 1191, 1191a, 

1191b, and 1191c; sec. 101(g), Pub. L. 104– 

191, 110 Stat. 1936; sec. 401(b), Pub. L. 105– 

200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 

12(d), Pub. L. 110–343, 122 Stat. 3881; sec. 

1001, 1201, and 1562(e), Pub. L. 111–148, 

124 Stat. 119, as amended by Pub. L. 111– 

152, 124 Stat. 1029; Secretary of Labor’s 

Order 1–2011, 77 FR 1088 (January 9, 2012). 

■ 4. Section 2590.715–2713 is amended 

by revising paragraphs (a)(1) 

introductory text and (a)(1)(iv) to read as 

follows: 

§ 2590.715–2713 Coverage of preventive 

health services. 

(a) * * * 

(1) In general. Beginning at the time 

described in paragraph (b) of this 

section and subject to § 2590.715– 

2713A, a group health plan, or a health 

insurance issuer offering group health 

insurance coverage, must provide 

coverage for all of the following items 

and services, and may not impose any 

cost-sharing requirements (such as a 

copayment, coinsurance, or a 

deductible) with respect to those items 

and services: 

* * * * * 

(iv) With respect to women, to the 

extent not described in paragraph 

(a)(1)(i) of this section, evidenceinformed preventive care and screenings 

provided for in binding comprehensive 

health plan coverage guidelines 

supported by the Health Resources and 

Services Administration, in accordance 

with 45 CFR 147.131(a). 

* * * * * 

■ 5. Section 2590.715–2713A is added 

to read as follows: 

§ 2590.715–2713A Accommodations in 

connection with coverage of preventive 

health services. 

(a) Eligible organizations. An eligible 

organization is an organization that 

satisfies all of the following 

requirements: 

(1) The organization opposes 

providing coverage for some or all of 

any contraceptive services required to 

be covered under § 2590.715– 

2713(a)(1)(iv) on account of religious 

objections. 

(2) The organization is organized and 

operates as a nonprofit entity. 

(3) The organization holds itself out as 

a religious organization. 

(4) The organization self-certifies, in a 

form and manner specified by the 

Secretary, that it satisfies the criteria in 

paragraphs (a)(1) through (3) of this 

section, and makes such selfcertification available for examination 

upon request by the first day of the first 

plan year to which the accommodation 

in paragraph (b) or (c) of this section 

applies. The self-certification must be 

executed by a person authorized to 

make the certification on behalf of the 

organization, and must be maintained in 

a manner consistent with the record 

retention requirements under section 

107 of ERISA. 

(b) Contraceptive coverage—selfinsured group health plans—(1) A group 

health plan established or maintained 

by an eligible organization that provides 

benefits on a self-insured basis complies 

for one or more plan years with any 

requirement under § 2590.715– 

2713(a)(1)(iv) to provide contraceptive 

coverage if all of the requirements of 

this paragraph (b)(1) are satisfied: 

(i) The eligible organization or its plan 

contracts with one or more third party 

administrators. 

(ii) The eligible organization provides 

each third party administrator that will 


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Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 39895 

process claims for any contraceptive 

services required to be covered under 

§ 2590.715–2713(a)(1)(iv) with a copy of 

the self-certification described in 

paragraph (a)(4) of this section, which 

shall include notice that— 

(A) The eligible organization will not 

act as the plan administrator or claims 

administrator with respect to claims for 

contraceptive services, or contribute to 

the funding of contraceptive services; 

and 

(B) Obligations of the third party 

administrator are set forth in § 2510.3– 

16 of this chapter and § 2590.715– 

2713A. 

(iii) The eligible organization must 

not, directly or indirectly, seek to 

interfere with a third party 

administrator’s arrangements to provide 

or arrange separate payments for 

contraceptive services for participants 

or beneficiaries, and must not, directly 

or indirectly, seek to influence the third 

party administrator’s decision to make 

any such arrangements. 

