[Federal Register Volume 82, Number 197 (Friday, October 13, 2017)]
[Rules and Regulations]
[Pages 47792-47835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21851]



[[Page 47791]]

Vol. 82

Friday,

No. 197

October 13, 2017

Part II





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





Religious Exemptions and Accommodations for Coverage of Certain 
Preventive Services Under the Affordable Care Act; Final Rule

Federal Register / Vol. 82 , No. 197 / Friday, October 13, 2017 / 
Rules and Regulations

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD-9827]
RIN 1545-BN92

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB83

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 147

[CMS-9940-IFC]
RIN 0938-AT20


Religious Exemptions and Accommodations for Coverage of Certain 
Preventive Services Under the Affordable Care Act

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; and Centers for 
Medicare & Medicaid Services, Department of Health and Human Services.

ACTION: Interim final rules with request for comments.

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SUMMARY: The United States has a long history of providing conscience 
protections in the regulation of health care for entities and 
individuals with objections based on religious beliefs and moral 
convictions. These interim final rules expand exemptions to protect 
religious beliefs for certain entities and individuals whose health 
plans are subject to a mandate of contraceptive coverage through 
guidance issued pursuant to the Patient Protection and Affordable Care 
Act. These rules do not alter the discretion of the Health Resources 
and Services Administration (HRSA), a component of the United States 
Department of Health and Human Services (HHS), to maintain the 
guidelines requiring contraceptive coverage where no regulatorily 
recognized objection exists. These rules also leave the 
``accommodation'' process in place as an optional process for certain 
exempt entities that wish to use it voluntarily. These rules do not 
alter multiple other Federal programs that provide free or subsidized 
contraceptives for women at risk of unintended pregnancy.

DATES: Effective date: These interim final rules and temporary 
regulations are effective on October 6, 2017.
    Comment date: Written comments on these interim final rules are 
invited and must be received by December 5, 2017.

ADDRESSES: Written comments may be submitted to the Department of 
Health and Human Services as specified below. Any comment that is 
submitted will be shared with the Department of Labor and the 
Department of the Treasury, and will also 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 may be posted on the Internet 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. 
Comments, identified by ``Preventive Services,'' may be submitted 
one of four ways (please choose only one of the ways listed)

    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-9940-IFC, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    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-IFC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the 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 Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    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 the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    Comments received will be posted without change to 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Jeff Wu (310) 492-4305 or 
<a href="/cdn-cgi/l/email-protection#aec3cfdcc5cbdadccbc8c1dcc3eecdc3dd80c6c6dd80c9c1d8"><span class="__cf_email__" data-cfemail="bbd6dac9d0decfc9deddd4c9d6fbd8d6c895d3d3c895dcd4cd">[email protected]</span></a> for Centers for Medicare & Medicaid Services 
(CMS), Department of Health and Human Services (HHS), Amber Rivers or 
Matthew Litton, Employee Benefits Security Administration (EBSA), 
Department of Labor, at (202) 693-8335; Karen Levin, Internal Revenue 
Service, Department of the Treasury, at (202) 317-5500.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor concerning employment-based 
health coverage laws may call the EBSA Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the Department of Labor's Web site (www.dol.gov/ebsa). Information from HHS on private health insurance coverage can be 
found on CMS's Web site (www.cms.gov/cciio), and information on health 
care reform can be found at www.HealthCare.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    Congress has consistently sought to protect religious beliefs in 
the context of health care and human services, including health 
insurance, even as it has sought to promote access to health 
services.\1\ Against that backdrop,

[[Page 47793]]

