[Federal Register Volume 89, Number 208 (Monday, October 28, 2024)]
[Proposed Rules]
[Pages 85750-85795]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-24675]



[[Page 85749]]

Vol. 89

Monday,

No. 208

October 28, 2024

Part IV





Department of the Treasury





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Internal Revenue Service





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26 CFR Part 54





Department of Labor





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Employee Benefits Security Administration





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29 CFR Part 2590





Department of Health and Human Services





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45 CFR Part 147





Enhancing Coverage of Preventive Services Under the Affordable Care 
Act; Proposed Rule

Federal Register / Vol. 89, No. 208 / Monday, October 28, 2024 / 
Proposed Rules

[[Page 85750]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[REG-110878-24]
RIN 1545-BR35

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AC25

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 147

[CMS 9887-P]
RIN 0938-AV57


Enhancing Coverage of Preventive Services Under the Affordable 
Care Act

AGENCY: 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: Proposed rule.

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SUMMARY: This document sets forth proposed rules that would amend the 
regulations regarding coverage of certain preventive services under the 
Public Health Service Act. Specifically, this document proposes rules 
that would provide that medical management techniques used by non-
grandfathered group health plans and health insurance issuers offering 
non-grandfathered group or individual health insurance coverage with 
respect to such preventive services would not be considered reasonable 
unless the plan or issuer provides an easily accessible, transparent, 
and sufficiently expedient exceptions process that would allow an 
individual to receive coverage without cost sharing for the preventive 
service that is medically necessary with respect to the individual, as 
determined by the individual's attending provider, even if such service 
is not generally covered under the plan or coverage. These proposed 
rules also contain separate requirements that would apply to coverage 
of contraceptive items that are preventive services under the Public 
Health Service Act. Specifically, these proposed rules would require 
plans and issuers to cover certain recommended over-the-counter 
contraceptive items without requiring a prescription and without 
imposing cost-sharing requirements. In addition, the proposed rules 
would require plans and issuers to cover certain recommended 
contraceptive items that are drugs and drug-led combination products 
without imposing cost-sharing requirements, unless a therapeutic 
equivalent of the drug or drug-led combination product is covered 
without cost sharing. Finally, this document proposes to require a 
disclosure pertaining to coverage and cost-sharing requirements for 
over-the-counter contraceptive items in plans' and issuers' 
Transparency in Coverage internet-based self-service tools or, if 
requested by the individual, on paper. These proposed rules would not 
modify Federal conscience protections related to contraceptive coverage 
for employers, plans and issuers.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below by December 27, 2024.

ADDRESSES: Written comments may be submitted to the address specified 
below. Any comment that is submitted will be shared with the Department 
of the Treasury, Internal Revenue Service, and the Department of Health 
and Human Services (HHS). Commenters should not submit duplicates.
    Comments will be made available to the public. Warning: Do not 
include any personally identifiable information (such as name, address, 
or other contact information) or confidential business information that 
you do not want publicly disclosed. All comments are posted on the 
internet exactly as received and can be retrieved by most internet 
search engines. No deletions, modifications, or redactions will be made 
to the comments received, as they are public records. Comments may be 
submitted anonymously.
    In commenting, please refer to file code 1210-AC25.
    Comments must be submitted in one of the following two ways (please 
choose only one of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By mail. You may mail written comments to the following address 
ONLY: Office of Health Plan Standards and Compliance Assistance, 
Employee Benefits Security Administration, Room N-5653, U.S. Department 
of Labor, Washington, DC 20210, Attention: 1210-AC25.
    Always allow sufficient time for mailed comments to be received 
before the close of the comment period. Because of staff and resource 
limitations, the Departments cannot accept comments by facsimile (FAX) 
transmission.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. The comments are posted on 
the following website as soon as possible after they have been 
received: https://www.regulations.gov. Follow the search instructions 
on that website to view public comments.
    Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a 
summary of these proposed rules of not more than 100 words in length, 
in plain language, may be found at https://www.regulations.gov/.

FOR FURTHER INFORMATION CONTACT: Regan Rusher, Internal Revenue 
Service, Department of the Treasury, at (202) 317-5500. Matthew 
Meidell, Employee Benefits Security Administration, Department of 
Labor, at (202) 693-8335. Rebecca Miller, Employee Benefits Security 
Administration, Department of Labor, at (202) 693-8335. Geraldine 
Doetzer, Centers for Medicare & Medicaid Services, Department of Health 
and Human Services at (667) 290-8855. Kendra May, Centers for Medicare 
& Medicaid Services, Department of Health and Human Services at (301) 
448-3996.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor (DOL) concerning employment-
based health coverage laws may call the Employee Benefits Security 
Administration (EBSA) Toll-Free Hotline at 1-866-444-EBSA (3272) or 
visit the DOL's website (www.dol.gov/ebsa). In addition, information 
from HHS on private health insurance coverage and on non-Federal 
governmental plans can be found on the Centers for Medicare & Medicaid 
Services (CMS) website (www.cms.gov/cciio), and information on health 
care reform can be found at www.HealthCare.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Coverage of Preventive Services Under the Affordable Care Act and 
Implementing Regulations

    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

[[Page 85751]]

30, 2010. These statutes are collectively known as the Affordable Care 
Act (ACA). The ACA reorganized, amended, and added 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 ACA added section 715(a)(1) to the 
Employee Retirement Income Security Act of 1974 (ERISA) \1\ and section 
9815(a)(1) to the Internal Revenue Code (Code) \2\ 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.
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    \1\ 29 U.S.C. 1185d.
    \2\ 26 U.S.C. 9815.
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    Section 2713 of the PHS Act,\3\ as added by section 1001 of the ACA 
and incorporated into ERISA and the Code, and its implementing 
regulations require that non-grandfathered group health plans and 
health insurance issuers offering non-grandfathered group or individual 
health insurance coverage (plans and issuers) provide coverage without 
imposing any cost-sharing requirements for the following items and 
services: \4\
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    \3\ 42 U.S.C. 300gg-13.
    \4\ The items and services described in these recommendations 
and guidelines are referred to in this preamble as ``recommended 
preventive services.''
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    <bullet> Evidence-based items or services that have in effect a 
rating of ``A'' or ``B'' in the current recommendations of the United 
States Preventive Services Task Force (USPSTF) with respect to the 
individual involved, except for the recommendations of the USPSTF 
regarding breast cancer screening, mammography, and prevention issued 
in or around November 2009; <SUP>5 6</SUP>
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    \5\ The USPSTF published updated breast cancer screening 
recommendations in April 2024. However, section 223 of title II of 
Division D of the Further Consolidated Appropriations Act, 2024 
(Pub. L. 118-47) requires that for purposes of PHS Act section 2713, 
USPSTF recommendations relating to breast cancer screening, 
mammography, and prevention issued before 2009 remain in effect 
until January 1, 2026.
    \6\ On September 19, 2024, the Departments filed a petition for 
a writ of certiorari requesting U.S. Supreme Court review of the 
decision of the U.S. Court of Appeals for the Fifth Circuit in 
Braidwood Management v. Becerra, which found in part that the 
actions taken by the Departments under section 2713(a) of the PHS 
Act to require coverage of certain preventive services recommended 
by the USPSTF are unconstitutional and unenforceable by the 
Departments as to the named plaintiffs. See 104 F.4th 930 (5th Cir. 
2024), petition for cert. filed (U.S. Sept. 19, 2024) (No. 24-316).
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    <bullet> Immunizations for routine use in children, adolescents, 
and adults that have in effect a recommendation from the Advisory 
Committee on Immunization Practices (ACIP) of the Centers for Disease 
Control and Prevention (CDC) with respect to the individual involved; 
\7\
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    \7\ In addition, under section 3203 of the Coronavirus Aid, 
Relief, and Economic Security Act (CARES Act), enacted on March 27, 
2020 (Pub. L. 116-136), plans and issuers must cover, without cost-
sharing requirements, any qualifying coronavirus preventive service 
pursuant to section 2713(a) of the PHS Act and its implementing 
regulations (or any successor regulations). The term ``qualifying 
coronavirus preventive service'' means an item, service, or 
immunization that is intended to prevent or mitigate coronavirus 
disease 2019 (COVID-19) and that is (1) an evidence-based item or 
service that has in effect a rating of ``A'' or ``B'' in the current 
USPSTF recommendations; or (2) an immunization that has in effect a 
recommendation from ACIP with respect to the individual involved. 
See FAQs about Families First Coronavirus Response Act, Coronavirus 
Aid, Relief, and Economic Security Act, and Health Insurance 
Portability and Accountability Act Implementation Part 58, Q4 (Mar. 
29, 2023), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58.pdf and 
https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-part-58.pdf.
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    <bullet> With respect to infants, children, and adolescents, 
evidence-informed preventive care and screenings provided for in 
comprehensive guidelines supported by the Health Resources and Services 
Administration (HRSA); and
    <bullet> With respect to women,\8\ such additional preventive care 
and screenings not described in the USPSTF recommendations in PHS Act 
section 2713(a)(1), as provided for in comprehensive guidelines 
supported by HRSA.\9\
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    \8\ Consistent with the terminology in the statute, for purposes 
of coverage of contraceptive items, these proposed rules use the 
term ``women'' to refer to all individuals potentially capable of 
becoming pregnant. Plans and issuers are required to cover 
contraceptive services for all such individuals consistent with the 
requirements in 26 CFR 54.9815-2713, 29 CFR 2590.715-2713, and 45 
CFR 147.130. See FAQs about Affordable Care Act Implementation Part 
XXVI, Q5 (May 11, 2015), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf.
    \9\ For accommodations and exemptions with respect to coverage 
of recommended contraceptive services, see 26 CFR 54.9815-2713A, 29 
CFR 2590.715-2713A, and 45 CFR 147.131 through 147.133.
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    On August 1, 2011, HRSA established the HRSA-supported Women's 
Preventive Services Guidelines (HRSA-supported Guidelines) based on 
recommendations from a Department of Health and Human Services' (HHS) 
commissioned study by the Institute of Medicine.\10\ Among other 
recommended items and services, the 2011 HRSA-supported Guidelines 
addressed contraceptive methods and counseling as a type of preventive 
service and included all Food and Drug Administration (FDA)-approved 
``contraceptive methods, sterilization procedures, and patient 
education and counseling for all women with reproductive capacity.'' 
\11\ The HRSA-supported Guidelines' recommendation on contraception has 
been updated several times, including in 2016,\12\ and most recently in 
2021.\13\ The 2011 HRSA-supported Guidelines included for each type of 
preventive service a column labeled ``Frequency,'' which for 
contraceptive methods and counseling, stated, ``as prescribed.'' The 
``Frequency'' column does not appear in the 2016, 2019, or 2021 updated 
HRSA-supported Guidelines for any preventive service, and the updated 
HRSA-supported Guidelines do not contain language that specifies 
frequency in accordance with a prescription for contraceptive methods 
(or contraceptives) by a health care provider Plans and issuers are 
required to provide coverage of women's preventive services, including 
contraceptive items and services, without cost sharing, consistent with 
the 2021 HRSA-supported Guidelines, for plan years and policy years 
beginning on or after December 30, 2022.\14\ The 2021 HRSA-supported 
Guidelines refer, under the header

[[Page 85752]]

``Contraception,'' to ``the full range of contraceptives and 
contraceptive care to prevent unintended pregnancies and improve birth 
outcomes.'' The term ``contraceptive methods'' was replaced in 2021 by 
``contraceptives.'' \15\ With the removal of the phrase ``female-
controlled,'' as HRSA explained,\16\ male condoms are included in the 
2021 HRSA-supported Guidelines, which also include ``screening, 
education, counseling, and provision of contraceptives (including in 
the immediate postpartum period)'' including ``follow-up care (e.g., 
management, evaluation and changes, including the removal, 
continuation, and discontinuation of contraceptives).'' \17\ The 2021 
HRSA-supported Guidelines recommend ``the full range of U.S. Food and 
Drug Administration (FDA)-approved, -granted, or -cleared 
contraceptives, effective family planning practices, and sterilization 
procedures be available as part of contraceptive care.'' \18\
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    \10\ See HRSA (2011), ``Women's Preventive Services: Required 
Health Plan Coverage,'' available at: https://web.archive.org/web/20130526033922/https:/www.hrsa.gov/womensguidelines/index.html; see 
also Institute of Medicine, ``Clinical Preventive Services for 
Women: Closing the Gaps'' (2011), available at https://nap.nationalacademies.org/read/13181/chapter/7.
    \11\ The references in this preamble to ``contraception,'' 
``contraceptive,'' ``contraceptive coverage,'' ``contraceptive 
services,'' ``contraceptive product,'' or ``contraceptive item'' 
generally include all contraceptives, sterilization, and related 
patient education and counseling recommended by the currently 
applicable HRSA-supported Guidelines, unless otherwise indicated.
    \12\ The HRSA-supported Guidelines, as amended in December 2016, 
refer, under the header ``Contraception,'' to: ``the full range of 
female-controlled U.S. Food and Drug Administration-approved 
contraceptive methods, effective family planning practices, and 
sterilization procedures,'' ``contraceptive counseling, initiation 
of contraceptive use, and follow-up care (e.g., management, and 
evaluation as well as changes to and removal or discontinuation of 
the contraceptive method),'' and ``instruction in fertility 
awareness-based methods, including the lactation amenorrhea 
method.'' See https://www.hrsa.gov/womens-guidelines-2016/
index.html.
    \13\ See HRSA, ``Women's Preventive Services Guidelines: Current 
Guidelines,'' available at https://www.hrsa.gov/womens-guidelines.
    \14\ The Departments' regulations under section 2713 of the PHS 
Act at 26 CFR 54.9815-2713T, 29 CFR 2590.715-2713, and 45 CFR 
147.130 require that plans and issuers provide coverage of 
recommended preventive services generally for plan years (in the 
individual market, policy years) that begin on or after September 
23, 2010, or, if later, for plan years (in the individual market, 
policy years) that begin on or after the date that is one year after 
the date the recommendation or guideline is issued.
    \15\ See 86 FR 59741, 59742 (Oct. 28, 2021).
    \16\ HRSA stated that this change was made to allow women to 
purchase male condoms for pregnancy prevention. See id.
    \17\ See HRSA, Women's Preventive Services Guidelines, available 
at https://www.hrsa.gov/womens-guidelines/index.html (version last 
reviewed March 2024, accessed September 25, 2024).
    \18\ Id.
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    The Departments of the Treasury, Labor, and HHS (the Departments) 
previously issued rulemaking to implement the preventive services 
requirements of section 2713 of the PHS Act, using their authority 
under section 9833 of the Code, section 734 of ERISA, and section 2792 
of the PHS Act.\19\ On July 19, 2010, the Departments issued interim 
final rules (July 2010 interim final rules) at 26 CFR 54.9815-2713T, 29 
CFR 2590.715-2713, and 45 CFR 147.130, which require that plans and 
issuers provide coverage of recommended preventive services generally 
for plan years or policy years that begin on or after September 23, 
2010; or, if later, for plan years or policy years that begin on or 
after the date that is one year after the recommendation or guideline 
is issued.\20\ Among other provisions, the July 2010 interim final 
rules allow plans and issuers to rely on the relevant clinical evidence 
base to impose reasonable medical management techniques to determine 
the frequency, method, treatment, or setting for coverage of a 
recommended preventive health item or service, to the extent not 
specified in the applicable recommendation or guideline.\21\ 
Additionally, if a plan or issuer has a provider in its network that 
can provide a recommended preventive service, the July 2010 interim 
final rules specify that the plan or issuer is not required to provide 
coverage or waive cost sharing for the item or service when delivered 
by an out-of-network provider.\22\ However, if a plan or issuer does 
not have in its network a provider who can provide a recommended 
preventive service (or the plan or coverage does not have a network), 
the plan or issuer must cover the item or service when performed by an 
out-of-network provider, and may not impose any cost-sharing 
requirements with respect to the item or service. The Departments 
finalized these rules on July 14, 2015.\23\
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    \19\ 26 U.S.C. 9833, 29 U.S.C. 1191c, and 42 U.S.C. 300gg-92.
    \20\ 75 FR 41726 (July 19, 2010).
    \21\ 26 CFR 54.9815-2713T(a)(4); 29 CFR 2590.715-2713(a)(4); and 
45 CFR 147.130(a)(4).
    \22\ 26 CFR 54.9815-2713T(a)(3); 29 CFR 2590.715-2713(a)(3); and 
45 CFR 147.130(a)(3).
    \23\ 80 FR 41318 (July 14, 2015).
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    The Departments have also previously issued rules that provide 
exemptions from the contraceptive coverage requirement for entities and 
individuals with moral or religious objections to contraceptive 
coverage, and accommodations through which objecting entities are not 
required to contract, arrange, pay, or provide a referral for 
contraceptive coverage, while at the same time ensuring that 
participants, beneficiaries, and enrollees enrolled in coverage 
sponsored or arranged by an objecting entity could separately obtain 
contraceptive services at no additional cost.\24\ Most recently, on 
February 2, 2023, the Departments issued proposed rules (2023 proposed 
rules) to rescind the moral exemption to the contraceptive coverage 
requirement and to establish a new ``individual contraceptive 
arrangement,'' an independent pathway that individuals enrolled in 
plans or coverage sponsored, arranged, or provided by objecting 
entities could use to obtain contraceptive services at no cost directly 
from a provider or facility that furnishes contraceptive services.\25\
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    \24\ These proposed rules would not modify Federal conscience 
protections related to contraceptive coverage for employers, plans 
and issuers. The rules related to optional accommodations for 
certain eligible entities (26 CFR 54.9815-2713A, 29 CFR 2510.3-16 
and 2590.715-2713A, and 45 CFR 147.131) and religious (45 CFR 
147.132) and moral (45 CFR 147.133) exemptions in connection with 
the coverage of certain recommended preventive services--as well as 
the conscience protections that apply to certain health care 
providers, patients, and other participants (45 CFR part 88)--are 
outside the scope of these proposed rules. For a detailed overview 
of the regulatory and judicial history of Departmental rules 
specifically related to optional accommodations and religious and 
moral exemptions from the contraceptive coverage requirement, see 88 
FR 7236, 7237-40 (Feb. 2, 2023). For additional information on the 
Department of Health and Human Services' final rule on enforcement 
of religious freedom and conscience laws, see 89 FR 2078 (Jan. 11, 
2024).
    \25\ 88 FR 7236.
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B. Guidance Related to the Coverage of Recommended Preventive Services

    Since publishing the July 2010 interim final rules, the Departments 
have issued extensive guidance related to the requirement to cover 
recommended preventive services, including contraceptive services, 
without cost sharing under section 2713 of the PHS Act and its 
implementing regulations. These guidance documents respond to questions 
from interested parties regarding the requirement to provide coverage 
for recommended preventive services without cost sharing.\26\ 
Cumulatively, this body of guidance interprets key elements of the 
preventive health services recommendations and guidelines and coverage 
requirements, including with respect to the allowed use of reasonable 
medical management techniques.\27\ These guidance documents include:
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    \26\ See FAQs about Affordable Care Act Implementation Part XII 
(Feb. 20, 2013), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html; FAQs about Affordable Care Act 
Implementation Part XXVI (May 11, 2015), available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf; FAQs about Affordable Care Act 
Implementation Part 31, Mental Health Parity Implementation, and 
Women's Health and Cancer Rights Act Implementation (April 20, 
2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and 
https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-31_final-4-20-16.pdf; FAQs about Affordable Care Act 
Implementation Part 51, Families First Coronavirus Response Act, and 
Coronavirus Aid, Relief, and Economic Security Act Implementation 
(Jan. 10, 2022), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf and https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/FAQs-Part-51.pdf; FAQs about Affordable Care Act 
Implementation Part 54 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.; and FAQs about Affordable Care Act 
Implementation Part 64 (Jan. 22, 2024) available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64 and https://www.cms.gov/files/document/faqs-part-64.pdf.
    \27\ As noted in section I.A of the preamble to these proposed 
rules, under 26 CFR 54.9815-2713T(a)(4), 29 CFR 2590.715-2713(a)(4), 
and 45 CFR 147.130(a)(4), plans and issuers may use ``reasonable 
medical management techniques'' to determine the frequency, method, 
treatment, or setting for a recommended preventive service, to the 
extent this information is not specified in a recommendation or 
guideline. Plans and issuers may rely on established techniques and 
the relevant clinical evidence base to determine the frequency, 
method, treatment, or setting for coverage of a recommended 
preventive health item or service where cost sharing must be waived. 
Whether a medical management technique is reasonable depends on all 
the relevant facts and circumstances. See FAQs Part 54, Q8 (July 28, 
2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and 
https://www.cms.gov/files/document/faqs-part-54.pdf.

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[[Page 85753]]

    <bullet> Frequently Asked Questions on February 20, 2013 (FAQs Part 
XII), which, among other things, clarified the scope of reasonable 
medical management with respect to recommended preventive services, 
including contraceptive items and services. The FAQs specified that 
plans and issuers must cover ``the full range of FDA-approved 
contraceptive methods'' and must design reasonable medical management 
techniques to include accommodations for the specific medical needs of 
an individual. FAQs Part XII, Q14 noted that plans may, for example, 
cover a generic drug without cost sharing and impose cost sharing for 
equivalent branded drugs. If, however, a generic version is not 
available, or would not be medically appropriate for the patient (as 
determined by the attending provider, in consultation with the 
patient), then a plan or issuer must have a mechanism to provide 
coverage for the brand name drug without any cost sharing.\28\ FAQs 
Part XII also interpreted the statutory and regulatory requirements to 
cover recommended preventive services without cost sharing to mean that 
recommended preventive services (including contraceptive products) that 
are generally available without a prescription must be covered without 
cost sharing only when prescribed by a health care provider.\29\
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    \28\ See FAQs Part XII, Q14 (Feb. 20, 2013), available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/aca_implementation_faqs12.
    \29\ See id. at Q4 and Q15. As noted elsewhere in this section 
I.B, the language ``as prescribed'' appeared in the HRSA-supported 
Guidelines until 2016.
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    <bullet> Frequently Asked Questions on May 11, 2015 (FAQs Part 
XXVI), which clarified that plans and issuers must cover, without cost 
sharing, at least one form of contraception in each method \30\ that is 
identified by the FDA in its Birth Control Guide.\31\ FAQs Part XXVI 
further clarified the scope of reasonable medical management techniques 
by specifying that if multiple services and FDA-approved items within a 
contraceptive category are medically appropriate for an individual, the 
plan or issuer may use reasonable medical management techniques to 
determine which specific products to cover without cost sharing with 
respect to that individual and, subject to the relevant facts and 
circumstances, generally may impose cost sharing (including full cost 
sharing) on some items and services to encourage an individual to use 
other specific items and services within the chosen contraceptive 
category.\32\ However, if the individual's attending provider \33\ 
recommends a particular service or FDA-approved, -cleared, or -granted 
item based on a determination of medical necessity with respect to that 
individual, the plan or issuer must defer to the determination of the 
attending provider with respect to the individual involved, and cover 
that item or service without cost sharing.\34\ Additionally, FAQs Part 
XXVI specified that to the extent a plan or issuer uses reasonable 
medical management techniques within a specified method of 
contraception, the plan or issuer must have an easily accessible, 
transparent, and sufficiently expedient exceptions process that is not 
unduly burdensome on the individual or a provider (or other individual 
acting as a patient's authorized representative) to ensure coverage 
without cost sharing of any service or FDA-approved item within the 
specified method of contraception that has been recommended by the 
individual's attending provider based on a determination of medical 
necessity.\35\
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    \30\ As noted in FDA's Birth Control Guide (Chart), published in 
May 2024, available at https://www.fda.gov/media/150299/download, 
the FDA approves, clears, and grants marketing authorization for 
individual contraceptive products, not ``methods.'' However, for 
purposes of this chart, which includes birth control options broader 
than products, the term ``methods'' is used. Similarly, FAQs Part 
XXVI used the term ``methods'' consistent with the then-current FDA 
Birth Control Guide.
    \31\ FAQs Part XXVI referenced the then-current 2015 FDA Birth 
Control Guide, which identified 18 contraceptive methods for women, 
but noted that the ``FDA Birth Control Guide additionally lists 
sterilization surgery for men and male condoms, but the HRSA 
Guidelines exclude services relating to a man's reproductive 
capacity.'' See FAQs Part XXVI, fn. 12, available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf. The 2021 HRSA-supported Guidelines 
incorporated by reference a subsequent update of the FDA Birth 
Control Guide (as published on December 22, 2021), and now describes 
the full range of contraceptives to include: ``(1) sterilization 
surgery for women, (2) implantable rods, (3) copper intrauterine 
devices, (4) intrauterine devices with progestin (all durations and 
doses), (5) injectable contraceptives, (6) oral contraceptives 
(combined pill), 7) oral contraceptives (progestin only), (8) oral 
contraceptives (extended or continuous use), (9) the contraceptive 
patch, (10) vaginal contraceptive rings, (11) diaphragms, (12) 
contraceptive sponges, (13) cervical caps, (14) condoms, (15) 
spermicides, (16) emergency contraception (levonorgestrel), and (17) 
emergency contraception (ulipristal acetate), and any additional 
contraceptives approved, granted, or cleared by the FDA.'' See FAQs 
Part 64 (Jan. 22, 2024), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64.pdf and https://www.cms.gov/files/document/faqs-part-64.pdf. The 2021 HRSA-supported Guidelines also state: 
``Additionally, instruction in fertility awareness-based methods, 
including the lactation amenorrhea method, although less effective, 
should be provided for women desiring an alternative method.''
    \32\ See FAQs Part XXVI, Q3 (May 11, 2015), available at https:/
/www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf. For example, a plan could use cost 
sharing to encourage use of one of several FDA-approved intrauterine 
devices (IUDs) with progestin by imposing cost sharing on the more 
costly IUD with progestin while waiving cost sharing for a less 
costly IUD with progestin.
    \33\ See id. at Q1, fn. 13 (``An attending provider means an 
individual who is licensed under applicable State law, who is acting 
within the scope of the provider's license, and who is directly 
responsible for providing care to the patient relating to the 
recommended preventive services. Therefore, a plan, issuer, 
hospital, or managed care organization is not an attending 
provider.'')
    \34\ See id. at introduction and Q3.
    \35\ Id. at Q2.
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    <bullet> Frequently Asked Questions on April 20, 2016 (FAQs Part 
31), which further clarified the requirements on plans and issuers with 
respect to the development and implementation of an exceptions process, 
including that plans and issuers that meet all other requirements are 
permitted to develop and utilize a standard exceptions process form 
(such as the Medicare Part D Coverage Determination Request Form) and 
instructions as part of the exceptions process.\36\
---------------------------------------------------------------------------

    \36\ FAQs Part 31, Q2 (April 20, 2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and https://www.cms.gov/CCIIO/
Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-31_Final-4-20-16.pdf.
---------------------------------------------------------------------------

    <bullet> Frequently Asked Questions on July 19, 2021 (FAQs Part 
47), which followed USPSTF's release on June 11, 2019 of a 
recommendation with an ``A'' rating that clinicians offer preexposure 
prophylaxis (PrEP) with ``effective antiretroviral therapy to persons 
who are at high risk of human immunodeficiency virus (HIV) 
acquisition.'' \37\ FAQs Part 47 clarified

[[Page 85754]]

that plans and issuers are required to cover, without cost sharing, all 
items and services that USPSTF recommends should be received prior to 
being prescribed PrEP and for ongoing follow-up and monitoring. These 
items and services include specific baseline and monitoring services, 
such as laboratory testing and adherence counseling. The FAQs also 
clarified that plans and issuers utilizing reasonable medical 
management must have an easily accessible, transparent, and 
sufficiently expedient exceptions process that is not unduly burdensome 
on the individual or a provider (or other individual acting as an 
authorized representative).
---------------------------------------------------------------------------

    \37\ FAQs about Affordable Care Act Implementation Part 47 (July 
19, 2021), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-47.pdf and 
https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-part-47.pdf. Note that USPSTF subsequently updated the 
recommendation referenced in FAQs Part 47. See USPSTF, Prevention of 
Acquisition of HIV: Preexposure Prophylaxis, updated August 22, 
2023, available at https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/prevention-of-human-immunodeficiency-virus-hiv-infection-pre-exposure-prophylaxis.
---------------------------------------------------------------------------

    <bullet> Frequently Asked Questions on January 10, 2022 (FAQs Part 
51), which acknowledged complaints received about compliance with the 
contraceptive coverage requirement and clarified currently applicable 
guidance. Specifically, FAQs Part 51, Q9 was issued in response to 
complaints and public reports of potential violations of the 
contraceptive coverage requirement, including that plans and issuers 
and pharmacy benefit managers (PBMs) were not adhering to requirements 
for utilizing reasonable medical management techniques. The FAQs also 
highlighted several examples of such potential violations, including 
denying coverage for all or particular brand name contraceptives, even 
after the individual's attending provider determines and communicates 
to the plan or issuer that a particular service or FDA-approved, -
cleared, or -granted contraceptive product is medically necessary with 
respect to that individual; requiring individuals to fail first using 
numerous other services or FDA-approved, -cleared, or -granted 
contraceptive products within the same method of contraception before 
the plan or issuer will approve coverage for a service or FDA-approved, 
-cleared, or -granted contraceptive product that is medically 
appropriate for the individual, as determined by the individual's 
attending health care provider; requiring individuals to fail first 
using numerous other services or FDA-approved, -cleared, or -granted 
contraceptive products in other contraceptive methods before the plan 
or issuer will approve coverage for a service or FDA-approved, -
cleared, or -granted contraceptive product that is medically 
appropriate for the individual, as determined by the individual's 
attending health care provider; and failing to provide an acceptable 
exceptions process (for example, by requiring individuals to appeal an 
adverse benefit determination using the plan's or issuer's internal 
claims and appeals process, rather than providing an exceptions process 
that is easily accessible, transparent, sufficiently expedient, and not 
unduly burdensome).\38\
---------------------------------------------------------------------------

    \38\ FAQs Part 51, Q9 (Jan. 10, 2022), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-51.pdf.
---------------------------------------------------------------------------

    <bullet> Frequently Asked Questions on July 28, 2022 (FAQs Part 
54), which further clarified the contraceptive coverage requirement and 
currently applicable guidance. These FAQs clarified that plans and 
issuers must cover, without imposing cost-sharing requirements, items 
and services that are integral to a recommended contraceptive 
service.\39\ The FAQs also stated that plans and issuers must cover any 
FDA-approved, -cleared, or -granted contraceptive products and services 
that an individual and their attending provider have determined to be 
medically appropriate for the individual, regardless of whether those 
products or services are specifically identified in the categories 
listed in the HRSA-supported Guidelines.\40\ For contraceptive services 
or FDA-approved, -cleared, or -granted contraceptive products not 
included in a category described in the HRSA-supported Guidelines, the 
FAQs stated that plans and issuers may use reasonable medical 
management techniques to determine which specific products to cover 
without cost sharing only if multiple, substantially similar services 
or products that are not included in a category described in the HRSA-
supported Guidelines are medically appropriate for the individual. The 
FAQs further stated that if the individual's attending provider 
recommends a particular service or FDA-approved, -cleared, or -granted 
product not included in a category described in the HRSA-supported 
Guidelines based on a determination of medical necessity with respect 
to that individual, the plan or issuer must cover that service or 
product without cost sharing. The plan or issuer must defer to the 
determination of the attending provider and must make available an 
easily accessible, transparent, and sufficiently expedient exceptions 
process that is not unduly burdensome so the individual or their 
provider (or other individual acting as the individual's authorized 
representative) can obtain coverage for the medically necessary service 
or product for the individual without cost sharing as required under 
PHS Act section 2713 and its implementing regulations and guidance.\41\ 
The FAQs also encouraged plans and issuers to cover over-the-counter 
(OTC) emergency contraceptive products with no cost sharing when they 
are purchased by consumers without a prescription.\42\ FAQs Part 54, Q8 
further acknowledged that the Departments continued to receive 
complaints and reports that participants, beneficiaries, and enrollees 
were being denied contraceptive coverage, in some cases due to the 
application of medical management techniques that were not reasonable 
based on all of the relevant facts and circumstances. In addition to 
summarizing ongoing complaints similar to those highlighted in FAQs 
Part 51, Q9, the Departments also noted that they were aware of 
complaints that plans and issuers or PBMs were imposing age limits on 
contraceptive coverage rather than providing these benefits to all 
individuals with reproductive capacity. FAQs Part 54, Q13 also 
described actions within the scope of the authority of the Departments 
of Labor and HHS to enforce the requirements of PHS Act section 
2713.\43\
---------------------------------------------------------------------------

    \39\ FAQs Part 54, Q1 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
    \40\ Id. at Q2.
    \41\ Id. at Q3.
    \42\ Id. at Q5.
    \43\ See FAQs Part 54, Q5, Q8, and Q13 (July 28, 2022), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
---------------------------------------------------------------------------

    <bullet> Frequently Asked Questions on January 22, 2024 (FAQs Part 
64), which provided further clarifications regarding contraceptive 
coverage requirements, including providing guidance regarding a 
therapeutic equivalence approach. The FAQs explained that plans and 
issuers could adopt a therapeutic equivalence approach (in combination 
with an easily accessible, transparent, and sufficiently expedient 
exceptions process that is not unduly burdensome) to ensure the plan's 
or issuer's medical management techniques for contraceptive drugs and 
drug-led devices \44\ that are required to

[[Page 85755]]

be covered under PHS Act section 2713 are reasonable.\45\ Specifically, 
with respect to FDA-approved contraceptive drugs and drug-led devices, 
if a plan or issuer utilizes medical management techniques within a 
specified category described in the HRSA-supported Guidelines (or group 
of substantially similar products that are not included in a specified 
category), the Departments will generally consider such medical 
management techniques to be reasonable if the plan or issuer covers all 
FDA-approved contraceptive drugs and drug-led devices in that category 
(or group of substantially similar products) without cost sharing, 
other than those for which there is at least one therapeutic equivalent 
drug or drug-led device that the plan or issuer covers without cost 
sharing.
---------------------------------------------------------------------------

    \44\ In FAQs Part 64, the term ``drug-led device'' referred to a 
combination product, as defined under 21 CFR 3.2(e), that is 
comprised of a drug and a device, and for which the drug component 
provides the primary mode of action. The primary mode of action of a 
combination product is the single mode of action (that is, the 
action provided by the drug, device, or biological product) that 
provides the most important therapeutic action of the combination 
product. See 21 U.S.C. 353(g)(1)(C) and 21 CFR 3.2(m). As further 
discussed in section II.A.2 of the preamble to these proposed rules, 
the Departments propose a substantially similar definition of the 
term ``drug-led combination product'' in these proposed rules to 
refer to the same products for which the term ``drug-led device'' 
was used in FAQs Part 64.
    \45\ FAQs Part 64 (Jan. 22, 2024), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64.pdf and https://www.cms.gov/files/document/faqs-part-64.pdf.
---------------------------------------------------------------------------

C. Executive Orders on the Affordable Care Act and Reproductive Health

    On January 28, 2021, President Biden issued Executive Order 14009, 
``Strengthening Medicaid and the Affordable Care Act'' (E.O. 
14009).\46\ Section 3 of E.O. 14009 directs the Secretaries of the 
Departments (the Secretaries) to review all existing regulations, 
guidance documents, and policies to determine whether such actions are 
inconsistent with protecting and strengthening Medicaid and the ACA and 
making high-quality health care accessible and affordable for every 
American.
---------------------------------------------------------------------------

    \46\ 86 FR 7793.
---------------------------------------------------------------------------

    On April 5, 2022, President Biden issued Executive Order 14070, 
``Continuing To Strengthen Americans' Access to Affordable, Quality 
Health Coverage'' (E.O. 14070).\47\ Section 2 of E.O. 14070 reaffirms 
the goals and policy of E.O. 14009 and further directs agencies with 
responsibilities related to Americans' access to health coverage to 
consider and pursue agency actions that improve the comprehensiveness 
of coverage and protect consumers from low-quality coverage.
---------------------------------------------------------------------------