(2) If a third party administrator 

receives a copy of the self-certification 

described in paragraph (a)(4) of this 

section, and agrees to enter into or 

remain in a contractual relationship 

with the eligible organization or its plan 

to provide administrative services for 

the plan, the third party administrator 

shall provide or arrange payments for 

contraceptive services using one of the 

following methods— 

(i) Provide payments for contraceptive 

services for plan participants and 

beneficiaries without imposing any costsharing requirements (such as a 

copayment, coinsurance, or a 

deductible), or imposing a premium, 

fee, or other charge, or any portion 

thereof, directly or indirectly, on the 

eligible organization, the group health 

plan, or plan participants or 

beneficiaries; or 

(ii) Arrange for an issuer or other 

entity to provide payments for 

contraceptive services for plan 

participants and beneficiaries without 

imposing any cost-sharing requirements 

(such as a copayment, coinsurance, or a 

deductible), or imposing a premium, 

fee, or other charge, or any portion 

thereof, directly or indirectly, on the 

eligible organization, the group health 

plan, or plan participants or 

beneficiaries. 

(3) If a third party administrator 

provides or arranges payments for 

contraceptive services in accordance 

with either paragraph (b)(2)(i) or (ii) of 

this section, the costs of providing or 

arranging such payments may be 

reimbursed through an adjustment to 

the Federally-facilitated Exchange user 

fee for a participating issuer pursuant to 

45 CFR 156.50(d). 

(4) A third party administrator may 

not require any documentation other 

than the copy of the self-certification 

from the eligible organization regarding 

its status as such. 

(c) Contraceptive coverage—insured 

group health plans—(1) General rule. A 

group health plan established or 

maintained by an eligible organization 

that provides benefits through one or 

more group health insurance issuers 

complies for one or more plan years 

with any requirement under § 2590.715– 

2713(a)(1)(iv) to provide contraceptive 

coverage if the eligible organization or 

group health plan furnishes a copy of 

the self-certification described in 

paragraph (a)(4) of this section to each 

issuer that would otherwise provide 

such coverage in connection with the 

group health plan. An issuer may not 

require any documentation other than 

the copy of the self-certification from 

the eligible organization regarding its 

status as such. 

(2) Payments for contraceptive 

services—(i) A group health insurance 

issuer that receives a copy of the selfcertification described in paragraph 

(a)(4) of this section with respect to a 

group health plan established or 

maintained by an eligible organization 

in connection with which the issuer 

would otherwise provide contraceptive 

coverage under § 2590.715– 

2713(a)(1)(iv) must— 

(A) Expressly exclude contraceptive 

coverage from the group health 

insurance coverage provided in 

connection with the group health plan; 

and 

(B) Provide separate payments for any 

contraceptive services required to be 

covered under § 2590.715–2713(a)(1)(iv) 

for plan participants and beneficiaries 

for so long as they remain enrolled in 

the plan. 

(ii) With respect to payments for 

contraceptive services, the issuer may 

not impose any cost-sharing 

requirements (such as a copayment, 

coinsurance, or a deductible), or impose 

any premium, fee, or other charge, or 

any portion thereof, directly or 

indirectly, on the eligible organization, 

the group health plan, or plan 

participants or beneficiaries. The issuer 

must segregate premium revenue 

collected from the eligible organization 

from the monies used to provide 

payments for contraceptive services. 

The issuer must provide payments for 

contraceptive services in a manner that 

is consistent with the requirements 

under sections 2706, 2709, 2711, 2713, 

2719, and 2719A of the PHS Act, as 

incorporated into section 715 of ERISA. 

If the group health plan of the eligible 

organization provides coverage for some 

but not all of any contraceptive services 

required to be covered under 

§ 2590.715–2713(a)(1)(iv), the issuer is 

required to provide payments only for 

those contraceptive services for which 

the group health plan does not provide 

coverage. However, the issuer may 

provide payments for all contraceptive 

services, at the issuer’s option. 

(d) Notice of availability of separate 

payments for contraceptive services— 

self-insured and insured group health 

plans. For each plan year to which the 

accommodation in paragraph (b) or (c) 