Congress granted the Health Resources and Services Administration 
(HRSA), a component of the United States Department of Health and Human 
Services (HHS), discretion under the Patient Protection and Affordable 
Care Act to specify that certain group health plans and health 
insurance issuers shall cover, ``with respect to women, such additional 
preventive care and screenings . . . as provided for in comprehensive 
guidelines supported by'' by HRSA (the ``Guidelines''). Public Health 
Service Act section 2713(a)(4). HRSA exercised that discretion under 
the last Administration to require health coverage for, among other 
things, certain contraceptive services,\2\ while the administering 
agencies--the Departments of Health and Human Services, Labor, and the 
Treasury (collectively, ``the Departments'' \3\)--exercised the same 
discretion to allow exemptions to those requirements. Through 
rulemaking, including three interim final rules, the Departments 
allowed exemptions and accommodations for certain religious objectors 
where the Guidelines require coverage of contraceptive services. Many 
individuals and entities challenged the contraceptive coverage 
requirement and regulations (hereinafter, the ``contraceptive 
Mandate,'' or the ``Mandate'') as being inconsistent with various legal 
protections, including the Religious Freedom Restoration Act, 42 U.S.C. 
2000bb-1. Much of that litigation continues to this day.
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    \1\ See, for example, 42 U.S.C. 300a-7 (protecting individuals 
and health care entities from being required to provide or assist 
sterilizations, abortions, or other lawful health services if it 
would violate their ``religious beliefs or moral convictions''); 42 
U.S.C. 238n (protecting individuals and entities that object to 
abortion); Consolidated Appropriations Act of 2017, Div. H, Title V, 
Sec. 507(d) (Departments of Labor, HHS, and Education, and Related 
Agencies Appropriations Act), Public Law 115-31 (protecting any 
``health care professional, a hospital, a provider-sponsored 
organization, a health maintenance organization, a health insurance 
plan, or any other kind of health care facility, organization, or 
plan'' in objecting to abortion for any reason); Id. at Div. C, 
Title VIII, Sec. 808 (regarding any requirement of ``the provision 
of contraceptive coverage by health insurance plans'' in the 
District of Columbia, ``it is the intent of Congress that any 
legislation enacted on such issue should include a `conscience 
clause' which provides exceptions for religious beliefs and moral 
convictions.''); Id. at Div. C, Title VII, Sec. 726(c) (Financial 
Services and General Government Appropriations Act) (protecting 
individuals who object to prescribing or providing contraceptives 
contrary to their ``religious beliefs or moral convictions''); Id. 
at Div. I, Title III (Department of State, Foreign Operations, and 
Related Programs Appropriations Act) (protecting applicants for 
family planning funds based on their ``religious or conscientious 
commitment to offer only natural family planning''); 42 U.S.C. 
290bb-36 (prohibiting the statutory section from being construed to 
require suicide related treatment services for youth where the 
parents or legal guardians object based on ``religious beliefs or 
moral objections''); 42 U.S.C. 290kk-1 (protecting the religious 
character of organizations participating in certain programs and the 
religious freedom of beneficiaries of the programs); 42 U.S.C. 300x-
65 (protecting the religious character of organizations and the 
religious freedom of individuals involved in the use of government 
funds to provide substance abuse services); 42 U.S.C. 604a 
(protecting the religious character of organizations and the 
religious freedom of beneficiaries involved in the use of government 
assistance to needy families); 42 U.S.C. 1395w-22(j)(3)(B) 
(protecting against forced counseling or referrals in Medicare 
Choice, now Medicare Advantage, managed care plans with respect to 
objections based on ``moral or religious grounds''); 42 U.S.C. 
1396a(w)(3) (ensuring particular Federal law does not infringe on 
``conscience'' as protected in State law concerning advance 
directives); 42 U.S.C. 1396u-2(b)(3) (protecting against forced 
counseling or referrals in Medicaid managed care plans with respect 
to objections based on ``moral or religious grounds''); 42 U.S.C. 
5106i (prohibiting certain Federal statutes from being construed to 
require that a parent or legal guardian provide a child any medical 
service or treatment against the religious beliefs of the parent or 
legal guardian); 42 U.S.C. 2996f(b) (protecting objection to 
abortion funding in legal services assistance grants based on 
``religious beliefs or moral convictions''); 42 U.S.C. 14406 
(protecting organizations and health providers from being required 
to inform or counsel persons pertaining to assisted suicide); 42 
U.S.C. 18023 (blocking any requirement that issuers or exchanges 
must cover abortion); 42 U.S.C. 18113 (protecting health plans or 
health providers from being required to provide an item or service 
that helps cause assisted suicide); also, see 8 U.S.C. 1182(g) 
(protecting vaccination objections by ``aliens'' due to ``religious 
beliefs or moral convictions''); 18 U.S.C. 3597 (protecting 
objectors to participation in Federal executions based on ``moral or 
religious convictions''); 20 U.S.C. 1688 (prohibiting sex 
discrimination law to be used to require assistance in abortion for 
any reason); 22 U.S.C. 7631(d) (protecting entities from being 
required to use HIV/AIDS funds contrary to their ``religious or 
moral objection'').
    \2\ This document's references to ``contraception,'' 
``contraceptive,'' ``contraceptive coverage,'' or ``contraceptive 
services'' generally includes contraceptives, sterilization, and 
related patient education and counseling, unless otherwise 
indicated.
    \3\ Note, however, that in sections under headings listing only 
two of the three Departments, the term ``Departments'' generally 
refers only to the two Departments listed in the heading.
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    The Departments have recently exercised our discretion to 
reevaluate these exemptions and accommodations. This evaluation 
includes consideration of various factors, such as the interests served 
by the existing Guidelines, regulations, and accommodation process; \4\ 
the extensive litigation; Executive Order 13798, ``Promoting Free 
Speech and Religious Liberty'' (May 4, 2017); protection of the free 
exercise of religion in the First Amendment and by Congress in the 
Religious Freedom Restoration Act of 1993; Congress' history of 
providing protections for religious beliefs regarding certain health 
services (including contraception, sterilization, and items or services 
believed to involve abortion); the discretion afforded under section 
2713(a)(4) of the PHS Act; the structure and intent of that provision 
in the broader context of section 2713 and the Patient Protection and 
Affordable Care Act; the regulatory process and comments submitted in 
various requests for public comments (including in the Departments' 
2016 Request for Information).
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    \4\ In this document, we generally use ``accommodation'' and 
``accommodation process'' interchangeably.
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    In light of these factors, the Departments issue these new interim 
final rules to better balance the Government's interest in ensuring 
coverage for contraceptive and sterilization services in relation to 
the Government's interests, including as reflected throughout Federal 
law, to provide conscience protections for individuals and entities 
with sincerely held religious beliefs in certain health care contexts, 
and to minimize burdens in our regulation of the health insurance 
market.