    \47\ 87 FR 20689.
---------------------------------------------------------------------------

    Following the U.S. Supreme Court decision in Dobbs v. Jackson 
Women's Health Organization (Dobbs),\48\ President Biden issued 
Executive Order 14076, ``Protecting Access to Reproductive Healthcare 
Services'' (E.O. 14076) on July 8, 2022. Section 3 of E.O. 14076 
requires the Secretary of HHS to identify potential actions to 
``protect and expand access to the full range of reproductive 
healthcare services, including actions to enhance family planning 
services such as access to emergency contraception'' and identify 
``ways to increase outreach and education about access to reproductive 
healthcare services, including by launching a public awareness 
initiative to provide timely and accurate information about such 
access, which shall . . . include promoting awareness of and access to 
the full range of contraceptive services.'' \49\
---------------------------------------------------------------------------

    \48\ 597 U.S. 215 (2022).
    \49\ 87 FR 42053.
---------------------------------------------------------------------------

    On June 23, 2023, President Biden issued Executive Order 14101, 
``Strengthening Access to Affordable, High-Quality Contraception and 
Family Planning Services'' (E.O. 14101).\50\ Section 2 of E.O. 14101 
directs the Secretaries to consider issuing guidance ``to further 
improve Americans' ability to access contraception, without out-of-
pocket expenses, under the Affordable Care Act'' and to consider 
additional actions ``to promote increased access to affordable over-
the-counter contraception, including emergency contraception.'' \51\
---------------------------------------------------------------------------

    \50\ 88 FR 41815.
    \51\ Id.
---------------------------------------------------------------------------

D. FDA Approval of Daily Over-the-Counter Oral Contraceptive

    On July 13, 2023, the FDA announced that it had approved a 
progestin-only birth control pill as the first daily oral contraceptive 
for use in the United States available without a 
prescription.<SUP>52 53</SUP> Interested parties, including health care 
provider associations, have supported the availability of a daily OTC 
oral contraceptive for its potential to improve access to affordable 
contraception, thereby improving management of family planning and 
reducing unintended pregnancies.\54\ Studies have shown that challenges 
with access and costs are among the most common reasons cited by women 
for not using contraception or having gaps in contraceptive use.\55\ 
One large, nationally representative study found 29 percent of women 
reported encountering barriers to obtaining or filling an initial 
prescription or refills of oral contraceptive pills, specifically 
citing insurance coverage, getting an appointment, not having a regular 
provider, and difficulty accessing a pharmacy.\56\ Accordingly, the 
availability of a daily OTC oral contraceptive could improve access to 
contraception if the product is affordable, including if it is covered 
by insurance without cost sharing, and as a result, could reduce the 
number of unintended pregnancies.\57\ Beginning in March 2024, an OTC 
oral contraceptive has become widely available for sale online and in 
stores under the brand name Opill[supreg], with a manufacturer's

[[Page 85756]]

suggested retail price ranging from $19.99 for a 1-month supply to 
$89.99 for a 6-month supply.\58\
---------------------------------------------------------------------------

    \52\ FDA (July 13, 2023). ``FDA Approves First Nonprescription 
Daily Oral Contraceptive,'' available at https://www.fda.gov/news-events/press-announcements/fda-approves-first-nonprescription-daily-oral-contraceptive.
    \53\ Progestin-only oral contraceptives are a product that is 
already available in a prescription form and are a category of 
contraceptives listed in the FDA Birth Control Guide, as referenced 
in the HRSA-supported Guidelines.
    \54\ See American Medical Association (2023). ``AMA Applauds FDA 
Approval of OTC Birth Control,'' available at https://www.ama-assn.org/press-center/press-releases/ama-applauds-fda-approval-otc-birth-control; The American College of Obstetricians and 
Gynecologists (2023). ``ACOG Praises FDA Approval of Over-the-
Counter Access to Birth Control Pill,'' available at https://www.acog.org/news/news-releases/2023/07/acog-praises-fda-approval-of-over-the-counter-access-to-birth-control-pill.
    \55\ See Key, K., Wollum, A., Asetoyer, C., Cervantes, M., 
Lindsey, A., Rivera, R., Robinson Flint, J., Zuniga, C., Sanchez, 
J., and Baum, S. (2023). ``Challenges accessing contraceptive care 
and interest in over-the-counter oral contraceptive pill use among 
Black, Indigenous, and people of color: An online cross-sectional 
survey,'' Contraception, available at https://doi.org/10.1016/j.contraception.2023.109950; Thompson, E. L., Galvin, A. M., Garg, 
A., Diener, A., Deckard, A., Griner, S. B., and Kline, N. S. (2023). 
``A socioecological perspective to contraceptive access for women 
experiencing homelessness in the United States,'' Contraception, 
available at https://doi.org/10.1016/j.contraception.2023.109991; 
Bessett, D., Prager, J., Havard, J., Murphy, D. J., Ag[eacute]nor, 
M., and Foster, A. M. (2015). ``Barriers to contraceptive access 
after health care reform: Experiences of young adults in 
Massachusetts,'' Women's Health Issues, available at https://doi.org/10.1016/j.whi.2014.11.002; and Johnson, E. R. (2022). 
``Health care access and contraceptive use among adult women in the 
United States in 2017,'' Contraception, available at https://doi.org/10.1016/j.contraception.2022.02.008.
    \56\ Grindlay, K., Grossman, D. (2016). ``Prescription Birth 
Control Access Among U.S. Women At Risk of Unintended Pregnancy,'' 
Journal of Women's Health, available at https://www.liebertpub.com/doi/10.1089/jwh.2015.5312.
    \57\ A recent study found that over 12 million adult women and 
nearly two million young women aged 15-17 would likely be interested 
in using an OTC oral contraceptive if it were free to them, but the 
numbers declined to 7.1 million adult women and 760,000 young women 
if the out-of-pocket cost of the contraceptive was $15. The same 
study indicated that the levels of interest would translate to an 
estimated eight percent decrease in unintended pregnancies 
(approximately 320,000 fewer) in one year among adult women when 
cost sharing was $0, and an estimated five percent decrease 
(approximately 199,000 fewer unintended pregnancies) if there were a 
monthly out-of-pocket cost of $15. See Wollum, A., Trussell, J., 
Grossman, D., and Grindlay, K. (2020). ``Modeling the Impacts of 
Price of an Over-the-Counter Progestin-Only Pill on Use and 
Unintended Pregnancy among U.S. Women,'' Women's Health Issues, 
available at https://www.sciencedirect.com/science/article/pii/S1049386720300037/pdfft?md5=903aee27ef3468f62abaf9091e0a957c&pid=1-s2.0-S1049386720300037-main.pdf.
    \58\ Lupkin, S., NPR (March 18, 2024). ``First over-the-counter 
birth control pill now for sale online,'' available at https://npr.org/sections/health-shots/2024/03/04/1235404522/opill-over-counter-birth-control-pill-contraceptive-shop.
---------------------------------------------------------------------------

E. OTC Preventive Products Request for Information

    As discussed in sections I.A and I.C of this preamble, the Biden-
Harris Administration has prioritized access to comprehensive, high-
quality contraception and family planning services as critical 
components of women's reproductive health and overall public health. In 
response to E.O. 14009, E.O. 14070, E.O.14076, and E.O. 14101, and 
following the FDA approval of an OTC oral contraceptive, as discussed 
in section I.D of this preamble, the Departments issued a ``Request for 
Information; Coverage of Over-the-Counter Preventive Services'' on 
October 4, 2023 (OTC Preventive Products RFI).\59\ The Departments 
issued the OTC Preventive Products RFI to gather public feedback 
regarding the potential benefits and costs of requiring plans and 
issuers to cover OTC preventive products \60\ without cost sharing and 
without a prescription; learn of any potential challenges associated 
with providing such coverage; understand whether and how providing such 
coverage would benefit consumers; and assess any potential burden that 
plans and issuers would face if required to provide such coverage.
---------------------------------------------------------------------------

    \59\ 88 FR 68519 (Oct. 4, 2023).
    \60\ For consistency with the OTC Preventive Products RFI, this 
preamble uses the term ``OTC preventive products'' to refer to 
recommended preventive services that may be made available to an 
individual without a prescription.
---------------------------------------------------------------------------

    The Departments received 376 unique comments in response to the OTC 
Preventive Products RFI, including comments from individuals; plans and 
issuers; PBMs; State government agencies; and advocacy organizations 
representing consumers, health care providers, group health plans, 
hospitals, and durable medical equipment suppliers. The Departments 
reviewed comments received in response to the OTC Preventive Products 
RFI as part of the development of these proposed rules. However, these 
proposed rules do not address all the issues on which information was 
requested.
    Many commenters stated that requiring plans and issuers to cover 
all recommended preventive services would promote health equity and 
improve health outcomes by reducing costs and administrative barriers 
to accessing preventive health care. Many commenters highlighted that 
prescription and cost-sharing requirements represent a particular 
barrier for people with lower incomes and Black, Indigenous, and People 
of Color (BIPOC) communities, and that requiring coverage of OTC 
preventive products without cost sharing and without a prescription 
would significantly lower these barriers, thereby increasing access to 
OTC preventive products in a manner that would be especially beneficial 
to lower-income and underserved populations.
    Many commenters highlighted the particular benefit to women of 
requiring plans and issuers to cover OTC contraceptive items without 
requiring a prescription and without cost-sharing requirements. Several 
commenters pointed out that neither section 2713 of the PHS Act nor its 
implementing regulations impose a specific prescription requirement on 
recommended contraceptive items. These commenters also highlighted 
HRSA's removal of ``as prescribed'' language which appeared in the 2011 
HRSA-supported Guidelines but does not appear in the 2016 or any 
subsequent version of the HRSA-supported Guidelines.\61\ In the view of 
these commenters, the existing prescription requirement is therefore 
based only on agency guidance that is within the authority of the 
Departments to revise.\62\
---------------------------------------------------------------------------

    \61\ See section I.A of this preamble for a discussion of the 
``as prescribed'' language.
    \62\ See, e.g., FAQs Part XII, Q4 (Feb. 20, 2013), available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html.
---------------------------------------------------------------------------

    Another commenter noted that, in the United States, approximately 
one-third of childbearing-aged women and those capable of becoming 
pregnant experience difficulties obtaining hormonal contraception, and 
that coverage of OTC oral contraception without a prescription and 
without cost sharing would improve access to reproductive care for this 
group. Several commenters highlighted the burdens of a prescription 
requirement on people seeking contraception, including requesting time 
off from work, unnecessary visits to the doctor, appointment wait 
times, and finding childcare, while a few other commenters specifically 
emphasized the importance of waiving cost sharing to make OTC 
contraceptive services truly accessible. One commenter noted that 
access to affordable contraception was particularly important within 
the context of widespread Medicaid coverage losses following the 
termination on March 31, 2023 of the continuous enrollment condition 
previously associated with the COVID-19 public health emergency 
(PHE).\63\ Many other commenters supported requiring coverage of OTC 
contraceptive services in order to ensure that women can access 
effective, affordable means of preventing unintended pregnancies in the 
wake of the Dobbs decision.
---------------------------------------------------------------------------

    \63\ See Center for Medicare and Medicaid Services (CMS), Center 
for Consumer Information and Insurance Oversight, Temporary Special 
Enrollment Period (SEP) for Consumers Losing Medicaid or the 
Children's Health Insurance Program (CHIP) Coverage Due to Unwinding 
of the Medicaid Continuous Enrollment Condition--Frequently Asked 
Questions (FAQ) (Jan. 27, 2023), available at https://www.cms.gov/technical-assistance-resources/temp-sep-unwinding-faq.pdf.
---------------------------------------------------------------------------

    In addition to comments highlighting the benefits to women of 
removing prescription and cost-sharing requirements for coverage of OTC 
contraceptive items, several commenters noted that consumers would 
benefit from increased access to other specific OTC preventive products 
if plans and issuers were required to cover those other products 
without a prescription and without cost sharing. For example, several 
commenters stated that coverage based on prescription requirements 
limits access to OTC tobacco cessation products. One of these 
commenters emphasized that prescription requirements are a particular 
barrier with respect to tobacco cessation because of the nature of 
nicotine addiction, which typically requires multiple quit attempts. In 
that commenter's view, removing cost-sharing and prescription 
requirements would allow people to access evidence-based treatment when 
they are motivated to make a quit attempt, without having to wait for a 
medical appointment. Conversely, another commenter who acknowledged 
that removing cost sharing on OTC tobacco cessation products could have 
a positive effect on access to these products, particularly for people 
with low incomes, also emphasized the role of clinicians in screening 
for and diagnosing tobacco use disorder and recommending or prescribing 
effective treatments. This commenter encouraged the Departments to make 
an effort to preserve the clinician-patient relationship with respect 
to tobacco cessation products to ensure that patients are properly 
connected to care, including biomedical and psychiatric services that 
may be comorbid with tobacco use disorder.
    Another commenter noted that a woman who is not pregnant or 
planning

[[Page 85757]]

to become pregnant may not be under the care of a prescribing health 
care provider but could still benefit from the USPSTF recommendation 
that women who could become pregnant should consume a daily folic acid 
supplement. A few commenters described the disparate occurrence of 
spina bifida in newborns born to Spanish-speaking people, which 
commenters believe could be reduced if plans and issuers were required 
to cover OTC folic acid without cost sharing or prescription 
requirements.
    However, several commenters identified operational barriers to 
widespread implementation of a requirement to cover all recommended OTC 
preventive products without cost sharing or a prescription. A few 
commenters noted potential strains on pharmacies, retailers, and the 
existing health care delivery system; fraud and abuse threats; and 
potential cost increases for plan sponsors and plan participants. For 
example, one commenter cited the administrative and cost burdens that 
pharmacies and retailers could incur if they were required to cover the 
upfront costs of OTC preventive products and pursue post-claim 
reimbursements. In that commenter's view, requiring plans and issuers 
to provide coverage of OTC preventive products without cost sharing 
could also facilitate fraudulent behavior, including sale to 
unauthorized persons or re-sale outside of the health care market, that 
could in turn create a shadow market based on overuse and misuse. This 
commenter highlighted the existing significant clinical and 
administrative burdens that already strain pharmacist and retailer 
resources (ranging from filling and dispensing medications to providing 
immunizations, patient counseling, and information about insurance 
eligibility and coverage), and expressed concern that the 
responsibility for educating consumers about potential access to and 
appropriateness of OTC contraceptives would fall to pharmacists and 
retailers at the point of sale. Another commenter noted that requiring 
coverage of OTC preventive products such as contraceptives, OTC 
naloxone, and smoking cessation products without cost sharing or a 
prescription would increase access to such products but advised that 
such requirements would increase administrative burden on pharmacists 
by increasing workload and costs and decreasing reimbursement for vital 
patient counseling and additional services. One commenter indicated 
that using a credit card (rather than a debit card or paper 
reimbursement system) would facilitate coverage of OTC preventive 
products, but also noted that the use of a credit card without a fixed 
spending limit would be more likely to lead to fraud and would 
necessitate implementing systems for freezing or repaying cards in the 
case of misuse. Another commenter indicated general support for access 
to recommended preventive products without cost sharing but stated that 
prescription requirements were necessary for many products to ensure 
that individual patients receive appropriate care. In that commenter's 
view, the cost associated with applying a market-wide OTC preventive 
products coverage requirement would disrupt and likely outweigh any 
benefits of changing long-established coverage patterns. This commenter 
recommended that the Departments consider establishing a standing order 
for Opill[supreg] only, in order to conduct a targeted roll-out of a 
potential broader OTC preventive products coverage requirement without 
overburdening the health care system by attempting to implement the 
changes for all OTC preventive products at once. The same commenter, 
however, warned against requiring coverage of OTC products that do not 
have meaningful market competition, such as Opill[supreg], to avoid 
inadvertently driving up retail prices. Another commenter shared 
similar concerns regarding the potential for generating demand for 
preventive items and services that would ultimately be unused. A few 
commenters noted the particular cost and negative environmental impact 
that could be realized if OTC breastfeeding supplies with no cost 
sharing led to overconsumption of such products. One commenter urged 
the Departments to avoid rushing to require coverage of all OTC 
preventive products in order to provide sufficient advanced notice to 
allow plan sponsors to address operational and implementation issues.
    While several commenters expressed concern that current 
prescription requirements restrict access to breastfeeding services and 
supplies, many commenters stated that removing the prescription 
requirement for breastfeeding services and supplies could have a 
detrimental effect on breastfeeding parents and newborns. These 
commenters stated that consumers currently benefit from the expertise 
provided by lactation consultants and other specially trained staff at 
durable medical equipment suppliers contracted with plans and issuers 
to provide breast pumps. These commenters also expressed the view that 
removing the prescription requirement would make it more likely that a 
consumer would be forced to select breastfeeding supplies in a retail 
environment with fewer breast pump options and less privacy and 
support.
    In the OTC Preventive Products RFI, the Departments also requested 
feedback from interested parties based on their experiences with the 
requirement to cover OTC COVID-19 diagnostic tests during the COVID-19 
PHE.\64\ During the COVID-19 PHE, plans and issuers were required to 
cover OTC COVID-19 diagnostic tests without a prescription from a 
health care provider and without imposing any cost-sharing 
requirements, prior authorization, or other medical management 
requirements. However, the Departments permitted plans and issuers that 
met certain safe harbor requirements to implement cost and quantity 
limits to contain costs and combat potential fraud and abuse with 
respect to coverage of OTC COVID-19 diagnostic tests. A few commenters 
encouraged the Departments to use experiences with coverage of OTC 
COVID-19 diagnostic tests as a roadmap for future coverage of other 
recommended preventive services. However, another commenter cautioned 
the Departments against regulating the routine use of recommended 
preventive services by applying requirements used during an 
unprecedented public health emergency, in order to avoid issues the 
commenter reported taking place during the COVID-19 PHE, such as 
overconsumption of COVID-19 diagnostic tests, price gouging of products 
by manufacturers, and limited opportunities for health plans to contain 
waste and abuse. Another commenter acknowledged that coverage 
requirements for OTC COVID-19 diagnostic tests improved patient access 
to the tests by removing the barriers related to out-of-pocket costs 
and obtaining prescriptions but described a number of other issues 
associated with the testing coverage requirement. According to this 
commenter, implementation challenges included below-cost reimbursement, 
inconsistent requirements across plans and providers, and lack of 
reimbursement for pharmacies. In particular, this commenter noted that 
the average cost to a retail pharmacy provider to dispense a drug--
separate from the cost of acquiring the medication itself--is $12.40, 
and that any future OTC coverage requirements should reimburse 
pharmacies for both the acquisition and dispensing of products. Another 
commenter, citing the speed with which

[[Page 85758]]

the OTC COVID-19 diagnostic testing program was implemented, urged the 
Departments to proceed deliberately with the implementation of any 
broader OTC preventive products coverage requirements. According to 
this commenter, the rapid implementation of the testing coverage 
requirements during the PHE contributed to consumer confusion and led 
to many thousands of consumers failing to seek reimbursement for tests 
that were eligible to be covered.
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    \64\ See 88 FR 68519, 68523-24 (Oct. 4, 2023).
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F. Transparency in Coverage Under the ACA and Implementing Regulations

    Section 2715A of the PHS Act \65\ provides that non-grandfathered 
group health plans and health insurance issuers offering non-
grandfathered group or individual health insurance coverage must comply 
with section 1311(e)(3) of the ACA,\66\ which addresses transparency in 
health coverage and imposes certain reporting and disclosure 
requirements for health plans that are seeking certification as 
qualified health plans (QHPs) to be offered on an American Health 
Benefits Exchange (generally referred to as an Exchange or Marketplace) 
(as defined by section 1311(b)(1) of the ACA). A plan or issuer of 
coverage that is not offered through an Exchange and that is subject to 
section 2715A of the PHS Act is required to submit the required 
information to the Secretary of HHS and the relevant State's insurance 
commissioner, and to make that information available to the public.
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    \65\ 42 U.S.C. 300gg-15a.
    \66\ 42 U.S.C. 18031(e)(3).
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    Section 1311(e)(3)(C) of the ACA requires plans, as a requirement 
of certification as a QHP, to permit individuals to learn about the 
amount of cost sharing (including deductibles, copayments, and 
coinsurance) that the individual would be responsible for paying with 
respect to the furnishing of a specific item or service by an in-
network provider in a timely manner upon the request of the individual. 
Section 1311(e)(3)(C) of the ACA specifies that, at a minimum, such 
information must be made available to the individual through an 
internet website and through other means for individuals without access 
to the internet.
    On March 27, 2012, HHS issued the ``Patient Protection and 
Affordable Care Act; Establishment of Exchanges and Qualified Health 
Plans; Exchange Standards for Employers'' final rule (Exchange 
Establishment final rule) that implemented sections 1311(e)(3)(A) 
through (C) of the ACA at 45 CFR 155.1040(a) through (c) and 
156.220.\67\ The Exchange Establishment final rule created standards 
for QHP issuers to submit specific information related to transparency 
in coverage.
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    \67\ 77 FR 18310 (Mar. 27, 2012).
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    On November 12, 2020, the Departments issued ``Transparency in 
Coverage'' final rules (Transparency in Coverage final rules) 
implementing transparency reporting requirements for non-grandfathered 
group health plans and health insurance issuers offering non-
grandfathered group and individual health insurance coverage.\68\ 
Implementing section 1311(e)(3)(C) of the ACA and section 2715A of the 
PHS Act, these rules require plans and issuers to disclose cost-sharing 
information for all covered items and services available to a 
participant, beneficiary, or enrollee through an internet-based self-
service tool via the plan's or issuer's member portal or, if requested 
by the individual, on paper.\69\ The requirement to disclose cost-
sharing information for all covered items and services includes covered 
contraceptive items or services.
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    \68\ 85 FR 72158 (Nov. 12, 2020).
    \69\ The Consolidated Appropriations Act, 2021 imposed a largely 
duplicative requirement and added a requirement that the information 
also be provided by telephone, upon request. See also FAQs Part 49, 
Q3 (Aug. 20, 2021), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-49.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-49.pdf.
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    The Transparency in Coverage final rules enumerate seven cost-
related elements that plans and issuers must disclose in response to a 
search query by a participant, beneficiary, or enrollee for a covered 
item or service furnished by a provider or providers. The self-service 
tool must provide an estimate of the participant's, beneficiary's, or 
enrollee's cost-sharing liability for the covered item or service, 
which is calculated based on the following elements: (a) accumulated 
amounts with respect to any deductibles or maximum out-of-pocket 
limits; and either (b) the in-network rate, comprising a negotiated 
rate or underlying fee schedule rate as applicable to the payment 
model; or (c) an out-of-network allowed amount or any other rate that 
provides a more accurate estimate of an amount a plan or issuer will 
pay for the requested covered item or service from an out-of-network 
provider. Self-service tool results must also reflect a list of the 
items and services included in a bundled payment arrangement, if 
applicable; notification that coverage of a specific item or service is 
subject to a prerequisite, as applicable; and certain disclaimers in 
plain language describing the limitations of the estimate or other 
qualifications regarding the cost-sharing information disclosed.
    With respect to requests for cost-sharing information for items or 
services that are recommended preventive services under section 2713 of 
the PHS Act, if the plan or issuer cannot determine whether the request 
is for preventive or non-preventive purposes, the plan or issuer must 
display the cost-sharing liability that applies for non-preventive 
purposes along with a statement that the item or service may not be 
subject to cost sharing if it is billed as a preventive service. 
Displaying a non-zero cost-sharing liability in these circumstances 
helps protect against unexpected medical bills by ensuring 
participants, beneficiaries, and enrollees are aware of their potential 
cost-sharing liability while the statement ensures that consumers are 
made aware they can access recommended preventive services without cost 
sharing. Alternatively, the Transparency in Coverage final rules permit 
a plan or issuer to allow a participant, beneficiary, or enrollee to 
request cost-sharing information for the specific preventive or non-
preventive item or service by including terms such as ``preventive,'' 
``non-preventive,'' or ``diagnostic'' as a means to request the most 
accurate cost-sharing information.
    Plans and issuers must ensure users can search for cost-sharing 
information for a covered item or service by a specific in-network 
provider or by all in-network providers using either a descriptive term 
or a billing code. For covered items or services furnished by out-of-
network providers, users can search for an out-of-network allowed 
amount, percentage of billed charges, or other rate that provides a 
reasonably accurate estimate of the amount a plan or issuer will pay 
for a covered item or service provided by out-of-network providers. 
Users must also be able to input other factors utilized by the plan or 
issuer that are relevant for determining the applicable cost-sharing 
information or out-of-network allowed amount, such as location of 
service, facility name, or dosage and permit refining and reordering of 
search results.

II. Overview of the Proposed Rules

A. Coverage of Recommended Preventive Services

1. Reasonable Medical Management of Recommended Preventive Services: 
Exceptions Process
    The Departments' regulations implementing section 2713 of the PHS 
Act aim to strike a balance between

[[Page 85759]]

ensuring participants, beneficiaries, and enrollees do not face undue 
barriers to accessing their coverage of recommended preventive services 
as required by law and allowing plans and issuers to contain costs, 
promote efficient delivery of care, and minimize risks of fraud, waste, 
and abuse. To this end, current regulations permit plans and issuers to 
use reasonable medical management techniques to determine the 
frequency, method, treatment, or setting for coverage of a recommended 
preventive service, to the extent not specified in the applicable 
recommendation or guideline.\70\ The Departments have previously 
explained, in the context of certain recommended preventive services, 
that they generally do not consider medical management techniques with 
respect to recommended preventive services to be reasonable absent the 
availability of an exceptions process.\71\
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    \70\ 26 CFR 54.9815-2713(a)(4); 29 CFR 2590.715-2713(a)(4); and 
45 CFR 147.130(a)(4).
    \71\ See FAQs Part XXVI, Q2 (May 11, 2015), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf; FAQs Part 64, Q4 (Jan. 22, 2024), 
available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64.pdf and https://www.cms.gov/files/document/faqs-part-64.pdf.
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    As noted in previously issued guidance and described in section I.B 
of this preamble, the Departments continue to receive complaints of 
potential violations related to the application of medical management 
techniques that are not reasonable, including failing to provide an 
exceptions process that meets the standards set forth in guidance.\72\ 
Further, the U.S. House of Representatives' Committee on Oversight and 
Reform (Oversight Committee) published a report in October 2022 
documenting the findings of its investigation into contraceptive 
coverage for individuals enrolled in private health coverage. The 
Oversight Committee found that insurers and PBMs surveyed denied an 
average of at least 40 percent of exception requests related to 
contraceptive coverage, with one PBM denying more than 80 percent of 
requests in a year.\73\ To reinforce the requirement that medical 
management techniques must be reasonable, the Departments propose to 
codify that plans and issuers that utilize reasonable medical 
management techniques with respect to recommended preventive services 
would be required to accommodate any individual for whom a particular 
item or service would not be medically appropriate, as determined by 
the individual's attending provider, by having a mechanism for covering 
or waiving the otherwise applicable cost sharing for the medically 
necessary item or service. Specifically, under these proposed rules, 
consistent with previous guidance,\74\ if utilizing reasonable medical 
management techniques, a plan or issuer would be required to have an 
easily accessible, transparent, and sufficiently expedient exceptions 
process that is not unduly burdensome on the individual or a provider 
(or other person acting as the individual's authorized representative) 
under which the plan or issuer covers without cost sharing the 
recommended preventive service according to the frequency, method, 
treatment, or setting determined to be medically necessary with respect 
to the individual, as determined by the individual's attending 
provider. The exceptions process would ensure that an individual can 
access medically necessary recommended preventive services without cost 
sharing and would prevent medical management from functioning as an 
unreasonable barrier to coverage under section 2713 of the PHS Act. The 
Departments are authorized to issue this proposal, implementing section 
2713 of the PHS Act, by section 9833 of the Code, section 734 of ERISA, 
and section 2792 of the PHS Act. Nothing in this proposal, if 
finalized, would require an entity to provide coverage or payments for 
a contraceptive for which they have an exemption under 26 CFR 54.9815-
2713A, 29 CFR 2590.715-2713A, and 45 CFR 147.131 through 45 CFR 
147.133.
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    \72\ See, e.g., FAQs Part 51, Q9 (Jan. 10, 2022), available at 
https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-51.pdf; FAQs Part 54, Q8 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
    \73\ U.S. House of Representatives Committee on Oversight and 
Reform, (Oct. 25, 2022). ``Barriers to Birth Control: An Analysis of 
Contraceptive Coverage and Costs for Patients with Private 
Insurance,'' available at https://oversightdemocrats.house.gov/sites/evo-subsites/democrats-oversight.house.gov/files/2022-10-25.COR%20PBM-Insurer%20Report.pdf.
    \74\ See FAQs Part XXVI, Q3 (May 11, 2015), available at https:/
/www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf; FAQs Part 31, Q2 (Apr. 20, 2016), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-31_final-4-20-16.pdf. See also FAQs Part XII, Q14 (Feb. 20, 2013), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and 
www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html; FAQs Part 51, Q8-9 (Jan. 10, 2022), 
available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf and https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/FAQs-Part-51.pdf; FAQs Part 54, Q9, (July 28, 2022), available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf; FAQs Part 64 (Jan. 22, 
2024) available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64 and https://www.cms.gov/files/document/faqs-part-64.pdf.
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    While prior guidance has generally focused on the use of an 
exceptions process in the context of coverage of contraceptive 
services, it has not been limited to that context. For example, the 
Departments' guidance with respect to coverage of PrEP to prevent HIV 
acquisition has similarly stated that where a plan or issuer uses 
reasonable medical management techniques--such as covering a generic 
version of PrEP without cost sharing and imposing cost sharing on an 
equivalent branded version--a plan or issuer must have an easily 
accessible, transparent, and sufficiently expedient exceptions process 
that is not unduly burdensome on the individual or a provider (or other 
individual acting as an authorized representative) that waives 
otherwise applicable cost sharing for the particular PrEP medication 
(generic or branded) for any individual for whom the plan's or issuer's 
preferred medication ``would be medically inappropriate, as determined 
by the individual's health care provider.'' \75\
---------------------------------------------------------------------------

    \75\ See FAQs Part 47, introduction to Q3 (July 19, 2021), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-47.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-part-47.pdf (``[T]he Departments have clarified in previous guidance 
that plans and issuers must accommodate any individual for whom a 
particular medication (generic or brand name) would be medically 
inappropriate, as determined by the individual's health care 
provider, by having a mechanism for waiving the otherwise applicable 
cost sharing for the brand or non-preferred brand version. If 
utilizing reasonable medical management techniques, plans and 
issuers must have an easily accessible, transparent, and 
sufficiently expedient exceptions process that is not unduly 
burdensome.'')
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    Therefore, the Departments propose to reorganize and amend 26 CFR 
54.9815-2713(a)(4), 29 CFR 2590.715-2713(a)(4), and 45 CFR 
147.130(a)(4) by adding a new paragraph (a)(4)(i) to include existing 
language with minor technical edits for clarity and to add a new 
paragraph (a)(4)(ii) to specify that, in order for a plan's or issuer's 
medical management techniques with respect to a recommended preventive 
service to be considered reasonable, the plan or issuer would be 
required to have an

[[Page 85760]]

easily accessible, transparent, and sufficiently expedient exceptions 
process that is not unduly burdensome on a participant, beneficiary, or 
enrollee or attending provider \76\ (or other person acting as the 
individual's authorized representative). Under this proposal, an 
exceptions process would be required to ensure that an individual can 
receive coverage, without cost-sharing requirements, for a recommended 
preventive service according to the frequency, method, treatment, or 
setting that is medically necessary with respect to the individual, as 
determined by the individual's attending provider. For example, a plan 
or issuer may typically provide coverage without cost sharing for only 
a generic version of a recommended preventive service; an individual 
who experiences side effects from the covered generic version and whose 
attending provider has determined that the brand-name version of the 
recommended preventive services is medically necessary for the 
individual would be able to use the exceptions process to obtain the 
brand-name version without cost sharing, even though the plan or issuer 
typically does not provide coverage for the brand-name version (or 
provides coverage with cost sharing) This proposed change is necessary 
to effectuate the statutory requirement under PHS Act section 2713 that 
plans and issuers provide coverage of recommended preventive services 
without cost sharing, because without such an exceptions process, a 
plan's or issuer's medical management techniques could have the effect 
of preventing an individual from receiving coverage without cost 
sharing of medically necessary recommended preventive services.
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    \76\ For purposes of these proposed rules, consistent with 
previous guidance described in section I.B of this preamble, an 
attending provider would mean an individual who is licensed under 
applicable State law, who is acting within the scope of the 
provider's license, and who is directly responsible for providing 
care to the patient relating to the recommended preventive services. 
Therefore, a plan, issuer, hospital, or managed care organization 
would not be an attending provider. The reference to an ``attending 
provider'' (rather than simply a ``provider,'' as referenced in 
previously issued guidance) is based on the Departments' 
understanding that an attending provider is likely to act as an 
individual's authorized representative when pursuing an exceptions 
process, and for consistency with the requirement that an attending 
provider determine medical necessity. See also, fn. 33.
---------------------------------------------------------------------------

    Under this proposal and consistent with previous guidance, a plan 
or issuer would be required to defer to the determination of an 
individual's attending provider regarding medical necessity with 
respect to the individual. Previously issued guidance has used the 
terms ``medically necessary'' and ``medically appropriate'' 
interchangeably when referring to the appropriate standard for this 
clinical determination. However, in these proposed rules, the 
Departments propose to use the phrase ``medically necessary'' to 
establish uniform terminology and avoid confusion from the use of 
different terms.\77\ The Departments have determined that a standard 
based on ``medical necessity'' would more accurately comport with the 
goal of allowing plans and issuers to use reasonable medical management 
techniques to control costs, while ensuring every participant, 
beneficiary, and enrollee receives coverage without cost sharing for a 
form of a recommended preventive service that is suitable for the 
individual.
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    \77\ The Departments proposal to use the term and standard of 
``medically necessary'' with respect to the exceptions process in 
these proposed rules should not be interpreted as changing the 
standard or meaning of the Departments' previously published 
guidance with respect to the coverage of preventive services.
---------------------------------------------------------------------------

    These proposed rules use the term ``medically appropriate'' to 
refer to a range of potential options that are generally acceptable to 
address a condition or achieve a preventive health goal. However, a 
preventive service that is medically appropriate for most individuals 
(to whom the recommendation or guidelines applies) may not be medically 
appropriate to address a condition or achieve a preventive health goal 
in the context of other health factors specific to a certain 
individual. In these cases, another form of the preventive service 
would be medically necessary for that individual. In making a 
determination of whether a service is medically necessary, a provider 
might consider factors such as severity of side effects, differences in 
permanence and reversibility of a recommended preventive service, and 
ability to adhere to the appropriate use of the recommended preventive 
service, as determined by the attending provider. Under these proposed 
rules, if the recommended preventive service covered by the plan or 
issuer is not medically appropriate for the individual, as determined 
by the individual's attending provider, the plan or issuer would be 
required, through the exceptions process, to cover without cost sharing 
an alternative recommended preventive service that the individual's 
attending provider determines is medically necessary for that 
individual.\78\
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    \78\ Similarly, if the plan or issuer uses reasonable medical 
management techniques to limit the frequency or setting under which 
a recommended preventive service is covered without cost sharing and 
the individual's attending provider makes a determination that a 
different frequency or setting is medically necessary for a 
participant, beneficiary, or enrollee, under these proposed rules, 
the plan or issuer would be required to provide coverage without 
cost sharing for the recommended preventive service according to the 
frequency or setting the individual's attending provider determines 
to be medically necessary with respect to the individual.
---------------------------------------------------------------------------