of this section is to apply, a third party 

administrator required to provide or 

arrange payments for contraceptive 

services pursuant to paragraph (b) of 

this section, and an issuer required to 

provide payments for contraceptive 

services pursuant to paragraph (c) of 

this section, must provide to plan 

participants and beneficiaries written 

notice of the availability of separate 

payments for contraceptive services 

contemporaneous with (to the extent 

possible), but separate from, any 

application materials distributed in 

connection with enrollment (or reenrollment) in group health coverage 

that is effective beginning on the first 

day of each applicable plan year. The 

notice must specify that the eligible 

organization does not administer or 

fund contraceptive benefits, but that the 

third party administrator or issuer, as 

applicable, provides separate payments 

for contraceptive services, and must 

provide contact information for 

questions and complaints. The 

following model language, or 

substantially similar language, may be 

used to satisfy the notice requirement of 

this paragraph (d): ‘‘Your employer has 

certified that your group health plan 

qualifies for an accommodation with 

respect to the federal requirement to 

cover all Food and Drug 

Administration-approved contraceptive 

services for women, as prescribed by a 

health care provider, without cost 

sharing. This means that your employer 

will not contract, arrange, pay, or refer 

for contraceptive coverage. Instead, 

[name of third party administrator/ 

health insurance issuer] will provide or 

arrange separate payments for 

contraceptive services that you use, 

without cost sharing and at no other 

cost, for so long as you are enrolled in 

your group health plan. Your employer 

will not administer or fund these 

payments. If you have any questions 

about this notice, contact [contact 

information for third party 

administrator/health insurance issuer].’’ 


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39896 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

(e) Reliance—insured group health 

plans—(1) If an issuer relies reasonably 

and in good faith on a representation by 

the eligible organization as to its 

eligibility for the accommodation in 

paragraph (c) of this section, and the 

representation is later determined to be 

incorrect, the issuer is considered to 

comply with any requirement under 

§ 2590.715–2713(a)(1)(iv) to provide 

contraceptive coverage if the issuer 

complies with the obligations under this 

section applicable to such issuer. 

(2) A group health plan is considered 

to comply with any requirement under 

§ 2590.715–2713(a)(1)(iv) to provide 

contraceptive coverage if the plan 

complies with its obligations under 

paragraph (c) of this section, without 

regard to whether the issuer complies 

with the obligations under this section 

applicable to such issuer. 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

For the reasons stated in the 

preamble, the Department of Health and 

Human Services amends 45 CFR 

Subtitle A parts 147 and 156 as follows: 

PART 147—HEALTH INSURANCE 

REFORM REQUIREMENTS FOR THE 

GROUP AND INDIVIDUAL HEALTH 

INSURANCE MARKETS 

■ 1. The authority citation for part 147 

continues to read as follows: 

Authority: Secs. 2701 through 2763, 2791, 

and 2792 of the Public Health Service Act (42 

U.S.C. 300gg through 300gg–63, 300gg–91, 

and 300gg–92), as amended. 

■ 2. Section 147.130 is amended by 

revising paragraphs (a)(1) introductory 

text and (a)(1)(iv) to read as follows: 

§ 147.130 Coverage of preventive health 

services. 

(a) * * * 

(1) In general. Beginning at the time 

described in paragraph (b) of this 

section and subject to § 147.131, a group 

health plan, or a health insurance issuer 

offering group or individual health 

insurance coverage, must provide 

coverage for all of the following items 

and services, and may not impose any 

cost-sharing requirements (such as a 

copayment, coinsurance, or a 

deductible) with respect to those items 

and services: 

* * * * * 

(iv) With respect to women, to the 

extent not described in paragraph 

(a)(1)(i) of this section, evidenceinformed preventive care and screenings 

provided for in binding comprehensive 

health plan coverage guidelines 

supported by the Health Resources and 

Services Administration. 

* * * * * 

■ 3. Section 147.131 is added to read as 

follows: 

§ 147.131 Exemption and accommodations 

in connection with coverage of preventive 

health services. 

(a) Religious employers. In issuing 

guidelines under § 147.130(a)(1)(iv), the 

Health Resources and Services 

Administration may establish an 

exemption from such guidelines with 

respect to a group health plan 

established or maintained by a religious 

employer (and health insurance 

coverage provided in connection with a 

group health plan established or 

maintained by a religious employer) 

with respect to any requirement to cover 

contraceptive services under such 

guidelines. For purposes of this 

paragraph (a), a ‘‘religious employer’’ is 

an organization that is organized and 

operates as a nonprofit entity and is 

referred to in section 6033(a)(3)(A)(i) or 

(iii) of the Internal Revenue Code of 

1986, as amended. 

(b) Eligible organizations. An eligible 

organization is an organization that 

satisfies all of the following 

requirements: 

(1) The organization opposes 

providing coverage for some or all of 

any contraceptive services required to 

be covered under § 147.130(a)(1)(iv) on 

account of religious objections. 

(2) The organization is organized and 

operates as a nonprofit entity. 

(3) The organization holds itself out as 

a religious organization. 

