CMS-9940-P 1

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 54 [REG 129786-14] RIN 1545-BM39 DEPARTMENT OF LABOR Employee Benefits Security Administration 29 CFR Part 2590 RIN 1210-AB67 DEPARTMENT OF HEALTH AND HUMAN SERVICES 45 CFR Part 147 [CMS-9940-P] RIN 0938-AS50 Coverage of Certain Preventive Servic es Under the Affordable Care Act AGENCIES: Internal Revenue Service, Departmentof the Treasury; Employee Benefits Security Administration, Department of Labor ; Centers for Medicare & Medicaid Services, Department of Health and Human Services. ACTION: Proposed rules. SUMMARY: This document proposes a change to the de finition of an eligible organization that can avail itself of an accommodation with respect to coverage of certain preventive services under section 2713 of the Public He alth Service Act (PHS Act), ad ded by the Patient Protection and Affordable Care Act, as amended, and inco rporated into the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code.CMS-9940-P 2 Section 2713 of the PHS Act requires coverage without cost sharing of certain preventive health services by non-grandfathe red group health plans and hea lth insurance coverage. Among these services are women’s preventive health se rvices, as specified in guidelines supported by the Health Resources and Services Administra tion (HRSA). As authorized by the current regulations, and consistent with the HRSA Guidelines, group health plans established or maintained by certain religious employers (and group health insurance coverage provided in connection with such plans) ar e exempt from the otherwise a pplicable requirement to cover certain contraceptive services. Additionally, under current regulations, accommodations are available with respect to the contraceptive coverage requirement for group health plans established or maintained by eligible organi zations (and group health insurance coverage provided in connection with such plans), and st udent health insurance coverage arranged by eligible organizations th at are institutions of hi gher education, that effec tively exempt them from this requirement. The regulations establish a m echanism for separately furnishing payments for contraceptive services on behalf of participants and beneficiar ies of the group health plans of eligible organizations that av ail themselves of an accommoda tion, and enrollees and dependents of student health insurance covera ge arranged by eligible organiza tions that are institutions of higher education that avail th emselves of an accommodation. These rules propose and seek comments on poten tial changes to the definition of “eligible organization” in the Departments’ regulations in light of the Suprem e Court’s decision in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014), to ensure that participants and beneficiaries in group health plans (and enrollees and dependents in student health insurance coverage arranged by institutions of higher educat ion) obtain, without addi tional cost, coverage of the full range of Food and Drug Administra tion (FDA) approved cont raceptive services, asCMS-99 prescrib e religion- b
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t heCMS-9940-P 4 3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9940-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 4. By hand or courier. Alternatively, y ou may deliver (by hand or courier) your written comments ONLY to any of the following addresses prior to th e close of the comment period: a. For delivery in Washington, DC-- Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201 (Because access to the interior of the Hube rt H. Humphrey Building is not readily available to persons without Federal governmentidentification, commenters are encouraged to leave their comments in the CMS drop slots lo cated in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of f iling by stamping in and retaining an extra copy of the comments being filed.)CMS-9940-P 5 b. For delivery in Baltimore, MD-- Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786-9994 in advance to schedule your arrival with one of our staff members. Comments erroneously mailed to an address indicated as appropriate for hand or courier delivery may be delayed and received af ter the close of th e comment period. For information on viewing public co mments, see the beginning of the "SUPPLEMENTARY INFORMATION" section. FOR FURTHER INFORMATION CONTACT: David Mlawsky, Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS), at ( 410) 786-1565; Amy Turner or Beth Baum, Employee Benefits Security Administration (EBSA), Department of Labor, at (202) 693-8335; Karen Levin, Internal Revenue Service (IRS), Department of the Treasury, at (202) 927-9639. Customer Service Information: Individuals interested in obtaining information from the Department of Labor concerning employment-base d health coverage la ws may call the EBSA Toll-Free Hotline at 1-866-444-EBSA (3272) or vi sit the Department of Labor’s web site ( www.dol.gov/ebsa ). Information from HHS on private he alth insurance coverage can be found on CMS’s web site ( www.cms.gov/cciio ), and information on health care reform can be found at www.HealthCare.gov

. SUPPLEMENTARY INFORMATION:CMS-9940-P 6 Inspection of Public Comments: All comments received before the close of the comment period will be available for viewing by the public, includ ing any personally identif iable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web si te as soon as possible after they have been received: http://www.regulations.go v. Follow the search instructions on that Web site to view public comments. Comments received timely will also be av ailable for public inspection as they are received, generally beginning approximately 3 w eeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to vi ew public comments, phone 1-800-743-3951. I. Background The Patient Protection and Affordable Care Act (Pub. L. 111–148) was enacted on March 23, 2010. The Health Care and Educa tion Reconciliation Act of 2010 (Pub. L. 111–152) was enacted on March 30, 2010. These statutes ar e collectively known as the Affordable Care Act. The Affordable Care Act reorganizes, amends, and adds to the provisions of part A of title XXVII of the Public Health Serv ice Act (PHS Act) relating to group health plans and health insurance issuers in the group a nd individual markets. The Affo rdable Care Act adds section 715(a)(1) to the Employee Retirement Income Security Act of 1974 (ERISA) and section 9815(a)(1) to the Internal Revenue Code (Code) to incorporate the provisi ons of part A of title XXVII of the PHS Act into ERISA and the Code, a nd to make them applicable to group health plans and health insurance issuers providing heal th insurance coverage in connection with groupCMS-9940-P 7 health plans. The sections of the PHS Act inco rporated into ERISA and the Code are sections 2701 through 2728. Section 2713 of the PHS Act, as added by the Affordable Care Act and incorporated into ERISA and the Code, requires that non-grandfat hered group health plans and health insurance issuers offering non-grandfathered group or indi vidual health insurance coverage provide coverage of certain specified preventive servi ces without cost shari ng, including under paragraph (a)(4), benefits for certain women’s preventive h ealth services as provided for in comprehensive guidelines supported by the HealthResources and Services Admi nistration (HRSA). On August 1, 2011, HRSA adopted and released guidelines for women’s preventive health services (HRSA Guidelines) based on recommendations of th e independent Institute of Medicine. As relevant here, the HRSA Guidelines include all Food and Drug Admi nistration (FDA)-approved contraceptives, sterilization procedures, and pa tient education and counseling for women with reproductive capacity, as prescribed by a health care provider (collectively, contraceptive services). 1 Except as discussed later in this sect ion, non-grandfathered group health plans and health insurance coverage are required to pr ovide coverage consistent with the HRSA Guidelines, without cost sharing, for plan year s (or, in the individual market, policy years) beginning on or after August 1, 2012. 2 Interim final regulations implementing sect ion 2713 of the PHS Act were published on July 19, 2010 (75 FR 41726) (2010 interim fi nal regulations). On August 1, 2011, the Departments of Health and Human Services (HHS ), Labor, and the Treasury (collectively, the