A. The Affordable Care Act

    Collectively, the Patient Protection and Affordable Care Act (Pub. 
L. 111-148), enacted on March 23, 2010, and the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on 
March 30, 2010, are known as the Affordable Care Act. In signing the 
Affordable Care Act, President Obama issued Executive Order 13535 
(March 24, 2010), which declared that, ``[u]nder the Act, longstanding 
Federal laws to protect conscience (such as the Church Amendment, 42 
U.S.C. 300a-7, and the Weldon Amendment, section 508(d)(1) of Pub. L. 
111-8) remain intact'' and that ``[n]umerous executive agencies have a 
role in ensuring that these restrictions are enforced, including the 
HHS.''
    The Affordable Care Act reorganizes, amends, and adds to the 
provisions of part A of title XXVII of the Public Health Service Act 
(PHS Act) relating to group health plans and health insurance issuers 
in the group and individual markets. In addition, the Affordable Care 
Act adds section 715(a)(1) to the Employee Retirement Income Security 
Act of 1974 (ERISA) and section 9815(a)(1) to the Internal Revenue Code 
(Code) to incorporate the provisions of part A of title XXVII of the 
PHS Act into ERISA and the Code, and thereby make them applicable to 
certain group health plans regulated under ERISA or the Code. The 
sections of the PHS Act incorporated into ERISA and the Code are 
sections 2701 through 2728 of the PHS Act.
    These interim final rules concern section 2713 of the PHS Act. 
Where it applies, section 2713(a)(4) of the PHS Act requires coverage 
without cost sharing for ``such additional'' women's preventive care 
and screenings ``as provided for'' and ``supported by'' guidelines 
developed by HRSA/HHS. The Congress did not specify any particular 
additional preventive care and screenings with respect to women that 
HRSA could or should include in its Guidelines, nor did Congress 
indicate whether the Guidelines should include contraception and 
sterilization.

[[Page 47794]]