(4) The organization self-certifies, in a 

form and manner specified by the 

Secretary, that it satisfies the criteria in 

paragraphs (b)(1) through (3) of this 

section, and makes such selfcertification available for examination 

upon request by the first day of the first 

plan year to which the accommodation 

in paragraph (c) of this section applies. 

The self-certification must be executed 

by a person authorized to make the 

certification on behalf of the 

organization, and must be maintained in 

a manner consistent with the record 

retention requirements under section 

107 of the Employee Retirement Income 

Security Act of 1974. 

(c) Contraceptive coverage—insured 

group health plans—(1) General rule. A 

group health plan established or 

maintained by an eligible organization 

that provides benefits through one or 

more group health insurance issuers 

complies for one or more plan years 

with any requirement under 

§ 147.130(a)(1)(iv) to provide 

contraceptive coverage if the eligible 

organization or group health plan 

furnishes a copy of the self-certification 

described in paragraph (b)(4) of this 

section to each issuer that would 

otherwise provide such coverage in 

connection with the group health plan. 

An issuer may not require any 

documentation other than the copy of 

the self-certification from the eligible 

organization regarding its status as such. 

(2) Payments for contraceptive 

services—(i) A group health insurance 

issuer that receives a copy of the selfcertification described in paragraph 

(b)(4) of this section with respect to a 

group health plan established or 

maintained by an eligible organization 

in connection with which the issuer 

would otherwise provide contraceptive 

coverage under § 147.130(a)(1)(iv) 

must— 

(A) Expressly exclude contraceptive 

coverage from the group health 

insurance coverage provided in 

connection with the group health plan; 

and 

(B) Provide separate payments for any 

contraceptive services required to be 

covered under § 147.130(a)(1)(iv) for 

plan participants and beneficiaries for 

so long as they remain enrolled in the 

plan. 

(ii) With respect to payments for 

contraceptive services, the issuer may 

not impose any cost-sharing 

requirements (such as a copayment, 

coinsurance, or a deductible), or impose 

any premium, fee, or other charge, or 

any portion thereof, directly or 

indirectly, on the eligible organization, 

the group health plan, or plan 

participants or beneficiaries. The issuer 

must segregate premium revenue 

collected from the eligible organization 

from the monies used to provide 

payments for contraceptive services. 

The issuer must provide payments for 

contraceptive services in a manner that 

is consistent with the requirements 

under sections 2706, 2709, 2711, 2713, 

2719, and 2719A of the PHS Act. If the 

group health plan of the eligible 

organization provides coverage for some 

but not all of any contraceptive services 

required to be covered under 

§ 147.130(a)(1)(iv), the issuer is required 

to provide payments only for those 

contraceptive services for which the 

group health plan does not provide 

coverage. However, the issuer may 

provide payments for all contraceptive 

services, at the issuer’s option. 

(d) Notice of availability of separate 

payments for contraceptive services— 

insured group health plans and student 

health insurance coverage. For each 

plan year to which the accommodation 

in paragraph (c) of this section is to 

apply, an issuer required to provide 


emcdonald on DSK67QTVN1PROD with RULES3
Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 39897 

payments for contraceptive services 

pursuant to paragraph (c) of this section 

must provide to plan participants and 

beneficiaries written notice of the 

availability of separate payments for 

contraceptive services contemporaneous 

with (to the extent possible), but 

separate from, any application materials 

distributed in connection with 

enrollment (or re-enrollment) in group 

health coverage that is effective 

beginning on the first day of each 

applicable plan year. The notice must 

specify that the eligible organization 

does not administer or fund 

contraceptive benefits, but that the 

issuer provides separate payments for 

contraceptive services, and must 

provide contact information for 

questions and complaints. The 

following model language, or 

substantially similar language, may be 

used to satisfy the notice requirement of 

this paragraph (d): ‘‘Your [employer/ 

institution of higher education] has 

certified that your [group health plan/ 

student health insurance coverage] 

qualifies for an accommodation with 

respect to the federal requirement to 

cover all Food and Drug 

Administration-approved contraceptive 

services for women, as prescribed by a 

health care provider, without cost 

sharing. This means that your 

[employer/institution of higher 

education] will not contract, arrange, 

pay, or refer for contraceptive coverage. 