    For example, if a plan typically covers a generic tobacco cessation 
product (Gum A) without cost sharing, but an individual is allergic to 
an inactive ingredient in Gum A and the individual's attending provider 
determines that Gum B is medically necessary for the individual to 
achieve the preventive health benefits of the recommended preventive 
service without adverse side effects, then the plan or issuer would be 
required to provide coverage of Gum B without cost sharing through the 
exceptions process. However, if Gum A is medically appropriate for the 
individual, the plan would not be required to provide coverage of Gum B 
without cost sharing through the exceptions process solely on the basis 
that Gum B is also medically appropriate for the individual.
    The Departments request comment on the terminology used in the 
context of the exceptions process. The Departments also request comment 
generally on any operational or technical barriers to implementing the 
proposed requirement that plans and issuers defer to the attending 
provider's determination of medical necessity using an exceptions 
process for recommended preventive services separate from the required 
internal claims and appeals process,\79\ and what additional guidance 
or requirements would support implementation of this requirement (for 
example, with respect to documentation of the determination or 
communication with the individual or their attending provider or other 
representative regarding a request for a coverage exception).
---------------------------------------------------------------------------

    \79\ See section 2719 of the PHS Act (42 U.S.C. 300gg-19); 26 
CFR 54.9815-2719; 29 CFR 2590.715-2719; and 45 CFR 147.136.
---------------------------------------------------------------------------

    Consistent with prior guidance, the Departments would determine 
whether a plan's or issuer's exceptions process is easily accessible, 
transparent, sufficiently expedient, and not unduly burdensome based on 
all relevant facts and circumstances, including whether and how a plan 
or issuer provides notice of the availability of an exceptions process 
and what steps an individual or their provider or other authorized 
representative is required to

[[Page 85761]]

initiate and complete in order to seek an exception.\80\
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    \80\ FAQs Part 54, Q9 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
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    For this purpose, the Departments would consider an exceptions 
process to be easily accessible if plan documentation includes relevant 
information regarding the exceptions process under the plan or 
coverage, including how to access the exceptions process without 
initiating an appeal pursuant to the plan's or issuer's internal claims 
and appeals procedures, the types of reasonable information the plan or 
issuer requires as part of a request for an exception, and contact 
information for a representative of the plan or issuer who can answer 
questions related to the exceptions process. The Departments would also 
encourage plans and issuers to make this information available in a 
format and manner that is readily accessible, such as electronically 
(on a website, for example) and on paper. The Departments request 
comment on how plans and issuers could ensure that this information is 
readily available and accessible, such as any specific formats, 
mechanisms, or other best practices that could promote access to 
information about the exceptions process.
    The Departments would consider an exceptions process to be 
transparent if, at a minimum, the information relevant to the 
exceptions process (including, if used, a standard exceptions process 
form with instructions) is included and prominently displayed in plan 
documents (including in, or along with, the summary plan description 
for plans subject to ERISA), and in any other plan materials, including 
on the plan's or issuer's website, that describe the terms of the 
plan's or issuer's coverage of preventive services. The Departments 
request comment on the extent to which plans and issuers currently make 
such information available and accessible and to whom (for example, to 
prospective and current participants, beneficiaries, and enrollees and 
their providers), whether any additional individuals or groups should 
have access to this information if this proposal is finalized, and 
whether the Departments should finalize more specific standards 
regarding transparency or accessibility of information about the 
exceptions process in regulation.
    The Departments would consider an exceptions process to be 
sufficiently expedient if it makes a determination of a claim according 
to a timeframe and in a manner that takes into account the nature of 
the claim (for example, pre-service or post-service) and the medical 
exigencies involved for a claim involving urgent care. The Departments 
request comment on appropriate additional standards for an exceptions 
process to be considered sufficiently expedient under these proposed 
rules. Specifically, the Departments request comment on whether the 
regulations should contain specific timeframes, and if so, what 
timeframes would be appropriate, as well as whether the regulations 
should specify the manner in which plans and issuers should issue a 
determination (for example, on paper, electronically, or both).
    For example, as the Departments specifically noted in prior 
guidance, it would be unduly burdensome on participants, beneficiaries, 
and enrollees for a plan or issuer to deny coverage without cost 
sharing and require an individual or their authorized representative to 
file an appeal under the plan's or issuer's process for appealing 
adverse benefit determinations in order to obtain an exception to the 
standard contraceptive coverage policy.\81\ Under 26 CFR 54.9815-2719, 
29 CFR 2560.503-1, 29 CFR 2590.715-2719, and 45 CFR 147.136, plans and 
issuers must render a determination on an internal appeal in no more 
than 15 calendar days (in the case of a pre-service claim) or no more 
than 30 calendar days (in the case of a post-service claim). Because 
most claims for recommended preventive services likely would not meet 
the definition of a ``claim involving urgent care,'' \82\ the expedited 
timelines that apply to an appeal of a claim involving urgent care 
likely would not apply to a claim for a recommended preventive service. 
In the absence of a separate exceptions process, an individual could 
therefore be required to pursue a standard internal appeals process to 
seek coverage of a recommended preventive service, which could result 
in a coverage delay of up to 30 calendar days for a post-service claim 
or 15 calendar days for a pre-service claim. Such a delay, when 
combined with the ability of plans and issuers to use medical 
management techniques to limit coverage of recommended preventive 
services outside of an exceptions process, is not aligned with the 
statutory requirement to provide coverage without cost sharing for all 
required preventive services, because many individuals would be 
compelled to pay out-of-pocket for the recommended preventive service 
determined by their attending provider to be medically necessary or 
accept the form of the recommended preventive service covered by the 
plan or issuer as a result of medical management techniques, even if it 
may cause adverse effects that an alternate form of the recommended 
preventive service would not cause.
---------------------------------------------------------------------------

    \81\ FAQs Part 54, Q10 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf. An adverse benefit determination means an 
adverse benefit determination as defined in 29 CFR 2560.503-1, as 
well as any rescission of coverage, as described in 45 CFR 147.128 
(whether or not, in connection with the rescission, there is an 
adverse effect on any particular benefit at that time). See 26 CFR 
54.9815-2719, 29 CFR 2560.503-1, 29 CFR 2590.715-2719, and 45 CFR 
147.136 for regulations related to internal claims and appeals 
processes.
    \82\ A ``claim involving urgent care,'' defined at 29 CFR 
2560.503-1(m)(1) and adopted at 26 CFR 54.9815-2719(b)(2)(ii)(B), 29 
CFR 2590.715-2719(b)(2)(ii)(B), and 45 CFR 147.136(b)(2)(ii)(B), is 
``any claim for medical care or treatment with respect to which the 
application of the time periods for making non-urgent care 
determinations--(A) Could seriously jeopardize the life or health of 
the claimant or the ability of the claimant to regain maximum 
function, or, (B) In the opinion of a physician with knowledge of 
the claimant's medical condition, would subject the claimant to 
severe pain that cannot be adequately managed without the care or 
treatment that is the subject of the claim.'' Plans and issuers 
generally must render determinations regarding claims involving 
urgent care as soon as possible, accounting for medical exigencies, 
and not later than 72 hours after receipt of the claim by the plan.
---------------------------------------------------------------------------

    Therefore, a plan or issuer would not have an easily accessible, 
transparent, and sufficiently expedient exceptions process that is not 
unduly burdensome on the individual (or provider or other person acting 
as the individual's authorized representative) under these proposed 
rules if the plan or issuer requires participants, beneficiaries, or 
enrollees to appeal an adverse benefit determination using the plan's 
or issuer's internal claims and appeals process as the means to obtain 
an exception. The Departments request comment on whether plans and 
issuers should be permitted to require an individual or their 
authorized representative to use the existing process for urgent care 
claims under 26 CFR 54.9815-2719(b)(2)(ii)(B), 29 CFR 2560.503-
1(b)(2)(ii)(B), and 45 CFR 147.136(b)(2)(ii)(B) (regardless of whether 
the recommended preventive service meets the definition of a ``claim 
involving urgent care'') to obtain an exception to the standard 
preventive services coverage policy. The Departments also request 
comment on whether a health plan that is subject to the essential 
health benefit (EHB) prescription drug exception process

[[Page 85762]]

standards at 45 CFR 156.122(c) \83\ should be permitted to require an 
individual or their authorized representative to use the existing 
standard or expedited prescription drug exception request process when 
seeking an exception for a recommended preventive service that is a 
prescription drug, or all recommended preventive services.
---------------------------------------------------------------------------

    \83\ Separately from requirements related to appeals of adverse 
benefit determinations, HHS regulations at 45 CFR 156.122(c) state 
that a health plan does not provide essential health benefits (EHBs) 
unless it provides a standard and expedited exceptions process for 
prescription drugs through which an enrollee, the enrollee's 
designee, or the enrollee's prescribing physician (or other 
prescriber) can receive a coverage determination within 72 hours 
(for a standard exception) or no later than 24 hours (for an 
expedited exception, in the case of exigent circumstances).
---------------------------------------------------------------------------

    The Departments previously noted that plans and issuers may develop 
a standard exceptions process form with instructions as part of 
ensuring that the plan's or issuer's exceptions process is easily 
accessible, transparent, sufficiently expedient, and not unduly 
burdensome on the individual or provider (or other individual acting as 
a patient's authorized representative).\84\ A standardized form that is 
not unnecessarily long and that has clear instructions could reduce 
burden on individuals or their authorized representative. The proposed 
amendments at 26 CFR 54.9815-2713(a)(4)(ii), 29 CFR 2590.715-
2713(a)(4)(ii), and 45 CFR 147.130(a)(4)(ii) would not require that 
plans and issuers develop and utilize a standard exceptions process 
form. However, the Departments continue to encourage plans and issuers 
to make any such standard exceptions process form, whether developed by 
a plan or issuer, or the Medicare Part D Coverage Determination form, 
readily available, both in paper and electronically (such as on a 
website). The Departments request comment on whether the Medicare Part 
D Coverage Determination form, or another existing format, would be an 
appropriate model for plans and issuers implementing a standardized 
exceptions process under these proposed rules. Alternatively, the 
Departments request comment on whether it would be beneficial to 
interested parties if the Departments developed and made available a 
new standard form for an exceptions process, what information should be 
included in any such form, and whether use of such a standardized form 
should be required or optional. The Departments anticipate that most, 
if not all, plans and issuers have an existing exceptions process for 
recommended preventive services, or a process for other services that 
can be adapted to meet these requirements for recommended preventive 
services at minimal cost. The Departments request comment on this 
assumption and on all other aspects of this proposal.
---------------------------------------------------------------------------

    \84\ FAQs Part 54, Q9 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
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2. Coverage of Contraceptive Items
    Section 2713(a)(4) of the PHS Act was enacted to ensure that plans 
and issuers cover women's preventive health needs. Contraceptive 
coverage is an essential component of women's health care, as 
recognized by its inclusion in the HRSA-supported Guidelines, in part 
because contraception is effective at reducing unintended pregnancies 
and associated negative maternal-infant outcomes.\85\ Unintended 
pregnancies, which account for approximately 42 percent of pregnancies 
annually in the United States, are a major public health 
concern.<SUP>86 87</SUP> Coverage requirements that promote equitable 
access to medically appropriate contraceptive items and services are an 
essential component of high-quality reproductive health care with wide-
ranging social and economic benefits.\88\ Research shows that many 
women are not using their contraceptive of choice, for reasons that 
include concerns about side effects, cost, lack of availability, or 
inability to get a provider appointment.\89\ Coverage that allows 
individuals to identify and obtain a medically necessary contraceptive 
(accounting for variables such as hormonal properties, side effects, 
and delivery mechanisms, among other factors) without cost sharing 
could improve quality of life, reduce behaviors such as discontinuing 
contraception, and result in more effective use of contraception to 
prevent unintended pregnancy.\90\ As noted in the preamble to the 2023 
proposed rules, increased contraceptive coverage can improve access to 
care, and therefore also help to address racial inequities in 
reproductive health care that contribute to lifelong disproportionate 
health outcomes for women in underserved communities, including 
disparate maternal health outcomes.\91\
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    \85\ Nelson, H., Darney, B., Ahrens, K., Burgess, A., Jungbauer, 
R., Cantor, A., Atchison, C., Eden, K., Goueth, R., Fu, R. (2002). 
``Associations of Unintended Pregnancy With Maternal and Infant 
Health Outcomes: A Systematic Review and Meta-analysis,'' JAMA, 
available at https://jamanetwork.com/journals/jama/fullarticle/2797874.
    \86\ See CDC, ``Reproductive Health, Unintended Pregnancy,'' 
available at https://www.cdc.gov/reproductive-health/hcp/unintended-pregnancy/index.html.
    \87\ See Bradford, K., Costanza, K., Fouladi, F., Hill, T., 
Nguyen, K., and Speer, K., NCSL (2023). ``Supporting Moms' Health in 
the Postpartum Period,'' available at https://www.ncsl.org/health/supporting-moms-health-in-the-postpartum-period; Nelson, et al., 
supra fn. 75; Cruz-Bendez[uacute], A., Lovell, G. Roche, B., 
Perkins, M., Blake-Lamb, T., Taveras, E., and Simione M. (2020). 
``Psychosocial status and prenatal care of unintended pregnancies 
among low-income women,'' BMC Pregnancy and Childbirth, available at 
https://bmcpregnancychildbirth.biomedcentral.com/articles/10.1186/s12884-020-03302-2; Blake, S., Kiely, Gard, C., El-Mohandes, A., El-
Khorazaty, M.N. (2007). ``Pregnancy Intentions and Happiness Among 
Pregnant Black Women at High Risk for Adverse Infant Health 
Outcomes,'' American Journal of Public Health, available at https://doi.org/10.1363/3919407; Finer, L., and Zolna, M. (2014). ``Shifts 
in intended and unintended pregnancies in the United States, 2001-
2008,'' American Journal of Public Health, available at https://pubmed.ncbi.nlm.nih.gov/24354819.
    \88\ Id., see also Sonfield, A., Hasstedt, K., Kavanaugh, M., 
and Anderson, R., (2013). ``The Social and Economic Benefits of 
Women's Ability to Determine Whether and When to Have Children,'' 
Guttmacher Institute, available at https://www.guttmacher.org/sites/default/files/report_pdf/social-economic-benefits.pdf.
    \89\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
    \90\ Steinberg, J., Marthey, D., Xie, L., Boudreaux, M. (2021). 
``Contraceptive method type and satisfaction, confidence in use, and 
switching intentions,'' Contraception, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8286312.
    \91\ See 88 FR 7236, 7241 (Feb. 2, 2023), citing Sutton, M. Y., 
Anachebe, N. F., and Skanes H. (2021). ``Racial and Ethnic 
Disparities in Reproductive Health Services and Outcomes, 2020,'' 
Obstetrics and Gynecology, available at https://doi.org/10.1097/AOG.0000000000004224; White House Blueprint for Addressing the 
Maternal Health Crisis (2022), available at https://www.whitehouse.gov/wp-content/uploads/2022/06/Maternal-Health-Blueprint.pdf.
---------------------------------------------------------------------------

    Additionally, there has been significant activity related to 
coverage of contraceptive services and several new developments, 
including legal developments, that have affected women's needs 
regarding access to affordable contraception since the publication of 
the July 2010 interim final rules. The Departments continue to receive 
complaints and are aware of other reports documenting plans' and 
issuers' failure to provide coverage of the full range of contraceptive 
services. Coverage issues leading to lack of access to contraception 
were also substantiated in comments received in response to the OTC 
Preventive Products RFI. Other developments have included the Dobbs 
decision and subsequent State-level restrictions on access to abortion 
and emergency contraception, which have made it more challenging for 
women in some States to obtain contraception and quality family 
planning care, including because health care providers have been forced 
to close or chosen to relocate to

[[Page 85763]]

a different State; \92\ Executive Orders related to reproductive health 
care; and FDA approval of the first daily OTC oral contraceptive. As a 
result, the Departments have determined that it is necessary to propose 
amendments to the regulations governing how plans and issuers cover 
contraception and, as discussed in section II.B of this preamble, how 
they communicate information about this coverage to participants, 
beneficiaries, and enrollees.
---------------------------------------------------------------------------

    \92\ See, e.g., Murphy, C., Shin, P., Jacobs, F., and Johnson, 
K. (2024). ``In States with Abortion Bans, Community Health Center 
Patients Face Challenges Getting Reproductive Health Care,'' 
Commonwealth Fund, available at https://www.commonwealthfund.org/blog/2024/states-abortion-bans-community-health-center-patients-face-challenges-getting; Harper, C., Brown, K., and Arora, K. 
(2024). ``Contraceptive Access in the US Post-Dobbs,'' JAMA Internal 
Medicine, available at https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2823682; Qato, D., Myerson, R., 
Shooshtari, A., Guadamuz, J., Alexander, G.C., (2024). ``Use of Oral 
and Emergency Contraceptives After the US Supreme Court's Dobbs 
Decision,'' available at https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2820370.
---------------------------------------------------------------------------

    The Departments are interested in minimizing barriers to coverage 
and expanding the scope of coverage without cost sharing for all 
recommended preventive services, in alignment with section 2713 of the 
PHS Act. The Departments also recognize that the proposals described in 
this section II.A.2 of this preamble, if finalized, could require 
significant changes to current plan and issuer operations. Therefore, 
the Departments propose an incremental approach in this rulemaking with 
respect to the types of recommended services addressed that is focused 
initially on expanding coverage of contraception. This incremental 
approach would facilitate implementation for plans, issuers, and other 
interested parties and allow the Departments to gather additional 
feedback on challenges and benefits of adopting these proposed policies 
before considering whether and how to propose similar requirements with 
respect to other recommended preventive services. Focusing first on 
contraceptive items is appropriate due to ongoing and widely reported 
concerns regarding challenges faced by consumers in accessing 
contraceptive items and services without cost sharing, as well as 
recent developments affecting access to reproductive health care.\93\
---------------------------------------------------------------------------

    \93\ See, e.g., Adler, A., Biggs, A.M., Kaller, S., Schroeder, 
R., Ralph, L. (2023). ``Changes in the Frequency and Type of 
Barriers to Reproductive Health Care from 2017 to 2021,'' JAMA 
Network Open, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10087056; Qato, D., Myerson, R., Shooshtari, A., 
Guadamuz, J., Alexander, G.C., (2024). ``Use of Oral and Emergency 
Contraceptives After the US Supreme Court's Dobbs Decision,'' 
available at https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2820370; Harper, C., Brown, K., and Arora, K. (2024). 
``Contraceptive Access in the US Post-Dobbs,'' JAMA Internal 
Medicine, available at https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2823682; Kavanaugh, M. and 
Friedrich-Karnik, A. (2024). ``Has the Fall of Roe changed 
contraceptive access and use? New research from four US states 
offers critical insights,'' Health Affairs Scholar, available at 
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10986283; and American 
Academy of Pediatrics, (updated July 2023) ``The Importance of 
Access to Contraception--Barriers to accessing contraception'', 
available at https://www.aap.org/en/patient-care/adolescent-sexual-health/equitable-access-to-sexual-and-reproductive-health-care-for-all-youth/the-importance-of-access-to-contraception.
---------------------------------------------------------------------------

    As described in FAQs Part 51, Q9, FAQs Part 54, Q8, and sections 
I.B and II.A.2 of this preamble, the Departments continue to receive 
complaints and are aware of other credible reports that some plans and 
issuers frequently restrict access to contraceptive items and services 
that should be covered without cost sharing. For instance, in addition 
to widespread denials of exceptions process requests as described in 
section II.A.1 of this preamble, the October 2022 Oversight Committee 
report identified at least 34 different contraceptive items that were 
commonly excluded from coverage or for which cost-sharing requirements 
often were applied.\94\ Additionally, a recent investigation by the 
Vermont Department of Financial Regulation, the agency responsible for 
regulating issuers in that State, found that three issuers in Vermont 
violated State and Federal law by failing to provide coverage of 
contraceptive services without cost sharing. The investigation found 
that between 2017 and 2021, the issuers inappropriately charged 
patients $1.5 million for contraceptive items and services that should 
have been provided free of any out-of-pocket costs, resulting in a 
finding that 9,000 people were entitled to receive restitution for cost 
sharing that was incorrectly applied for contraceptive services.\95\ 
The investigation prompted a Congressional request to the Government 
Accountability Office for an investigation into plan and issuer 
compliance with ACA requirements to cover contraceptive items without 
cost sharing.\96\ In addition, the Centers for Medicare & Medicaid 
Services, as part of targeted market conduct examinations conducted on 
behalf of HHS, has identified multiple violations of the requirements 
of section 2713(a)(1) of the PHS Act and implementing regulations 
related to contraceptive coverage and continues to investigate 
additional complaints alleging violations.\97\ Additional reports of 
noncompliance documented by members of Congress, advocacy 
organizations, and media reports were cited by the Secretaries in their 
June 27, 2022 letter to group health plan sponsors and issuers.\98\ 
Given these reported instances of continued obstacles for women in 
accessing contraception, and within the context of several States' 
efforts to restrict access to reproductive health care following the 
Dobbs decision, the Departments have determined it is appropriate for 
these proposed rules to begin with addressing barriers to contraceptive 
services.
---------------------------------------------------------------------------

    \94\ U.S. House of Representatives Committee on Oversight and 
Reform, ``Barriers to Birth Control: An Analysis of Contraceptive 
Coverage and Costs for Patients with Private Insurance'' (Oct. 25, 
2022), available at https://oversightdemocrats.house.gov/sites/evo-subsites/democrats-oversight.house.gov/files/2022-10-25.COR%20PBM-Insurer%20Report.pdf.
    \95\ State of Vermont Department of Financial Regulation (Nov. 
13, 2023). ``Contraceptive Services Claims Restitution 
Information,'' available at https://dfr.vermont.gov/contraceptive-services-claims-restitution-information.
    \96\ Sen. Bernie Sanders (June 17, 2024). Letter to Hon. Gene 
Dodaro, Comptroller General of the United States, available at 
https://www.documentcloud.org/documents/24764790-61724-gao-aca-contraception-coverage-letter.
    \97\ CMS, ``Compliance and Enforcement, Federal Market Conduct 
Examination Final Reports,'' available at https://www.cms.gov/marketplace/private-health-insurance/consumer-protections-enforcement.
    \98\ See, e.g., Secretaries Becerra, Yellen, and Walsh (June 27, 
2022). Letter on the ACA contraceptive coverage requirement, 
available at https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/letter-from-secretaries-becerra-yellen-and-walsh-on-the-aca-contraceptive-coverage-requirement.pdf (highlighting reports of 
noncompliance documented by Members of the U.S. House of 
Representatives (in 2021 and 2022) and the U.S. Senate (in 2021 and 
2022), the National Women's Law Center, other nonprofit 
organizations, and media reports).
---------------------------------------------------------------------------

    Furthermore, focusing on contraception is consistent with recent 
Executive Orders. As described in section I.C of this preamble, 
President Biden issued E.O. 14101, which directed the Secretaries to 
consider actions that would, to the greatest extent permitted by law, 
ensure coverage of comprehensive contraceptive care, including all 
contraceptives approved, cleared, or granted by the FDA, without cost 
sharing for participants, beneficiaries, and enrollees; and streamline 
the process for patients and health care providers to request coverage, 
without cost sharing, of medically necessary contraception. Further, 
section 2(b) of E.O. 14101 instructed the Secretaries to consider 
actions that would promote increased access to affordable OTC

[[Page 85764]]

contraception.\99\ Consistent with E.O. 14101, and in consideration of 
the availability of OTC oral contraceptives, these proposed rules would 
promote coverage and streamline access to all medically necessary 
contraception, including the newly FDA-approved OTC daily oral 
contraceptive, by removing prescription and cost barriers for 
consumers.
---------------------------------------------------------------------------

    \99\ 88 FR 41815 at 41816 (June 23, 2023).
---------------------------------------------------------------------------

    The Departments acknowledge the possibility that increasing 
coverage without cost sharing for recommended preventive services, as 
discussed in this section II.A.2 of this preamble, could lead to 
greater demand for those services and potentially higher prices charged 
by providers. These increased costs could result in higher costs to 
consumers, both in the form of higher premiums for people with 
insurance and in the form of higher out-of-pocket costs for people who 
do not use insurance coverage to obtain OTC contraceptive products. The 
potential increases in cost further justify the incremental approach 
taken in these proposed rules. In addition, comments in response to the 
OTC Preventive Products RFI suggested that requiring coverage of all 
OTC preventive products may be challenging for some types of preventive 
care. For these reasons, the Departments propose to amend the 
preventive services regulations with respect to only contraceptive 
items \100\ at this time by inserting a new paragraph (a)(6) at 26 CFR 
54.9815-2713, 29 CFR 2590.715-2713, and 45 CFR 147.130. The 
Departments' issuance of these proposals implementing section 2713 of 
the PHS Act is authorized by section 9833 of the Code, section 734 of 
ERISA, and section 2792 of the PHS Act.
---------------------------------------------------------------------------

    \100\ See section II.A.2 of the preamble to these proposed rules 
for comment solicitation regarding whether to expand the proposed 
coverage requirements to other recommended preventive services.
---------------------------------------------------------------------------

    First, the Departments propose to define the terms ``drug-led 
combination product'' \101\ in proposed new paragraph (a)(6)(i)(A) and 
``therapeutic equivalent'' in proposed new paragraph (a)(6)(i)(B) for 
purposes of the proposed new paragraph (a)(6). Second, the Departments 
propose in proposed new paragraph (a)(6)(ii) to require that plans and 
issuers cover, without requiring a prescription and without imposing 
cost-sharing requirements, recommended contraceptive items that are 
available OTC and for which the applicable recommendation or guideline 
does not require a prescription. Third, the Departments propose in 
proposed new paragraph (a)(6)(iii) that, in order for medical 
management techniques to be considered reasonable, plans and issuers 
would be required to utilize a therapeutic equivalence approach for 
recommended contraceptive drugs and drug-led combination products.
---------------------------------------------------------------------------

    \101\ The Departments are proposing to define the term ``drug-
led combination products'' in these proposed rules instead of the 
term ``drug-led devices'' used in FAQs Part 64 to align these 
proposed rules with existing definitions at 21 CFR 3.2(e). The 
change in terminology should not be interpreted to suggest that the 
terms are interchangeable, as the term ``drug-led combination 
products'' encompasses ``drug-led devices'' as well as other drug-
led combination products for which the FDA evaluates therapeutic 
equivalence.
---------------------------------------------------------------------------

    The Departments request comment on whether to finalize these 
policies only with respect to contraception as proposed, or to instead 
finalize these policies with respect to all preventive services, or 
with respect to a larger subset of preventive services. In particular, 
the Departments request comment on issues related to coverage of 
additional specific OTC preventive products without a prescription (for 
example, tobacco cessation items) in addition to OTC contraceptive 
items, or all OTC preventive products without a prescription. The 
Departments also request comment on the experiences (particularly with 
respect to administrative challenges, consumer experiences, and costs) 
of any plans and issuers that currently provide coverage for any OTC 
preventive products without requiring a prescription, and how those 
experiences could inform the implementation of these proposed rules, if 
finalized. The Departments further request comment on whether and to 
what extent these proposals could affect the ability of plans and 
issuers to negotiate or otherwise limit costs for contraceptive items, 
including OTC contraceptive items and contraceptive drugs and drug-led 
combination products, and what additional rulemaking or guidance would 
be necessary to ensure that plans and issuers retain the ability to do 
so.
    Along with the incremental approach proposed in this rulemaking 
focused on contraception, the Departments anticipate issuing another 
notice of proposed rulemaking in the near future to address additional 
issues related to coverage of preventive services more generally.
a. Coverage of OTC Contraceptive Items Without Cost Sharing
    As discussed in section I.B of this preamble, the Departments' 
previously issued guidance provides that preventive health care items 
generally available OTC to patients (such as folic acid and certain 
contraceptive products, including contraceptive sponges, spermicides, 
and emergency contraception (levonorgestrel)) must be covered without 
cost sharing under section 2713 of the PHS Act only when prescribed by 
a health care provider.\102\ This approach reflected the traditional 
role of health coverage in providing benefits for health care items and 
services for which there is provider involvement. However, the FDA's 
approval of a daily OTC oral contraceptive without a prescription, in 
combination with the reasons outlined earlier in this preamble, have 
prompted the Departments to revisit this approach. As commenters to the 
OTC Preventive Products RFI noted, neither section 2713 of the PHS Act 
and its implementing regulations nor the current HRSA-supported 
Guidelines require a prescription as a condition of coverage without 
cost sharing for recommended preventive services that are available 
OTC, except to the extent a particular recommendation or guideline 
requires that an individual is prescribed an item or service. 
Therefore, with respect to contraceptive items that can be lawfully 
obtained \103\ by a participant, beneficiary, or enrollee without a 
prescription and for which the applicable recommendation or guideline 
does not require a prescription, the Departments propose in new 
paragraph (a)(6)(ii) that a plan or issuer would not be considered to 
comply with 26 CFR 54.9815-2713(a)(1), 29 CFR 2590.715-2713(a)(1), and 
45 CFR 147.130(a)(1), unless the plan or issuer provides coverage for 
the contraceptive item without requiring a prescription and without 
imposing any cost-sharing requirements. As noted by many commenters to 
the OTC Preventive Products RFI, out-of-pocket costs and prescription 
requirements make it more difficult for women to access contraception, 
including contraceptive items that are available without a 
prescription, such as oral contraceptives recently approved by the FDA 
for OTC sale. The Departments agree with commenters that these

[[Page 85765]]

obstacles present greater challenges to women in underserved 
communities, including those with lower incomes and who are members of 
underserved racial and ethnic groups, reinforcing structural barriers 
to health care and contributing to reproductive health disparities. 
Although some plans and issuers have voluntarily, or as required by 
State law,\104\ provided coverage of OTC contraceptive items without a 
prescription and without cost-sharing requirements or with limits on 
cost sharing, the Departments understand that many women lack such 
coverage. In response to a specific question regarding how commonly 
plans and issuers provide coverage for OTC preventive products without 
requiring a prescription, many commenters asserted that most plans and 
issuers cover OTC preventive products only when they are prescribed. 
The Departments have determined, therefore, that requiring (rather than 
encouraging) coverage of OTC contraceptive items without cost sharing 
and without a prescription, as proposed in these rules, is critical to 
ensuring that coverage requirements provide women with access to 
contraceptives as required under section 2713 of the PHS Act and the 
applicable HRSA-supported Guidelines, and to realizing the goal of 
promoting access to reproductive health care.
---------------------------------------------------------------------------

    \102\  See FAQs Part XII, Q4 and Q15 (Feb. 20, 2013), available 
at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html; 
FAQs Part 54, Q5-6 (July 28, 2022), available at https://
www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/
resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
    \103\ The Departments intend for this proposal to apply only to 
contraceptive items that are legally sold without a prescription. 
Nothing in this proposal would require a plan or issuer to provide 
coverage without cost sharing for a contraceptive item for which the 
FDA requires a prescription, if a participant, beneficiary, or 
enrollee acquires the item without a prescription.
    \104\ CA, CO, MD, NM, NJ, NY, and WA require some coverage of 
OTC contraceptive items. See KFF (Updated March 2024). ``State 
Private Insurance Coverage Requirements for OTC Contraception 
Without a Prescription,'' available at https://www.kff.org/other/state-indicator/state-private-insurance-coverage-requirements-for-otc-contraception-without-a-prescription. See, e.g., Cal. Health & 
Saf. Code section 1367.25(b)(1)(A) (barring prescription 
requirements for OTC FDA-approved contraceptive drugs, devices, and 
products and requiring point-of-sale coverage of OTC contraception 
at in-network pharmacies); Md. Code, Ins. section 15-826.1 
(requiring coverage without a prescription for all FDA-approved 
contraceptive drugs available OTC and limiting cost-sharing for OTC 
contraceptive drugs to the amount that would apply to the same drug 
dispensed under a prescription).
---------------------------------------------------------------------------

    Under this proposal, the requirement to cover OTC contraceptive 
items would be subject to the specific coverage requirements applicable 
to all recommended preventive services in 26 CFR 54.9815-2713, 29 CFR 
2590.715-2713, and 45 CFR 147.130. However, the Departments recognize 
that the provision and coverage of OTC contraceptive items present 
unique issues that plans and issuers may not encounter when covering 
other recommended services. Therefore, the following sections of this 
preamble discuss how plans and issuers would be expected to comply with 
certain existing requirements with respect to coverage of OTC 
contraceptive items.\105\
---------------------------------------------------------------------------

    \105\ The requirements regarding office visits would not be 
relevant with respect to coverage of OTC contraceptive items, and 
the requirements regarding timing do not raise unique issues with 
respect to OTC contraceptive items.
---------------------------------------------------------------------------

(1) In-Network and Out-of-Network Coverage of OTC Contraceptive Items
    Under section 2713 of the PHS Act and its implementing regulations 
at 26 CFR 54.9815-2713(a)(3)(i) and (ii), 29 CFR 2590.715-2713(a)(3)(i) 
and (ii), and 45 CFR 147.130(a)(3)(i) and (ii), a plan or issuer is not 
required to provide coverage for recommended preventive services 
delivered by an out-of-network provider if the plan or issuer has a 
network of providers. Similarly, nothing precludes a plan or issuer 
that has a network of providers from imposing cost-sharing requirements 
on recommended preventive services delivered by an out-of-network 
provider. However, if a plan or issuer does not have a provider in its 
network who can provide a recommended preventive service, the plan or 
issuer must cover the recommended preventive service, without cost 
sharing, when furnished by an out-of-network provider.\106\ Nothing 
under section 2713 of the PHS Act nor its implementing regulations 
requires a plan or issuer to establish a provider network.
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    \106\ See FAQs Part XXII, Q3 (Feb. 20, 2013), available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/aca_implementation_faqs12.
---------------------------------------------------------------------------

    The Departments are not proposing to amend these requirements with 
respect to OTC contraceptive items. Therefore, a plan or issuer that 
has a network of providers that can provide OTC contraceptive items 
would not be required to provide coverage, or waive cost sharing, for 
OTC contraceptive items that are provided by an out-of-network 
provider. For example, if a plan or issuer has a network of pharmacies 
(including mail-order pharmacies) that can provide OTC contraceptive 
items without a prescription, the plan or issuer would not be required 
to provide coverage (nor waive cost sharing) if a participant, 
beneficiary, or enrollee obtains a covered OTC contraceptive item at an 
out-of-network pharmacy or other retailer.\107\
---------------------------------------------------------------------------

    \107\ Nothing in the statute or preventive services regulations 
prevents a plan or issuer from providing coverage without cost 
sharing for out-of-network recommended preventive services, and the 
Departments encourage plans and issuers to do so.
---------------------------------------------------------------------------

    The Departments understand, based on responses to the OTC 
Preventive Products RFI and communications with plans and issuers 
regarding coverage of OTC COVID-19 diagnostic tests during and after 
the COVID-19 PHE, that network contracts between plans and issuers and 
pharmacies that are located in a retail store typically include only 
the pharmacies as the in-network providers. The retail stores at which 
the pharmacies are located are treated as separate entities. In these 
cases, the pharmacy point of sale would be considered an in-network 
provider at which an OTC contraceptive would be covered without cost 
sharing, but a non-pharmacy point of sale (for example, a cash 
register, self-check-out, or vending machine in the front of a retail 
store, unaffiliated with the pharmacy department) would not be 
considered an in-network provider. Although participants, 
beneficiaries, and enrollees would typically be able to purchase OTC 
contraceptives from the front of the retail store, these proposed rules 
would not require a plan or issuer with a network of pharmacies to also 
cover without cost sharing OTC contraceptive items that are purchased 
at a retail store that is co-located with an in-network pharmacy. If 
the plan or issuer has a network of pharmacies that provide coverage 
for OTC contraceptive items without cost sharing, that plan or issuer 
would be considered to have a network of providers to provide benefits 
for OTC contraceptive items and therefore would not be required to 
cover OTC contraceptive items purchased at a retail store that is not 
part of its network. For example, emergency contraception could be 
available in multiple locations in the same retail store: behind the 
pharmacy counter through an in-network pharmacy where a consumer 
typically provides health coverage information to allow the pharmacy to 
process a claim for coverage; and ``off the shelf'' in a non-pharmacy 
section of the same store. This could result in a participant, 
beneficiary, or enrollee being able to access an OTC contraceptive item 
at an in-network pharmacy without paying any out-of-pocket costs at the 
pharmacy counter point of sale, while being liable for the full cost of 
the identical OTC contraceptive item if it was purchased at a non-
pharmacy point of sale. The Departments request comment on the 
potential impact on consumers, pharmacies, and retail stores with this 
proposed approach.
    The Departments would expect that in-network coverage for OTC 
contraceptive items and services would be provided in a manner that is 
comparable to coverage for other recommended preventive services. For 
example, the Departments would expect