1 The HRSA Guidelines for Women’s Preventive Services do not include services relating to a man’s reproductive capacity, such as vasectomies and condoms. 2 Interim final regulations published by the Departments on July 19, 2010, generally provide that plans and issuers must cover a newly recommended preventive service starting w ith the first plan year (or, in the individual market, policy year) that begins on or after the date that is one year after the date on which the new recommendation is issued. 26 CFR 54.9815-2713T(b)(1); 29 CFR 2590.715-2713(b)(1); 45 CFR 147.130(b)(1).CMS-9940-P 8 Departments) amended the 2010 interim final regul ations to provide HRSA with authority to exempt group health plans established or main tained by certain religious employers (and group health insurance coverage provide d in connection with such plans) from the requirement to cover contraceptive services consistent with the HRSA Guidelines (76 FR 46621) (2011 amended interim final regulations). 3 On the same date, HRSA exerci sed this authority in the HRSA Guidelines to exempt group health plans establis hed or maintained by these religious employers (and group health insurance covera ge provided in connection with such plans) from the HRSA Guidelines with respect to contraceptive services. 4 The 2011 amended interim final regulations specified that, for purposes of this exemption, a religious employer was one that: (1) has the inculcation of religious values as its purpose; (2) primarily employs persons who share its religious tenets; (3) primarily se rves persons who share its religi ous tenets; and (4) is a nonprofit organization described in section 6033(a)(1) and (a)(3)(A)(i) or (iii) of the Code. Section 6033(a)(3)(A)(i) and (i ii) of the Code refers to churches , their integrated auxiliaries, and conventions or associations of churches, as well as to the exclusively religious activities of any religious order. Final regulations issued on February 10, 2012, adopted the definition of religious employer in the 2011 amended interim final regulations wit hout modification (2012 final regulations). 5 Contemporaneous with the issuance of the 2012 final regulations, HHS, with the agreement of the Departments of Labor and the Treasury, issued guidance establishing a temporary safe harbor from enforcement of th e contraceptive coverage requirement by the

3 The 2011 amended interim final regulations were issued and effective on August 1, 2011, and published in the Federal Register on August 3, 2011 (76 FR 46621). 4 HRSA subsequently amended the HRSA Guidelines to re flect the simplified definition of “religious employer” contained in the July 2013 final regulations. 78 FR 39870 (July 2, 2013) (discussed below), effective August 1, 2013. 5 The 2012 final regulations were published in the Federal Register on February 15, 2012 (77 FR 8725).CMS-9940-P 9 Departments for group health plans established or maintained by certain nonprofit organizations with religious objections to contraceptive co verage (and group health insurance coverage provided in connection with such plans). 6 The guidance provided that the temporary enforcement safe harbor would remain in effect until the first plan year beginning on or after August 1, 2013. At the same time, the Departments committed to rulemaking to achieve the goals of providing coverage of recommended preventive services, including contraceptive services, without cost sharing, while simultane ously ensuring that certain additional nonprofit organizations with religious objec tions to contraceptive coverage would not have to contract, arrange, pay, or refer for such coverage. On March 21, 2012, the Departments publis hed an advance notice of proposed rulemaking (ANPRM) that described and solicite d comments on possible approaches to achieve these goals (77 FR 16501). On February 6, 2013, following review of the comments on the ANPRM, the Departments published proposed regulations at 78 FR 8456 (proposed regulations). The regulations proposed to simplify and clarify the definition of “r eligious employer” for purposes of the religious employer exemption. The regul ations also proposed accommodations for group

6 Guidance on the Temporary Enforcemen t Safe Harbor for Certain Employers, Group Health Plans, and Group Health Insurance Issuers with Respect to the Requirement to Cover Contr aceptive Services Wit hout Cost Sharing Under Section 2713 of the Public Health Service Act, Section 715(a)(1) of the Employee Retirement Income Security Act, and Section 9815(a)(1) of the Internal Revenue Code (originally issued on February 10, 2012, and reissued on August 15, 2012 and June 28,2013), available a t: http://www.cms.gov/CCIIO/Resources/Regulations -and-Guidance/Download s/preventive-servicesguidance-6-28-2013.pdf