Instead, [name of health insurance 

issuer] will provide separate payments 

for contraceptive services that you use, 

without cost sharing and at no other 

cost, for so long as you are enrolled in 

your [group health plan/student health 

insurance coverage]. Your [employer/ 

institution of higher education] will not 

administer or fund these payments. If 

you have any questions about this 

notice, contact [contact information for 

health insurance issuer].’’ 

(e) Reliance—(1) If an issuer relies 

reasonably and in good faith on a 

representation by the eligible 

organization as to its eligibility for the 

accommodation in paragraph (c) of this 

section, and the representation is later 

determined to be incorrect, the issuer is 

considered to comply with any 

requirement under § 147.130(a)(1)(iv) to 

provide contraceptive coverage if the 

issuer complies with the obligations 

under this section applicable to such 

issuer. 

(2) A group health plan is considered 

to comply with any requirement under 

§ 147.130(a)(1)(iv) to provide 

contraceptive coverage if the plan 

complies with its obligations under 

paragraph (c) of this section, without 

regard to whether the issuer complies 

with the obligations under this section 

applicable to such issuer. 

(f) Application to student health 

insurance coverage. The provisions of 

this section apply to student health 

insurance coverage arranged by an 

eligible organization that is an 

institution of higher education in a 

manner comparable to that in which 

they apply to group health insurance 

coverage provided in connection with a 

group health plan established or 

maintained by an eligible organization 

that is an employer. In applying this 

section in the case of student health 

insurance coverage, a reference to ‘‘plan 

participants and beneficiaries’’ is a 

reference to student enrollees and their 

covered dependents. 

PART 156—HEALTH INSURANCE 

ISSUER STANDARDS UNDER THE 

AFFORDABLE CARE ACT, INCLUDING 

STANDARDS RELATED TO 

EXCHANGES 

■ 4. The authority citation for part 156 

continues to read as follows: 

Authority: Title I of the Affordable Care 

Act, sections 1301–1304, 1311–1312, 1321– 

1322, 1324, 1334, 1342–1343, 1401–1402, 

and 1412, Pub. L. 111–148, 124 Stat. 119 (42 

U.S.C. 18021–18024, 18031–18032, 18041– 

18042, 18044, 18054, 18061, 18063, 18071, 

18082, 26 U.S.C. 36B, and 31 U.S.C. 9701). 

■ 5. Section 156.50 is amended by 

adding paragraph (d) to read as follows: 

§ 156.50 Financial support. 

* * * * * 

(d) Adjustment of Federally-facilitated 

Exchange user fee—(1) A participating 

issuer offering a plan through a 

Federally-facilitated Exchange may 

qualify for an adjustment in the 

Federally-facilitated Exchange user fee 

specified in paragraph (c) of this section 

to the extent that the participating 

issuer— 

(i) Made payments for contraceptive 

services on behalf of a third party 

administrator pursuant to 26 CFR 

54.9815–2713A(b)(2)(ii) or 29 CFR 

2590.715–2713A(b)(2)(ii); or 

(ii) Seeks an adjustment in the 

Federally-facilitated Exchange user fee 

with respect to a third party 

administrator that, following receipt of 

a copy of the self-certification 

referenced in 26 CFR 54.9815– 

2713A(a)(4) or 29 CFR 2590.715– 

2713A(a)(4), made or arranged for 

payments for contraceptive services 

pursuant to 26 CFR 54.9815– 

2713A(b)(2)(i) or (ii) or 29 CFR 

2590.715–2713A(b)(2)(i) or (ii). 

(2) For a participating issuer 

described in paragraph (d)(1) of this 

section to receive the Federallyfacilitated Exchange user fee 

adjustment— 

(i) The participating issuer must 

submit to HHS, in the manner and 

timeframe specified by HHS, in the year 

following the calendar year in which the 

contraceptive services for which 

payments were made pursuant to 26 

CFR 54.9815–2713A(b)(2) or 29 CFR 

2590.715–2713A(b)(2) were provided — 

(A) Identifying information for the 

participating issuer and each third party 

administrator that received a copy of the 

self-certification referenced in 26 CFR 

54.9815–2713A(a)(4) or 29 CFR 

2590.715–2713A(a)(4) with respect to 

which the participating issuer seeks an 

adjustment in the Federally-facilitated 

Exchange user fee, whether or not the 

participating issuer was the entity that 

made the payments for contraceptive 

services; 