[[Page 85766]]

that a plan or issuer that does not preference the use of a mail-order 
pharmacy for coverage of prescription-only recommended preventive 
services would not preference the use of a mail-order pharmacy for 
coverage of OTC contraceptives. As another example, a plan or issuer 
should not impose shipping costs on an OTC contraceptive item that is 
furnished via mail order if the plan or issuer would not impose 
shipping costs on a comparable prescription product. Likewise, to the 
extent that a plan or issuer generally covers a recommended preventive 
service that requires a prescription without cost sharing at the in-
network pharmacy point of sale, without requiring consumers to pursue 
post-purchase reimbursement, the Departments would expect that the plan 
or issuer would generally cover OTC contraceptive items at the in-
network pharmacy point of sale in the same manner. Plans and issuers 
that require participants, beneficiaries, or enrollees to present 
information, such as an insurance card, to allow an in-network pharmacy 
to process a claim for a prescription-only recommended preventive 
service may require similar information to process a claim for an OTC 
contraceptive item. The Departments request comment on the appropriate 
approach for coverage in a scenario in which a plan's or issuer's 
preferred OTC contraceptive item is out of stock at an in-network 
pharmacy, while a non-preferred version is available. Specifically, the 
Departments request comment on whether plans or issuers should be 
required to cover the non-preferred version without cost-sharing 
requirements at the in-network pharmacy, without requiring the consumer 
to pursue an exceptions process when a preferred version is unavailable 
at an in-network pharmacy. The Departments also request comment on 
whether and how plans and issuers should document the unavailability of 
a preferred OTC contraceptive for coverage purposes.
    As noted earlier, plans and issuers are not required to establish a 
provider network in order to provide coverage of recommended preventive 
services and would not be required to contract with providers for the 
purpose of providing in-network coverage of OTC contraceptive items if 
these proposed rules are finalized. Under 26 CFR 54.9815-
2713(a)(3)(ii), 29 CFR 2590.715-2713(a)(3)(ii), and 45 CFR 
147.130(a)(3)(ii), a plan or issuer that lacks an in-network provider 
who can provide an OTC contraceptive item would be obligated to cover 
the OTC contraceptive item when provided by an out-of-network provider 
without imposing cost sharing.
    In the absence of a provider network, the Departments encourage 
plans and issuers to establish processes to ensure that participants, 
beneficiaries, and enrollees can obtain OTC contraceptive items from 
out-of-network providers without incurring out-of-pocket costs and 
without encountering significant barriers to access.\108\ The 
Departments are not proposing to specify in these proposed rules how a 
plan or issuer would do so, but would encourage plans and issuers to 
establish a robust approach with multiple entry points to ensure that 
participants, beneficiaries, and enrollees can access out-of-network 
OTC contraceptive items with no out-of-pocket costs and without 
friction at the point of sale. The Departments request comment on what 
additional standards or guidance would be helpful to ensure that 
participants, beneficiaries, and enrollees can use their health 
coverage to access OTC contraceptive items from out-of-network 
providers without cost sharing, while allowing plans and issuers 
flexibility to effectively implement the requirement to cover OTC 
contraceptive items, if finalized.
---------------------------------------------------------------------------

    \108\ The Departments note that plans and issuers would not be 
required to reimburse the cost of OTC contraceptive items that have 
already been reimbursed by an account-based plan, such as a health 
flexible spending arrangement (FSA) or health reimbursement 
arrangement (HRA). As of January 2020, section 3702 of the CARES Act 
amended the definition of qualifying medical expenses so that the 
expenses for certain OTC medications purchased without a 
prescription are eligible for reimbursement under certain 
arrangements, such as health savings accounts (HSAs), HRAs, and 
health FSAs. An individual generally may not submit claims to 
multiple sources of coverage to be reimbursed more than once for the 
same medical expense. Therefore, the cost (or the portion of the 
cost) of OTC contraception that has already been paid or reimbursed 
by a plan or issuer cannot also be reimbursed by an HSA, HRA, or 
health FSA.
---------------------------------------------------------------------------

    If these requirements are finalized, plans and issuers should 
ensure that processes that require participants, beneficiaries, or 
enrollees to pay out-of-pocket for OTC contraceptive items and pursue 
reimbursement do not present unreasonable barriers to accessing OTC 
contraceptive items provided by either an in-network or out-of-network 
provider. A traditional post-purchase reimbursement process might 
require consumers to bear the upfront cost of an OTC contraceptive item 
as well as the administrative burden of requesting reimbursement, 
providing documentation either on paper or electronically, and 
absorbing the financial impact of a delayed reimbursement while a 
reimbursement request is being reviewed and processed by the plan or 
issuer. For example, while it would be reasonable for a plan or issuer 
to require a form and receipt or other proof of purchase, post-purchase 
reimbursement programs that require an individual to submit multiple 
documents or involve numerous steps that unduly delay an individual's 
reimbursement for an OTC contraceptive item would not be reasonable 
under these proposed rules.
    Further, the Departments would strongly encourage plans and issuers 
to consider implementing additional methods for providing coverage of 
OTC contraceptive items without cost sharing, in addition to or in lieu 
of a traditional post-purchase reimbursement process. For example, 
plans and issuers could consider providing access to pre-paid accounts 
that are programmed to cover upfront costs associated with OTC 
contraceptive items at the point of sale, either by issuing physical 
debit or credit cards or providing access to a linked smartphone 
application or QR code to participants, beneficiaries, or enrollees, 
provided funds were sufficient to cover costs associated with OTC 
contraceptive items, the mechanism for delivery was programmed with 
sufficient guardrails to prevent funds from being applied to items that 
were not covered, and the method of access was otherwise implemented 
consistent with applicable law. Subject to the requirements for 
utilizing reasonable medical management techniques \109\ and consistent 
with previously issued guidance \110\ (including providing access to an 
easily accessible, transparent, and sufficiently expedient exceptions 
process that is not unduly burdensome on the individual, a provider, or 
other authorized representative),\111\ plans and issuers would be able 
to utilize reasonable medical management techniques to contain costs 
and promote efficient delivery of care, and could consider how to do so 
within the

[[Page 85767]]

context of such an approach for out-of-network coverage of OTC 
contraceptive items. For example, a plan or issuer would be able to 
program a debit or credit card or linked account to limit reimbursement 
to a set amount within a specified period of time, provided such 
limitations do not unreasonably limit coverage of covered OTC 
contraceptive items.
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    \109\ 26 CFR 54.9815-2713(a)(4), 29 CFR 2590.715-2713(a)(4), and 
45 CFR 147.130(a)(4).
    \110\ See, e.g., FAQs Part XII, Q14 (Feb. 20, 2013), available 
at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html; 
FAQs Part XXVI (May 11, 2015), available at https://www.dol.gov/
sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/
faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf.
    \111\ See section II.A of the preamble to these proposed rules 
for a description of existing guidance regarding the use of an 
exceptions process and the proposal in these proposed rules to 
require plans and issuers to provide an exceptions process when 
utilizing reasonable medical management for recommended preventive 
services.
---------------------------------------------------------------------------

    The Departments are aware that some OTC contraceptive items, such 
as software applications granted marketing authorization by the FDA for 
use as contraception, are typically not furnished by in-network 
providers (for example, because consumers purchase them directly from a 
manufacturer or vendor website). As with other recommended preventive 
services for which a plan or issuer does not have an in-network 
provider who can provide the item or service, the plan or issuer would 
be required to cover the item or service when delivered by an out-of-
network provider and could not impose cost sharing with respect to the 
item or service. The Departments request comment on whether additional 
guidance is necessary to ensure that individuals would be able to use 
their health coverage to obtain OTC contraceptive items that are 
typically obtained outside of the traditional system of network 
providers with zero cost sharing and without unnecessarily burdensome 
reimbursement requirements, while permitting plans and issuers to 
utilize reasonable medical management techniques.
    The Departments request comment on how plans and issuers would 
likely operationalize out-of-network coverage and whether the 
Departments should adopt specific standards for out-of-network coverage 
with respect to OTC contraceptive items. In addition, participants, 
beneficiaries, and enrollees would benefit if plans and issuers provide 
access to a broad network of providers with the capacity to provide the 
full range of OTC contraceptive items, and the Departments request 
comment on how to support and incentivize plans and issuers to develop 
such networks.
(2) Reasonable Medical Management Techniques for OTC Contraceptive 
Services
    As discussed in section II.A.1 of this preamble, to the extent not 
specified in the applicable recommendation or guideline, plans and 
issuers may rely on the relevant clinical evidence base and established 
reasonable medical management techniques to determine the frequency, 
method, treatment, or setting for coverage of a recommended preventive 
health service.\112\ In prior guidance, the Departments have stated 
that if a plan or issuer utilizes medical management techniques within 
a specified category of contraception (or, with respect to 
contraceptive categories not specifically described in the HRSA-
supported Guidelines, a group of substantially similar services or 
products), the use of those techniques will not be considered 
reasonable unless the plan or issuer has an easily accessible, 
transparent, and sufficiently expedient exceptions process that is not 
unduly burdensome on the individual or their attending provider (or 
other individual acting as the individual's authorized representative) 
allowing such individual to obtain coverage for a service or FDA-
approved, -cleared, or -granted product determined to be medically 
necessary, as determined by the individual's attending provider.\113\ 
The Departments are not proposing amendments to the medical management 
provisions specific to OTC contraceptive items. Therefore, these 
standards, as well as the new standards proposed in these rules,\114\ 
would apply to a plan's or issuer's use of medical management 
techniques with respect to OTC contraceptive items in the same manner 
and to the same extent as they would apply to other recommended 
preventive services.
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    \112\ 26 CFR 54.9815-2713(a)(4); 29 CFR 2590.715-2713(a)(4); and 
45 CFR 147.130(a)(4).
    \113\ See FAQs Part 54, Q3 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf.
    \114\ See sections II.A.1 (for discussion of proposal to amend 
the general requirements related to reasonable medical management) 
and II.A.2.b (for discussion of proposed amendment regarding 
reasonable medical management for contraceptive drugs and drug-led 
combination products, including OTC contraceptive items) of the 
preamble to these proposed rules.
---------------------------------------------------------------------------

    The Departments recognize that plans and issuers may encounter 
unique issues related to medical management if the Departments finalize 
the proposed requirements to cover OTC contraceptive items. In the OTC 
Preventive Products RFI, the Departments requested comment on what 
types of reasonable medical management techniques plans and issuers 
would consider implementing if recommended OTC preventive products were 
required to be covered without cost sharing. In response, some 
commenters suggested plans and issuers could limit the number of 
products an individual could obtain during a given period as a 
guardrail for OTC contraceptive services. One commenter stated that 
quantity limits would help prevent inequitable distribution and 
stockpiling for resale of OTC contraceptive services. Another commenter 
urged the Departments to allow plans and issuers to limit the initial 
purchase of OTC contraceptive services until there is more 
understanding of the cost implications and distribution channels for 
OTC preventive services. Other commenters discouraged the use of 
quantity limits as a medical management technique out of concern that 
such limits would discourage continuation of use, by creating new 
access barriers for individuals that already face challenges engaging 
with the health care system, in particular individuals that are members 
of underserved communities. In addition, a commenter expressed concern 
about the difficulty in predicting the need for emergency 
contraception.
    Some commenters advocated for 12-month quantity limits for monthly 
OTC contraceptive services in order to balance the health equity 
concerns of individuals with the implementation challenges that may 
arise for retailers and plans and issuers transitioning to covering OTC 
contraceptive services without a prescription and without cost sharing. 
Some commenters noted that there is already ample precedent for 
requiring coverage of extended supplies of contraceptives, with at 
least 25 States and the District of Columbia requiring Medicaid and 
private payers to cover the dispensing of an extended (usually 12-
month) supply of prescription contraceptives.\115\ One commenter to the 
OTC Preventive Products RFI stated that purchasing contraceptive items 
in larger dispensing quantities may create opportunities for plans and 
issuers to negotiate pricing discounts that will decrease per-unit 
costs for plans and issuers as well as suppliers and distributors. The 
Departments note that when the OTC oral contraceptive became available 
in March 2024 for sale online and in stores under the brand name 
Opill[supreg], the manufacturer's suggested retail price for a 6-month 
supply was cheaper (per-month) than

[[Page 85768]]

the manufacturer's suggested retail price for a 1-month supply.\116\
---------------------------------------------------------------------------

    \115\ In States that have implemented a 12-month prescription 
limitation, plans and issuers are required to cover without cost 
sharing a supply of up to 12 months when indicated by the 
prescribing provider. See Power to Decide (August 2023), ``Coverage 
for an Extended Supply of Contraception,'' available at https://powertodecide.org/sites/default/files/2023-08/Extended%20Supply%20of%20Contraception.pdf. Since the comment 
submission period for the OTC Preventive Products RFI closed, 
additional States have enacted coverage requirements related to 
extended contraceptive supplies. See NCSL, ``State Contraception 
Policies,'' available at https://www.ncsl.org/health/state-contraception-policies.
    \116\ Lupkin, S., NPR (March 18, 2024). ``First over-the-counter 
birth control pill now for sale online,'' available at https://npr.org/sections/health-shots/2024/03/04/1235404522/opill-over-counter-birth-control-pill-contraceptive-shop.
---------------------------------------------------------------------------

    Literature on contraception shows that dispensing a multi-month 
supply of prescription oral contraceptive pills at one time during the 
plan year is generally associated with increased continuation of 
contraception use, decreased occurrence of unintended pregnancy, and 
greater cost savings, but also more pill waste, compared to dispensing 
a single month's supply.<SUP>117 118</SUP> Research also shows that 
advance provision of emergency contraception significantly increases 
its use without adversely affecting the use of routine 
contraception,\119\ which suggests that it may be beneficial for women 
to receive more than one unit of emergency contraception at a time, in 
order to realize the benefits of advance provision for future use. 
Limitations on the supply of OTC contraception dispensed at one time 
should take into account the clinical evidence base regarding benefits 
to consumers, including as described in this section II.a.2.
---------------------------------------------------------------------------

    \117\ See Steenland, M., Rodriguez, M., Marchbanks, P., and 
Curtis, K. (2013). ``How does the number of oral contraceptive pill 
packs dispensed or prescribed affect continuation and other measures 
of consistent and correct use? A systematic review,'' Contraception, 
available at https://www.sciencedirect.com/science/article/pii/S0010782412007317?via%3Dihub.
    \118\ See Judge-Golden, C. P., Smith, K. J., Mor, M. K., and 
Borrero, S. (2019). ``Financial Implications of 12-Month Dispensing 
of Oral Contraceptive Pills in the Veterans Affairs Health Care 
System,'' JAMA Internal Medicine, available at https://doi.org/10.1001/jamainternmed2019.1678 (study of the Veterans Affairs health 
care system finding that a 12-month supply better supports 
continuous usage of contraceptive items than a 3-month supply and 
decreases the risk of unwanted pregnancies, and concluding that a 
12-month dispensing option would likely result in a $2 million 
dollar annual cost-savings for the Veterans Affairs health care 
system).
    \119\ See Kripke, C. (2000). ``Advance Provision for Emergency 
Oral Contraception,'' American Family Physician, available at 
https://www.aafp.org/pubs/afp/issues/2007/0901/p654.html; Jackson 
R.A., Bimla Schwarz, E., Freedman L, Darney P. (2003). ``Advance 
supply of emergency contraception: effect on use and usual 
contraception--a randomized trial,'' Obstetrics and Gynecology, 
available at https://pubmed.ncbi.nlm.nih.gov/12850599.
---------------------------------------------------------------------------

    Given the evidence regarding benefits to consumers of a multi-month 
supply of prescription oral contraceptive pills, the Departments would 
generally not consider coverage limitations that only allow for a 1-
month supply of an OTC oral contraception per instance of dispensing to 
be reasonable or consistent with the requirement to cover recommended 
preventive services under 26 CFR 54.9815-2713(a)(4), 29 CFR 2590.715-
2713(a)(4), and 45 CFR 147.130(a)(4) if there is no clinical basis for 
limiting the quantity to be dispensed at one time. The Departments seek 
comment, with respect to all forms of OTC contraceptives, on whether 
other quantity limits (such as a 6-month limit on OTC oral 
contraception or a 3-unit limit on OTC emergency contraception per 
instance of dispensing) should be considered reasonable or 
unreasonable, and what additional facts and circumstances should be 
considered when determining the reasonableness of a particular quantity 
limit with respect to OTC contraception, such as initial success with a 
shorter supply of OTC contraception. The Departments also request 
comment on the circumstances under which participants, beneficiaries, 
and enrollees who receive an initial extended quantity of OTC 
contraception could access a different form of contraception without 
incurring cost sharing before finishing the initial extended quantity 
(for example, before a 6-month supply is exhausted).
    Some commenters to the OTC Preventive Products RFI suggested 
individuals should be required to submit evidence to a plan or issuer 
that a particular form of prescription birth control is inappropriate 
before receiving coverage for an OTC contraceptive service. The 
Departments previously issued guidance that it is not a reasonable 
medical management technique to require individuals to fail first using 
numerous other services or FDA-approved, -cleared, or -granted 
contraceptive products before the plan or issuer will approve coverage 
for the service or FDA-approved, -cleared, or -granted contraceptive 
product that is medically necessary for the individual, as determined 
by the individual's attending provider.\120\ Within the context of 
medical management of OTC contraceptive items, the Departments would 
not consider it reasonable either to impose a prescription requirement 
for OTC contraception as a form of medical management, including 
requiring an individual to fail first using a prescription-only 
contraceptive item before providing coverage of an OTC contraceptive 
item without cost sharing, or to require an individual to fail first 
with numerous prescription or OTC contraceptive items before the plan 
or issuer will approve coverage for a medically necessary OTC 
contraceptive item.
---------------------------------------------------------------------------

    \120\ See FAQs Part 54, Q8 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
---------------------------------------------------------------------------

    Other commenters suggested that a plan or issuer could consider 
implementing age-based limitations or gender-based requirements instead 
of offering benefits to all individuals with reproductive capacity. The 
Departments would not consider age- and gender-based medical management 
with respect to OTC contraceptive services to be reasonable unless the 
medical management technique relies on a clinical rationale for 
limiting access to individuals of a certain age or gender and is 
consistent with FDA approvals of any particular OTC contraceptive 
product. The Departments have stated in previous guidance that imposing 
an age limit on contraceptive coverage instead of providing these 
benefits to all women would not be considered a reasonable medical 
management technique.\121\
---------------------------------------------------------------------------

    \121\ Id.
---------------------------------------------------------------------------

    A commenter suggested that implementing prior authorization 
requirements with respect to certain OTC items would not be an 
unreasonable medical management technique. However, such medical 
management techniques create barriers for consumers accessing 
contraceptive services with a prescription \122\ and would create 
similar barriers for consumers accessing contraceptives services 
without a prescription, with the added challenge that consumers seeking 
to obtain OTC contraceptive items are likely navigating such 
requirements without the assistance of a provider. Such requirements 
could be used as a means of circumventing the requirement to provide 
coverage of contraception without cost sharing and without a 
prescription. Therefore, under these proposed rules, coverage 
requirements that, in practice, operate as substitutes for a 
prescription coverage requirement by requiring the involvement of a 
provider (such as prior authorization processes that require provider 
involvement or other clinical expertise or a requirement that 
individuals receive counseling from a pharmacist prior to accessing an 
OTC contraceptive item) would not be considered reasonable medical 
management techniques with respect to OTC contraceptive items.
---------------------------------------------------------------------------

    \122\ See U.S. House of Representatives Committee on Oversight 
and Reform (Oct. 25, 2022). ``Barriers to Birth Control: An Analysis 
of Contraceptive Coverage and Costs for Patients with Private 
Insurance,'' available at https://oversightdemocrats.house.gov/sites/evo-subsites/democrats-oversight.house.gov/files/2022-10-25.COR%20PBM-Insurer%20Report.pdf.

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[[Page 85769]]

    Under these proposed rules, plans and issuers generally could adopt 
medical management techniques with respect to OTC contraceptive items 
that are not described as unreasonable in this preamble as long as they 
are otherwise consistent with proposed 26 CFR 54.9815-2713(a)(4), 29 
CFR 2590.715-2713(a)(4), and 45 CFR 147.130(a)(4) and existing guidance 
and the plan or issuer makes available an exceptions process as 
described in these proposed rules. The Departments request comment on 
what other medical management techniques plans and issuers would 
consider applying to OTC contraceptive items, including whether such 
techniques should be considered reasonable or unreasonable. The 
Departments request comment on the proposed interpretation of 
reasonable medical management requirements with respect to OTC 
contraceptive items, including whether any final regulations should 
specify or use examples to illustrate in the regulatory text the 
Departments' interpretation of reasonable medical management for OTC 
contraceptive items.
(3) Other Considerations
    The Departments acknowledge the concerns raised by commenters to 
the OTC Preventive Products RFI, such as risks to patient privacy, of 
overconsumption, and of fraud, waste, or abuse, that some commenters 
believe could be exacerbated with increased coverage with no cost 
sharing of OTC contraceptive items. These concerns could be heightened 
with respect to OTC items and services that do not require the input of 
a provider in the form of a prescription and may be further increased 
within the context of out-of-network providers with whom plans and 
issuers do not have contractual relationships. For example, plans and 
issuers may wish to ensure that individuals are obtaining OTC 
contraceptive items to prevent pregnancy rather than solely to address 
another underlying condition (such as to treat anemia or manage 
premenstrual symptoms) or to ensure that an individual is obtaining 
condoms for the use of a woman covered under the plan, rather than for 
use by another individual. Several commenters to the OTC Preventive 
Products RFI highlighted concerns that coverage of OTC preventive 
products without cost sharing could incentivize overconsumption or 
waste of such products. Additionally, OTC contraceptive items may 
present particular challenges with respect to patient privacy, given 
the deeply personal nature of reproductive health care and the dynamic 
nature of State laws governing access to reproductive health care.
    The Departments anticipate that plans and issuers with a network of 
providers would mitigate these risks by using existing claims 
processing systems with respect to in-network coverage, but acknowledge 
that coverage through pathways other than an in-network pharmacy may 
present privacy challenges (for example, because non-provider retailers 
are not required to implement the same privacy and security safeguards 
as they are with respect to back-pharmacy transactions). The 
Departments request comment on how best to encourage plans and issuers 
to develop mechanisms that promote access to OTC contraceptive items in 
accordance with these proposed regulations, if finalized, while 
protecting patient privacy and allowing plans and issuers to identify 
and address risks including waste, fraud, and abuse.
    The Departments further request comment on how the proposed 
exceptions process requirement should apply with respect to OTC 
contraceptives items, for which no provider involvement is generally 
required. The proposed exceptions process requirement described in 
section II.A.1 of this preamble refers to the determination of an 
individual's attending provider. Thus, the Departments request comment 
on what information individuals should be required to provide to seek 
an exception to access coverage for an OTC contraceptive item that is 
not typically covered, including how plans and issuers could determine 
whether an OTC contraceptive item is medically necessary, and whether 
any additional changes are necessary for an exceptions process when 
used to seek coverage, without cost sharing, for an OTC contraceptive 
item.
    The Departments also request comment on whether it would be 
beneficial to define a new term to refer to contraception that would be 
subject to the proposed amendments to 26 CFR 54.9815-2713(a)(6), 29 CFR 
2590.715-2713(a)(6), and 45 CFR 147.130(a)(6); and if so, request 
feedback on the appropriate term and scope of the definition. For 
example, the Departments request comment on whether to define 
``contraceptive item,'' ``contraceptive product,'' or ``contraceptive 
items and services'' within the context of these proposed rules; and 
whether the term would refer to all contraceptive items and services 
recommended under the HRSA-supported Guidelines, all contraceptive 
items and services recommended under 26 CFR 54.9815-2713(a)(1), 29 CFR 
2590.715-2713(a)(1), and 45 CFR 147.130(a)(1); or another subset of 
recommended preventive services.
b. Therapeutic Equivalence Approach to Reasonable Medical Management 
for Contraceptive Drugs and Drug-Led Combination Products
    As discussed in section II.A.2 of this preamble, despite repeated 
clarification in guidance, the Departments have continued to receive 
complaints and reports that participants, beneficiaries, and enrollees 
are being denied coverage for contraceptives that their attending 
providers have prescribed, in some cases due to the application of 
medical management techniques that are not reasonable based on all the 
relevant facts and circumstances.\123\ The Departments are also aware 
of investigations and other credible reports that have documented plans 
and issuers using potentially unreasonable medical management 
techniques.\124\ In response to these reports, the Departments issued 
FAQs Part 64 on January 22, 2024, which set forth a therapeutic 
equivalence approach that plans and issuers can, but are not required 
to, use (in combination with an easily accessible, transparent, and 
sufficiently expedient exceptions process) to comply with PHS Act 
section 2713 and its implementing regulations with respect to FDA-
approved contraceptive drugs and drug-led devices, as an alternative to 
standards that had been set forth in previous guidance and described in 
section II.A.1 of this preamble.\125\ The Departments have determined 
that it is necessary to require the therapeutic equivalence approach to 
ensure coverage of the full range of FDA-approved contraceptive items 
that are drugs and drug-led combination products. The proposed 
therapeutic equivalence approach would serve as a guardrail against the 
widespread use of narrow drug formularies, which the Departments

[[Page 85770]]

understand plans and issuers use to limit costs, but can have the 
effect of limiting access to medically appropriate contraceptive drugs 
and drug-led combination products.\126\ This proposed regulation would 
limit the use of such techniques with respect to recommended 
contraceptive drugs and drug-led combination products.
---------------------------------------------------------------------------

    \123\ See also FAQs Part 54, Q8 (July 28, 2022), available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
    \124\ See U.S. House of Representatives Committee on Oversight 
and Reform (Oct. 25, 2022). ``Barriers to Birth Control: An Analysis 
of Contraceptive Coverage and Costs for Patients with Private 
Insurance,'' available at https://oversightdemocrats.house.gov/sites/evo-subsites/democrats-oversight.house.gov/files/2022-10-25.COR%20PBM-Insurer%20Report.pdf.
    \125\ FAQs Part 64 (Jan. 22, 2024), available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64 and https://www.cms.gov/files/document/faqs-part-64.pdf.
    \126\ See Dieguez, G., Sawhney, T., and Mirchandani, H., 
Milliman (2016). ``Evolution of the Use of Restrictions in 
Commercial Formularies,'' available at https://www.milliman.com/-/media/milliman/importedfiles/uploadedfiles/insight/2016/evolution-restrictions-commercial-formularies.ashx; Rucker, J., Benfield, M., 
Jenkins, N., Enright, D., Henderson, R., Chambers, J. (2023). 
``Commercial Coverage of Specialty Drugs, 2017-2021'' Health Affairs 
Scholar, available at https://academic.oup.com/healthaffairsscholar/article/1/2/qxad030/7236995.
---------------------------------------------------------------------------

    Therefore, the Departments propose to amend 26 CFR 54.9815-2713, 29 
CFR 2590.715-2713, and 45 CFR 147.130 to add a new paragraph 
(a)(6)(iii) that would specify that a plan's or issuer's medical 
management techniques are not considered to be reasonable unless the 
plan or issuer provides coverage for recommended preventive services 
that are contraceptive drugs and drug-led combination products, other 
than those items for which there is at least one therapeutic equivalent 
drug or drug-led combination product, as applicable, for which the plan 
or issuer provides coverage without imposing any cost-sharing 
requirements, consistent with the therapeutic equivalence approach 
described in FAQs Part 64. The Departments also propose to define 
``therapeutic equivalent'' for purposes of this proposed provision as 
having the meaning given the term ``therapeutic equivalents'' in 21 CFR 
314.3(b), which defines ``therapeutic equivalents'' as ``approved drug 
products that are pharmaceutical equivalents for which bioequivalence 
has been demonstrated, and that can be expected to have the same 
clinical effect and safety profile when administered to patients under 
the conditions specified in the labeling.''
    Under this proposal, consistent with FAQs Part 64, a therapeutic 
equivalent drug or drug-led combination product would be one that is 
designated with a code with the first letter ``A'' in the FDA's 
Approved Drug Products with Therapeutic Equivalence Evaluations (Orange 
Book).\127\ If the Orange Book does not identify a therapeutic 
equivalent for a given drug or drug-led combination product, that drug 
or drug-led combination product would have no therapeutic equivalent 
for purposes of these proposed rules, and a plan or issuer would not be 
permitted to use medical management techniques to deny coverage of (or 
impose cost sharing on) that drug or drug-led combination product. For 
example, assume that there are six oral contraceptives (Pill A, Pill B, 
Pill W, Pill X, Pill Y, and Pill Z) listed in the Orange Book that are 
within the HRSA-supported Guidelines category of contraceptives known 
as ``oral contraceptives (combined pill).'' If the Orange Book does not 
identify a therapeutic equivalent for either Pill A or Pill B, but 
identifies the latter four (Pill W, Pill X, Pill Y, and Pill Z) as 
therapeutic equivalents of each other, then under these proposed rules, 
the plan would be required to cover without cost sharing Pill A and 
Pill B, for which there are no therapeutic equivalents. The plan could 
utilize reasonable medical management techniques that result in it 
covering only one of Pill W, Pill X, Pill Y, or Pill Z without cost 
sharing because all four are therapeutically equivalent to each other 
(provided the plan has an exceptions process that ensures an individual 
can receive coverage, without cost sharing, for any of Pill W, Pill X, 
Pill Y, or Pill Z, in the circumstances discussed in more detail in 
section II.A.1 of this preamble).
---------------------------------------------------------------------------

    \127\ FAQs Part 64, Q2 (Jan. 22, 2024), available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64 and https://www.cms.gov/files/document/faqs-part-64.pdf.
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    In the Orange Book, the FDA evaluates only multisource prescription 
drug products for therapeutic equivalence.\128\ Therefore, the FDA does 
not evaluate therapeutic equivalence for OTC drugs or OTC drug-led 
combination products and the Orange Book does not categorize such 
products as a ``therapeutic equivalent'' of any other drug or drug-led 
combination product. As described in section II.A.2, the Departments 
are proposing to require plans and issuers to provide coverage of OTC 
contraceptives without cost sharing and without requiring a 
prescription. If both the therapeutic equivalence proposal described in 
this preamble section and the OTC contraceptive coverage proposal are 
finalized, plans and issuers would be required to cover all OTC 
contraceptive items that are drugs and drug-led combination products 
without cost sharing. The Departments request comment on the potential 
impacts to interested parties, including participants, beneficiaries, 
and enrollees and plans and issuers, if both proposals are finalized. 
The Departments further request comment on whether an alternative 
approach to therapeutic equivalence would be appropriate for OTC 
contraceptive drugs and drug-led combination products. If so, the 
Departments request comment on what medical management techniques would 
be appropriate and reasonable while balancing the goals of increasing 
consumer access to OTC contraceptive drugs and drug-led combination 
products and containing costs. For example, the Departments seek 
comment on whether plans and issuers should be permitted to provide 
coverage without cost-sharing or prescription requirements of a 
preferred generic version of an OTC contraceptive, while only covering 
the brand version without cost-sharing or prescription requirements 
subject to an exceptions process.
---------------------------------------------------------------------------

    \128\ FDA, ``Orange Book Preface,'' available at https://www.fda.gov/drugs/development-approval-process-drugs/orange-book-preface.
---------------------------------------------------------------------------

    In addition to satisfying the therapeutic equivalence approach, the 
Departments would not consider a plan's or issuer's medical management 
techniques with respect to recommended contraceptive services to be 
reasonable unless the plan or issuer meets existing standards under 
applicable regulations and guidance, to the extent not superseded by 
the other proposals in these proposed rules. For example, as described 
in FAQs Part 54, Q8, a plan's or issuer's medical management techniques 
would generally be considered reasonable only if the plan or issuer 
utilizes reasonable medical management techniques within a specified 
category described in the HRSA-supported Guidelines (or group of 
substantially similar products that are not included in a specified 
category).<SUP>129 130</SUP> Therefore, if a plan or

[[Page 85771]]

issuer provided coverage consistent with the proposed therapeutic 
equivalence approach, but used medical management techniques to deny 
coverage or impose cost sharing for all contraceptives in another 
category (or other groups of substantially similar products), such as 
the category for sterilization surgery for women, the plan's or 
issuer's medical management techniques would not be considered to be 
reasonable. Similarly, consistent with FAQs Part 54, Q8, the 
Departments would not consider a plan's or issuer's medical management 
techniques to be reasonable if the plan or issuer requires an 
individual to fail first using numerous contraceptives within a 
category prior to providing coverage consistent with the proposed 
therapeutic equivalence approach.
---------------------------------------------------------------------------

    \129\ FAQs Part 54, Q8 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
    \130\ The Departments acknowledge that the proposed therapeutic 
equivalence standard would require plans and issuers to cover more 
contraceptive drugs and drug-led combination products than under 
FAQs Part XXVI, Q2, which specified that a plan or issuer must cover 
at least one form of contraception in each method that is identified 
by the FDA. The Departments have determined that this approach is 
necessary to ensure coverage of the full range FDA-approved 
contraceptive drugs and drug-led combination products, as required 
under section 2713 of the PHS Act, while still permitting plans and 
issuers to contain costs by not requiring plans and issuers to cover 
items for which there is at least one therapeutic equivalent drug or 
drug-led combination product, as applicable, for which the plan or 
issuer provides coverage without imposing any cost-sharing 
requirements. The FDA defines ``therapeutic equivalents'' at 21 CFR 
314.3(b) as approved drug products that are pharmaceutical 
equivalents (meaning, in general, that they contain identical 
amounts of the identical active drug ingredient in the identical 
dosage form and route of administration) and bioequivalents 
(meaning, in general, that the rate and extent of the active 
ingredient at the site of action are the same), and that can be 
expected to have the same clinical effect and safety profile when 
administered to patients under the conditions specified in the 
labeling. The contraceptives described in the HRSA-supported 
Guidelines do not refer to therapeutic equivalence, and as a result, 
there may be multiple drugs or drug-led combination products within 
a category that are not therapeutically equivalent to each other. 
For example, within the ``oral contraceptives (combined pill)'' 
category identified in the HRSA-supported Guidelines, there could 
exist multiple products that are oral contraceptive combined pills 
but are not therapeutically equivalent because, for example, they 
contain different amounts of the same active ingredients. Under this 
proposal, a plan or issuer would be required to cover, without cost 
sharing, at least one oral contraceptive combined pill that has a 
therapeutic equivalent, as well as each non-therapeutic equivalent 
oral contraceptive combined pill, rather than at least one form of 
an oral contraceptive combined pill in the category.
---------------------------------------------------------------------------

    In addition, consistent with FAQs Part 64, the Departments would 
not consider the use of medical management techniques to be reasonable 
where a plan or issuer provides coverage consistent with the proposed 
therapeutic equivalence approach but fails to provide an exceptions 
process that meets the standards proposed in these rules. Requiring 
plans and issuers that utilize reasonable medical management to both 
apply the therapeutic equivalence approach and provide an exceptions 
process would be particularly important in instances where the plan's 
or issuer's preferred method is not medically appropriate for an 
individual. Consider an example in which there are three products 
within the HRSA-supported Guidelines category of ``the contraceptive 
patch'' (Patch A, Patch B, and Patch C) and the Orange Book identifies 
all three products as therapeutic equivalents to each other. Under the 
proposed therapeutic equivalence approach, a plan or issuer would be 
permitted to utilize reasonable medical management techniques that 
result in it generally covering only one of Patch A, Patch B, or Patch 
C without cost sharing because all are therapeutically equivalent to 
each other. However, without an exceptions process, a person who, for 
example, has an allergy to a non-therapeutic ingredient in Patch A such 
as a dye or an adhesive could not access an alternative such as Patch B 
or Patch C that is determined to be medically necessary by the 
individual's attending provider, and as a result, would be denied the 
coverage required under PHS Act section 2713.
    The Departments propose to define ``drug-led combination product'' 
at 26 CFR 54.9815-2713(a)(6)(i)(A), 29 CFR 2590.715-2713(a)(6)(i)(A), 
and 45 CFR 147.130(a)(6)(i)(A) as ``a combination product, as defined 
under 21 CFR 3.2(e), that comprises a drug and a device, and for which 
the drug component provides the primary mode of action.'' The term 
``combination products'' refers to the existing FDA definition of 
``combination product'' at 21 CFR 3.2(e), and would apply only to drug-
led combination products within the context of the proposed therapeutic 
equivalence approach discussed in this section II.A.2.b of this 
preamble. While this proposal would not prevent plans and issuers from 
applying a therapeutic equivalence approach to other recommended 
preventive services, the Departments request comment on whether plans 
and issuers utilizing reasonable medical management of recommended 
preventive services other than contraceptive drugs and drug-led 
combination products should be required to apply the therapeutic 
equivalence approach as described in these proposed rules.