. The guidance clarified, among other things, that plans that took some action before February 10, 2012, to try, without success, to exclude or limit contr aceptive coverage were not precluded from eligibility for the safe harbor. The temporary enforcement sa fe harbor was also available to student health insurance coverage arranged by nonprofit institutions of higher edu cation with religious objections to contraceptive coverage that met the conditions set forth in the guidance. See “Student Health Insurance Coverage,” 77 FR16457 (Mar. 21, 2012).CMS-9940-P 10 health plans established or maintained or ar ranged by certain nonprofit re ligious organizations with religious objections to contraceptive co verage (and group health insurance coverage provided in connection with such plans). Thes e organizations were referred to as “eligible organizations.” The regulations proposed that, in the case of an insured group health plan established or maintained by an eligible organization, the he alth insurance issuer providing group health insurance coverage in connection with the plan would be required to assume sole responsibility for providing contraceptive coverage to plan par ticipants and beneficiarie s without cost sharing, premium, fee, or other charge to plan participants or beneficiarie s or to the eligible organization or its plan. The Departments proposed a comp arable accommodation with respect to student health insurance coverage arra nged by eligible organizations th at are institutions of higher education. In the case of a self-insured group health pl an established or maintained by an eligible organization, the proposed regulations presente d potential approaches under which the third party administrator of the plan would provide or arrange for a th ird party to provide contraceptive coverage to plan participants and beneficiaries without cost sharing, premium, fee, or other charge to plan participan ts or beneficiaries or to the elig ible organization or its plan. An issuer (or its affiliate) would be able to offset the costs incurred by the third party administrator and the issuer in the course of arranging and providing such c overage by claiming an adjustment in the Federally-facilitated Ex change (FFE) user fee. The Departments received over 400,000 comments (many of them standardized form letters) in response to the proposed regulations . After consideration of the comments, the Departments published final regulations on July 2, 2013 at 78 FR 39870 (July 2013 finalCMS-9940-P 11 regulations). The July 2013 final regulations si mplified and clarified the definition of religious employer for purposes of the religious employer exemption and established accommodations for health coverage established or maintained or arranged by eligib le organizations. A contemporaneously re-issued HHS guidance docume nt extended the temporary safe harbor from enforcement of the contraceptive coverage requi rement by the Departments to encompass plan years beginning on or after August 1, 2013, and before January 1, 2014. This guidance included a form to be used by an organization during this temporary period to self-certify that its plan qualified for the temporary enforcement safe harb or. In addition, HHS and the Department of Labor (DOL) issued a self-certification form , EBSA Form 700, to be executed by an organization seeking to be treated as an eligib le organization for purposes of an accommodation under the July 2013 final regulations. This self-c ertification form was provided for use with the accommodation under the July 2013 final regulations , after the expiration of the temporary enforcement safe harbor (that is, for planyears beginning on or after January 1, 2014). On June 30, 2014, the Supreme Court rule d in the case of Burwell v. Hobby Lobby Stores, Inc. that, under the Religious Freedom Restoration Act of 1993 (RFRA), the requirement to provide contraceptive coverage could not be applied to the clos ely held for-profit corporations before the Court because their owners had religi ous objections to providing such coverage, and because the Government’s goal of guaranteeing c overage for contraceptive methods without cost sharing could be achieved in a less restrictive manner by offering such closely held for-profit entities the accommodation the Government already provided to religious nonprofit organizations with religious obj ections to contraceptive cove rage. After describing this accommodation, the Court concluded that th e accommodation “does not impinge on theCMS-9940-P 12 plaintiffs’ religious belief that providing insurance coverage for the contraceptives at issue here violates their religion, a nd it serves HHS’ stated in terests equally well.” On July 3, 2014, the Supreme Court issued aninterim order in connection with an application for an injunction pending appeal in Wheaton College v. Burwell, 134 S. Ct. 2806 (2014) (the Wheaton order), in which Wheaton Co llege challenged under RFRA the requirement in the July 2013 final regulations that an e ligible organization invoking the accommodation send EBSA Form 700 to the insurance is suer or third party administrato r. The Court’s order stated that, “[i]f [Wheaton College] informs the Secretary of Health and Human Se rvices in writing that it is a nonprofit organizati on that holds itself out as religiou s and has religious objections to providing coverage for contracep tive services, the [Departments of Labor, Health and Human Services, and the Treasury] are enjoined from enforcing against [Wheaton College]” certain provisions of the Affordable Care Act and rela ted regulations requiring coverage without cost sharing of certain contraceptive services “pen ding final disposition of appellate review.” 134 S. Ct. at 2807. The order stated that Wheaton College need not use EBSA Form 700 or send a copy of the executed form to its health insuran ce issuers or third party administrators to meet the condition for this inj unctive relief. Id. The Court also st ated that its interim order neither affected “the ability of [Wheaton College’s] empl oyees and students to obtain, without cost, the full range of FDA approved contraceptives,” nor precluded the Government from relying on the notice by Wheaton College “to facilitate the provi sion of full contraceptive coverage under the Act.” Id. The Court’s order further stated that it “should not be construed as an expression of the Court’s views on the merits” of Wheaton Colle ge’s challenge to the accommodations. Id. This notice of proposed rulemaking proposes and invites comments on changes to the definition of an eligible organization in the De partments’ regulations in light of the SupremeCMS-9940-P 13 Court’s decision in Hobby Lobby. It also solici ts comments on any other steps the Government should take to help ensure that participants a nd beneficiaries in group health plans or enrollees and dependents in student health insurance covera ge arranged by institutio ns of higher education are able to obtain, without cost, the full range of FDA-approved contraceptives, as prescribed by a health care provider, without co st sharing, if enrolled in a group health plan or insurance coverage sponsored or arranged by a closely he ld for-profit entity that objects on religious grounds to covering contraceptive services. Given th e importance of this coverage, initiating this proposed rulemaking now allows for public input a nd a pathway toward helping to ensure access to contraceptive coverage. The Departments are publishing contemporan eously with this notice of proposed rulemaking interim final regulations in light of the Supreme Cour t’s interim order in connection with the application for an injunction in the pe nding case of Wheaton College v. Burwell. The interim final regulations are published elsewhere in this edition of the Federal Register