(B) Identifying information for each 

self-insured group health plan with 

respect to which a copy of the selfcertification referenced in 26 CFR 

54.9815–2713A(a)(4) or 29 CFR 

2590.715–2713A(a)(4) was received by a 

third party administrator and with 

respect to which the participating issuer 

seeks an adjustment in the Federallyfacilitated Exchange user fee; and 

(C) For each such self-insured group 

health plan, the total dollar amount of 

the payments that were made pursuant 

to 26 CFR 54.9815–2713A(b)(2) or 29 

CFR 2590.715–2713A(b)(2) for 

contraceptive services that were 

provided during the applicable calendar 

year. If such payments were made by 

the participating issuer directly as 

described in paragraph (d)(1)(i) of this 

section, the total dollar amount should 

reflect the amount of the payments 

made by the participating issuer; if the 

third party administrator made or 

arranged for such payments, as 

described in paragraph (d)(1)(ii) of this 

section, the total dollar amount should 

reflect the amount reported to the 

participating issuer by the third party 

administrator. 

(ii) Each third party administrator that 

intends for a participating issuer to seek 

an adjustment in the Federallyfacilitated Exchange user fee with 

respect to the third party administrator 

for payments for contraceptive services 

must submit to HHS a notification of 

such intent, in a manner specified by 

HHS, by the later of January 1, 2014, or 

the 60th calendar day following the date 

on which the third party administrator 

receives the applicable copy of the selfcertification referenced in 26 CFR 

54.9815–2713A(a)(4) or 29 CFR 

2590.715–2713A(a)(4). 

(iii) Each third party administrator 

identified in paragraph (d)(2)(i)(A) of 


emcdonald on DSK67QTVN1PROD with RULES3
39898 Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 

this section must submit to HHS, in the 

manner and timeframe specified by 

HHS, in the year following the calendar 

year in which the contraceptive services 

for which payments were made 

pursuant to 26 CFR 54.9815– 

2713A(b)(2) or 29 CFR 2590.715– 

2713A(b)(2) were provided— 

(A) Identifying information for the 

third party administrator and the 

participating issuer; 

(B) Identifying information for each 

self-insured group health plan with 

respect to which a copy of the selfcertification referenced in 26 CFR 

54.9815–2713A(a)(4) or 29 CFR 

2590.715–2713A(a)(4) was received by 

the third party administrator and with 

respect to which the participating issuer 

seeks an adjustment in the Federallyfacilitated Exchange user fee; 

(C) The total number of participants 

and beneficiaries in each such selfinsured group health plan during the 

applicable calendar year; 

(D) For each such self-insured group 

health plan with respect to which the 

third party administrator made 

payments pursuant to 26 CFR 54.9815– 

2713A(b)(2) or 29 CFR 2590.715– 

2713A(b)(2) for contraceptive services, 

the total dollar amount of such 

payments that were provided during the 

applicable calendar year. If such 

payments were made by the 

participating issuer directly as described 

in paragraph (d)(1)(i) of this section, the 

total dollar amount should reflect the 

amount reported to the third party 

administrator by the participating 

issuer; if the third party administrator 

made or arranged for such payments, as 

described in paragraph (d)(1)(ii) of this 

section, the total dollar amount should 

reflect the amount of the payments 

made by or on behalf of the third party 

administrator; and 

(E) An attestation that the payments 

for contraceptive services were made in 

compliance with 26 CFR 54.9815– 

2713A(b)(2) or 29 CFR 2590.715– 

2713A(b)(2). 

(3) If the requirements set forth in 

paragraph (d)(2) of this section are met, 

and as long as an authorizing exception 

under OMB Circular No. A–25R is in 

effect, the participating issuer will be 

provided a reduction in its obligation to 

pay the Federally-facilitated Exchange 

user fee specified in paragraph (c) of 

this section equal in value to the sum of 

the following: 

(i) The total dollar amount of the 

payments for contraceptive services 

submitted by the applicable third party 

administrators, as described in 

paragraph (d)(2)(iii)(D) of this section. 

(ii) An allowance for administrative 

costs and margin. The allowance will be 

no less than 10 percent of the total 

dollar amount of the payments for 

contraceptive services specified in 

paragraph (d)(3)(i) of this section. HHS 

will specify the allowance for a 

particular calendar year in the annual 

HHS notice of benefit and payment 

parameters. 

(4) As long as an exception under 

OMB Circular No. A–25R is in effect, if 

the amount of the adjustment under 

paragraph (d)(3) of this section is greater 

than the amount of the participating 

issuer’s obligation to pay the Federallyfacilitated Exchange user fee in a 

particular month, the participating 

issuer will be provided a credit in 

succeeding months in the amount of the 

excess. 