B. Communicating OTC Contraceptive Coverage Requirements

    Because plans and issuers have not traditionally provided coverage 
for health items that can be purchased directly by a consumer without a 
prescription, participants, beneficiaries, and enrollees may not be 
aware that their health plan or coverage would cover OTC contraceptive 
items without cost sharing and without a prescription if these proposed 
rules are finalized. The Departments expect that without sufficient 
communication about this new coverage requirement from plans and 
issuers, consumers' lack of awareness may lead to minimal use of this 
benefit. Therefore, these proposed rules propose new requirements under 
26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2, and 45 CFR 147.211 that 
would ensure participants, beneficiaries, and enrollees are informed of 
this new coverage.
    Section 2715A of the PHS Act provides that non-grandfathered group 
health plans and health insurance issuers offering non-grandfathered 
group or individual health insurance coverage must comply with section 
1311(e)(3) of the ACA. Through section 1311(e)(3)(C) of the ACA, 
section 2715A of the PHS Act requires plans and issuers to permit 
individuals to learn the amount of cost sharing (including deductibles, 
copayments, and coinsurance) associated with a specific item or service 
furnished by an in-network provider upon the individual's request.
    Under the Departments' rulemaking authority in section 9833 of the 
Code, section 734 of ERISA, and 2792 of the PHS Act to implement 
section 2715A of the PHS Act, the Departments propose to require that 
plans and issuers permit individuals to learn the amount of cost 
sharing associated with OTC contraceptive items covered by their plan 
or coverage without a prescription. Specifically, the Departments 
propose to amend 26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2, and 45 
CFR 147.211 to add a new paragraph (b)(1)(vi) that would require plans 
and issuers to provide information to participants, beneficiaries, and 
enrollees explaining that OTC contraceptive items are covered without 
cost sharing and without a prescription consistent with these proposed 
rules when participants, beneficiaries, and enrollees request cost-
sharing information for any covered contraceptive item or service. By 
promoting awareness of coverage of OTC contraceptive items without 
cost-sharing or prescription requirements, these proposals serve as 
important companions to proposed 26 CFR 54.9815-2713(a)(6), 29 CFR 
2590.715-2713(a)(6), and 45 CFR 147.130(a)(6), described in section 
II.A.2.a of this preamble.
    In accordance with PHS Act section 2715A and ACA section 
1311(e)(3)(C), under current 26 CFR 54.9815-2715A2(b), 29 CFR 2590.715-
2715A2(b), and 45 CFR 147.211(b), plans and issuers must disclose an 
estimate of the participant's, beneficiary's, or enrollee's cost-
sharing liability for all covered items or services furnished by a 
provider or providers, through the Transparency in Coverage internet-
based self-service tool or, if requested by the individual, paper. 
Under current rules, if a participant, beneficiary, or enrollee uses 
the self-service tool to look up contraceptive items or services with 
respect to an in-network pharmacy (or to look up the

[[Page 85772]]

out-of-network cost sharing for these items or services for a plan or 
issuer that does not have a provider in its network that can provide 
the preventive item), the self-service tool would display the non-zero 
dollar cost-sharing liability for the individual that is associated 
with being billed as non-preventive (if applicable), along with a 
statement that the contraceptive item or service may not be subject to 
cost sharing if it is billed as preventive. For contraceptive items 
that are only covered by the plan or coverage for preventive purposes 
(including because they are only indicated for preventive purposes), 
current rules require the self-service tool to reflect a zero-dollar 
cost-sharing liability. The Departments note also that some 
contraceptive items may be covered for non-preventive purposes (either 
with or without a prescription), and in this case the self-service tool 
would reflect the non-zero dollar cost-sharing liability. The 
Departments also note that under current rules, plans and issuers are 
not required to disclose any cost-sharing information through the self-
service tool for non-covered items and services, including with respect 
to contraceptive items and services. Nothing in these proposed rules 
alters these disclosure requirements.
    As discussed in section II.A.2 of this preamble, the Departments 
are proposing to require plans and issuers to cover OTC contraceptive 
items without a prescription and without imposing cost-sharing 
requirements. To ensure individuals are aware that OTC contraceptive 
items are covered consistent with these proposed rules, plans and 
issuers would be required to inform individuals of this benefit under 
the plan or coverage. Participants, beneficiaries, and enrollees should 
have access to more robust information to ensure they understand their 
plan's or issuer's policies regarding coverage of OTC contraceptive 
items without a prescription and without cost sharing, and in the 
Departments' view, the self-service tool would offer an effective means 
of communicating such information. Therefore, the Departments propose 
to require plans and issuers to make an additional cost-sharing 
information disclosure to participants, beneficiaries, and enrollees in 
new proposed 26 CFR 54.9815-2715A2(b)(1)(vi), 29 CFR 2590.715-
2715A2(b)(1)(vi), and 45 CFR 147.211(b)(1)(vi). Specifically, if a 
participant, beneficiary, or enrollee requests cost-sharing information 
for any covered contraceptive item or service through a self-service 
tool, the proposed rules would require the response through the self-
service tool or, if requested, on paper to include with the information 
a statement explaining that OTC contraceptive items are covered without 
cost sharing and without a prescription. This statement would be 
required to include a phone number and internet link that a 
participant, beneficiary, or enrollee could use to learn more 
information about the plan's or policy's contraception coverage. This 
could be a link to an existing web page and a general customer service 
line that the plan or issuer already maintains.
    The requirement to provide this information would be triggered by a 
search in the self-service tool for any covered contraceptive items or 
services, including items or services that are not drugs or drug-led 
combination products or are not available without a prescription, so 
that any user seeking options to prevent pregnancy would be made aware 
that OTC contraceptive items are covered without cost sharing. Under 
this proposed requirement, the disclosure would be required regardless 
of whether the user is searching for cost-sharing information for 
contraceptive items and services from an in-network or out-of-network 
provider, or if the plan or coverage maintains no network of providers. 
As such, plans and issuers, including those without a network of 
providers, would be required to disclose that they will cover OTC 
contraceptive items without cost sharing or a prescription in 
accordance with proposed 26 CFR 54.9815-2713(a)(6), 29 CFR 2590.715-
2713(a)(6), and 45 CFR 147.130(a)(3)(ii). The Departments note that 
because the self-service tool requirements apply to covered items and 
services, the disclosure requirements proposed in this section would 
not apply to plans and issuers that do not cover contraceptive items or 
services based on an objection under 45 CFR 147.132 or 147.133.\131\ 
The Departments request comment on whether and how these proposed 
requirements should apply to entities that have an objection to only 
some contraceptive items and services.
---------------------------------------------------------------------------

    \131\ The Departments issued proposed rules to rescind the moral 
exemption to the contraceptive coverage requirement under 45 CFR 
147.133. 88 FR 7236 (Feb. 2, 2023).
---------------------------------------------------------------------------

    The Departments also request comment on whether plans and issuers 
should have the option to include in the statement either a phone 
number or an internet link--rather than both--to where a participant, 
beneficiary, or enrollee can learn more about the plan's or policy's 
contraception coverage. The Departments are interested in better 
understanding the benefits and burdens associated with each approach.
    The Departments also request comment on whether plans and issuers 
should be required to include in this statement the general names or 
types of OTC contraceptive items that are covered without a 
prescription and without cost sharing (for example, ``daily oral 
contraceptive,'' ``Plan B (levonorgestrel),'' or ``condoms''). Under 
this approach, users would not need to call the provided phone number 
or navigate to the linked web page and could simply copy and paste the 
provided product names into the self-service tool's search field to 
find local pharmacies where they can access the product without a 
prescription and without cost sharing. In particular, the Departments 
request comment on the burdens on plans and issuers to provide a list 
that may need to be updated in the self-service tool's statement as 
circumstances change (such as if additional OTC contraceptive items 
come to market or new therapeutic equivalents become available) or that 
could require multiple alternative disclosures for a plan or issuer 
that has coverage options across geographic regions based on 
availability in the specific market. In addition, the Departments 
request comment on potential benefits to consumers of listing in the 
tool itself the OTC contraceptive items covered without a prescription 
and without cost sharing, rather than having to gather this information 
by clicking an internet link or calling a customer service line.
    The Departments also request comment on whether plans and issuers 
should be required to include in the statement information on coverage 
of therapeutic equivalents or the exceptions process under these 
proposed rules and, if so, how disclosures should be presented to 
ensure the additional information is meaningful and actionable for 
consumers.\132\ For example, the Departments request comment on whether 
the statement should indicate that an exceptions process is available 
so individuals can receive coverage for any recommended preventive 
service, including an OTC contraceptive item, that is medically 
necessary for the individual; and, if so, how to present this 
information in a way that would be meaningful and actionable for 
consumers. Similarly, the Departments request comment on whether the

[[Page 85773]]

statement should disclose that plans and issuers must cover all FDA-
approved contraceptive drugs and drug-led combination products without 
cost sharing, other than those for which there is at least one 
therapeutic equivalent drug or drug-led combination product that the 
plan or issuer covers without cost sharing; and, if so, how to present 
this information in a way that would be meaningful and actionable for 
consumers.
---------------------------------------------------------------------------

    \132\ See sections II.A.1 and II.A.2.b of the preamble to these 
proposed rules, respectively, for a discussion of the exceptions 
process and therapeutic equivalence approach proposals.
---------------------------------------------------------------------------

    The Departments also request comment regarding the challenges of 
implementing and maintaining such statements, information about their 
potential effectiveness in improving access to OTC contraceptive items, 
and other information that could help inform potential future 
disclosures related to other recommended preventive services. The 
Departments also request comment on whether additional self-service 
tool requirements need to be specified to ensure plans and issuers 
fully inform participants, beneficiaries, and enrollees of the 
availability of covered OTC contraceptive items without cost sharing.
    Lastly, the Departments believe that broadly disseminating 
information on the availability and coverage of OTC contraceptive items 
without cost sharing to eligible individuals and members of the public 
would increase access to this benefit, if finalized as proposed, and 
would allow individuals to select the plan that best meets their needs. 
Therefore, the Departments request comment on how plans and issuers 
could efficiently and effectively provide such information to eligible 
individuals, participants, beneficiaries, enrollees, and members of the 
public, including the relative benefits and burdens of doing so. For 
example, the Departments are interested in whether it would be feasible 
for plans and issuers to provide general coverage and cost-sharing 
information on a public website. Similarly, the Departments are 
interested in whether plans and issuers should be required to provide 
more tailored cost and benefit information to participants, 
beneficiaries, or enrollees when they provide other relevant plan 
documents, such as Summaries of Benefits and Coverage (SBCs) or drug 
formularies. The Departments also request comment on how plans and 
issuers can make information available to participants, beneficiaries, 
and enrollees about the specific steps they would need to take to 
access OTC contraceptive items without cost sharing, particularly when 
plans and issuers do not have network providers available that can 
provide access to such items. Lastly, the Departments request comment 
on additional ways to communicate this information effectively to 
individuals in vulnerable and underserved communities.

C. Applicability

    The proposed amendments to 26 CFR 54.9815-2713(a)(4), 29 CFR 
2590.715-2713(a)(4), and 45 CFR 147.130(a)(4) regarding an exceptions 
process would apply on the effective date of the final rules. The 
Departments assume that most plans and issuers generally already have 
in place an exceptions process for recommended preventive services to 
align with previously issued guidance, although the Departments 
acknowledge in section IV.B.2.d of this preamble that some plans and 
issuers could incur costs to develop or update an exceptions process to 
comply with these proposed rules, if finalized. While prior guidance 
has generally focused on the use of an exceptions process in the 
context of contraceptive coverage and coverage of PrEP to prevent HIV, 
the Departments expect that plans and issuers could adapt existing 
exceptions processes to accommodate additional recommended preventive 
services as necessary to comply with the proposed amendments by the 
effective date of the final rules.
    The Departments propose delayed applicability dates for the 
proposed amendments to the preventive services regulations that are 
specific to contraceptive items. Specifically, the Departments propose 
that the proposed provisions of 26 CFR 54.9815-2713(a)(6), 29 CFR 
2590.715-2713(a)(6), and 45 CFR 147.130(a)(6) would apply for plan 
years (in the individual market, policy years) beginning on or after 
January 1, 2026. These proposed rules, if finalized, would mandate the 
use of the currently optional therapeutic equivalence approach 
described in FAQs Part 64, where applicable, and newly require the 
coverage of OTC contraceptive items without a prescription. In the 
Departments' view, the proposed applicability dates appropriately 
balance the need for improved access to coverage of recommended 
preventive services with the time necessary for plans and issuers to 
make the systems and operational changes to implement these proposals.
    Until any final rules are issued and applicable, the Departments 
would continue to consider plans and issuers that provide coverage 
consistent with the therapeutic equivalence approach and have an easily 
accessible, transparent, and sufficiently expedient exceptions process 
that is not unduly burdensome as outlined in FAQs Part 64 to be in 
compliance with section 2713 of the PHS Act and its implementing 
regulations with respect to coverage of recommended contraceptives that 
are drugs and drug-led devices.
    To align with applicability dates for the proposed requirements for 
OTC contraceptive items and therapeutic equivalents, the proposed 
requirements in 26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2 and 45 
CFR 147.211 that would direct plans and issuers to disclose information 
related to contraceptive coverage in the self-service tool would be 
applicable to plans and issuers for plan years (or in the individual 
market, policy years) beginning on or after January 1, 2026.
    The Departments request comment on the proposed applicability 
dates. With respect to the proposed delayed applicability dates, the 
Departments request comment on whether an earlier applicability date 
(such as the effective date of any final rules) would be feasible.

III. Severability

    In the event that any provision of these proposed rules, if 
finalized, is held to be invalid or unenforceable by its terms, or as 
applied to any person or circumstance, the Departments intend that 
these rules shall be construed so as to continue to give maximum effect 
to these rules as permitted by law, unless the holding shall be one of 
utter invalidity or unenforceability. In the event a provision is found 
to be utterly invalid or unenforceable, the provision shall be 
severable from these proposed rules as finalized, as well as the final 
rules they amend and shall not affect the remainder thereof or the 
application of the provision to persons not similarly situated or to 
dissimilar circumstances.
    In these rules, the Departments are proposing several amendments to 
reduce barriers to coverage and promote access to recommended 
preventive services, including OTC contraceptive items. The 
Departments' authority under section 9833 of the Code, section 734 of 
ERISA, sections 2713, 2715A, and 2792 of the PHS Act, and sections 
1311(e)(3)(C) and 1321 of the ACA to propose these amendments is well-
established in law and long-standing practice and should be upheld in 
any legal challenge. However, in the event that any portion of the 
final rules related to any of the proposals in these rules, if 
finalized, is declared invalid, the Departments intend that the other 
provisions would be severable, except as described in this section of 
the preamble. For example, if a court were to find unlawful (1) the 
requirement that plans and issuers utilizing medical management 
techniques provide an

[[Page 85774]]

exceptions process in order for such techniques to be considered 
reasonable; (2) the requirement to provide coverage for OTC 
contraceptive items without requiring a prescription or imposing cost 
sharing; or (3) the therapeutic equivalence approach to reasonable 
medical management for contraceptive items that are drugs and drug-led 
combination products, the Departments intend the remaining provisions 
of the rules to stand. Additionally, the Departments intend for the 
proposed amendments to the preventive services regulations to remain in 
place in the event that a court were to find unlawful any portion of 
the rules, if finalized, with respect to the proposals related to 
disclosing information related to contraceptive coverage through the 
self-service tool. However, the Departments do not intend for the 
disclosure through the self-service tool to remain in place in the 
event that a court were to find unlawful the requirement to provide 
coverage for OTC contraceptive items without requiring a prescription 
or imposing cost sharing, as the disclosure requirements would not 
provide meaningful information to consumers in the absence of these 
underlying coverage requirements.

IV. Regulatory Impact Analysis

A. Summary--Departments of Health and Human Services and Labor \133\
---------------------------------------------------------------------------

    \133\ In sections IV.A, IV.B, and IV.C of this preamble, ``the 
Departments'' refers to the Departments of HHS and Labor.
---------------------------------------------------------------------------

    These proposed rules would make several changes to the requirements 
for non-grandfathered group health plans and health insurance issuers 
offering non-grandfathered group or individual health insurance 
coverage to provide coverage of certain recommended preventive services 
without cost sharing under section 2713 of the PHS Act and its 
implementing regulations. First, these proposed rules would provide 
that medical management techniques used by plans and issuers with 
respect to recommended preventive services, including contraceptive 
items, would not be considered reasonable unless the plan or issuer 
provides an easily accessible, transparent, and sufficiently expedient 
exceptions process that allows an individual to receive coverage 
without cost-sharing requirements for a recommended preventive service 
according to the frequency, method, treatment, or setting that is 
medically necessary with respect to the individual, as determined by 
the individual's attending provider. These proposed rules also would 
require plans and issuers to cover recommended OTC contraceptive items 
without a prescription and without imposing cost-sharing requirements. 
These proposed rules would further require plans and issuers to cover 
all recommended contraceptive items that are drugs and drug-led 
combination products without imposing cost-sharing requirements, unless 
a therapeutic equivalent of the drug or drug-led combination product is 
covered without cost sharing. Lastly, these proposed rules would amend 
the Transparency in Coverage final rules implementing section 2715A of 
the PHS Act and section 1311(e)(3) of the ACA by requiring plans and 
issuers to provide information related to contraceptive coverage and 
cost-sharing requirements, including a statement explaining the 
coverage of OTC contraceptive items without cost sharing, in their 
Transparency in Coverage internet-based self-service tool or, if 
requested by the individual, on paper.
    The Departments have examined the impacts of these proposed rules 
as required by Executive Order 12866 on Regulatory Planning and Review 
(September 30, 1993),\134\ Executive Order 13563 on Improving 
Regulation and Regulatory Review (January 18, 2011),\135\ Executive 
Order 14094 on Modernizing Regulatory Review (April 6, 2023),\136\ the 
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), 
section 1102(b) of the Social Security Act, section 202 of the Unfunded 
Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), and 
Executive Order 13132 on Federalism (August 4, 1999).\137\
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    \134\ Executive Order 12866 of September 30, 1993, 58 FR 51735 
(October 4, 1993).
    \135\ Executive Order 13563 of January 18, 2011, 76 FR 3821 
(January 21, 2011).
    \136\ Executive Order 14094 of April 6, 2023, 88 FR 21879 (April 
11, 2023).
    \137\ Executive Order 13132 of August 4, 1999, 64 FR 43255 
(August 10, 1999).
---------------------------------------------------------------------------

B. Executive Orders 12866, 13563, and 14094--Departments of Health and 
Human Services and 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, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 14094 (Modernizing Regulatory Review) amends section 3(f) of 
Executive Order 12866 (Regulatory Planning and Review). The amended 
section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a rule: 
(1) having an annual effect on the economy of $200 million or more in 
any 1 year (adjusted every 3 years by the Administrator of the Office 
of Information and Regulatory Affairs (OIRA) in the Office of 
Management and Budget (OMB) for changes in gross domestic product), or 
adversely affecting in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, Territorial, or Tribal governments 
or communities; (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 legal or policy issues for which centralized 
review would meaningfully further the President's priorities or the 
principles set forth in Executive Order 12866, as specifically 
authorized in a timely manner by the Administrator of OIRA in each 
case.\138\
---------------------------------------------------------------------------

    \138\ Executive Order 14094 of April 6, 2023, 88 FR 21879 at 
21879 (April 11, 2023).
---------------------------------------------------------------------------

    A regulatory impact analysis (RIA) must be prepared for rules 
deemed significant under section 3(f). Based on the Departments' 
estimates, OMB's OIRA has determined this rulemaking is significant 
under section 3(f)(1) as measured by the $200 million or more in any 1 
year threshold. Therefore, OMB has reviewed these proposed rules, and 
the Departments have provided the following assessment of their impact.
1. Need for Regulatory Action
    As discussed in section II of this preamble, ongoing complaints and 
reports of noncompliance with section 2713 of the PHS Act and its 
implementing regulations indicate that participants, beneficiaries, and 
enrollees face barriers when attempting to use their coverage to access 
recommended preventive services without cost sharing. As a result of 
these concerns and other significant activity related to preventive 
services, the Departments are proposing to amend the regulations 
governing coverage of recommended preventive services in order to 
ensure that participants, beneficiaries, and enrollees would be able to 
access the full range of recommended preventive services to which they 
are entitled, with particular focus on strengthening coverage 
requirements with respect to recommended contraceptive items for women, 
as summarized in section IV.A

[[Page 85775]]

of this preamble. The Departments consider these provisions to be 
timely and necessary given the ongoing documented challenges faced by 
consumers in accessing recommended preventive services, as discussed 
further in section IV.B.2.a of this preamble.
2. Summary of Impacts
    In accordance with Executive Order 12866 and OMB Circular A-4, 
table 1 depicts an accounting statement summarizing the Departments' 
assessment of the benefits, costs, and transfers associated with these 
regulatory actions. The Departments are unable to quantify all 
benefits, costs, and transfers associated with these proposed rules, 
but have sought, where possible, to describe these non-quantified 
impacts.
---------------------------------------------------------------------------

    \139\ The Departments expect self-insured group health plans to 
rely on TPAs to implement the proposed requirements and compensate 
them accordingly and thereby bear any implementation costs.

                                            Table 1--Accounting Table
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Non-Quantified:
    <bullet> Potential reduction in unintended pregnancies and improved health outcomes for covered individuals.
    <bullet> Increased convenience and decreased costs for covered individuals who no longer need to obtain a
     prescription to obtain recommended OTC contraceptive items without cost sharing..
    <bullet> Decreased costs to plans and issuers due to improved health outcomes associated with increased
     coverage of recommended preventive services without cost sharing and avoided unintended pregnancies..
    <bullet> Potential benefits associated with increased awareness of coverage of OTC contraceptive items
     without a prescription and without cost sharing..
----------------------------------------------------------------------------------------------------------------
Costs                              Estimate............     Year dollar  Discount............     Period covered
                                                                         rate................
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year)....  $9.9 million........            2024  2 percent...........          2026-2035
----------------------------------------------------------------------------------------------------------------
Quantified:
    <bullet> Costs to issuers and TPAs, on behalf of self-insured group health plans, associated with the
     disclosure of coverage and cost-sharing requirements for OTC contraceptive items, including one-time costs
     of approximately $35.1 million for integrating the contraception statement language into the existing
     Transparency in Coverage internet-based self-service tool and creating or updating a webpage to provide
     information about coverage benefits, and annual costs of approximately $6.1 million for programming
     updates, webpage maintenance, training customer service representatives, and responding to calls to provide
     assistance; these costs would ultimately be incurred by plans and issuers.\139\.
Non-Quantified:
    <bullet> Increased costs to plans and issuers due to changes in utilization of recommended preventive
     services..
    <bullet> Potential administrative costs to plans and issuers associated with the establishment of or use of
     an existing exceptions process that allows an individual to receive coverage without cost-sharing
     requirements for a medically necessary recommended preventive service..
    <bullet> Cost to pharmacies, plans, and issuers to update billing processes and systems for covered OTC
     products..
----------------------------------------------------------------------------------------------------------------
Transfers                          Estimate............     Year dollar  Discount............     Period covered
                                                                         rate................
----------------------------------------------------------------------------------------------------------------
Annualized Monetized (Excluding    $468.6 million......            2024  2 percent...........          2026-2035
 Federal Budgetary) ($/year).
Annualized Monetized Federal       $300.1 million......            2024  2 percent...........          2026-2035
 Budgetary ($/year).
----------------------------------------------------------------------------------------------------------------
Quantified:
    <bullet> Transfers totaling approximately $768.7 million per year from plans and issuers to covered
     individuals caused by reduced out-of-pocket costs for contraceptive items, which plans and issuers would
     recoup in the form of higher premiums..
        [cir] The increase in premiums could increase the cost of employer-sponsored insurance and reduce the
         share of total employee compensation subject to taxation, reducing Federal tax revenue by approximately
         $217 million per year..
        [cir] Net Federal spending on premium tax credits for Exchange plans could increase by approximately
         $83.1 million per year..
        [cir] Premiums paid (directly or indirectly, through declines in after-tax wages) by covered individuals
         could increase by approximately $468.6 million per year..
Non-Quantified:
    <bullet> Transfers from plans and issuers to covered individuals caused by reduced out-of-pocket costs for
     other recommended preventive services for which coverage without cost sharing would be accessible through
     an exceptions process, which plans and issuers would recoup in the form of higher premiums. This could
     result in an increase in premiums paid by covered individuals and an increase in net Federal spending on
     premium tax credits for Exchange plans..
    <bullet> Potential transfers from plans and issuers to firms in the medicine and medical device supply chain
     due to decreased bargaining leverage on prices for contraceptive items..
----------------------------------------------------------------------------------------------------------------

a. Background
    Nine in ten women report using contraception at some point in their 
lifetime.\140\ Estimates from the CDC indicate that 65.3 percent of 
women ages 15-49 used some form of contraception between 2017 and 2019, 
including permanent or one or more forms of reversible contraception 
listed in the FDA's Birth Control Guide.\141\ The majority of women 
used reversible contraception such as oral contraceptive pills (14 
percent), long-acting reversible contraceptives (LARCs) such as 
intrauterine device (IUDs) (10.4 percent), or the male condom (8.4 
percent). The most common form of contraception is female sterilization 
(18.1 percent), a nonreversible method.\142\
---------------------------------------------------------------------------

    \140\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings/.
    \141\ Daniels, K. and Abma, J.C., CDC (2020). ``Current 
Contraceptive Status Among Women Aged 15-49: United States, 2017-
2019,'' NCHS Data Brief No. 388, available at https://www.cdc.gov/nchs/products/databriefs/db388.htm.
    \142\ Id.
---------------------------------------------------------------------------

    The 2022 KFF Women's Health Survey (of U.S. women ages 18-49) found 
that nearly two-thirds of survey respondents who were not currently 
trying to get pregnant reported avoiding a pregnancy in the next month 
as being ``very important.'' \143\ The same survey found that among 
women who use contraception, 61 percent use it only to prevent 
pregnancy, 24 percent use it both to prevent pregnancy and for some 
other reason, and 15 percent use it solely for a reason not related to

[[Page 85776]]

preventing pregnancy (for example, managing a medical condition or 
preventing a sexually transmitted infection).\144\ Individuals' 
contraceptive needs, including because of side effects, can vary 
depending on their health history, medical needs, allergies, and other 
factors. A recent study that reviewed two decades of literature on 
contraception found that hormonal contraceptives can impact medical 
conditions associated with hormonal fluctuations, including acne, 
endometriosis, and premenstrual dysphoric disorder.\145\ This and other 
studies detail that combined hormonal contraceptives and progestin-only 
pills often have different side effects for women with varying 
backgrounds or medical conditions.\146\ Studies emphasize that it is 
difficult to predict how individuals will react to oral contraceptives, 
with one noting that ``certain side effects . . . may be considered 
beneficial by some people but unacceptable by others,'' and that 
``different formulations have different side effect profiles, so 
patients may need to try another formulation if an undesirable side 
effect occurs.'' \147\ Studies point to the fact that optimal 
contraception selection depends on a person's health needs and personal 
factors and preferences.\148\
---------------------------------------------------------------------------

    \143\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings/.
    \144\ Id.
    \145\ Teal, S. and Edelman, A. (2021). ``Contraception 
Selection, Effectiveness, and Adverse Effects: A Review,'' JAMA, 
available at https://pubmed.ncbi.nlm.nih.gov/34962522.
    \146\ Britton, L.E., Alspaugh, A., Greene, M.Z., and McLemore, 
M.R. (2020). ``An Evidence-Based Update on Contraception,'' American 
Journal of Nursing, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7533104.
    \147\ Id.
    \148\ Id.
---------------------------------------------------------------------------

    A growing body of research finds there is a mismatch between 
preferred and commonly used contraception methods.\149\ These studies 
find that LARCs and hormonal methods generally have higher rates of 
satisfaction than condoms, withdrawal, and no method of contraception. 
Nearly 25 percent of all people, and nearly 30 percent of people 
earning under 200 percent of the Federal Poverty Line, are not using 
their preferred method. People report using less preferred methods due 
to issues with side effects, cost and affordability, inadequate 
counseling, and other access barriers such as facilities not offering 
the preferred method.\150\ The mismatch between preferred and used 
method was found to be less common among those with higher incomes, 
those with insurance coverage, and those that have a usual source of 
care.\151\ The literature also finds that unsatisfied preferences were 
associated with discontinuation of contraception method and 
subsequently higher rates of pregnancy, indicating that reducing 
barriers that contribute to this satisfaction mismatch has the 
potential to reduce unwanted pregnancies, especially among underserved 
communities such as women of color and low-income communities.\152\
---------------------------------------------------------------------------

    \149\ Burke, K. and Potter, J. (2023). ``Meeting Preferences for 
Specific Contraceptive Methods: An Overdue Indicator,'' Studies in 
Family Planning, available at https://onlinelibrary.wiley.com/doi/full/10.1111/sifp.12218.
    \150\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings and Burke, K. and Potter, J. (2023). ``Meeting Preferences 
for Specific Contraceptive Methods: An Overdue Indicator,'' Studies 
in Family Planning, available at https://onlinelibrary.wiley.com/doi/full/10.1111/sifp.12218.
    \151\ Burke, K. and Potter, J. (2023). ``Meeting Preferences for 
Specific Contraceptive Methods: An Overdue Indicator,'' Studies in 
Family Planning, available at https://onlinelibrary.wiley.com/doi/full/10.1111/sifp.12218.
    \152\ Id.
---------------------------------------------------------------------------

    The 2022 KFF Women's Health Survey found that 77 percent of 
respondents (and 79 percent of respondents with private health 
insurance coverage) favored making oral contraceptive pills available 
OTC without a prescription if research showed they are safe and 
effective, and 39 percent of respondents indicated they would be likely 
to use oral contraceptive pills available OTC without a 
prescription.\153\ The survey further found that 29 percent of 
respondents currently using oral contraceptive pills would be ``very 
likely'' to use OTC oral contraceptive pills that do not require a 
prescription, as would 19 percent of respondents currently using other 
contraceptive methods and 15 percent of respondents currently not using 
any contraceptive method.\154\ These figures indicate that take-up of 
OTC contraceptive items available without a prescription and without 
cost sharing might be fairly high. When asked why they would be likely 
to use OTC oral contraceptive pills, most respondents reported that it 
is because they are more convenient (59 percent) or faster (15 
percent), while 8 percent reported that they do not want a physical or 
pelvic exam, 7 percent reported that OTC oral contraceptive pills are 
more confidential, 6 percent reported that they think it would save 
money, and 3 percent reported that they do not want to have to use 
health insurance.\155\ Coverage of OTC contraceptive items without cost 
sharing or a prescription requirement would be particularly beneficial 
for certain contraceptive users considering that 33 percent of hormonal 
contraceptive users indicated that they missed taking their birth 
control on time because they were not able to get their next supply on 
time \156\ and 36 percent of oral contraceptive users have missed 
taking it on time for the same reason.\157\
---------------------------------------------------------------------------

    \153\ This figure was the same (39 percent) among the subset of 
respondents with private health insurance coverage. See Long, M., 
Frederiksen, B., Ranji, U., Diep, K., and Salganicoff, A., KFF 
(2022). ``Interest in Using Over-the-Counter Oral Contraceptive 
Pills: Findings from the 2022 KFF Women's Health Survey,'' available 
at https://www.kff.org/womens-health-policy/issue-brief/interest-using-over-the-counter-oral-contraceptive-pills-findings-2022-kff-womens-health-survey.
    \154\ Id.
    \155\ Id.
    \156\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
    \157\ Long, M., Diep, K., Sobel, L. and Salganicoff, A., KFF 
(2023). ``Over-the-Counter Oral Contraceptive Pills,'' available at 
https://www.kff.org/womens-health-policy/issue-brief/over-the-counter-oral-contraceptive-pills.
---------------------------------------------------------------------------

    More generally, as discussed in section II of this preamble, cost 
sharing reduces the use of preventive care, and some individuals may 
forego a preventive service entirely rather than being forced to choose 
between a form of care that their provider has determined would not be 
medically appropriate for them or to pay out-of-pocket for the care 
they need.
b. Number of Affected Entities
    This section addresses entities that would be directly affected by 
these proposed rules. These proposed rules would apply to non-
grandfathered group health plans and health insurance issuers offering 
non-grandfathered group or individual health insurance coverage.\158\ 
For the purposes of this RIA, the term covered plans refers to these 
plan and coverage types. Health insurance company refers to a single 
entity that offers health insurance coverage in one or multiple States, 
which might own or be affiliated with one or multiple entities that are 
separately required to be licensed to engage in the business of 
insurance in each such State. Health insurance issuer or issuer means 
an insurance company, insurance service, or insurance organization 
(including a health maintenance organization (HMO)) that is required to 
be licensed to engage in

[[Page 85777]]

the business of insurance in a State and that is subject to State law 
that regulates insurance.
---------------------------------------------------------------------------

    \158\ As noted in section I.A, these proposed rules would not 
modify Federal conscience protections related to contraceptive 
coverage for employers, plans and issuers. See fn. 24.
---------------------------------------------------------------------------

    The Departments estimate that there are 499,299 ERISA-covered self-
insured, non-grandfathered group health plans \159\ and 1,844,520 
ERISA-covered fully-insured, non-grandfathered group health plans.\160\ 
The Departments further estimate that there are 76,345 non-
grandfathered non-Federal governmental plans sponsored by State and 
local governmental entities.\161\
---------------------------------------------------------------------------

    \159\ The Departments estimate that there are 594,404 ERISA-
covered self-insured group health plans based on data from the 2022 
Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and 
the 2020 County Business Patterns from the Census Bureau. The 2020 
KFF Employer Health Benefits Survey reported that in 2020, 16 
percent of firms offering health benefits offered at least one 
grandfathered health plan (see KFF, 2020 Kaiser Employer Health 
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the 
Departments have calculated the number of self-insured, non-
grandfathered plans in the following manner: 594,404 ERISA-covered 
self-insured group health plans x (100 percent minus 16 percent) = 
499,299.
    \160\ The Departments estimate that there are 2,195,857 ERISA-
covered fully-insured group health plans based on data from the 2022 
Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and 
the 2020 County Business Patterns from the Census Bureau. The 2020 
KFF Employer Health Benefits Survey reported that in 2020, 16 
percent of firms offering health benefits offered at least one 
grandfathered health plan (see KFF, 2020 Kaiser Employer Health 
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the 
Departments have calculated the number of fully-insured, non-
grandfathered plans in the following manner: 2,195,857 ERISA-covered 
fully-insured group health plans x (100 percent minus 16 percent) = 
1,844,520.
    \161\ According to data from the 2022 Census of Governments, 
there are 90,887 State and local governmental entities (see U.S. 
Census Bureau, 2022 Census of Governments, available at https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html). The 
Departments assume that each State and local governmental entity 
sponsors one health plan on average. Therefore, the Departments 
estimate that there are 90,887 non-Federal governmental health 
plans. The 2020 KFF Employer Health Benefits Survey reported that 16 
percent of employers offer at least one grandfathered plan (see KFF, 
2020 Kaiser Employer Health Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). The Departments therefore estimate there are 
approximately 76,345 non-grandfathered non-Federal governmental 
plans.
---------------------------------------------------------------------------