. II. Provisions of the Proposed Regulations As stated above, on June 30, 2014, the Suprem e Court ruled in Burwell v. Hobby Lobby Stores, Inc. that, under RFRA, the requirement to provide contraceptive coverage could not be applied to certain closely held for-profit organizations. The in dividual plaintiffs in Hobby Lobby and the associated case Cone stoga Wood Specialties Corp. v. Burwell run closely held businesses that are family-owned and operated a nd that have adopted statements of mission or purpose to conduct the companies’ affairs in acc ordance with the owne rs’ shared religious beliefs and values. See134 S. Ct. at 2764-2766. In light of the Court’s decision in H obby Lobby, the Departments propose to amend the definition of an eligible organization under the July 2013 final regulations to include a closelyCMS-9940-P 14 held for-profit entity that has a religious objection to providing c overage for some or all of the contraceptive services otherwise required to be covered. Under these proposed rules, a qualifying closely held for-profit en tity that has a religious obj ection to providing coverage for some or all of the contraceptive services otherwise re quired to be covered would not be required to contract, arrange, pay or refe r for contraceptive coverage; instea d, payments for contraceptive services provided to participants and beneficiaries in the eligib le organization’s plan would be provided separately by an issuer (if the qualifying entity sponsors an insured group health plan, or if the qualifying entity is an institution of higher education that a rranges student health insurance coverage) or arranged se parately by a third party administ rator (if the qualifying entity is self-insured), consistent with the July 2013 final regulations as amended by interim final regulations published in th is same edition of the Federal Register . This proposed change would extend to participants and beneficiaries in gr oup health plans established or maintained by certain closely held for-profit entities with relig ious objections to contr aceptive coverage, and to enrollees and dependents enrolled in student h ealth insurance coverage arranged by certain closely held for-profit entities th at are institutions of higher edu cation with religious objections to contraceptive coverage, the same, separate paym ents for contraceptive services provided to participants and beneficiaries of group health plans (and enro llees and dependents in student health insurance) established or maintained by certain nonprofit religiou s entities with such objections, while similarly respecting the religio us objections of the closely held for-profit entities. Defining a Closely Held For-Profit Entity In considering inclusion of certain closely held for-profit entiti es among the eligible organizations that may avail themselves of the accommodations, the Departments areCMS-9940-P 15 considering and seek comment on how to define a qualifying closely held for-profit entity. In Hobby Lobby, the Supreme Court noted that the companies at issue in the cases were not publicly traded and were owned and controlledby members of a single family and that the companies were operated in accordance with the ow ners’ shared religious beliefs and values. 134 S. Ct. at 2764-2766. In light of the Supreme Court’s decision, the Departments are proposing for comment two possible approaches to de fining a qualifying closely held for-profit entit y, although the Departments invite comments on other approaches as well. In common understanding, a closely held corporation – a term often used interchangeab ly with a “close” or “closed” corporation – is a corporation the stock of which is owned by a small number of persons and for which no active trading market exists. See, for example, Amer ican Law Institute, Principles of Corporate Governances section 1.06; Black’s Law Dictionary(9th ed. 2009) (“close corporation”); Del. Code Tit. 8, Ch.1, Sub. Ch. 14 (“close corpor ation”). The examples below are by way of illustration, and the maximum number of shareholde rs specified in particular examples would not necessarily be borrowed as the standard in this context. Under the first proposed approach, a qualifying cl osely held for-profit entity would be an entity where none of the ownership interests in the entity is publicly traded and where the entity has fewer than a specified number of shareholders or owners. There is precedent in other ar eas of federal law for limiting the definition of closely held entities in this context to those with a relatively small number of owners. For example, subchapter S treatment under sectio n 1361 of the Code is currently limited to corporations with 100 or fewer shareholders who are generally indi viduals and has in the past been limited toCMS-9940-P 16 corporations with 10 or fewer shareholders. Sim ilarly, certain favorable estate tax treatment is limited to businesses with 45 or fewer partners or shareholders under section 6166 of the Code. Under a second, alternative approach, a qualifying closely held entity would be a forprofit entity in which the ownership interests ar e not publicly traded, a nd in which a specified fraction of the ownership interest is concentrated in a limited a nd specified number of owners. This approach also has precedent in federal la w. For example, certain rules governing the taxation of real estate investment trusts, passive activity losses, and certain income from foreign entities are limited to organizati ons that are more than 50 percen t owned by or for not more than five individuals. See, for example, sections 856(h), 542(a)(2), a nd 469(j)(1) of the Code and regulations under these sections. These approaches might serve to identify for-p rofit entities controlled and operated by individual owners who likely have associational ties, are personally identified with the entity, and can be regarded as conducting personal busine ss affairs through the entity. These appear to be the types of entities the Court sought to accommodate in Hobby Lobby. There may also be useful definitions or principles in state laws governing close corpor ations, or other areas of law. The Departments invite comments on the a ppropriate scope of the definition of a qualifying closely held for-profit entity, including but not limited to whether a closely held forprofit entity should be defined w ith reference to a maximum numbe r of owners (and, if so, what that maximum number should be) or a minimum con centration of ownership (and if so, what that concentration should be) or with referen ce to additional or other criteria. It would be helpful for comments to addre ss how the selection of a particular approach can be informed by the purposes of the Affordab le Care Act and the contraceptive coverage requirement; the range of business structures in the Nation’s economy; background principles ofCMS-9940-P 17 federal and state law applicable to business entitie s and the relationship of the entities’ owners to the entities; other related or analogous areas of the law; experience regarding accommodations of religion and religious beliefs in various contexts and the rationale s for the scope and operation of such accommodations; Hobby Lobby and other court decisions that shed light on these issues; and any other relevant matters. Religious Objection to Providing Coverage for Some or All of the Contraceptive Services Required to be Covered. In Hobby Lobby, the Supreme Court held that th e closely held for-profit corporations at issue in that case could opt not to provide othe rwise required contraceptiv e coverage if doing so runs counter to their owners’ sincerely held relig ious beliefs. These pr oposed regulations would require that the qualifying closely held for-p rofit entity’s objection, based on its owners’ sincerely held religious beliefs, to covering some or all of the contraceptive services otherwise required to be covered, be made in accordance with the entity’s applicable rules of governance. As discussed by the Court in Hobby Lobby, state corporate law dictates how a corporation may establish its governing structure. 7 Under the Departments’ proposal, valid cor porate action (or similar action by a business that is not organized as a cor poration) taken in accordance withthe entity’s governing structure in accordance with state law, stating its owners ’ religious objection to providing some or all contraceptive coverage otherwise required to be provided, can serv e to establish that a closely held for-profit entity has religious objections to providing such coverage. In determining whether a closely held for-prof it entity’s decision-making process followed the necessary rules and procedures, the laws of the state in which the entity is in corporated, or, for non-corporate