(5) Within 60 days of receipt of any 

adjustment in the Federally-facilitated 

Exchange user fee under this section, a 

participating issuer must pay each third 

party administrator with respect to 

which it received any portion of such 

adjustment an amount no less than the 

portion of the adjustment attributable to 

the total dollar amount of the payments 

for contraceptive services submitted by 

the third party administrator, as 

described in paragraph (d)(2)(iii)(D) of 

this section. No such payment is 

required with respect to the allowance 

for administrative costs and margin 

described in paragraph (d)(3)(ii) of this 

section. This paragraph does not apply 

if the participating issuer made the 

payments for contraceptive services on 

behalf of the third party administrator, 

as described in paragraph (d)(1)(i) of 

this section, or is in the same issuer 

group as the third party administrator. 

(6) A participating issuer receiving an 

adjustment in the Federally-facilitated 

Exchange user fee under this section for 

a particular calendar year must maintain 

for 10 years following that year, and 

make available upon request to HHS, 

the Office of the Inspector General, the 

Comptroller General, and their 

designees, documentation 

demonstrating that it timely paid each 

third party administrator with respect to 

which it received any such adjustment 

any amount required to be paid to the 

third party administrator under 

paragraph (d)(5) of this section. 

(7) A third party administrator with 

respect to which an adjustment in the 

Federally-facilitated Exchange user fee 

is received under this section for a 

particular calendar year must maintain 

for 10 years following that year, and 

make available upon request to HHS, 

the Office of the Inspector General, the 

Comptroller General, and their 

designees, all of the following 

documentation: 

(i) A copy of the self-certification 

referenced in 26 CFR 54.9815– 

2713A(a)(4) or 29 CFR 2590.715– 

2713A(a)(4) for each self-insured plan 

with respect to which an adjustment is 

received. 

(ii) Documentation demonstrating that 

the payments for contraceptive services 

were made in compliance with 26 CFR 

54.9815–2713A(b)(2) or 29 CFR 

2590.715–2713A(b)(2). 

(iii) Documentation supporting the 

total dollar amount of the payments for 

contraceptive services submitted by the 

third party administrator, as described 

in paragraph (d)(2)(iii)(D) of this section. 

■ 6. Section 156.80 is amended by 

revising paragraph (d)(1) to read as 

follows: 

§ 156.80 Single risk pool. 

* * * * * 

(d) * * * 

(1) In general. Each plan year or 

policy year, as applicable, a health 

insurance issuer must establish an index 

rate for a state market described in 

paragraphs (a) through (c) of this section 

based on the total combined claims 

costs for providing essential health 

benefits within the single risk pool of 

that state market. The index rate must 

be adjusted on a market-wide basis for 

the state based on the total expected 

market-wide payments and charges 

under the risk adjustment and 

reinsurance programs, and Exchange 

user fees (expected to be remitted under 

§ 156.50(b) or § 156.50(c) and (d) of this 

subchapter as applicable plus the dollar 

amount under § 156.50(d)(3)(i) and (ii) 

of this subchapter expected to be 

credited against user fees payable for 

that state market). The premium rate for 

all of the health insurance issuer’s plans 

in the relevant state market must use the 

applicable market-wide adjusted index 

rate, subject only to the plan-level 

adjustments permitted in paragraph 

(d)(2) of this section. 

* * * * * 


emcdonald on DSK67QTVN1PROD with RULES3
Federal Register / Vol. 78, No. 127 / Tuesday, July 2, 2013 / Rules and Regulations 39899 

Signed this 27th day of June 2013. 

Beth Tucker, 

Deputy Commissioner for Operations 

Support, Internal Revenue Service. 

Mark J. Mazur, 

Assistant Secretary of the Treasury (Tax 

Policy). 

Signed this 26th day of June 2013. 

Phyllis C. Borzi, 

Assistant Secretary, Employee Benefits 

Security Administration, Department of 

Labor. 

Dated: June 20, 2013 

Marilyn Tavenner, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: June 25, 2013. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2013–15866 Filed 6–28–13; 11:15 am] 

BILLING CODE 4830–01–P; 4510–029–P; 4120–01–P; 

6325–64–P 


emcdonald on DSK67QTVN1PROD with RULES3