    Issuers and third-party administrators (TPAs) provide key support 
for plan compliance with laws and regulations. Plans often have TPAs 
provide expertise in plan design, establish networks, and administer 
claims. For medications, issuers and TPAs often provide these services 
via contracted or affiliated PBMs.
    The Departments assume that issuers and TPAs would be the 
organizations performing the work of redesigning prescription drug 
formularies, negotiating new or amended network arrangements with 
pharmacies, and developing any necessary amendments and changes to 
billing systems and procedures.
    The Departments estimate that these proposed rules would affect 479 
health insurance companies nationwide that provide coverage in the 
group and individual health insurance markets, with 1,467 issuers 
(health insurance company/State combinations).\162\
---------------------------------------------------------------------------

    \162\ The Departments' estimate of the number of health 
insurance companies and the number of issuers (issuer/State 
combinations) is based on medical loss ratio reports submitted by 
issuers for the 2022 reporting year (see Centers for Medicare & 
Medicaid Services, ``Medical Loss Ratio Data and System Resources 
(2022),'' available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr).
---------------------------------------------------------------------------

    These proposed rules would also affect pharmacies, given the 
coverage requirements for OTC contraceptives proposed in these proposed 
rules. According to the Census Bureau's Statistics of U.S. Businesses, 
there are 19,234 firms in the pharmacies and drug stores sector in the 
U.S. as of 2017.\163\
---------------------------------------------------------------------------

    \163\ U.S. Census Bureau (2017). 2017 SUSB Annual Data Tables by 
Establishment Industry (Data by Enterprise Receipts Size), available 
at https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
---------------------------------------------------------------------------

    Because these proposed rules have the potential to impact the gross 
premiums of covered plans--either directly as paid by plan participants 
and enrollees and/or indirectly by their employers in lieu of salary or 
other benefits--all participants, beneficiaries, and enrollees in 
affected plans may potentially be affected by these proposed rules, 
regardless of their use of contraceptive items. For purposes of this 
RIA, covered individuals refers to participants, beneficiaries, and 
enrollees in covered plans that are subject to the proposed rules.
    There are an estimated 181.4 million individuals in plans that 
would be affected by these proposed rules.\164\ Within this total, 
there are an estimated 21 million covered individuals enrolled in 
coverage provided through an Exchange (with approximately 16 million 
policyholders).\165\ This separate tally of Exchange enrollees is used 
as an input to the estimation of the net Federal spending impact of 
these proposed rules in the transfers section IV.B.2.e of this 
preamble.
---------------------------------------------------------------------------

    \164\ The calculation (approximately 181,412,000 individuals) is 
based on reports of private insurance coverage in the 2023 Current 
Population Survey Annual Social and Economic Supplement (CPS-ASEC). 
Private coverage in that survey includes employment-based (including 
non-government, non-Federal government, and Federal government 
employment), directly purchased (Exchange and non-Exchange), and 
TRICARE coverage. To arrive at the number of covered individuals 
(which excludes TRICARE enrollees), the Departments remove from the 
count respondent households for which the respondent is a member of 
the military. It also removes respondents who are over 65 or who 
report government insurance (such as Medicare, Medicaid, or VA) in 
addition to private insurance. The Departments view this calculation 
as an upper bound because the data are not sufficient to identify 
and exclude enrollees in grandfathered plans or individuals in non-
ACA compliant individually purchased plans. The Departments do not 
have an estimate of the relevant number of enrollees in either of 
these plan types; the latest available data on percentage of 
enrollees in grandfathered plans is from the 2020 KFF Employer 
Health Benefits Survey. See KFF, 2020 Kaiser Employer Health 
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf, reporting 
that 14 percent of individuals were enrolled in grandfathered plans. 
However, the number has been declining since 2011, falling from 56 
percent in 2011. See KFF, 2018 Kaiser Employer Health Benefits 
Survey, Figure 13.3, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2018). In the absence 
of more recent data, the Departments cannot rule out that the rate 
has continued to fall.
    \165\ See CMS, ``Open Enrollment Period Report: Final National 
Snapshot,'' available at https://www.cms.gov/newsroom/fact-sheets/marketplace-2024-open-enrollment-period-report-final-national-snapshot (reporting 21,310,538 Exchange enrollees). The estimated 
conversion between total enrollees and policyholders--15 enrollees 
per 11 policyholders--is based on medical loss ratio reports 
submitted by issuers for the 2021 reporting year, in which the 
number of policyholders in individual health insurance coverage 
offered in the individual market was approximately 11 million, and 
the number of enrollees was approximately 15,000,000. See CMS 
(2022), ``Medical Loss Ratio Data and System Resources,'' https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
---------------------------------------------------------------------------

    Among individuals in covered plans, the Departments estimate that 
51.71 million individuals (28.5 percent) are women of reproductive age 
(15-49).\166\ The Departments calculate, based on data from the 2017-
2019 National Survey of Family Growth (NSFG),\167\ that 29.4 percent of 
women of reproductive age who have private health insurance are using 
contraceptive items that are (only now, in the case of oral 
contraceptive pills) available OTC (oral contraception pills, condoms, 
and/or emergency contraception) in a given enrollment month. This 
estimate is somewhat higher than the 2020 estimate by the National 
Center for Health Statistics (approximately 22.4 percent), given that 
the Departments' analysis restricts its calculations to women who

[[Page 85778]]

report enrollment in private health insurance coverage.\168\ Thus, the 
Departments estimate that 15.2 million individuals (8.4 percent of all 
individuals in covered plans) are women of reproductive age using these 
forms of contraceptives.\169\ The Departments request comment on this 
analysis.
---------------------------------------------------------------------------

    \166\ The calculation is based on the reports of private 
insurance coverage in the 2023 CPS-ASEC. The calculation 
specifically includes all individuals who report their sex as female 
and are of age 15 to 49 years. Private insurance coverage includes 
those covered by directly purchased (Exchange and non-Exchange) and 
employment-based health insurance. Those in the armed services are 
excluded from the calculation.
    \167\ See CDC, ``2017-2019 NSFG: Public-Use Data Files, 
Codebooks, and Documentation,'' available at https://www.cdc.gov/nchs/nsfg/nsfg_2017_2019_puf.htm.
    \168\ See CDC, ``Current Contraceptive Status Among Women Aged 
15-49: United States, 2017-2019,'' available at https://www.cdc.gov/nchs/data/databriefs/db388-H.pdf (estimating that approximately 65 
percent of women ages 15-49 were currently using contraception. By 
method, these included female sterilization (18.1 percent), oral 
contraceptive pills (14.0 percent), LARCs (10.4 percent), male 
condoms (8.4 percent), male sterilization (5.6 percent), Depo-
Provera, contraceptive ring, or patch (3.1 percent), and 5.7 percent 
across all other methods (includes diaphragm, withdrawal, periodic 
abstinence with safe period assessed via calendar rhythm, 
temperature, or cervical mucus test)).
    \169\ Approximately 181.4 million individuals in covered plans, 
times 28.5 percent who are women of reproductive age, times 29.4 
percent of these who are assumed to use recommended OTC 
contraceptives, per the NSFG analysis (see https://www.cdc.gov/nchs/nsfg/nsfg_2017_2019_puf.htm).
---------------------------------------------------------------------------

    Table 2 summarizes the number of entities that would be affected by 
these proposed rules.

                  Table 2--Number of Affected Entities
------------------------------------------------------------------------
                                                           Number of
                   Affected entity                          entities
------------------------------------------------------------------------
ERISA-covered non-grandfathered group health plans...          2,343,819
    ERISA-covered self-insured, non-grandfathered                499,299
     group health plans..............................
    ERISA-covered fully-insured, non-grandfathered             1,844,520
     group health plans..............................
Non-grandfathered non-Federal governmental plans.....             76,345
Issuers (health insurance company/State combinations)              1,467
Pharmacies and drug stores...........................             19,234
Covered individuals..................................        181,412,000
------------------------------------------------------------------------

c. Benefits
    This analysis provides a qualitative discussion of the benefits 
associated with these proposed rules, as the Departments do not have 
the data necessary to quantify these benefits. The Departments request 
comment and data on how to quantify these benefits.
(1) Enhanced Coverage of a Wider Range of Preventive Services Without 
Cost Sharing for Eligible Individuals Leading to a Potential Reduction 
in Unintended Pregnancies and Improved Health Outcomes for Individuals
    The potential for these proposed rules to facilitate greater 
coverage of a wider range of preventive services without cost sharing 
for eligible individuals could lead to important benefits to health and 
satisfaction (for example, in the form of better matches between chosen 
contraceptive items and individuals' medical needs and preferences). 
There is clear evidence that many contraceptive users are not using 
their preferred form of contraception because of concerns about side 
effects, cost, or availability, for example.\170\ Greater flexibility 
in contraceptive choice could directly improve quality of life, 
including by minimizing side effects and facilitating covered 
individuals in optimizing contraceptive use according to their unique 
needs and preferences. Improved satisfaction with one's contraceptive 
method, including by reducing unwanted side effects, would be an 
important benefit of these proposed rules. Given the many variations of 
contraceptive drugs or drug-led combination products, each with 
different hormonal properties, dosage levels, physical properties, 
delivery mechanisms, side effects, and benefits, there is significant 
need for individual tailoring and choice. Better aligning contraceptive 
use with a method or product with preferred health outcomes could be a 
source of major health improvements for covered individuals, as 
discussed further in this section. The ability to select among more 
contraceptive options at zero cost may facilitate such alignment, 
helping more women find a contraceptive that works best for their 
medical needs.
---------------------------------------------------------------------------

    \170\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
---------------------------------------------------------------------------

    Increased coverage of medically necessary preventive services 
without cost-sharing requirements through the use of an exceptions 
process would have a similar effect of expanding covered individuals' 
ability to access and use appropriate recommended preventive services 
by eliminating a financial barrier to receiving medically necessary 
care.
    The Departments recognize the potential for a reduction in 
unintended pregnancies and improved health outcomes as a result of 
these proposed rules. First, a reduction in unintended pregnancies and 
improved health outcomes could result from increases in the share of 
covered women who use contraception.\171\ Second, these proposed rules 
could induce some contraceptive switching among covered women already 
using reversible contraception that could create a closer match between 
the contraceptive method or product with the best medical outcomes for 
the individual and the method or product they currently use. In such 
cases, individuals able to switch to a method or product with the best 
medical outcome for them may more reliably adhere to the relevant usage 
recommendations.\172\
---------------------------------------------------------------------------

    \171\ See CDC, ``Reproductive Health, Unintended Pregnancy,'' 
available at https://www.cdc.gov/reproductive-health/hcp/unintended-pregnancy/index.html (finding that 41.6 percent of pregnancies were 
unintended).
    \172\ Fiffick, A.N., Iyer, T.K., Cochran, T., and Batur, P. 
(2023). ``Update on Current Contraceptive Options: A Case-based 
Discussion of Efficacy, Eligibility, and Use.'' Cleveland Clinic 
Journal of Medicine, available at: https://www.ccjm.org/content/ccjom/90/3/181.full.pdf.
---------------------------------------------------------------------------

    Any benefit of reducing unintended or unplanned pregnancies would 
scale in proportion to the extent of new (or more reliable) use of 
contraception. The Departments do not have the data necessary to 
precisely estimate the extent of such an expansion in contraception use 
along both the extensive (new use) and intensive (more reliable use) 
margins, but anticipate relatively small effects on the number of women 
newly using any contraceptives as a result of the proposed rules, as 
discussed later in this section.

[[Page 85779]]

    Studies have consistently shown that approximately 70 percent of 
privately insured women who use contraception have the cost of their 
method covered in full by private health insurance.\173\ These studies 
include evidence on the share of privately-insured women who do not pay 
cost sharing for oral contraceptives after passage of the ACA.\174\ 
That these proposed rules would apply to a population of privately-
insured women who already have coverage of certain contraceptives 
without cost sharing suggests the possibility of a small net effect on 
any contraception use for covered individuals. For example, in the 2022 
KFF Women's Health Survey, only 4 percent of respondents reported cost 
as a reason for not using birth control, and this figure included 
individuals who did not have health insurance.\175\
---------------------------------------------------------------------------

    \173\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings/#Contraceptive-Coverage.
    \174\ Sonfield, A., Tapales, A., Jones, R.K., and Finer, L.B. 
(2015). ``Impact of the Federal Contraceptive Coverage Guarantee on 
Out-of-Pocket Payments for Contraceptives: 2014 Update,'' 
Contraception, available at https://pubmed.ncbi.nlm.nih.gov/25288034/.
    \175\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
---------------------------------------------------------------------------

    Nonetheless, it is plausible that by providing coverage without 
cost sharing for a wider variety of contraceptive items, these proposed 
rules could induce new take-up among covered individuals who were 
previously dissuaded from contraceptive use because of cost and 
accessibility considerations related to their preferred method, as 
discussed in section IV.B.2.a of this RIA. Further, medication 
adherence and consistent use of contraception could be improved if more 
covered individuals have coverage of their preferred method without 
cost sharing. In the 2022 KFF Women's Health Survey, among female 
contraceptive users ages 18-49 who were not using their preferred 
contraceptive method, 12 percent of survey respondents indicated that 
the primary reason for not doing so was because they could not afford 
it.\176\ A third of women report not using contraception due to 
concerns over side effects,\177\ the burden of which could be lessened 
by expanding the selection of covered contraceptive product choice 
available without cost sharing. Such considerations could be important 
given that women using contraception--especially women with low incomes 
and women using less effective contraceptive methods--often report a 
mismatch between their most preferred contraceptive method and the 
method they usually use.\178\
---------------------------------------------------------------------------

    \176\ Id.
    \177\ Id. (``Among reproductive age females who are able to 
conceive and are not pregnant or trying to become pregnant who are 
not using contraception, four in ten say it is because they did not 
want to use birth control (42 [percent]). One in three females who 
are not currently using contraception report concern about side 
effects (32 [percent]), and one in five (22 [percent]) say they 
don't really mind if they become pregnant.'')
    \178\ He, K., Dalton, V.K., Zochowski, M.K., and Hall, K.S. 
(2017). ``Women's Contraceptive Preference-Use Mismatch,'' Journal 
of Women's Health, available at https://pubmed.ncbi.nlm.nih.gov/27710196 and Burke, K. and Potter, J. (2023). ``Meeting Preferences 
for Specific Contraceptive Methods: An Overdue Indicator,'' Studies 
in Family Planning, available at https://pubmed.ncbi.nlm.nih.gov/36705876.
---------------------------------------------------------------------------

    Historically, more comprehensive coverage of contraceptive services 
has been shown to improve the consistent use of the most effective 
short-acting methods of contraception, and the removal of cost sharing 
also increases the use of more effective LARC methods.\179\ One study 
found that following the implementation of the ACA contraceptive 
coverage requirement, the discontinuation of use of oral contraceptive 
pills fell and nonadherence to brand-name oral contraceptive pills also 
declined.\180\
---------------------------------------------------------------------------

    \179\ Behn, M., Pace L.E., and Leighton, K. (2019). ``The Trump 
Administration's Final Regulations Limit Insurance Coverage of 
Contraception,'' Women's Health Issues, available at https://www.whijournal.com/article/S1049-3867(18)30751-5/fulltext.
    \180\ Pace, L., Dusetzina, S., and Keating, N. (2016). ``Early 
Impact of the Affordable Care Act on Oral Contraceptive Cost 
Sharing, Discontinuation, and Nonadherence,'' Health Affairs, 
available at https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.1624.
---------------------------------------------------------------------------

    Therefore, beyond the direct benefits of improved satisfaction with 
contraceptive method--due to, for example, reductions in side effects--
remedying the misalignment between contraceptive preference and 
contraceptive use could lead to fewer unplanned pregnancies because of 
lower rates of discontinuation.\181\
---------------------------------------------------------------------------

    \181\ Burke, K. and Potter, J. (2023). ``Meeting Preferences for 
Specific Contraceptive Methods: An Overdue Indicator,'' Studies in 
Family Planning, available at https://pubmed.ncbi.nlm.nih.gov/36705876.
---------------------------------------------------------------------------

    While the Departments do not anticipate that the proposed 
requirement in these proposed rules to cover OTC contraception without 
cost sharing would substantially affect the overall rate of birth 
control use, to the extent that access to and use of OTC and other 
contraceptive items, without cost sharing, is increased, it is expected 
to provide better matching of preferred contraceptive items and thus 
may ultimately improve health outcomes.
    The Departments also anticipate that improved health outcomes would 
result from enhanced coverage of a wider range of recommended 
preventive services without cost sharing through the use of an 
exceptions process for recommended preventive services offered by plans 
and issuers. Covered individuals would have coverage of medically 
necessary preventive services because of this provision, whereas under 
current regulations they might be more likely to pay for such services 
out-of-pocket or forgo such services.
    The Departments request comment on this analysis.
(2) Increased Convenience and Decreased Costs for Covered Individuals 
Who No Longer Need a Prescription To Obtain Recommended OTC 
Contraceptive Items
    The Departments anticipate that some covered individuals would 
benefit from the provision of these proposed rules that would require 
plans to cover recommended OTC contraceptive items without a 
prescription and without cost sharing because these individuals would 
face reduced transportation costs, childcare costs, and/or time costs 
that would otherwise be incurred due to scheduling, travelling to, and 
attending health care provider visits in order to obtain prescriptions 
for contraceptives. Some covered individuals would also benefit from 
this provision if they cannot secure timely access to appointments to 
obtain a prescription, particularly if the individuals are in areas 
with primary care shortages. Out-of-pocket visit costs, if any, would 
also be avoided. Any such effects would be proportional to the number 
of covered individuals forgoing such provider visits as a result of 
this proposed provision, and therefore dependent on both the share of 
contraceptive users who switch methods from a prescription 
contraceptive to an OTC product and on the subset of these switchers 
who forgo provider visits that would otherwise have been needed for a 
contraceptive prescription.
    As discussed further in section IV.B.2.f of this preamble, the 
Departments do not anticipate a significant share of covered 
individuals to both switch methods from prescription contraceptives to 
OTC contraceptives and make fewer preventive health care visits. The 
Departments assume that even among covered women who would avail

[[Page 85780]]

themselves of the new OTC benefit in these proposed rules, nearly all 
would continue to utilize preventive care visits. Therefore, while the 
benefits of reduced burdens associated with reduced health care visits 
could be significant for any individuals who see providers less 
frequently as a result of this proposed provision, the Departments do 
not anticipate such averted benefits (or costs) would accrue to a 
significant fraction of covered individuals. The Departments request 
comment on this analysis.
(3) Potential Benefits of Increased Transparency by Expanding Awareness 
of Coverage of OTC Contraceptive Items Without a Prescription and 
Without Cost Sharing
    Studies have found that increased transparency about contraceptive 
care options and service costs are essential for improving 
contraceptive access by increasing public awareness and understanding 
about current health care policy and opportunities, and when women are 
fully informed about available contraceptive methods and find them 
affordable, they are more likely to use them consistently.\182\
---------------------------------------------------------------------------

    \182\ Swan, L.E.T. (2021). ``The Impact of US Policy on 
Contraceptive Access: A Policy Analysis,'' Reproductive Health, 
available at https://reproductive-health-journal.biomedcentral.com/articles/10.1186/s12978-021-01289-3 and Planned Parenthood 
Federation of America (2014). ``New Study on Birth Control Use Shows 
That, When Fully Implemented, the Affordable Care Act Could 
Dramatically Reduce Unintended Pregnancy in the U.S.,'' available at 
https://www.plannedparenthood.org/about-us/newsroom/press-releases/new-study-birth-control-use-shows-when-fully-implemented-affordable-care-act-could-dramatically.
---------------------------------------------------------------------------

    Overall, making information about OTC contraceptive coverage 
without a prescription and without cost sharing available to 
participants, beneficiaries, and enrollees can result in better health 
outcomes, as discussed in more detail in this section IV.B.2.c of this 
preamble.
    The Departments request comment on this analysis.
d. Costs
    This section provides a qualitative and quantitative discussion of 
the costs associated with these proposed rules. The Department request 
comment and data on how to better quantify these costs.
(1) Increased Costs to Plans and Issuers Due to a Change in Utilization 
of Preventive Services, and Decreased Costs Due to Improved Health 
Outcomes and Avoided Unintended Pregnancies
    Previous analysis by the Office of the Assistant Secretary for 
Planning and Evaluation (ASPE), which evaluated the impacts of the 
ACA's original contraceptive coverage requirements, found no likely net 
impact on gross costs of expanding utilization for contraception: 
``While the costs of contraceptives for individual women can be 
substantial and can influence choice of contraceptive methods, 
available data indicate that providing contraceptive coverage as part 
of a health insurance benefit does not add to the cost of providing 
insurance coverage.'' \183\ This conclusion was reached based on a 
review of the literature and of case studies on how expanding access to 
reproductive care affected insurance costs and gross premiums. For 
example, in 1999, Congress required the health plans in the Federal 
Employees Health Benefits (FEHB) program to cover the full range of 
FDA-approved contraceptive methods. ASPE concluded: ``When medical 
costs associated with unintended pregnancies are taken into account, 
including costs of prenatal care, pregnancy complications, and 
deliveries, the net effect on premiums is close to zero.'' \184\ This 
conclusion echoes the conclusion of earlier studies.\185\ The 
Departments are aware that the health insurance market has evolved 
since the publication of this study but are of the view that the 
general results of this analysis are still relevant today.
---------------------------------------------------------------------------

    \183\ Bertko, J., Glied, S., Miller, E., Simmons, A., and 
Wilson, L., ASPE (2012). ``The Cost of Covering Contraceptives 
through Health Insurance,'' available at https://aspe.hhs.gov/reports/cost-covering-contraceptives-through-health-insurance.
    \184\ Id.
    \185\ Trussell, J., Leveque, J.A., Koenig, J.D., London, R., 
Borden, S., Henneberry, J., LaGuardia, K., Stewart, F., Wilson, G., 
Wysocki, S., and Strauss, M. (1995). ``The Economic Value of 
Contraception: A Comparison of 15 Methods,'' American Journal of 
Public Health, available at http://ajph.aphapublications.org/doi/pdf/10.2105/AJPH.85.4.494.
---------------------------------------------------------------------------

    The Departments assume that, unlike the initial introduction of 
contraceptive coverage requirements under the ACA, these proposed rules 
would have small impacts on the fraction of covered women using 
contraception, as approximately 70 percent of this population of 
covered women that uses contraception already has coverage for 
contraception through private insurance without cost sharing.
    Nonetheless, in line with the findings of ASPE and others, the 
Departments assume that any increase in contraception utilization, 
however small, induced by these proposed rules would not increase net 
insurer claims costs and thus not increase gross premiums. This effect 
is separate from the transfers created by shifting the out-of-pocket 
cost burden from the covered individual to the plan, which are 
accounted for separately. The Departments request comment on this 
analysis.
    The Departments also anticipate that the establishment or use of an 
existing exceptions process by plans and issuers that would allow 
covered individuals to access coverage of certain recommended 
preventive services without cost sharing would also lead to a decrease 
in out-of-pocket costs for these preventive services and a 
corresponding increase in utilization or switching from other 
preventive services. The Departments expect that this change would 
increase net claims costs initially and potentially over time. Plans 
and issuers could experience claims cost savings that at least 
partially offset these new costs, due to improved health outcomes 
associated with increased utilization of certain recommended preventive 
services.
    The Departments request comment and data on how the costs to plans 
and issuers would change due to a change in utilization of preventive 
services associated with these proposed rules.
(2) Costs to Pharmacies and Plans and Issuers To Update Billing 
Processes and Systems for Covered OTC Products
    The Departments anticipate that pharmacies, as well as plans and 
issuers, would incur some upfront and annual operational and 
administrative costs in order to comply with the coverage requirements 
for OTC contraceptives in these proposed rules, but do not have 
information necessary to estimate such costs.
    For pharmacies, the Departments anticipate costs would include 
updating real-time claims adjudication systems and processes for their 
point-of-sale systems. The Departments are aware that there are 
uncertainties regarding how pharmacies could adapt existing systems, 
including the requirements in some point-of-sale systems to fill in a 
``prescriber NPI,'' which would not exist in its usual form for OTC 
products. The Departments are aware of at least one large pharmacy 
chain that has already implemented insurance coverage for an OTC oral 
contraceptive pill at the pharmacy counter by setting up codes for 
insurance reimbursement with real-time claim adjudication. The 
Departments lack information regarding how widespread such existing 
capabilities are among pharmacies and thus the costs of transitioning 
systems and processes that do not yet have these

[[Page 85781]]

capabilities.\186\ The Departments request comment on the potential 
changes that pharmacies would have to make to their systems and 
processes and the corresponding burden and costs.
---------------------------------------------------------------------------

    \186\ One analogous example of widespread implementation of 
over-the-counter insurance coverage is the recent COVID-19 pandemic 
when COVID tests were available over-the-counter at no cost sharing. 
See Huber, K., T. Roades, A. Higgins, M. Aspinall, C. Silcox, and M. 
McClellan, Duke University Margolis Center for Health Policy, 
(2022). ``Over the Counter COVID-19 Testing: Insurance Coverage 
Strategies to Support Equitable Access,'' available at https://healthpolicy.duke.edu/sites/default/files/2022-05/Margolis%20OTC%20Testing.pdf. It remains unclear how these 
preparations might affect the cost of implementation of these 
proposed rules, but it is likely that this prior work may--to some 
extent--mitigate costs.
---------------------------------------------------------------------------

    The Departments anticipate that plans and issuers would incur costs 
associated with updating IT systems and processes to process claims. 
Plans and issuers would also have to develop, if they have not already, 
processes aimed at preventing fraud, waste, and abuse for OTC products, 
which could include processes to monitor utilization. Plans and issuers 
routinely do such monitoring for prescription products in order to, for 
example, enforce reasonable quantity limits. The Departments request 
comment on the costs and any associated burden that would be borne by 
plans and issuers to update their systems and processes.
    The Departments do not anticipate significant costs associated with 
formulary redesign to accommodate OTC products, as formularies are 
regularly updated even in the absence of any relevant policy changes 
and plans and issuers are already required to cover OTC products 
without cost sharing when the patient has a prescription. For the same 
reason, the Departments do not anticipate significant costs associated 
with formulary redesign to comply with the provision of the proposed 
rules requiring coverage of every recommended contraceptive drug and 
drug-led combination product without cost sharing unless a therapeutic 
equivalent is covered without cost sharing.
    The Departments also anticipate some costs to pharmacies, as well 
as plans and issuers, associated with negotiating new contract terms 
for OTC coverage.
    Despite the costs to pharmacies identified in this section, the 
Departments anticipate that pharmacies would see increased revenues 
from sales of covered OTC contraceptives, and that associated profit 
increases (if they occur) might offset these costs from the pharmacies' 
perspective.
    The Departments request comment on the potential costs (and 
revenues) to pharmacies and costs to plans and issuers associated With 
the changes in these proposed rules.
(3) Potential Administrative Costs to Plans and Issuers Associated With 
the Establishment or Use of an Existing Exceptions Process
    Plans and issuers could incur administrative costs associated with 
the establishment or use of an existing exceptions process that allows 
an individual to receive coverage without cost-sharing requirements for 
a medically necessary recommended preventive service. The Departments 
assume that most plans and issuers have an exceptions process in place 
that they would be able to adapt for the provision in these proposed 
rules. However, those that do not would incur costs to develop one. The 
Departments do not have information about the percentage of plans and 
issuers that currently have an exceptions process in place that could 
be adapted for the provision in these proposed rules or the upfront and 
recurring costs that plans and issuers would incur to establish one. 
The Departments request comment on the potential costs to plans and 
issuers associated with this provision.
(4) Costs to Issuers and TPAs (on Behalf of Self-Insured Group Health 
Plans) Associated With the Disclosure of Coverage and Cost-Sharing 
Requirements for OTC Contraceptive Items
    As detailed in section IV.D of this preamble, issuers and 
TPAs,\187\ on behalf of self-insured group health plans, would incur 
costs associated with the disclosure of coverage and cost-sharing 
requirements for OTC contraceptive items. Specifically, issuers and 
TPAs would incur one-time costs of $35,089,261 to integrate the 
contraception statement language into the existing Transparency in 
Coverage internet-based self-service tool,\188\ and to create or update 
a web page to provide information about coverage of contraceptive items 
and services. Additionally, issuers and TPAs would incur annual costs 
of $6,091,096 for programming updates, web page maintenance, training 
customer service representatives, and responding to calls to provide 
assistance. These costs would ultimately be incurred by plans and 
issuers and, in turn, by covered individuals through a minimal impact 
on premiums. The Departments request comment on the costs to issuers 
and TPAs associated with this provision.
---------------------------------------------------------------------------

    \187\ The Departments assume that fully-insured group health 
plans would depend on health insurance issuers and self-insured 
group health plans would rely on TPAs to implement the proposed 
requirements. The Departments expect self-insured group health plans 
would compensate TPAs accordingly and thereby bear any 
implementation costs.
    \188\ The Departments expect that while participants, 
beneficiaries, and enrollees will continue to request cost-sharing 
information on paper in certain circumstances, the proposed 
additional disclosure would impose negligible additional burden on 
plans and issuers as the disclosure will likely be no more than one 
or two sentences and would only be required when a participant, 
beneficiary, or enrollee requests cost-sharing information for a 
subset of covered items and services, covered contraceptive items 
and services.
---------------------------------------------------------------------------

e. Transfers
    Eliminating cost sharing for some contraceptive items has the 
potential to affect transfers associated with contraceptive items and 
insurance coverage. Specifically, the Departments expect these proposed 
rules would result in transfers from plans and issuers to covered 
individuals resulting from reduced out-of-pocket costs for 
contraceptive items, which are estimated to be mostly paid by covered 
individuals experiencing higher premiums, with a smaller portion paid 
by the Federal government through premium tax credit (PTC) spending. 
The Departments also expect these proposed rules would result in 
transfers from plans and issuers (and potentially premium-payers and 
the Federal government) to pharmacies, drug wholesalers, and drug 
manufacturers resulting from anticipated shifts in formulary design and 
utilization management that could affect plan-paid prices for some 
contraceptive items. Lastly, the Departments expect these proposed 
rules would result in transfers associated with the use of an 
exceptions process for covered individuals to access coverage without 
cost sharing of certain recommended preventive services but are unable 
to quantify the magnitudes of these transfers due to a lack of data, as 
discussed later in this section.
(1a) Transfers From Plans and Issuers to Covered Individuals Resulting 
From Reduced Out-of-Pocket Costs for Contraceptive Items
    The Departments expect that the proposed elimination of cost 
sharing for a wider variety of contraceptive items would lead to 
transfers from plans and issuers to covered individuals due to reduced 
out-of-pocket spending on contraceptive services. (Analysis of who 
ultimately pays these transfers is presented in the next sub-section.) 
These transfers would accrue to covered individuals who are women of 
reproductive age, who use a contraceptive method, who--in the

[[Page 85782]]

absence of the proposed changes--would otherwise pay some non-zero 
cost-sharing amount for contraceptives, and whose out-of-pocket costs 
would be reduced by these proposed rules. As per the calculation in 
section IV.B.2.b of this preamble, approximately 15.2 million 
individuals (8.4 percent of individuals in covered plans) are women of 
reproductive age using those noted forms of contraceptives. The 2022 
KFF Women's Health Survey showed that among privately-insured women 
using contraception, 70 percent reported that insurance covered their 
contraceptive method with no cost sharing, and 16 percent reported that 
insurance paid some but not all of the cost.\189\ The remaining 13 
percent of respondents paid out-of-pocket despite being insured, 
believed contraception not to be covered by insurance, or replied in 
some other way.\190\
---------------------------------------------------------------------------

    \189\ Frederiksen, B, Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings/.
    \190\ The Departments note that studies of out-of-pocket 
spending for contraception based on examination of health care 
claims cannot speak to the issue of an insured woman not making use 
of insurance for a contraceptive purchase--a case that would not 
generate an insurance claim.
---------------------------------------------------------------------------

    In terms of consumer response, lack of knowledge about plan 
benefits and features as well as preference for non-covered 
contraceptive items (for example, a branded drug in the presence of a 
generic drug with no cost sharing) may explain some of the incomplete 
take-up of zero cost-sharing options under the status quo, and such 
frictions and preferences might persist to some degree under the 
proposed rules.
    Therefore, the Departments assume that--as under the status quo--
some covered women would continue to pay out-of-pocket for 
contraceptives, including by not using insurance when insurance could 
cover some or all of the out-of-pocket costs. The Departments 
operationalize this assumption by assuming that the 16 percent of women 
who currently use insurance but face non-zero cost sharing due to 
partial insurance coverage would instead face zero cost sharing under 
these proposed rules, while the 13 percent \191\ of contraceptive users 
who are insured but do not use insurance coverage for their 
contraceptive items would continue to not use insurance coverage.\192\ 
The Departments estimate that among the subset of covered individuals 
for whom contraceptives are covered with non-zero cost sharing (16 
percent of contraceptive users and therefore estimated to be 
approximately 1.3 percent of the total covered population) \193\ these 
proposed rules would decrease average cost sharing by a maximum of $316 
per year.\194\ Therefore, the Departments estimate a total transfer of 
approximately $768.7 million per year to contraceptive users in the 
form of reduced out-of-pocket payments.\195\
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    \191\ This is the sum of the 6 percent of users whose plan does 
not cover contraception, the 4 percent of users who reported 
``Other,'' and the 3 percent of users who had coverage but did not 
use it. The Departments note that these proposed rules could induce 
this final category of users to switch to a covered OTC method, but 
the Departments do not assume this is the case.
    \192\ Frederiksen, B, Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' Fig. 14, 
available at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
    \193\ 8.4 percent of covered individuals are women of 
reproductive age who are currently using contraception, and 16 
percent of these women face some out-of-pocket costs for 
contraception = 1.3 percent.
    \194\ The Departments calculate the typical monthly out-of-
pocket costs for those individuals who use insurance but pay a non-
zero amount by estimating a weighted average of out-of-pocket 
amounts as reported in the KFF survey: 24 percent reporting $50 or 
more, 13 precent reporting $25-$49, 19 percent reporting $15-$24, 26 
percent reporting $5-$14, and 6 percent reporting $1-$4, and 12 
percent reporting ``Don't know.'' Taking midpoints of these ranges, 
assuming a $50 monthly payment for the top category, and excluding 
individuals who report ``don't know'' yields $26.29 per month 
(=((.24*50)+(.13*37)+ (0.19*19.5)+(.26*9.5)+(.06*2.5))/(1-.12)) or 
$315.50 annually. The Departments assume that the estimated 16 
percent of covered women with partial coverage would face zero cost 
sharing under these proposed rules, while the remaining 14 percent 
of covered women, who currently do not report using insurance for 
contraceptives, would not experience a significant decline in out-
of-pocket costs.
    \195\ Approximately 1.3 percent of the covered population 
(approximately 181.4 million individuals) times a $316 reduction in 
out-of-pocket costs = $768.7 million.
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(1b) Transfers From Covered Individuals and From the Federal Government 
to Plans and Issuers in the Form of Higher Premiums (Analysis of Who 
Pays for the Transfers Estimated Above)
    The Departments assume these proposed provisions would cause plans 
and issuers to increase premiums to approximately offset the new net 
costs incurred by lower cost sharing. In other words, the Departments 
assume the cost of decreased cost sharing would be passed on to premium 
payers. From a total decline in out-of-pocket payments of $768.7 
million per year, the Departments estimate that these proposed rules 
would increase annual gross premiums by about $4.24 per covered 
individual or less than 0.1 percent.\196\ Premium payers include 
employer plan participants--both directly through employee 
contributions to premiums and indirectly by reductions in salary 
compensation or other benefits--and individuals purchasing plans 
outside of the employment context (on or off an Exchange). Because 
these proposed provisions would increase the cost of employer-sponsored 
insurance and reduce the share of total compensation subject to 
taxation, the Departments estimate these changes would reduce Federal 
tax revenue by $217 million annually. Because these proposed provisions 
are expected to increase gross premiums for individual health insurance 
coverage purchased on the Exchanges, the Departments estimate and 
anticipate an $83.1 million annual increase in net Federal premium tax 
credit (PTC) spending.\197\ The annual Federal budgetary transfers 
would therefore amount to an estimated $300.1 million ($217 million 
reduction in Federal tax revenue plus $83.1 million increase in net 
Federal PTC spending).