7 134 S. Ct. at 2774-2775.CMS-9940-P 18 entities, organized, would govern. The Departme nts invite comments on whether to require documentation of the decision-making pro cess and disclosure of the decision. The Departments seek comment on this approachto determining that a closely held forprofit entity opposes providing coverage for some or all of the contraceptive services otherwise required to be covered on account of the owners’ religious objections. Other Potential Changes The Departments seek comment on other po tential changes to the July 2013 final regulations in light of the proposed change to the definition of eligible organization. In particular, the Departments seek comment on a pplying the approach set forth in the July 2013 final regulations in the context of the expanded definition of eligible organization. The July 2013 final regulations provide for separate paymen ts for contraceptive services for participants and beneficiaries in self-insured group health plans of eligible organizations in a manner that enables these organizations to co mpletely separate themselves from administration and payment for contraceptive coverage. Specifically, the thir d party administrator must provide or arrange such payments, and can seek reimbursement for such costs (including an allowance for administrative costs and margin) by making an arrange ment with a participating issuer – that is, an issuer offering coverage through a Federally-f acilitated Exchange (FFE ). The participating issuer can receive an adjustment to its FFE user fees to finance such costs. The Departments seek comment on the likely number of closely held for-profit entities that would seek an accommodation, the number of pa rticipants and beneficiaries (or in the case of student health insurance covera ge, enrollees and dependents) in the plans of such entities, and the number of issuers and third-party administrato rs affected by the propose d rules. Finally, the Departments seek comment on whether any other aspects of the accommodations in the JulyCMS-9940-P 19 2013 final regulations, including rele vant definitions, should be modi fied in light of the proposed addition of closely held for-prof it entities with religi ous objections to contraceptive coverage to the definition of eligible organization. These proposed regulations, if finalized as proposed, would require a small number of conforming changes to cross-references in th e regulations. Any such necessary conforming changes would be incorporated into final regulations. III. Response to Comments Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. The Departments will consider all comments we receive by the date and time specified in the "DATES" section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document. IV. Economic Impact and Paperwork Burden A. Executive Orders 12866 and 13563 – Departme nt of Health and Human Services and Department of Labor Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, and public health and safety effects; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefi ts, reducing costs, harmonizing rules, and promoting flexibility. Section 3(f) of Executive Order 12866 define s a “significant regulatory action” as an action that is likely to result in a regulation: (1) having an an nual effect on the economy ofCMS-9940-P 20 $100 million or more in any 1 year, or adversel y and materially affecting a sector of the economy, productivity, competition, jobs, the environm ent, public health or safety, or state, local, or tribal governments or communities (als o referred to as “econom ically significant”); (2) creating a serious inconsistenc y or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetar y impacts of entitlement grants, user fees, or loan programs or the rights and obligations of re cipients thereof; or (4 ) raising novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the Executive Order. A regulatory impact analysis must be prepared for major rules with economically significant effects ($100 million or more in a ny 1 year), and an “economically significant” regulatory action is subject to review by the Office of Manage ment and Budget (OMB). The Departments anticipate that these proposed regul ations are not likely to have economic impacts of $100 million or more in any 1 year, and therefor e, do not meet the definition of “economically significant” under Ex ecutive Order 12866. 1. Need for Regulatory Action The proposed rules would modify the July 2013 final regulations in light of the Supreme Court’s decision in Hobby Lobby. That decision held that a closely held for-profit corporation is exempt from the requirement to provide contrace ptive coverage if its owners have religious objections to such coverage, because there is a less restrictive means of furthering the law’s interests, namely the accommodation the Govern ment already provided to nonprofit religious organizations with such objections. Contracepti ve coverage is crucial to women’s health and equality for a number of reas ons, including but not limited to the psychological toll and compromised financial position, and adverse h ealth consequences, that can result fromCMS-9940-P 21 unplanned or unwanted pregnancies. As documente d in a report of the Institute of Medicine, women experiencing an unintende d pregnancy may not immediatel y be aware that they are pregnant, and thus delay prenatal care. They also may not be as motivated to discontinue behaviors that pose pregnancy-re lated risks (for example, sm oking, consumption of alcohol). 8 Studies show a greater risk of preterm birth and low birth we ight among unintended pregnancies compared with pregnancies that were planned. 9 Contraceptives also ha ve medical benefits for women who are contraindicated for pregnancy, an d there are demonstrated preventive health benefits from contraceptives relating to conditions other than pregnancy. 10 In addition, there are significant cost savings to employers fr om the coverage of contraceptives. 11 Providing this coverage to participants and be neficiaries affected by the Suprem e Court decision is a priority. 2. Anticipated Effects The Departments expect that these propos ed regulations would not result in any additional significant burden on or co sts to the affected entities. B. Special Analyses – De partment of the Treasury For purposes of the Department of the Treasury, it has been determined that this proposed rule is not a significant regulat ory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory a ssessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Ac t (5 U.S.C. chapter 5) does not apply to this proposed rule. Pursuant to the Regu latory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that this proposed rule will not have a significant economic impact on a

8 Inst. Of Med., Clinical Preventive Services for Women: Closing the Gaps , Wash., D.C.: Nat’l Acad. Press, 2011, at p. 16. 9 Gipson, J.D. et al., The Effects of Unintended Pregnancy on Infant, Child and Parental Health: A Review of the Literature, Studies on Family Planning , 2008, 39(1):18-38. 10 Inst. Of Med., Clinical Preventive Services for Women: Closing the Gaps , Wash., D.C.: Nat’l Acad. Press, 2011, at p. 107. 11 See discussion at 77 FR 8727.CMS-9940-P 22

substantial number of small entities This certif ication is based on the f act that the regulations merely propose to modify the definition of eligib le organization to include certain closely held for-profit entities. This modifi cation, if adopted, would not incr ease costs to or burdens on the affected organizations. 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. C. Paperwork Reduction Act – Department of Health and Human Services Under the Paperwork Reduction Act of 1995, we are required to provi de 60-day notice in the Federal Register and solicit public comment before a co llection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues:

● The need for the information collection and its usefulness in carrying out the proper functions of our agency.

● The accuracy of our estimate of the information collection burden.

● The quality, utility, and clarity of the information to be collected.