[[Page 85783]]

The remainder of the estimated $768.7 million in annual transfers, or 
approximately $468.6 million ($768.7 million minus $300.1 million), is 
expected to be paid by covered participants and enrollees (directly or 
indirectly, as discussed earlier in this section) through increased 
premiums paid to plans and issuers and subsequent reductions to 
employees' taxable wages. However, the Departments acknowledge that 
employers could also offset plan or coverage cost increases through 
increased prices for consumers, reduced production costs (for example, 
layoffs, other reductions to labor costs, or other production cost 
reductions), or lower profits, for example. The Departments request 
comment on and evidence regarding the extent to which new net costs 
incurred by lower cost sharing for contraceptive items would be passed 
along to covered individuals through increases in premiums.
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    \196\ Approximately $768.7 million in new plan costs divided 
across 181.4 million covered individuals = $4.24 in annual premiums. 
Of the 181.4 million covered individuals, the CMS 2023 Open 
Enrollment Report indicates there are 16.4 million consumers 
enrolled in health insurance plans purchased through an Exchange and 
that the average annual premium for single coverage for Exchange 
coverage is $7,260 ($605 per individual per month). The Departments 
assume that the average annual premium for off-Exchange single 
coverage would be comparable to this figure. 2023 KFF data indicate 
that the average annual premium for (single) group comprehensive 
insurance is $8,435. The Departments assume that the average annual 
premium for (single) non-Federal government plan coverage would be 
comparable to this figure. Based on these figures and assumptions, 
the weighted average annual premium would be expected to increase by 
about 0.05 percent. See CMS, ``Health Insurance Marketplaces 2023 
Open Enrollment Report,'' available at https://www.cms.gov/files/document/health-insurance-exchanges-2023-open-enrollment-report-final.pdf and KFF, ``2023 Employer Health Benefits Survey,'' 
available at https://www.kff.org/health-costs/report/2023-employer-health-benefits-survey.
    \197\ The Departments have estimated this net Federal spending 
transfer effect by assuming that the expected $4.24 increase in 
annual gross premiums will apply to the second-lowest-cost silver 
plans in each market, and that each dollar of increased silver plan 
premiums generates exactly a dollar of additional net Federal PTC 
spending for individuals receiving PTCs. A $4.24 increase in per 
capita annual gross premiums, times 21,310,538 Exchange annual 
enrollees (as reported above), times 92 percent of enrollees 
receiving PTCs, equals approximately $83.1 million. This estimate 
does not account for the expiration of the enhanced PTC subsidies at 
the end of 2025, which would likely reduce the level of Exchange 
enrollment (or at least reduce enrollment growth), reduce the share 
of enrollees receiving PTCs, and therefore reduce net Federal PTC 
spending. Source of fraction receiving PTCs: Effectuated Enrollment: 
Early 2024 Snapshot and Full Year 2023 Average, available at https://www.cms.gov/files/document/early-2024-and-full-year-2023-effectuated-enrollment-report.pdf.
---------------------------------------------------------------------------

(2) Transfers Associated With the Use of an Exceptions Process
    The Departments anticipate that the increased access to coverage 
without cost sharing of other recommended preventive services through 
the use of an exceptions process would generate transfers caused by 
reduced out-of-pocket costs for other recommended preventive services 
for which coverage without cost sharing would be accessible through an 
exceptions process.
    More specifically, the Departments anticipate that the increased 
access to coverage without cost sharing of other preventive services 
through the use of an exceptions process would generate transfers; on 
an intermediate basis, they would flow from plans and issuers to 
covered individuals, but these transfers are expected to be ultimately 
paid by a combination of other covered individuals, experiencing higher 
premiums, and by the Federal government in the form of higher net 
Federal PTC spending for Exchange plans caused by higher premiums 
(approximately equal in size to the total reduction in out-of-pocket 
costs for other preventive services for which coverage without cost 
sharing would be accessible through the use of an exceptions process).
    It is uncertain how plan and issuer expenditure would change due to 
use of an exceptions process to allow covered individuals to access 
coverage of recommended preventive services without cost sharing. The 
Departments do not have data that would allow for a quantification of 
these effects. The Departments request comment on the transfers 
associated with the exceptions process and their likely magnitudes.
(3) Potential Transfers From Plans and Issuers to Pharmacies, Drug 
Wholesalers, and Drug Manufacturers Resulting From Anticipated Shifts 
in Formulary Design That Could Affect Plan-Paid Prices for Some 
Contraceptive Items
    These proposed rules would require plans and issuers to cover a 
wider range of recommended contraceptive items without cost sharing. 
This is likely to affect the relative price negotiating power between 
entities in the drug supply chain (manufacturers, wholesalers, and 
pharmacies) and plans and issuers, including their affiliated or 
subcontracted PBMs. This could lead to higher negotiated prices to 
plans, issuers, and their PBMs. If so, it would increase total plan 
costs for recommended contraceptive items and would ultimately cause 
increases in plan premiums.
    Plans and issuers place downward pressure on negotiated prices for 
drugs and devices and limit spending in several ways: \198\ through the 
threat of exclusion of a product from a drug formulary; through the 
threat of setting high consumer cost sharing that would steer covered 
individuals away from high cost or ineffective products; and through 
the threat of erecting non-price barriers to access, such as prior 
authorization, step-therapy, or requirements for a provider-requested 
exception to access a product.\199\ Plans and issuers also place 
downward pressure on negotiated prices for drugs and devices and limit 
spending by contracting with providers whose prescribing patterns align 
with the cost-control goals of the plans and issuers.
---------------------------------------------------------------------------

    \198\ For a useful overview of the management tools employed by 
managed care organizations, see Glied, S., National Bureau of 
Economic Research (1999), ``Managed Care,'' available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=202746.
    \199\ Lakdawalla, D. and Yin, W., National Bureau of Economic 
Research (2009). ``Insurer Bargaining and Negotiated Drug Prices in 
Medicare Part D,'' available at https://www.nber.org/papers/w15330; 
Lakdawalla, D.N. (2018). ``Economics of the Pharmaceutical 
Industry,'' Journal of Economic Literature, available at https://www.aeaweb.org/articles?id=10.1257/jel.20161327.
---------------------------------------------------------------------------

    Because drug and device suppliers desire favorable coverage and 
favorable provider prescribing behavior in order to attract higher 
volumes of covered individuals to use their products, these tools place 
powerful downward pressures on negotiated (net-of-rebate) prices paid 
by plans. Research has shown that when plans and issuers are unable to 
use cost sharing, they rely on non-price barriers to access, such as 
prior authorization and step therapy, to steer consumers across 
medication options, and ultimately constrain overall plan costs.\200\
---------------------------------------------------------------------------

    \200\ See Geruso, M., Layton, T., and Prinz, D. (2019). 
``Screening in Contract Design: Evidence from the ACA Health 
Insurance Exchanges,'' American Economic Journal: Economic Policy, 
available at https://www.aeaweb.org/articles/pdf/doi/10.1257/pol.20170014 (finding that when plans are limited in their ability 
to expose their enrollees to cost-sharing, as with cost-sharing-
reduction enrollees in Exchange plans, plans may respond by relying 
more heavily on non-price barriers to access, such as step-therapy 
and prior authorization).
---------------------------------------------------------------------------

    The provisions of these proposed rules would clarify the use of 
reasonable medical management that plans and issuers can use with 
respect to covering recommended preventive services, including 
contraceptive items, without cost sharing under the ACA. This 
clarification could impact their bargaining power against drug 
suppliers, removing some sources of downward pressure on prices. The 
Departments do not have sufficient data to estimate the magnitude of 
these effects. The Departments anticipate that they are unlikely to be 
significant for contraceptive products for which there are available 
therapeutic equivalents. For such products, competition across two or 
more therapeutic equivalents is a key constraint on prices even in the 
absence of cost sharing and other plan and issuer tools. The 
Departments anticipate that price effects could be larger for products 
for which there is no therapeutic equivalent. The Departments request 
comment and data regarding these potential transfers.
f. Uncertainty
    As noted throughout this RIA, due to a lack of data and 
information, there are several areas of uncertainty regarding the 
potential impacts of these proposed rules. The Departments are unable 
to forecast with high confidence how the provisions of these proposed 
rules would affect the choice of contraceptive method or product among 
covered women or how many covered women would continue to use 
contraceptives with non-zero cost sharing. Further, the Departments are 
unable to forecast with high confidence whether or the extent to which 
the pharmaceutical and medical device supply chain entities (including 
manufacturers, wholesalers, and pharmacies) might respond in pricing 
negotiations with PBMs and issuers to both the new patterns of consumer 
take-up of contraceptive items--as the set of options without cost 
sharing would expand under these proposed rules--and to the provisions 
of these proposed

[[Page 85784]]

rules that would clarify plans' and issuers' ability to use reasonable 
medical management. As a result, there is some uncertainty about the 
potential impact on premiums.
    The Departments expect that the administrative and operational 
costs associated with these proposed rules would primarily fall on 
plans, issuers, and pharmacies. As discussed in section IV.B.2.d of 
this preamble and discussed in comments in response to the OTC 
Preventive Products RFI, these entities would incur costs associated 
with updating IT systems and processes to accommodate insurance 
coverage of OTC contraceptives. Commenters noted that various systems 
would likely need to be updated or created, such as to accommodate new 
information requirements for claims, but provided no further 
information related to any associated burdens or costs. Therefore, the 
Departments lack information on the scope and size of such activities 
and costs.
    The Departments are uncertain about the number of women who would 
switch contraceptive methods to OTC contraceptives as a result of these 
proposed rules. Since the first FDA-approved daily OTC oral 
contraceptive pill was approved in July 2023 and became widely 
available for purchase (including by being carried by major pharmacy 
chains and online retailers) beginning in March 2024, it is too soon to 
predict with confidence the extent of switching to an OTC contraceptive 
from other prescription products.
    A reasonable analog to daily OTC oral contraception is the 
increased use of emergency contraception since its approval for OTC use 
in the early 2000s. The FDA approved nonprescription availability of 
emergency contraception (Plan B) for women 18 years or older in August 
2006.\201\ This was expanded to women 17 years and older in 2009 and 
without age restrictions in 2013. The Guttmacher Institute reports that 
between 2008 and 2015, the use of emergency contraceptive pills 
increased significantly across nearly all social and demographic 
groups.\202\ For example, the report shows that use among 25-29-year-
olds more than doubled during this time, increasing from 16 percent of 
women ever having used emergency contraception to 36 percent. While 
these data do not allow us to forecast switching from prescription to 
OTC birth control, they do suggest that take-up of OTC contraceptive 
items may increase.
---------------------------------------------------------------------------

    \201\ FDA, Center for Drug Evaluation and Research, ``Plan B 
One-Step Information,'' available at https://www.fda.gov/drugs/postmarket-drug-safety-information-patients-and-providers/plan-b-one-step-15-mg-levonorgestrel-information.
    \202\ Guttmacher Institute (2021). ``Use of Emergency 
Contraception in the United States,'' available at https://www.guttmacher.org/fact-sheet/use-emergency-contraception-united-states.
---------------------------------------------------------------------------

    There is also insufficient data to forecast the extent to which 
take-up of OTC oral contraception would result in fewer visits to 
health care providers and the scope for potential negative health 
consequences due to this reduction in contact with health care 
providers. Research finds that fewer primary care visits may lead to 
less interaction with preventive care services such as mammograms, 
vaccinations, and colonoscopies, and may result in more emergency room 
visits and hospitalizations, all of which could lead to greater health 
care expenditures in the future.\203\ However, the same work finds that 
the likelihood of preventive services uptake does not increase with 
respect to the number of visits, suggesting that while increased 
engagement with primary care improves compliance with these preventive 
interventions, the benefits of visits may diminish in value past a 
certain frequency.\204\ Applied to this uncertain setting, this body of 
research suggests a possibility that covering recommended OTC 
contraceptive items without cost sharing and without a prescription 
could be associated with negative health consequences if it leads to a 
reduction in provider visits that specifically reduces interaction with 
preventive services. However, there is no evidence to suggest that such 
a policy to increase coverage of recommended OTC contraceptive items 
would affect the strong incentives for women to continue to seek 
preventive care, via a provider visit, outside of their need to obtain 
a prescription for contraception. Among these incentives, the ACA 
requires plans and issuers to cover, without cost sharing, an annual 
well-woman visit as well as other recommended preventive services.
---------------------------------------------------------------------------

    \203\ Rose, A.J., Timble, J.W., Setoldji, C., Friedberg, M.W., 
Malsberger, R., and Kahn, K.L. (2019). ``Primary Care Visit 
Regularity and Patient Outcomes: an Observational Study,'' Journal 
of General Internal Medicine, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6318173 and Hostetter, J., 
Schwarz, N., Klug, M., Wynne, J., and Basson, M.D. (2020), ``Primary 
Care Visits Increase Utilization of Evidence-Based Preventative 
Health Measures,'' BMC Family Practice, available at https://bmcprimcare.biomedcentral.com/articles/10.1186/s12875-020-01216-8.
    \204\ Gao, J., Moran, E., Grimm, R., Toporek, A., Ruser, C. 
(2022). ``The Effect of Primary Care Visits on Total Patient Care 
Cost: Evidence from the Veterans Health Administration,'' Journal of 
Primary Care Community Health, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9793026 (examining the 
correlation between additional in-person primary care visits and 
total health care costs among Veterans Health Administration 
patients and finding that the first visit was associated with the 
largest savings, with diminishing returns for subsequent visits).
---------------------------------------------------------------------------

    Further, there is significant uncertainty about the potential 
changes in take-up of OTC contraceptives that would be caused by these 
proposed rules and the impact of any such change on the frequency of 
provider visits. In a survey about hypothetical use that predated the 
introduction of an FDA-approved daily OTC oral contraceptive pill, many 
female respondents indicated they would be likely to switch to an OTC 
contraceptive if it was available to them.\205\ Women may be motivated 
to make such a switch by the potential reduction in required provider 
visits to maintain a prescription. The costs of seeing a provider 
include costs such as transportation and childcare during the 
appointment time, or the opportunity costs of time associated with the 
visit. If these proposed rules reduce the frequency or likelihood of 
health care provider visits among women, the revenue of providers who 
otherwise would have performed and billed for services would be 
impacted, representing a cost of at least $100 per visit, on 
average.\206\
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    \205\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings (finding that 60 percent of reproductive age females who 
have used birth control pills in the past 12 months said they would 
be likely or very likely to use over-the-counter birth control 
pills).
    \206\ In 2016, the average cost per visit to a primary care 
physician was $106 compared to $103 for an office visit to a NP or 
PA. See Hargraves, J., Frost A. (2018). ``HCCI Brief: Trends in 
Primary Care Visits,'' available at https://healthcostinstitute.org/hcci-originals-dropdown/all-hcci-reports/trends-in-primary-care-visits.
---------------------------------------------------------------------------

    Nonetheless, practical considerations surrounding OTC contraceptive 
items may limit the number of covered individuals who take up this 
option in practice. First, contraceptives have numerous side effects, 
which vary by person and product.\207\ Women are likely to have a 
preference for a given contraceptive they have already become 
accustomed to; in this case, they may perceive switching as involving 
some risk of generating a worse match.\208\ A

[[Page 85785]]

commenter to the OTC Preventive Products RFI noted these considerations 
in explaining why the extent of switching to OTC products would likely 
be moderate.
---------------------------------------------------------------------------

    \207\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
    \208\ Switching oral contraceptives can increase the chance of 
pregnancy and can often cause side effects. See Lesnewski, R., 
Prine, L., and Ginzburg, R. (2011). ``Preventing Gaps When Switching 
Contraceptives,'' American Family Physician Journal, available at 
https://www.aafp.org/pubs/afp/issues/2011/0301/p567.html and 
Burgess, L. (2023). ``How to Switch Birth Control Pills Properly,'' 
Medical News Today, available at https://www.medicalnewstoday.com/articles/322356.
---------------------------------------------------------------------------

    One way to understand how important such factors may be is to 
examine the experience with pharmacist-prescribed contraceptives. As of 
2023, 28 states and the District of Columbia allowed pharmacists to 
provide contraceptives, 21 of which do not require any physician 
follow-up.\209\ However, less than 10 percent of women currently opt to 
take advantage of pharmacist provision.\210\ Some women may be unaware 
of this option, while others might find that the added convenience may 
not be enough to offset a significant preference towards consulting 
with a physician and obtaining a prescription for contraception. There 
are several considerations that may explain this preference: first, 
most women (73 percent) see a family or internal medicine doctor as 
their usual source of care.\211\ Thus, it is likely that many women are 
prescribed birth control through their primary care physician (PCP), 
and that these visits are likely to continue on a semi-regular basis 
regardless of how birth control is obtained.\212\ Next, practitioners 
are able to renew birth control pills over the phone or via 
telemedicine applications, eliminating the net potential benefit of 
reducing follow-up visits by switching to an OTC pill. Finally, some 
women currently procure contraception from a clinical visit that does 
not include a significant medical exam, thus lowering the health 
benefit of such a provider interaction (other than its prescribing 
function)--in contrast to other visit types with PCPs. Therefore, 
despite the potential time and money savings of forgone visits that 
would be enabled by wider OTC contraceptive coverage without cost 
sharing, this evidence suggests these factors may not significantly 
impact the use of recommended preventive services.
---------------------------------------------------------------------------

    \209\ Guttmacher Institute (2023). ``Pharmacist-Prescribed 
Contraceptives,'' available at https://www.guttmacher.org/state-policy/explore/pharmacist-prescribed-contraceptives.
    \210\ The 2022 KFF Women's Health Survey finds that 8 percent of 
women ages 18-49 get their birth control from places other than the 
doctor's office, a clinic, or online, where ``other'' includes 
pharmacies. When asked about where women would prefer to get their 
birth control, only 12 percent said ``other''. See Frederiksen, B., 
Ranji, U., Long, M., Diep, K., and Salganicoff, A., KFF (2022). 
``Contraception in the United States: A Closer Look at Experiences, 
Preferences, and Coverage,'' available at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
    \211\ Long, M., Frederickson, B., Ranji, U., and Salganicoff A., 
KFF (2020). ``Women's Health Care Utilization and Costs: Findings 
from the 2020 KFF Women's Health Survey,'' available at https://www.kff.org/womens-health-policy/issue-brief/womens-health-care-utilization-and-costs-findings-from-the-2020-kff-womens-health-survey/.
    \212\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and 
Salganicoff, A., KFF (2022). ``Contraception in the United States: A 
Closer Look at Experiences, Preferences, and Coverage,'' available 
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
---------------------------------------------------------------------------

    Informed by the existing research discussed in this section, the 
Departments anticipate approximately no impact of the proposed rules on 
the frequency of recommended preventive services visits with PCPs, 
nurse practitioners, or physician assistants, and thus approximately no 
impact on health outcomes of covered women through this channel. 
Similarly, the Departments anticipate approximately no impact of the 
proposed rules on revenues of these health care providers. The 
Departments note that although the option of switching to OTC 
contraception may not provide significant value to all contraceptive 
users, the option may provide particularly high value for the subset of 
covered women in contraception deserts. The Departments request comment 
on this analysis.
    Finally, the Departments acknowledge the potential for long-term 
economic effects of increased coverage of certain recommended 
preventive services. Research suggests that access to contraception can 
increase educational attainment and labor force participation, for 
example, with follow-on potential to improve career outcomes and 
lifetime earnings.\213\ It is also possible that overall health 
outcomes might improve because of increased coverage of certain 
recommended preventive services, which, in turn, could reduce health 
care expenditures and therefore premiums in the future. Further long-
term economic effects could be seen by entities and individuals 
directly or indirectly (public health insurance programs, uninsured or 
self-pay individuals, and suppliers in the pharmaceutical industry, for 
example) affected by these proposed rules, to the extent that prices 
for different recommended preventive services change as a result of 
these proposed rules. However, due to a lack of data and clear 
understanding of how preventive services utilization will evolve given 
these proposed rules, the Departments are unable to develop monetized 
estimates of these potential benefits, costs, and transfers.
---------------------------------------------------------------------------

    \213\ See, e.g., Bernstein, A. and Jones, K.M. (2019). ``The 
Economic Effects of Contraceptive Access: A Review of the 
Evidence,'' Institute for Women's Policy Research, available at 
https://iwpr.org/wp-content/uploads/2020/07/B381_Contraception-Access_Final.pdf.
---------------------------------------------------------------------------

    Due to the lack of data, the Departments are unable to develop 
monetized estimates of the benefits to covered individuals anticipated 
to arise from these proposed rules, including a potential reduction in 
unintended pregnancies and improved health outcomes for individuals and 
greater flexibility in utilizing a wider range of recommended 
preventive services without cost sharing for eligible individuals.
g. Regulatory Review Cost Estimation
    Due to the uncertainty involved with quantifying the number of 
entities that will review these proposed rules, the Departments assume 
that the total number of unique entities that may review these proposed 
rules will equal the number of health insurance companies (479) plus 
the number of TPAs (205) (on behalf of self-insured group health plans) 
plus the States, Territories, and Washington DC (56) plus the number of 
unique commenters (364) to the OTC Preventive Products RFI.\214\ That 
sum yields 1,104 unique entities. The Departments acknowledge that this 
assumption may understate or overstate the number of reviewers and 
therefore the costs of reviewing these proposed rules. The Departments 
request comment on the approach in estimating the number of entities 
which will review these proposed rules.
---------------------------------------------------------------------------

    \214\ See 88 FR 68519 (Oct. 4, 2023).
---------------------------------------------------------------------------

    Using the median wage information from the BLS for business 
operations specialist (13-1199) to account for labor costs (including a 
100 percent increase to account for the cost of fringe benefits and 
other indirect costs), the Departments estimate that the cost of 
reviewing this rule is $76.52 per hour, including overhead and fringe 
benefits.\215\ Assuming an average reading speed of 200 words per 
minute, the Departments estimate that it would take approximately 3.25 
hours for the staff to review these proposed rules. For each entity 
that reviews the rule, the estimated cost is $248.69 (3.25 hours x 
$76.52). Therefore, the Departments estimate that the total cost of 
reviewing this regulation is approximately $274,554 ($248.69 x 1,104).
---------------------------------------------------------------------------

    \215\ BLS, ``May 2023 National Occupational Employment and Wage 
Estimates, United States,'' available at https://www.bls.gov/oes/current/oes_nat.htm.

---------------------------------------------------------------------------

[[Page 85786]]

C. Regulatory Alternatives--Departments of Health and Human Services 
and Labor

    In developing these proposed rules, the Departments considered 
various alternative approaches.
    The Departments considered proposing to require plans and issuers 
to cover all recommended preventive services, with no cost sharing and 
without applying reasonable medical management techniques. However, as 
discussed in section II.A of this preamble, the Departments have 
determined that allowing plans and issuers to utilize reasonable 
medical management techniques, when paired with requirements to provide 
an exceptions process, as proposed in these rules, strikes an 
appropriate balance between the statutory requirement that plans and 
issuers cover recommended preventive services at no cost and the 
importance of allowing plans and issuers to impose reasonable 
limitations in order to contain costs (including costs that would be 
passed on to consumers in the form of increased premiums) and promote 
efficient delivery of care. The provision of an easily accessible, 
transparent, and sufficiently expedient exceptions process that is not 
unduly burdensome on the individual or a provider (or other person 
acting as the individual's authorized representative) would ensure that 
covered individuals can access coverage of medically necessary 
recommended preventive services without cost sharing even if such 
services are typically not covered or are otherwise subject to 
reasonable medical management techniques.
    With respect to the proposal to require plans and issuers utilizing 
reasonable medical management techniques to provide an easily 
accessible, transparent, and sufficiently expedient exceptions process 
that is not unduly burdensome, the Departments considered limiting this 
proposal to contraceptive items only or to a subset of recommended 
preventive services rather than to all preventive services. However, 
the Departments concluded that an exceptions process should be required 
for all recommended preventive services in order to fully implement the 
requirements under section 2713 of the PHS Act to ensure that plans and 
issuers provide coverage of recommended preventive services without 
cost-sharing requirements, consistent with prior guidance. Without such 
a process, individuals could be forced to pay out-of-pocket or forego 
the medically necessary form of a recommended preventive service if it 
differs from the form covered by their plan or issuer. While prior 
guidance has generally focused on the use of an exceptions process in 
the context of contraceptive coverage, it has not been exclusively 
limited to that context, nor are the Departments aware of any legal or 
policy reason for limiting applicability of an exceptions process to 
one or a subset of recommended preventive services. Therefore, the 
Departments determined it was appropriate to propose that a plan or 
issuer would be required to provide an exceptions process with respect 
to any recommended preventive service for which it utilizes medical 
management techniques in order for such techniques to be considered 
reasonable.
    The Departments considered whether to propose to require plans and 
issuers to provide coverage without cost sharing of all or a subset of 
recommended OTC preventive products. The Departments similarly 
considered whether to propose that the therapeutic equivalence approach 
be applicable to all or some broader subset of recommended preventive 
services that are drugs and drug-led combination products, rather than 
only to contraceptive drugs and drug-led combination products. However, 
the Departments decided to take an incremental approach, beginning 
first with recommended contraceptive items. As discussed in section 
II.A.2 of this preamble, section 2713 of the PHS Act and its 
implementing regulations do not exclude from their coverage requirement 
coverage of OTC recommended preventive services. However, in 
consideration of comments in response to the OTC Preventive Products 
RFI cautioning against swift implementation of a coverage requirement 
for all OTC preventive products, the Departments determined it would be 
advisable to propose an initial implementation of such a requirement, 
applicable only to recommended OTC contraceptive items. Similarly, the 
Departments are of the view that it is advisable to initially propose 
to require the use of a therapeutic equivalence approach for the same 
set of recommended preventive services--that is, to contraceptive drugs 
and drug-led combination products--as in prior guidance. This 
incremental approach to coverage, with respect to recommended OTC 
contraceptive items and therapeutic equivalence, would provide plans 
and issuers, providers, retailers, and other interested parties with 
the opportunity to gather implementation data before the Departments 
determine whether additional guidance or rulemaking is appropriate. 
Further, for the reasons outlined in sections I and II.A of this 
preamble, it is particularly necessary to support access to 
contraceptive items at this time.
    With respect to the Departments' effort to ensure individuals are 
made aware that OTC contraceptive items are covered without cost 
sharing and without a prescription, the Departments also considered 
proposing to require plans and issuers to create a public-facing web 
page with comprehensive information about their contraceptive coverage 
policy, including related to therapeutic equivalents, exceptions 
processes, network information, and OTC coverage. However, the 
Departments understand that at least some group health plans do not 
maintain a website for employee health benefit plans, and the 
Departments believe more information is needed to assess whether it 
would be feasible for plans and issuers to provide information about 
contraceptive coverage on a public website in cases where they do not 
maintain such a website, such as by entering into a written agreement 
under which a plan's health insurance issuer or TPA, as applicable, 
posts the information on its public website where information is 
normally made available to participants, beneficiaries, and enrollees, 
on the plan's behalf. The Departments also considered proposing to 
require the statement to include more information about coverage of 
therapeutic equivalents and requested comment on this approach, given 
the Departments' desire to maximize the statement's effectiveness by 
keeping it brief, and that therapeutic equivalent coverage policies 
will not differ between plans and thus a plan-specific disclosure may 
be less essential.
    The Departments also considered proposing to require that 
information about coverage of OTC contraceptive items without cost 
sharing and without a prescription be included on SBCs. However, due to 
the space limitations, the Departments are concerned that the SBC would 
not provide a sufficiently robust disclosure. The Departments decided 
to seek comment on the SBC's utility for informing participants, 
beneficiaries, and enrollees of coverage of OTC contraceptive items 
without cost sharing and without a prescription.

D. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA), the Departments 
are required to provide 60-day notice in the Federal Register and 
solicit public comment before a collection of information requirement 
is submitted to OMB for review and approval. To fairly

[[Page 85787]]

evaluate whether an information collection should be approved by OMB, 
section 3506(c)(2)(A) of the PRA requires that the Departments solicit 
comment on the following issues:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of an agency.
    <bullet> The accuracy of the Departments' estimate of the 
information collection burden.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    As part of the continuing effort to reduce paperwork and respondent 
burden, the Departments conduct a preclearance consultation program to 
provide the general public and Federal agencies with an opportunity to 
comment on proposed and continuing collections of information in 
accordance with the PRA. This helps to ensure that the public 
understands the Departments' collection instructions, respondents can 
provide the requested data in the desired format, reporting burden 
(time and financial resources) is minimized, collection instruments are 
clearly understood, and the Departments can properly assess the impact 
of collection requirements on respondents. Under the PRA, an agency may 
not conduct or sponsor, and an individual is not required to respond 
to, a collection of information unless it displays a valid OMB control 
number.
    The Departments have submitted a copy of these proposed rules to 
OMB in accordance with 44 U.S.C. 3507(d) for review of the proposed 
(revised) information collections described in this section. The 
Departments request public comment on these information collections. 
Commenters may submit their comments on the Departments' PRA analysis 
in the same way they send comments in response to this NPRM as a whole 
(for example, through the https://www.regulations.gov website), 
including as part of a comment responding to the broader NPRM. To 
obtain copies of the supporting statements and any related forms for 
the proposed collections, please visit https://www.reginfo.gov.
1. Wage Estimates
    The Departments generally used data from the Contract Awarded Labor 
Category (CALC) database tool \216\ to derive average labor costs for 
estimating the burden and equivalent costs associated with the 
information collection requirements (ICRs). Table 3 presents the 
estimated mean hourly wages, which include both base pay and benefits, 
used in the burden and equivalent cost estimates.
---------------------------------------------------------------------------

    \216\ The CALC tool was built to assist acquisition 
professionals with market research and price analysis for labor 
categories on multiple U.S. General Services Administration (GSA) & 
Veterans Administration (VA) contracts. The Departments chose to use 
wages derived from the CALC database because, even though the Bureau 
of Labor Statistics (BLS) data set is valuable to economists, 
researchers, and others that would be interested in larger, more 
macro-trends in parts of the economy, the CALC data set is meant to 
help market research based on existing government contracts in 
determining how much a project/product will cost based on the 
required skill sets needed. The CALC data set factors the fully 
burdened hourly rates (base pay + benefits) into the wages whereas 
BLS does not. CALC occupations and wages provide the Departments 
with data that aligns more with, and provides more detail related 
to, the occupations required for the implementation of the 
requirements in these proposed rules. CALC information and wage 
rates are available at https://buy.gsa.gov/pricing/.

   Table 3--Hourly Wages Used in Burden and Equivalent Cost Estimates
------------------------------------------------------------------------
                                                       Mean hourly wage
                CALC occupation title                      ($/hour)
------------------------------------------------------------------------
Project Manager/Team Lead...........................             $146.15
Sr. Developer/Lead..................................              197.27
Designer............................................              107.10
Training Specialist.................................               99.95
Customer Service Representative.....................               45.83
Web Database/Application Developer IV...............              170.35
------------------------------------------------------------------------

2. ICR Regarding Requirements for Contraceptive Disclosure to 
Participants, Beneficiaries, or Enrollees on the Internet-Based Self-
Service Tool (26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2, and 45 CFR 
147.211)
    The Departments propose in new 26 CFR 54.9815-2715A2(b)(1)(vi), 29 
CFR 2590.715-2715A2(b)(1)(vi), and 45 CFR 147.211(b)(1)(vi) that if a 
participant, beneficiary, or enrollee requests cost-sharing information 
for any covered contraceptive item or service using a plan's or 
issuer's internet-based self-service tool or requests such information 
be provided on paper, a plan or issuer would be required to provide a 
statement explaining the availability of OTC contraceptive items 
without a prescription and without cost sharing, along with a phone 
number and internet link to where a participant, beneficiary, or 
enrollee can learn more information about the plan's or policy's 
contraception coverage. The Departments propose to require plans and 
issuers to incorporate this disclosure into their existing self-service 
tool for plan years (in the individual market, policy years) beginning 
on or after January 1, 2026.
    The Departments assume that fully-insured group health plans would 
depend on health insurance issuers and self-insured group health plans 
would rely on TPAs to implement the proposed requirements. Based on 
recent data, the Departments estimate that approximately 1,467 issuers 
\217\ and 205 TPAs \218\ would implement the proposed requirements on 
behalf of plans and issuers.
---------------------------------------------------------------------------

    \217\ The Departments' estimate of the number of health 
insurance companies and the number of issuers (issuer/State 
combinations) is based on medical loss ratio reports submitted by 
issuers for the 2022 reporting year. See CMS (2022), ``Medical Loss 
Ratio Data and System Resources,'' available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
    \218\ Non-issuer TPAs estimate is based on data derived from the 
2016 benefit year reinsurance program contributions.
---------------------------------------------------------------------------

    The Departments assume that issuers and TPAs have already built 
self-service tools (first applicable for plan years (or policy years) 
beginning on or after January 1, 2023) and would only be required to 
modify their existing tools to incorporate the proposed new 
contraceptive statement. This statement would explain that OTC 
contraceptive items are covered without a prescription and without cost 
sharing and would provide a customer service phone number and internet 
link for a participant, beneficiary, or enrollee that wishes to speak 
with a customer service representative or gain additional information 
about the plan's or policy's contraception coverage. The

[[Page 85788]]

introduction of the new contraception statement would impose the 
following additional burden on issuers and TPAs: \219\ (1) first-year 
one-time development costs needed to integrate the contraception 
statement language into the existing self-service tool. This would 
involve design changes to the existing web user interface to enable 
identification of services that would trigger the static statement to 
the consumer. Additionally, the statement would be required to include 
a link to information about the participant's, beneficiary's, or 
enrollee's contraception coverage benefits. Issuers and TPAs would 
incur one-time costs to create or update a web page to provide this 
information; (2) annual costs of programming updates, web page 
maintenance, and maintaining the list of contraceptive items and 
services required to be coded to trigger the statement; (3) annual 
costs associated with training customer service representatives to 
assist consumers with inquiries related to the new contraceptive 
statement, and (4) annual costs for customer service representatives to 
respond to calls.
---------------------------------------------------------------------------

    \219\ Note that the Departments expect self-insured group health 
plans would rely on TPAs to implement the proposed requirements and 
compensate them accordingly and thereby bear any implementation 
costs.
---------------------------------------------------------------------------

    The Departments estimate that for each issuer or TPA, on average, 
it would take a Project Manager/Team Lead 40 hours (at $146.15 per 
hour), a Senior Developer/lead 20 hours (at $197.27 per hour), a 
Designer 25 hours at ($107.10 per hour), and a Web Database/Application 
Developer IV 50 hours (at $170.35 per hour) to integrate the 
contraception statement language into the existing self-service tool, 
make design changes, and create or update a web page to provide further 
details regarding the plan's or policy's contraceptive coverage. The 
Departments estimate the total hour burden per issuer or TPA would be 
approximately 135 hours, with an equivalent cost of approximately 
$20,986 per issuer or TPA. For all 1,672 issuers and TPAs, the total 
first-year one-time total hour burden is estimated to be 225,720 hours, 
with an equivalent total cost of approximately $35,089,261 as shown in 
table 4.