● Recommendations to minimize the inform ation collection burden on the affected public, including automate d collection techniques. We are soliciting public comment on each of th ese issues for the following sections of this document that contain information collection requirements (ICRs): The 2013 final regulations require an eligib le organization that seeks an accommodation to self-certify that it meets the definition of an eligible organization using the EBSA Form 700CMS-9940-P 23 and providing it directly to each third party admi nistrator or issuer under the plan that would otherwise arrange for or provide the covered contraceptive services. The interim final regulations being published cont emporaneously with these propos ed regulations continue to allow such eligible organizations to use EBSA Form 700, as set forth in the 2013 final regulations and guidance. In a ddition, the interim final regulations permit an alternative process, consistent with the Supreme Court’s interim or der in Wheaton College, under which an eligible organization may notify HHS in writi ng of its religious objection to c overage of all or a subset of contraceptive services. These proposed regulations do not change the requirement that an eligible organization that seeks accommodation self-certifies that it m eets the definition of an eligible organization, either using the EBSA Form 700 method of self- certification or the alte rnative notice to HHS
process. HHS is anticipating that 71 for-profit organizations will seek an accommodation. This is based on the number of plaintiffs that are fo r-profit employers in recent litigation objecting on religious grounds to the provision of contraceptive services. We seek comments on this estimate and welcome any data that may assist us in estimating the number of entities affected by this provision. For each eligible organization it is assumed that, cl erical staff will gather and enter the necessary information, send the self-certificat ion or the notice to it s issuer(s) or third party administrator(s) or to HHS electronically and retain a copy for recordkeeping, a manager and legal counsel will review it, and a senior executive will execute it. It is estimated that an organization will need approximately 50 minutes (30 minutes of cleri cal labor at a cost of $30.00 per hour, 10 minutes for a manager at a cost of $102 per hour, 5 minutes for legal counsel at a cost of $127 per hour, and 5 minutes for a senior executive at a cost of $121 per hour) to execute the self-certification. The certification may be electronically transmitted to the issuer or to HHS at minimal cost, but aCMS-9940-P 24 cost burden of $38.34 is estimated for a paper fili ng calculated with 5 cents per page printing and material costs and 49 cents postage costs. Ther efore, the total one-time burden for preparing and providing the information in the self-certificati on is estimated to be approximately $53 for each eligible organization. Based on this estimate of 71 affected entitie s and the individual burden estimate of $53, we estimate the hour burden to be 59.2 hours with an equivalent cost of $3736 and a paper filing cost burden of $38.34. As the Department of La bor and the Department of Health and Human Services share jurisdiction they are splitting th e hour burden so each will account for 29.6 burden hours and a cost burden of $19.17. We welcome comments on any aspect of this burden estimate. If you comment on these information collecti on and recordkeeping requirements, please submit your comments electronically as specified in the ADDRESSES section of this proposed rule. Comments must be received on/by [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]

.CMS-9940-P 25 D. Paperwork Reduction Act – Department of Labor As discussed above, the proposed regulations would revise the definition of eligible organization to include qualifying closely held for-profit entities . This action would amend the EBSA Form 700 information collection request(ICR), which is approved under OMB Control number 1210-NEW to allow qualified closely held fo r-profit entities to ava il themselves of the accommodation by self-certifying that they meet the definition of an eligible organization, either using the EBSA Form 700 method of self-certification or the a lternative notice to HHS process under the contemporaneous inte rim final regulations.

• Consistent with the HHS analysis presented above, DOL estimates that there will be 71 additional entities that would utilize th e accommodation. The Departments are soliciting comments for 60 days regarding the likely num ber of additional entities seeking an accommodation, the number of participants and benefi ciaries in the plans of such organizations, and the number of issuers and third party admini strators impacted by th e proposed regulations. The Departments will submit a copy of these proposed rules to OMB in accordance with 44 U.S.C. 3507(d) for review of the proposed IC Rs. The Departments and OMB are particularly interested in comments that:

• Evaluate whether the collection of information is necessary fo r the proper performance of the functions of the agency, including whethe r the information will have practical utility;

• Evaluate the accuracy of the agency’s es timate of the burden of the collection of information, including the validity of the methodology and assumptions used;

• Enhance the quality, utility, and clarity of the information to be collected; and

• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electr onic, mechanical, or otherCMS-9940-P 26 technological collection technique s or other forms of information technology, for example, by permitting electronic submission of responses. Comments should be sent to the Office of In formation and Regulatory Affairs, Attention: Desk Officer for the Employee Benefits Secur ity Administration either by Fax to (202) 395-5806 or by email to oira_submission@omb.eop.gov. A copy of the proposed ICRs may be obtained by contacting the PRA addressee: G. Christ opher Cosby, Office of Policy and Research, Department of Labor, Employee Benefits S ecurity Administration, 200 Constitution Avenue NW., Room N–5718, Washington, DC 20210; telephone: (202) 693–8410; Fax: (202) 219–4745 (please note that these numbers are not toll-free numbers); email: ebsa.opr@dol.gov . Proposed ICRs submitted to OMB also are available at www.reginfo.gov (http://www.reginfo.gov/public/do/PRAMain ). The Departments expect that qualified closely held for-profit entities will spend the same time (and incur the same cost) to prepare and send the EBSA Form 700 or the notification to the Secretary of HHS as other eligible organi zations under the existi ng ICR (approximately 50 minutes in preparation time and $0.54 mailing cost s). The Departments note that persons are not required to respond to, and generally are not subject to any penalty for failing to comply with, an ICR unless the ICR has a valid OMB control nu mber. The paperwork burden estimates are summarized as follows: Type of Review : Revised Collection. Agencies : Employee Benefits Security Admi nistration, Department of Labor Title : EBSA Form 700. OMB Number : 1210-NEW. Affected Public : Business or other for profit entity.CMS-9940-P 27 Total Respondents : 71 Total Responses : 71 Frequency of Response : Once, Variable. Estimated Total Annual Burden Hours : 59 hours (DOL 29.5 hours, HHS 29.5 hours) Estimated Total Annual Burden Cost : $38 (DOL $19, HHS $19)
V. Unfunded Mandates Reform Act For purposes of the Unfunded Mandates Refo rm Act of 1995 (Pub. L. 104-4), as well as Executive Order 12875, these proposed regulations do not include any federal mandate that may result in expenditures by state, local, or tribal governments, nor do they include any federal mandates that may impose an annual burden of $100 million, adjusted for inflation, or more on the private sector. 12 VI. Federalism – Department of Health and Human Services and Department of Labor Executive Order 13132 outlines fundamental principles of federalism, and requires the adherence to specific criteria by federal agenci es in the process of their formulation and implementation of policies that have “substantia l direct effects” on st ates, the relationship between the federal government and states, or the distribution of power and responsibilities among the various levels of govern ment. Federal agencies promul gating regulations that have these federalism implications must consult with st ate and local officials, and describe the extent of their consultation and th e nature of the concerns of state an d local officials in the preamble to the regulation. In the Departments’ view, these proposed re gulations have federalism implications, but the federalism implications are substantially mitigat ed because, with respect to health insurance

12 In 2014, that threshold level is approximately $141 million.CMS-9940-P 28 issuers, 45 states are either enforcing the requirem ents 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 i ssuers meet these standards. In five states, HHS ensures that issuers comply with these requi rements. Therefore, the proposed regulations are not likely to require substantial additional oversight of states by HHS. In general, section 514 of ERISA provides thatstate laws are superseded to the extent that they relate to any covered employee benef it plan, and preserves st ate laws that regulate insurance, banking, or securities. ERISA also prohi bits states from regulating a covered plan as an insurance or investment company or ba nk. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) added a new preemption provision to ERISA (as well as to the PHS Act) narrowly preempting state require ments on group health insurance coverage. States may continue to apply stat e law requirements but not to the extent that such requirements prevent the application of the fe deral requirement that group hea lth insurance coverage provided in connection with certain group health plans prov ide coverage for specified preventive services without cost sharing. HIPAA’s Conference Repo rt states that the c onferees intended the narrowest preemption of state laws with regard to health insurance issu ers (H.R. Conf. Rep. No. 104-736, 104 th Cong. 2d Session 205, 1996). State insurance laws that are more stringent than the federal requirement are unlikely to “prevent the application of” the preventive services coverage provision, and therefore are unlikely to be preempted. Accordingly, states have significant latitude to impose requi rements on health insurance issu ers that are more restrictive than those in federal law. Guidance conveying this interp retation was published in the Federal Register on April 8, 1997 (62 FR 16904) and December 30, 2004 (69 FR 78720), and these proposedCMS-9940-P 29 regulations implement the preventive services coverage provision’s minimum standards and do not significantly reduce the discretion give n to states under the statutory scheme. The PHS Act provides that states may enfo rce the provisions of title XXVII of the PHS Act as they pertain to issuers, but that the Se cretary of HHS will enforce any provisions that a state does not have authority to enforce or that a state has failed to substantially enforce. When exercising its responsibility to enforce provisions of the PHS Act, HHS works cooperatively with the state to address the state’s concerns and avoid conflicts with the state’s exercise of its authority. HHS has developed procedures to impl ement its enforcement responsibilities, and to afford states the maximum opportunity to enfo rce the PHS Act’s requirements in the first instance. In compliance with Executive Orde r 13132’s requirement that agencies examine closely any policies that may ha ve federalism implications or limit the policymaking discretion of states, the Departments have engaged in numer ous efforts to consult and work cooperatively with affected state and local officials. In conclusion, throughout the process of deve loping these proposed regulations, to the extent feasible within the specific preempti on provisions of ERISA and the PHS Act, the Departments have attempted to balance states’ inte rests in regulating health coverage and health insurance issuers, and th e rights of those indivi duals intended to be protected in the PHS Act, ERISA, and the Code. VII. Statutory Authority The Department of the Treasury regulati ons are adopted pursuan t to the authority contained in sections 7805 and 9833 of the Code. The Department of Labor regul ations are adopted pursuant to the authority contained in 29 U.S.C. 1002(16), 1027, 1059, 1135, 1161–1168, 1169, 1181–1183, 1181 note, 1185, 1185a,CMS-9940-P 30 1185b, 1185d, 1191, 1191a, 1191b, and 1191c; sec. 101(g), Public Law 104–191, 110 Stat. 1936; sec. 401(b), Public Law 105–200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Public Law 110–343, 122 Stat. 3881; sec. 1001, 1201, a nd 1562(e), Public Law 111–148, 124 Stat. 119, as amended by Public Law 111–152, 124 Stat. 1029; Secretary of Labor’s Order 3-2010, 75 FR 55354 (September 10, 2010). The Department of Health and Human Servic es regulations are adopted pursuant to the authority contained in sec tions 2701 through 2763, 2791, and 2792 of the PHS Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92), as ame nded; and Title I of the Affordable Care Act, sections 1301–1304, 1311–1312, 1321–1322, 1324, 1334, 1342–1343, 1401–1402, and 1412, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 18021–18024, 18031–18032, 18041–18042, 18044, 18054, 18061, 18063, 18071, 18082, 26 U.S.C. 36B, and 31 U.S.C. 9701). Signed this 20 th day of August 2014.
John Dalrymple Deputy Commissioner for Services and Enforcement Internal Revenue Service

Signed this 20 th day of August 2014.

______________________________________ Phyllis C. Borzi, Assistant Secretary, Employee Benefits Secu rity Administration. Department of Labor.
Dated: August 19, 2014.CMS-9940-P 31

___________________________________ Marilyn Tavenner, Administrator, Centers for Medicare & Medicaid Services.

Approved: August 20, 2014.