Table 4--Total First Year Estimated One-Time Cost and Hour Burden To Incorporate the New Contraceptive Statement
    in the Internet-Based Self-Service Tool, Make Design Changes, and Develop or Update a Web Page To Provide
  Further Details Regarding the Plan's or Policy's Contraception Coverage for All Health Insurance Issuers and
                                                      TPAs
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
 Number of respondents   Number of responses        respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,672                  1,672                     135               225,720           $35,089,261
----------------------------------------------------------------------------------------------------------------

    In addition to the one-time cost and hour burden estimated above, 
issuers and TPAs would incur ongoing annual costs for website 
maintenance, programming updates, and updates to the list of 
contraceptive items and services required to be coded to trigger the 
statement. The Departments estimate that for each issuer and TPA, it 
would take a Web Database/Application Developer IV 5 hours (at $170.35 
per hour) to complete this task. For all 1,672 issuers and TPAs, the 
total annual maintenance burden related to the new contraceptive 
statement would be 8,360 hours with an equivalent total cost of 
approximately $1,424,126 as shown in table 5.

  Table 5--Estimated Annual Cost and Hour Burden for Maintenance of Internet-Based Self-Service Tool Related to
                            the New Contraceptive Statement for All Issuers and TPAs
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
 Number of respondents   Number of responses        respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,672                  1,672                       5                 8,360            $1,424,126
----------------------------------------------------------------------------------------------------------------

    Issuers and TPAs would also incur an ongoing annual burden and cost 
associated with customer service representative training related to the 
new contraceptive statement. The Departments assume that the 
introduction of the new contraception statement would not necessitate 
hiring additional full-time customer service representatives. Instead, 
the Departments expect issuers and TPAs would utilize their existing 
customer service representatives for this task. Therefore, the 
Departments estimate that for each issuer and TPA, one Training 
Specialist would spend 5 hours at a cost of $99.95 per hour to train 5 
customer service representatives on how to respond to participants, 
beneficiaries, and enrollees if they call in because of the new 
contraception statement, who would also require 5 hours to complete the 
training at a cost of $45.83 per hour. For all 1,672 issuers and TPAs, 
the total annual training hour burden would be 50,160 hours, with an 
equivalent total annual cost of approximately $2,751,276 as shown in 
table 6.

        Table 6--Estimated Annual Cost and Hour Burden for All Issuers and TPAs To Train Customer Service
 Representatives To Provide Assistance to Consumers Related to New Contraceptive Statement in the Internet-Based
                                                Self-Service Tool
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
 Number of respondents   Number of responses        respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,672                  1,672                      30                50,160            $2,751,276
----------------------------------------------------------------------------------------------------------------


[[Page 85789]]

    After the training, customer service representatives would be 
expected to respond to the potential increase in calls resulting from 
the new contraception statement. The Departments estimate that for each 
issuer and TPA, it would take 5 customer service representatives 5 
hours (at $45.83 per hour) to complete this task. For all 1,672 issuers 
and TPAs, the total annual cost of responding to these calls would be 
41,800 hours, with an equivalent total cost of approximately $1,915,694 
as shown in table 7.

  Table 7--Estimated Annual Cost and Hour Burden for All Issuers and TPAs To Respond to Calls Regarding the New
                         Contraceptive Statement on the Internet-Based Self-Service Tool
----------------------------------------------------------------------------------------------------------------
                                                 Burden hours per
 Number of respondents   Number of responses        respondent         Total burden hours        Total cost
----------------------------------------------------------------------------------------------------------------
             1,672                  1,672                      25                41,800            $1,915,694
----------------------------------------------------------------------------------------------------------------

    Taking into account their segment of jurisdiction over issuers and 
TPAs, HHS would assume 50 percent of the total burden, while the 
Departments of Labor and the Treasury would each assume 25 percent. 
Tables 8 to 10 display the share of each Department's total burden 
hours to implement the new contraceptive statement.

       Table 8--Estimated HHS Share of Total Burden Hours for Implementing the New Contraceptive Statement
----------------------------------------------------------------------------------------------------------------
                                                   Number of       Number of    Burden hours per   Total burden
                     Year                         respondents      responses       respondent          hours
----------------------------------------------------------------------------------------------------------------
Year 1........................................             836             836               135         112,860
Year 2........................................             836             836                60          50,160
Year 3........................................             836             836                60          50,160
3-Year Average................................             836             836                85          71,060
----------------------------------------------------------------------------------------------------------------


   Table 9--Estimated Department of Labor's Share of Total Burden Hours for Implementing the New Contraceptive
                                                    Statement
----------------------------------------------------------------------------------------------------------------
                                                   Number of       Number of    Burden hours per   Total burden
                     Year                         respondents      responses       respondent          hours
----------------------------------------------------------------------------------------------------------------
Year 1........................................             418             418               135          56,430
Year 2........................................             418             418                60          25,080
Year 3........................................             418             418                60          25,080
3-Year Average................................             418             418                85          35,530
----------------------------------------------------------------------------------------------------------------


      Table 10--Estimated Department of the Treasury's Share of Total Burden Hours for Implementing the New
                                             Contraceptive Statement
----------------------------------------------------------------------------------------------------------------
                                                   Number of       Number of    Burden hours per   Total burden
                     Year                         respondents      responses       respondent          hours
----------------------------------------------------------------------------------------------------------------
Year 1........................................             418             418               135          56,430
Year 2........................................             418             418                60          25,080
Year 3........................................             418             418                60          25,080
3-Year Average................................             418             418                85          35,530
----------------------------------------------------------------------------------------------------------------

    The burden related to the Transparency in Coverage disclosure of 
certain cost-sharing information for HHS is currently approved under 
OMB control number 0938-1429 (CMS-10715, Transparency in 
Coverage).\220\ HHS will revise this information collection request to 
account for the additional burden associated with the contraceptive 
disclosure. This information collection request was approved as a host 
for common forms. The burden related to the Transparency in Coverage 
disclosure of certain cost-sharing information for DOL and Treasury was 
submitted to OMB for each respective Department under 0938-1429 as 
Request for Common Form (RCF) submissions. Upon OMB approval of the RCF 
submissions, DOL and Treasury will update and submit their information 
collection requests.
---------------------------------------------------------------------------

    \220\ Available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202410-0938-006.

                                      Table 11--Summary of Proposed Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Burden per                     Hourly labor
        Regulation section           OMB control No.     Respondents      Responses       response      Total annual       cost of         Total cost
                                                                                           (hours)     burden (hours)     reporting
--------------------------------------------------------------------------------------------------------------------------------------------------------
45 CFR 47.211.....................          0938-1429             836             836              85          71,060            $119         $8,721,124
26 CFR 54.9815-2715A2.............          0938-1429             418             418              85          35,530             119          4,360,562

[[Page 85790]]

 
29 CFR 2590.715-2715A2............          0938-1429             418             418              85          35,530             119          4,360,562
                                   ---------------------------------------------------------------------------------------------------------------------
    Total.........................  .................           1,672           1,672  ..............         142,120  ..............         17,442,248
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Departments seek comment on the assumptions made and the burden 
estimates discussed in this section.

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \221\ requires agencies to 
analyze options for regulatory relief of small entities and to prepare 
an initial regulatory flexibility analysis to describe the impact of a 
proposed rule on small entities, unless the head of the agency can 
certify that the rule will not have a significant economic impact on a 
substantial number of small entities. The RFA generally defines a 
``small entity'' as (1) a proprietary firm meeting the size standards 
of the Small Business Administration (SBA), (2) a not-for-profit 
organization that is not dominant in its field, or (3) a small 
government jurisdiction with a population of less than 50,000. States 
and individuals are not included in the definition of ``small entity.'' 
The data and conclusions presented in this section amount to the 
Departments' initial regulatory flexibility analysis under the RFA.
---------------------------------------------------------------------------

    \221\ 5 U.S.C. 601, et seq.
---------------------------------------------------------------------------

1. Need for Regulatory Action, Objectives, and Legal Basis
    As discussed in section II of this preamble, ongoing complaints and 
reports of noncompliance with section 2713 of the PHS Act and its 
implementing regulations indicate that consumers face barriers when 
attempting to use their health plan or coverage to access recommended 
preventive services without cost sharing. As a result of these concerns 
and other significant activity related to preventive services, the 
Departments are proposing to amend the regulations governing coverage 
of recommended preventive services in order to ensure that 
participants, beneficiaries, and enrollees can access the full range of 
recommended preventive services to which they are entitled, with 
particular focus on strengthening coverage requirements with respect to 
recommended contraceptive items for women, as summarized in section 
IV.A of this preamble. The Departments consider these provisions to be 
timely and necessary given the documented challenges faced by consumers 
in accessing recommended preventive services, as discussed in section 
IV.B.2.a of this preamble.
2. Number of Affected Small Entities and Compliance Requirements and 
Costs
    The provisions in these proposed rules would affect small entities 
including health insurance issuers, ERISA-covered non-grandfathered 
group health plans, non-grandfathered non-Federal governmental plans, 
and pharmacies.
    The Departments anticipate that health insurance issuers, many of 
which are part of larger health insurance companies or holding groups, 
would incur costs associated with the provisions in these proposed 
rules, as described in section IV.B.2.d of this preamble. Health 
insurance companies are generally classified under the North American 
Industry Classification System (NAICS) code 524114 (Direct Health and 
Medical Insurance Carriers). According to SBA size standards,\222\ 
entities with average annual receipts of $47 million or less are 
considered small entities for this NAICS code. The Departments expect 
that few, if any, insurance companies underwriting health insurance 
policies fall below these size thresholds. Based on data from medical 
loss ratio annual report submissions for the 2022 reporting year, 
approximately 87 out of 487 health insurance companies nationwide had 
total premium revenue of $47 million or less.\223\ This estimate may 
overstate the actual number of small health insurance companies that 
may be affected, since over 76 percent of these small companies belong 
to larger holding groups, and many, if not all, of these small 
companies are likely to have non-health lines of business that will 
result in their revenues exceeding $47 million.
---------------------------------------------------------------------------

    \222\ Small Business Administration (2023). ``Table of Size 
Standards (last updated March 2023),'' available at https://www.sba.gov/document/support--table-size-standards.
    \223\ Based on internal calculations. See CMS, Medical Loss 
Ratio Data and System Resources, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------

    Plans and plan sponsors would incur some costs associated with 
meeting the requirements of these proposed rules, whether directly or 
indirectly through compensation paid to a TPA. However, the Departments 
anticipate that most of these costs would ultimately be passed on to 
plan participants, as discussed in section IV.B.2.e of this preamble. 
As noted in section IV.B.2.b of this preamble, the Departments estimate 
that there are 499,299 ERISA-covered self-insured, non-grandfathered 
group health plans \224\ and 1,844,520 ERISA-covered fully-insured, 
non-grandfathered group health plans.\225\ The Departments further 
estimate that there are 76,345 non-grandfathered non-Federal 
governmental plans sponsored by State and local governmental 
entities.\226\
---------------------------------------------------------------------------

    \224\ The Departments estimate that there are 594,404 ERISA-
covered self-insured group health plans based on data from the 2022 
Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and 
the 2020 County Business Patterns from the Census Bureau. The 2020 
KFF Employer Health Benefits Survey reported that in 2020, 16 
percent of firms offering health benefits offered at least one 
grandfathered health plan (see KFF, 2020 Kaiser Employer Health 
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the 
Departments have calculated the number of self-insured, non-
grandfathered plans in the following manner: 594,404 ERISA-covered 
self-insured group health plans x (100 percent minus 16 percent) = 
499,299.
    \225\ The Departments estimate that there are 2,195,857 ERISA-
covered fully-insured group health plans based on data from the 2022 
Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and 
the 2020 County Business Patterns from the Census Bureau. The 2020 
KFF Employer Health Benefits Survey reported that in 2020, 16 
percent of firms offering health benefits offered at least one 
grandfathered health plan (see KFF, 2020 Kaiser Employer Health 
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the 
Departments have calculated the number of fully-insured, non-
grandfathered plans in the following manner: 2,195,857 ERISA-covered 
fully-insured group health plans x (100 percent minus 16 percent) 
=1,844,520.
    \226\ According to data from the 2022 Census of Governments, 
there are 90,887 State and local governmental entities (see U.S. 
Census Bureau, 2022 Census of Governments, available at https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html). The 
Departments assume that each State and local governmental entity 
sponsors one health plan on average. Therefore, the Departments 
estimate that there are 90,887 non-Federal governmental health 
plans. The 2020 KFF Employer Health Benefits Survey reported that 16 
percent of employers offer at least one grandfathered plan (see KFF, 
2020 Kaiser Employer Health Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). The Departments therefore estimate there are 
approximately 76,345 non-grandfathered non-Federal governmental 
plans.

---------------------------------------------------------------------------

[[Page 85791]]

    Due to limited data, the Departments are unable to quantify the 
percentages of these plans whose sponsors might be considered small 
entities under the RFA but anticipate that most could be.\227\ The 
Departments request comment and data on the number of plan sponsors 
that might be small entities, as well as the potential economic impacts 
of these proposed rules on plan sponsors.
---------------------------------------------------------------------------

    \227\ Based on data from the 2022 MEPS-IC, the 2020 County 
Business Patterns from the Census Bureau, and the 2020 Kaiser 
Employer Health Benefits Survey, the Departments estimate that 
approximately 2,189,444 ERISA-covered non-grandfathered group health 
plans have less than 100 participants, or approximately 93 percent 
of the total number of ERISA-covered non-grandfathered group health 
plans.
---------------------------------------------------------------------------

    The Departments anticipate that pharmacies would incur costs to 
update billing processes and systems for covered OTC contraceptive 
items, as discussed in section IV.B.2.d of this preamble. Pharmacies 
are classified under NAICS code 456110 (Pharmacies and Drug Retailers) 
with a size standard of $37.5 million or less. According to the Census 
Bureau's Statistics of U.S. Businesses, there are 19,234 firms in the 
pharmacies and drug stores sector in the U.S. as of 2017.\228\ Based on 
these firms' receipts in 2017 (adjusted for inflation between 2017 and 
2023), 18,879, or 98.2 percent, of these firms, accounting for 22.0 
percent of receipts in the sector, operate below the SBA size standard 
and are therefore considered small entities.\229\ The Departments 
request comment on this analysis.
---------------------------------------------------------------------------

    \228\ U.S. Census Bureau (2017). 2017 SUSB Annual Data Tables by 
Establishment Industry (Data by Enterprise Receipts Size), available 
at https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
    \229\ Adjusted for inflation between 2017 and 2023 using the 
consumer price index for all urban consumers (CPI-U). See U.S. 
Bureau of Labor Statistics (2024), Consumer Price Index, available 
at https://www.bls.gov/cpi/tables/supplemental-files/ (Historical 
CPI-U, August 2024).
---------------------------------------------------------------------------

3. Duplication, Overlap, and Conflict With Other Rules and Regulations
    The Departments do not anticipate that these proposed rules would 
cause any duplication, overlap, or conflict with other rules and 
regulations.
4. Significant Alternatives
    The Departments considered various alternatives to the provisions 
proposed in these proposed rules in section IV.C. In light of this 
discussion of regulatory alternatives, the Departments are of the view 
that there are no significant alternatives that would both achieve the 
policy objectives and goals of these proposed rules and be less 
burdensome to small entities.

F. Special Analyses--Department of the Treasury

    Pursuant to the Memorandum of Agreement, Review of Treasury 
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory 
actions issued by the IRS are not subject to the requirements of 
section 6 of Executive Order 12866, as amended. Therefore, a regulatory 
impact assessment is not required. Pursuant to section 7805(f) of the 
Code, these regulations have been submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on their 
impact on small business.

G. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits before 
issuing a proposed rule that includes any Federal mandate that may 
result in expenditures in any one year by State, local, or Tribal 
governments, in the aggregate, or by the private sector, of $100 
million in 1995 dollars, updated annually for inflation. That threshold 
is approximately $183 million in 2024. These proposed rules would not 
impose a mandate that will result in the expenditure by State, local, 
and Tribal governments, in the aggregate, or by the private sector, of 
more than $183 million in any one year. As discussed in section 
IV.B.2.e of this preamble, the Departments expect that most, if not 
all, of the transfer effects would be incurred by covered individuals 
(directly or indirectly) and the Federal government. The Departments 
also anticipate that the total costs to plans, issuers, and pharmacies 
identified in section IV.B.2.d of this preamble would be below the 
threshold. The Departments therefore anticipate that State, local, and 
Tribal governments, in the aggregate, or the private sector would not 
experience an increase in expenditure that meets this threshold.

H. Federalism

    Executive Order 13132 outlines fundamental principles of 
federalism. It requires adherence to specific criteria by Federal 
agencies in formulating and implementing policies that have 
``substantial direct effects'' on the States, the relationship between 
the National Government and States, or on 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 proposed rules.
    In the Departments' view, these proposed rules have federalism 
implications because they may have direct effects on the States, the 
relationship between the Federal government and the States, or on the 
distribution of power and responsibilities among various levels of 
government. However, the federalism implications are substantially 
mitigated because, with respect to health insurance issuers, 45 States 
are either enforcing the requirements related to coverage of specified 
preventive services (including contraception) without cost sharing 
pursuant to State law or otherwise are working collaboratively with HHS 
to ensure that issuers meet these standards. In five States, HHS 
ensures that issuers comply with these requirements. In addition, seven 
States have passed laws requiring State-regulated health plans to 
cover, without cost sharing, certain OTC contraceptive items without a 
prescription.\230\ Therefore, these proposed rules would not be likely 
to require substantial additional oversight of States by HHS.
---------------------------------------------------------------------------

    \230\ CA, CO, MD, NJ, NM, NY, WA. KFF, (March 2024). ``State 
Private Insurance Coverage Requirements for OTC Contraception 
Without a Prescription,'' available at https://www.kff.org/other/state-indicator/state-private-insurance-coverage-requirements-for-otc-contraception-without-a-prescription.
---------------------------------------------------------------------------

    In general, through section 514, ERISA supersedes State laws to the 
extent that they relate to any covered employee benefit plan, and 
preserves State laws that regulate insurance, banking, or securities. 
While ERISA prohibits States from regulating a plan as an insurance or 
investment company or bank, the preemption provisions of section 731 of 
ERISA and section 2724 of the PHS Act (implemented in 29 CFR 
2590.731(a) and 45 CFR 146.143(a)) apply so that the ACA's preventive 
service requirements 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 Federal requirement. The conference 
report accompanying the Health Insurance Portability and Accountability 
Act of 1996 (HIPAA)

[[Page 85792]]

indicates that this is intended to be the ``narrowest'' preemption of 
State laws.\231\
---------------------------------------------------------------------------

    \231\ See Conf. Rep. No. 104-736, pg. 205, reprinted in 1996 
U.S. Code Cong. & Admin. News 2018, available at https://www.congress.gov/congressional-report/104th-congress/house-report/736/1.
---------------------------------------------------------------------------

    States may continue to apply State law requirements except to the 
extent that such requirements prevent the application of the preventive 
services requirements in section 2713 of the PHS Act.\232\ State 
insurance laws that are more stringent than the Federal requirements 
are unlikely to prevent the application of the preventive services 
requirements and be preempted. Accordingly, States have significant 
latitude to impose requirements on health insurance issuers that are 
more restrictive than the Federal law.
---------------------------------------------------------------------------

    \232\ See ERISA section 731 and PHS Act section 2724(a); 29 CFR 
2590.731(a) and 45 CFR 146.143(a) and 148.210. See also FAQs Part 
54, Q11 and Q12 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
---------------------------------------------------------------------------

    The Departments request comment on the potential impacts on States 
(if any) associated with these proposed rules.
    Throughout the process of developing these proposed rules, to the 
extent feasible within the specific preemption provisions of HIPAA as 
it applies to the preventive services requirements, the Departments 
have attempted to balance the States' interests in regulating health 
insurance issuers, and Congress' intent to provide uniform minimum 
protections to consumers in every State. By doing so, it is the 
Departments' view that they have complied with the requirements of 
Executive Order 13132.

Statutory Authority

    The Department of the Treasury regulations are proposed to be 
adopted pursuant to the authority contained in sections 7805 and 9833 
of the Code.
    The Department of Labor regulations are proposed to be adopted 
pursuant to the authority contained in 29 U.S.C. 1002, 1135, 1182, 
1185d, 1191a, 1191b, and 1191c; Secretary of Labor's Order 1-2011, 77 
FR 1088 (Jan. 9, 2012).
    The Department of Health and Human Services regulations are 
proposed to be adopted pursuant to the authority contained in sections 
2701 through 2763, 2791, 2792, and 2794 of the PHS Act (42 U.S.C. 
300gg-63, 300gg-91, 300gg-92 and 300gg-94), as amended; sections 1311 
and 1321 of PPACA (42 U.S.C. 13031 and 18041).

List of Subjects

26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

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.

Douglas W. O'Donnell,
Deputy Commissioner, Internal Revenue Service.
Lisa M. Gomez,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
Xavier Becerra,
Secretary, Department of Health and Human Services.

DEPARTMENT OF THE TREASURY

Internal Revenue Service

Proposed Amendments to the Regulations

    Accordingly, the Treasury Department and IRS propose to amend 26 
CFR part 54 as follows:

PART 54--PENSION EXCISE TAXES

0
Paragraph 1.The authority citation for part 54 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *
* * * * *
0
Par. 2. Section 54.9815-2713 is amended by revising paragraph (a)(4), 
adding paragraph (a)(6), and revising paragraph (d) to read as follows:


Sec.  54.9815-2713  Coverage of preventive health services.

    (a) * * *
    (4) Reasonable medical management. (i) 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 
described in paragraph (a)(1) of this section to the extent not 
specified in the relevant recommendation or guideline. To the extent 
not specified in a recommendation or guideline described in paragraph 
(a)(1) of this section, a plan or issuer may rely on the relevant 
clinical evidence base and established reasonable medical management 
techniques to determine the frequency, method, treatment, or setting 
for coverage of a recommended preventive health service.
    (ii) For a medical management technique to be considered reasonable 
under paragraph (a)(4)(i) of this section, a plan or issuer must have 
an easily accessible, transparent, and sufficiently expedient 
exceptions process that is not unduly burdensome on a participant, 
beneficiary, or attending provider (or other person acting as the 
individual's authorized representative) that ensures the individual can 
receive coverage, without cost-sharing requirements, for the item or 
service specified in a recommendation or guideline described in 
paragraph (a)(1) of this section, according to the frequency, method, 
treatment, or setting, that is medically necessary with respect to the 
individual, as determined by the individual's attending provider.
* * * * *
    (6) Contraceptive items--(i) Definitions. For purposes of this 
paragraph (a)(6)--
    (A) Drug-led combination product means a combination product, as 
defined under 21 CFR 3.2(e), that comprises a drug and a device, and 
for which the drug component provides the primary mode of action.
    (B) Therapeutic equivalent has the meaning given the term 
therapeutic equivalents in 21 CFR 314.3(b).
    (ii) Over-the-counter contraception. Subject to Sec.  54.9815-2713A 
and 45 CFR 147.132 and 147.133, a plan or issuer is not considered to 
comply with paragraph (a)(1) of this section with respect to a 
contraceptive item that can be lawfully obtained by a participant or 
beneficiary without a prescription and for which the applicable 
recommendation or guideline does not require a prescription, unless the 
plan or issuer provides coverage for the contraceptive item without 
requiring a prescription and without imposing any cost-sharing 
requirements in accordance with paragraph (a)(1) of this section.
    (iii) Therapeutic equivalents. For purposes of paragraph (a)(4) of 
this section, a plan's or issuer's medical management techniques are 
not considered to be reasonable unless the plan or issuer provides 
coverage, without imposing any cost-sharing requirements, for all 
contraceptive items recommended under paragraph (a)(1) of this section 
that are drugs or drug-led combination products, other than those items 
for which there is at least one therapeutic equivalent drug or drug-led 
combination product, as applicable, for which the plan or issuer 
provides

[[Page 85793]]

coverage without imposing any cost-sharing requirements.
* * * * *
    (d) Applicability date. The provisions of this section apply for 
plan years beginning on or after September 23, 2010. Notwithstanding 
the previous sentence, the provisions of paragraph (a)(4)(ii) of this 
section apply beginning on [EFFECTIVE DATE OF FINAL RULE] and the 
provisions of paragraph (a)(6) of this section apply for plan years 
beginning on or after January 1, 2026. See Sec.  54.9815-1251 for 
determining the application of this section to grandfathered health 
plans (providing that these rules regarding coverage of preventive 
health services do not apply to grandfathered health plans).
0
Par. 3. Section 54.9815-2715A2 is amended by:
0
a. Redesignating paragraphs (b)(1)(vi) and (vii) as paragraphs 
(b)(1)(vii) and (viii);
0
b. Adding new paragraph (b)(1)(vi); and
0
c. Revising paragraph (c)(1).
    The addition and revision read as follows:


Sec.  54.9815-2715A2  Transparency in coverage--required disclosures to 
participants and beneficiaries.

* * * * *
    (b) * * *
    (1) * * *
    (vi) If a participant or beneficiary requests cost-sharing 
information for any covered contraceptive item or service, a statement 
explaining that over-the-counter contraceptive items are covered 
without a prescription and without cost sharing in accordance with 
Sec.  54.9815-2713(a)(6), along with a phone number and internet link 
to where a participant or beneficiary can learn more information about 
the plan or policy's contraception coverage.
* * * * *
    (c) * * *
    (1) The provisions of this section apply for plan years beginning 
on or after January 1, 2023, with respect to the 500 items and services 
to be posted on a publicly available website, and with respect to all 
covered items and services, for plan years beginning on or after 
January 1, 2024. Notwithstanding the previous sentence, the provisions 
of paragraph (b)(1)(vi) of this section apply for plan years beginning 
on or after January 1, 2026.
* * * * *

DEPARTMENT OF LABOR

Employee Benefits Security Administration

    For the reasons stated in the preamble, the Department of Labor 
proposes to amend 29 CFR part 2590 as set forth below:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
1. The authority citation for part 2590 continues to read as follows:

    Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a-n, 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. 512(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; 
Division M, Pub. L. 113-235, 128 Stat. 2130; Pub. L. 116-260 134 
Stat. 1182; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 
2012).

0
2. Section 2590.715-2713 is amended by revising paragraph (a)(4), 
adding paragraph (a)(6), and revising paragraph (d) to read as follows:


Sec.  2590.715-2713  Coverage of preventive health services.

    (a) * * *
    (4) Reasonable medical management. (i) 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 
described in paragraph (a)(1) of this section to the extent not 
specified in the relevant recommendation or guideline. To the extent 
not specified in a recommendation or guideline described in paragraph 
(a)(1) of this section, a plan or issuer may rely on the relevant 
clinical evidence base and established reasonable medical management 
techniques to determine the frequency, method, treatment, or setting 
for coverage of a recommended preventive health service.
    (ii) For a medical management technique to be considered reasonable 
under paragraph (a)(4)(i) of this section, a plan or issuer must have 
an easily accessible, transparent, and sufficiently expedient 
exceptions process that is not unduly burdensome on a participant, 
beneficiary, or attending provider (or other person acting as the 
individual's authorized representative) that ensures the individual can 
receive coverage, without cost-sharing requirements, for the item or 
service specified in a recommendation or guideline described in 
paragraph (a)(1) of this section, according to the frequency, method, 
treatment, or setting, that is medically necessary with respect to the 
individual, as determined by the individual's attending provider.
* * * * *
    (6) Contraceptive items--(i) Definitions. For purposes of this 
paragraph (a)(6)--
    (A) Drug-led combination product means a combination product, as 
defined under 21 CFR 3.2(e), that comprises a drug and a device, and 
for which the drug component provides the primary mode of action.
    (B) Therapeutic equivalent has the meaning given the term 
therapeutic equivalents in 21 CFR 314.3(b).
    (ii) Over-the-counter contraception. Subject to Sec.  2590.715-
2713A and 45 CFR 147.132 and 147.133, a plan or issuer is not 
considered to comply with paragraph (a)(1) of this section with respect 
to a contraceptive item that can be lawfully obtained by a participant 
or beneficiary without a prescription and for which the applicable 
recommendation or guideline does not require a prescription, unless the 
plan or issuer provides coverage for the contraceptive item without 
requiring a prescription and without imposing any cost-sharing 
requirements in accordance with paragraph (a)(1) of this section.
    (iii) Therapeutic equivalents. For purposes of paragraph (a)(4) of 
this section, a plan's or issuer's medical management techniques are 
not considered to be reasonable unless the plan or issuer provides 
coverage, without imposing any cost-sharing requirements, for all 
contraceptive items recommended under paragraph (a)(1) of this section 
that are drugs or drug-led combination products, other than those items 
for which there is at least one therapeutic equivalent drug or drug-led 
combination product, as applicable, for which the plan or issuer 
provides coverage without imposing any cost-sharing requirements.
* * * * *
    (d) Applicability date. The provisions of this section apply for 
plan years beginning on or after September 23, 2010. Notwithstanding 
the previous sentence, the provisions of paragraph (a)(4)(ii) of this 
section apply beginning on [EFFECTIVE DATE OF FINAL RULE] and the 
provisions of paragraph (a)(6) of this section apply for plan years 
beginning on or after January 1, 2026. See Sec.  2590.715-1251 for 
determining the application of this section to grandfathered health 
plans (providing that these rules regarding coverage of preventive 
health services do not apply to grandfathered health plans).
* * * * *
0
3. Section 2590.715-2715A2 is amended by--
0
a. Redesignating paragraphs (b)(1)(vi) and (vii) as paragraphs 
(b)(1)(vii) and (viii);

[[Page 85794]]

0
b. Adding new paragraph (b)(1)(vi); and
0
c. Revising paragraph (c)(1).
    The addition and revision read as follows:


Sec.  2590.715-2715A2  Transparency in coverage--required disclosures 
to participants and beneficiaries.

* * * * *
    (b) * * *
    (1) * * *
    (vi) If a participant or beneficiary requests cost-sharing 
information for any covered contraceptive item or service, a statement 
explaining that over-the-counter contraceptive items are covered 
without a prescription and without cost sharing in accordance with 
Sec.  2590.715-2713(a)(6), along with a phone number and internet link 
to where a participant or beneficiary can learn more information about 
the plan or policy's contraception coverage.
* * * * *
    (c) * * *
    (1) The provisions of this section apply for plan years beginning 
on or after January 1, 2023, with respect to the 500 items and services 
to be posted on a publicly available website, and with respect to all 
covered items and services, for plan years beginning on or after 
January 1, 2024. Notwithstanding the previous sentence, the provisions 
of paragraph (b)(1)(vi) of this section apply for plan years beginning 
on or after January 1, 2026.
* * * * *

DEPARTMENT OF HEALTH AND HUMAN SERVICES

    For the reasons stated in the preamble, the Department of Health 
and Human Services proposes to amend 45 CFR part 147 as set forth 
below:

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
1. The authority citation for part 147 continues to read as follows:

    Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, 300gg-92, 
and 300gg-111 through 300gg-139, as amended, and section 3203, Pub. 
L. 116-136, 134 Stat. 281.

0
2. Section 147.130 is amended by revising paragraph (a)(4), adding 
paragraph (a)(6), and revising paragraph (d) to read as follows:


Sec.  147.130  Coverage of preventive health services.

    (a) * * *
    (4) Reasonable medical management. (i) 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 
described in paragraph (a)(1) of this section to the extent not 
specified in the relevant recommendation or guideline. To the extent 
not specified in a recommendation or guideline described in paragraph 
(a)(1) of this section, a plan or issuer may rely on the relevant 
clinical evidence base and established reasonable medical management 
techniques to determine the frequency, method, treatment, or setting 
for coverage of a recommended preventive health service.
    (ii) For a medical management technique to be considered reasonable 
under paragraph (a)(4)(i) of this section, a plan or issuer must have 
an easily accessible, transparent, and sufficiently expedient 
exceptions process that is not unduly burdensome on a participant, 
beneficiary, enrollee, or attending provider (or other person acting as 
the individual's authorized representative) that ensures the individual 
can receive coverage, without cost-sharing requirements, for the item 
or service specified in a recommendation or guideline described in 
paragraph (a)(1) of this section, according to the frequency, method, 
treatment, or setting, that is medically necessary with respect to the 
individual, as determined by the individual's attending provider.
* * * * *
    (6) Contraceptive items--(i) Definitions. For purposes of this 
paragraph (a)(6)--
    (A) Drug-led combination product means a combination product, as 
defined under 21 CFR 3.2(e), that comprises a drug and a device, and 
for which the drug component provides the primary mode of action.
    (B) Therapeutic equivalent has the meaning given the term 
therapeutic equivalents in 21 CFR 314.3(b).
    (ii) Over-the-counter contraception. Subject to Sec. Sec.  147.131, 
147.132, and 147.133, a plan or issuer is not considered to comply with 
paragraph (a)(1) of this section with respect to a contraceptive item 
that can be lawfully obtained by a participant, beneficiary, or 
enrollee without a prescription and for which the applicable 
recommendation or guideline does not require a prescription, unless the 
plan or issuer provides coverage for the contraceptive item without 
requiring a prescription and without imposing any cost-sharing 
requirements in accordance with paragraph (a)(1) of this section.
    (iii) Therapeutic equivalents. For purposes of paragraph (a)(4) of 
this section, a plan's or issuer's medical management techniques are 
not considered to be reasonable unless the plan or issuer provides 
coverage, without imposing any cost-sharing requirements, for all 
contraceptive items recommended under paragraph (a)(1) of this section 
that are drugs or drug-led combination products, other than those items 
for which there is at least one therapeutic equivalent drug or drug-led 
combination product, as applicable, for which the plan or issuer 
provides coverage without imposing any cost-sharing requirements.
* * * * *
    (d) Applicability date. The provisions of this section apply for 
plan years (in the individual market, for policy years) beginning on or 
after September 23, 2010. Notwithstanding the previous sentence, the 
provisions of paragraph (a)(4)(ii) of this section apply beginning on 
[EFFECTIVE DATE OF FINAL RULE] and the provisions of paragraph (a)(6) 
of this section apply for plan years (in the individual market, for 
policy years), beginning on or after January 1, 2026. See Sec.  147.140 
of this part for determining the application of this section to 
grandfathered health plans (providing that these rules regarding 
coverage of preventive health services do not apply to grandfathered 
health plans).
* * * * *
0
3. Section 147.211 is amended by--
0
a. Redesignating paragraphs (b)(1)(vi) and (vii) as paragraphs 
(b)(1)(vii) and (viii);
0
b. Adding new paragraph (b)(1)(vi); and
0
c. Revising paragraph (c)(1).
    The addition and revision read as follows:


Sec.  147.211  Transparency in coverage--required disclosures to 
participants, beneficiaries, or enrollees.

* * * * *
    (b) * * *
    (1) * * *
    (vi) If a participant, beneficiary, or enrollee requests cost-
sharing information for any covered contraceptive item or service, a 
statement explaining that over-the-counter contraceptive items are 
covered without a prescription and without cost sharing in accordance 
with Sec.  147.130(a)(6), along with a phone number and internet link 
to where a participant, beneficiary, or enrollee can learn more 
information about the plan or policy's contraception coverage.
* * * * *
    (c) * * *
    (1) The provisions of this section apply for plan years (in the 
individual

[[Page 85795]]

market, for policy years) beginning on or after January 1, 2023, with 
respect to the 500 items and services to be posted on a publicly 
available website, and with respect to all covered items and services, 
for plan years (in the individual market, for policy years) beginning 
on or after January 1, 2024. Notwithstanding the previous sentence, the 
provisions of paragraph (b)(1)(vi) of this section apply for plan years 
(in the individual market, for policy years) beginning on or after 
January 1, 2026.
* * * * *
[FR Doc. 2024-24675 Filed 10-23-24; 4:15 pm]
BILLING CODE 4150-29-P; 4830-01-P; 4120-01-P