___________________________________ Sylvia M. Burwell, Secretary, Department of Health and Human Services.

[Billing Codes: 4830-01-P; 4510-029-P; 4120-01-P; 6325-64]

List of Subjects 26 CFR Part 54 Excise taxes, Health care, Health insura nce, Pensions, Reporting and recordkeeping requirements. 29 CFR Part 2590 Continuation coverage, Disclosure, Employee benefit plans, Group health plans, Health care, Health insurance, Medical child suppor t, Reporting and recordkeeping requirements. 45 CFR Part 147 Health care, Health insurance, Reporti ng and recordkeeping requirements, State regulation of health insurance.CMS-9940-P 32

DEPARTMENT OF THE TREASURY Internal Revenue Service Accordingly, 26 CFR part 54 is proposed to be amended as follows: PART 54 – PENSION EXCISE TAXES Paragraph 1. The authority citation for part 54 con tinues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * Par. 2. Section 54.9815-2713A is amended by re vising paragraph (a) to read as follows: §54.9815-2713A Accommodations in connection with coverage of preventive health services. (a) Eligible organizations. An eligible or ganization is an organization that meets the criteria of paragraph (a)(1) through (3) of this section. (1) The organization opposes providing covera ge for some or all of any contraceptive items or services required to be covered under §54.9815-2713(a)(1)(iv) on account of religious objections. (2)(i) The organization is or ganized and operates as a nonprofit entity and holds itself out as a religious organization; or (ii) The organization is orga nized and operates as a closel y held for-profit entity, as defined in paragraph (a)(4) of th is section, and the enti ty’s objection to cove ring some or all of the contraceptive services on account of its owners ’ sincerely held religious beliefs is made in accordance with the organization’s a pplicable rules of governance, consistent with state law. (3) The organization must self-certify in th e form and manner spec ified by the Secretary or provide notice to the Secretary of Health and Human Services as described in paragraph (b) or (c) of this section. The organi zation must make such self-certi fication or notice available for examination upon request by the first day of the fi rst plan year to which the accommodation inCMS-9940-P 33 paragraph (b) or (c) of th is section applies. The self-certific ation or notice must be executed by a person authorized to make the ce rtification on behalf of the orga nization, and must be maintained in a manner consistent with the record rete ntion requirements under section 107 of ERISA. (4) [Reserved] * * * * * DEPARTMENT OF LABOR Employee Benefits Security Administration For the reasons stated in the preamble, th e Department of Labor proposes to amend 29 CFR part 2590 as follows: PART 2590--RULES AND REGULATI ONS FOR GROUP HEALTH PLANS 1. The authority citation for part 2590 is revised to read as follows: Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1185d, 1191, 1191a, 1191b, and 1191c; sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 105- 200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 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. 11-152, 124 Stat . 1029; Secretary of Labor's Order 1-2011, 77 FR 1088 (January 9, 2012). 2. Section 2590.715-2713A is amended by revisi ng paragraph (a) to read as follows: § 2590.715-2713A Accommodations in connection wi th coverage of preventive health services. (a) Eligible organizations. An eligible or ganization is an organization that meets the criteria of paragraph (a)(1) through (3) of this section.CMS-9940-P 34 (1) The organization opposes providing covera ge for some or all of any contraceptive items or services required to be covered under § 2590.715-2713(a)(1)(iv) on account of religious objections. (2)(i) The organization is or ganized and operates as a nonprofit entity and holds itself out as a religious organization; or (ii) The organization is orga nized and operates as a closel y held for-profit entity, as defined in paragraph (a)(4) of th is section, and the enti ty’s objection to cove ring some or all of the contraceptive services on account of its owners ’ sincerely held religious beliefs is made in accordance with the organization’s a pplicable rules of governance, consistent with state law. (3) The organization must self-certify in th e form and manner spec ified by the Secretary or provide notice to the Secretary of Health and Human Services as described in paragraph (b) or (c) of this section. The organi zation must make such self-certi fication or notice available for examination upon request by the first day of the fi rst plan year to which the accommodation in paragraph (b) or (c) of th is section applies. The self-certific ation or notice must be executed by a person authorized to make the ce rtification on behalf of the orga nization, and must be maintained in a manner consistent with the record rete ntion requirements under section 107 of ERISA. (4) [Reserved] * * * * * 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 subtitle A, part 147 as follows: PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND INDIVIDUAL HEALTH INSRUANCE MARKETSCMS-9940-P 35 1. The authority citation for part 14 7 continues to read as follows: Authority: Secs 2701 through 2763, 2791, and 2792 of the Public Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92), as amended. 2. Section 147.131 is amended by revising para graphs (b) and (f) to read as follows: §147.131 Exemption and accommodation in connectio n with coverage of preventive health services. * * * * * (b) Eligible organizations. An eligible or ganization is an organization that meets the criteria of paragraph (b)(1) through (3) of this section. (1) The organization opposes providing covera ge for some or all of any contraceptive items or services required to be covere d under §147.130(a)(1)(iv) on account of religious objections. (2)(i) The organization is or ganized and operates as a nonprofit entity and holds itself out as a religious organization; or (ii) The organization is orga nized and operates as a closel y held for-profit entity, as defined in paragraph (b)(4) of this section, and th e entity’s objection to covering some or all of the contraceptive services on account of its owners ’ sincerely held religious beliefs is made in accordance with the organization’s a pplicable rules of governance, consistent with state law. (3) The organization must self-certify in th e form and manner spec ified by the Secretary or provide notice to the Secretary of Health and Human Services as described in paragraph (c) of this section. The organization must make su ch self-certification or notice available for examination upon request by the first day of the fi rst plan year to which the accommodation in paragraph (c) of this section a pplies. The self-certification or notice must be executed by aCMS-9940-P 36 person authorized to make the ce rtification on behalf of the orga nization, and must be maintained in a manner consistent with the record rete ntion requirements under section 107 of ERISA. (4) [Reserved] * * * * * (f) Application to student health insuran ce coverage. The provisions of this section apply to student health insurance coverage arra nged by an eligible organization that is an institution of higher education as defined in 20 U.S.C. 1002 in a manner comparable to that in which they apply to group health insurance cove rage provided in connectio n with a group health plan established or maintained by an eligible organization that is an employer. In applying this section in the case of student health insurance coverage, a reference to “plan participants and beneficiaries” is a reference to student enrollees and their covered dependents.

[FR Doc. 2014-20254 Filed 08/22/2014 at 3:30 pm; Publication Date: 08/27/2014]