    The Departments have consistently interpreted section 2714(a)(4) 
PHS Act's grant of authority to include broad discretion to decide the 
extent to which HRSA will provide for and support the coverage of 
additional women's preventive care and screenings in the Guidelines. In 
turn, the Departments have interpreted that discretion to include the 
ability to exempt entities from coverage requirements announced in 
HRSA's Guidelines. That interpretation is rooted in the text of section 
2713(a)(4) of the PHS Act, which allows HRSA to decide the extent to 
which the Guidelines will provide for and support the coverage of 
additional women's preventive care and screenings.
    Accordingly, the Departments have consistently interpreted section 
2713(a)(4) of the PHS Act's reference to ``comprehensive guidelines 
supported by HRSA for purposes of this paragraph'' to grant HRSA 
authority to develop such Guidelines. And because the text refers to 
Guidelines ``supported by HRSA for purposes of this paragraph,'' the 
Departments have consistently interpreted that authority to afford HRSA 
broad discretion to consider the requirements of coverage and cost-
sharing in determining the nature and extent of preventive care and 
screenings recommended in the guidelines. (76 FR 46623). As the 
Departments have noted, these Guidelines are different from ``the other 
guidelines referenced in section 2713(a) of the PHS Act, which pre-
dated the Affordable Care Act and were originally issued for purposes 
of identifying the non-binding recommended care that providers should 
provide to patients.'' Id. Guidelines developed as nonbinding 
recommendations for care implicate significantly different legal and 
policy concerns than guidelines developed for a mandatory coverage 
requirement. To guide HRSA in exercising the discretion afforded to it 
in section 2713(a)(4) of the PHS Act, the Departments have previously 
promulgated regulations defining the scope of permissible exemptions 
and accommodations for such guidelines. (45 CFR 147.131). The interim 
final rules set forth herein are a necessary and appropriate exercise 
of the authority of HHS, of which HRSA is a component, and of the 
authority delegated to the Departments collectively as administrators 
of the statutes. (26 U.S.C. 9833; 29 U.S.C. 1191c; 42 U.S.C. 300gg-92)
    Our interpretation of section 2713(a)(4) of the PHS Act is 
confirmed by the Affordable Care Act's statutory structure. Congress 
did not intend to require entirely uniform coverage of preventive 
services (76 FR 46623). To the contrary, Congress carved out an 
exemption from section 2713 of the PHS Act for grandfathered plans. In 
contrast, this exemption is not applicable to many of the other 
provisions in Title I of the Affordable Care Act--provisions previously 
referred to by the Departments as providing ``particularly significant 
protections.'' (75 FR 34540). Those provisions include: Section 2704 of 
the PHS Act, which prohibits preexisting condition exclusions or other 
discrimination based on health status in group health coverage; section 
2708 of the PHS Act, which prohibits excessive waiting periods (as of 
January 1, 2014); section 2711 of the PHS Act, which relates to 
lifetime limits; section 2712 of the PHS Act, which prohibits 
rescission of health insurance coverage; section 2714 of the PHS Act, 
which extends dependent coverage until age 26; and section 2718 of the 
PHS Act, which imposes a medical loss ratio on health insurance issuers 
in the individual and group markets (for insured coverage), or requires 
them to provide rebates to policyholders. (75 FR 34538, 34540, 34542). 
Consequently, of the 150 million nonelderly people in America with 
employer-sponsored health coverage, approximately 25.5 million are 
estimated to be enrolled in grandfathered plans not subject to section 
2713 of the PHS Act.\5\ As the Supreme Court observed, ``there is no 
legal requirement that grandfathered plans ever be phased out.'' 
Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2764 n.10 (2014).
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    \5\ Kaiser Family Foundation & Health Research & Educational 
Trust, ``Employer Health Benefits, 2017 Annual Survey,'' available 
at http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2017.
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    The Departments' interpretation of section 2713(a)(4) of the PHS 
Act to permit HRSA to establish exemptions from the Guidelines, and of 
the Departments' own authority as administering agencies to guide HRSA 
in establishing such exemptions, is also consistent with Executive 
Order 13535. That order, issued upon the signing of the Affordable Care 
Act, specified that ``longstanding Federal laws to protect conscience * 
* * remain intact,'' including laws that protect religious beliefs (and 
moral convictions) from certain requirements in the health care 
context. While the text of Executive Order 13535 does not require the 
expanded exemptions issued in these interim final rules, the expanded 
exemptions are, as explained below, consistent with longstanding 
Federal laws to protect religious beliefs regarding certain health 
matters, and are consistent with the intent that the Affordable Care 
Act would be implemented in accordance with the protections set forth 
in those laws.

B. The Regulations Concerning Women's Preventive Services

    On July 19, 2010, the Departments issued interim final rules 
implementing section 2713 of the PHS Act (75 FR 41726). Those interim 
final rules charged HRSA with developing the Guidelines authorized by 
section 2713(a)(4) of the PHS.
1. The Institute of Medicine Report
    In developing the Guidelines, HRSA relied on an independent report 
from the Institute of Medicine (IOM, now known as the National Academy 
of Medicine) on women's preventive services, issued on July 19, 2011, 
``Clinical Preventive Services for Women, Closing the Gaps'' (IOM 
2011). The IOM's report was funded by the HHS Office of the Assistant 
Secretary for Planning and Evaluation (ASPE), pursuant to a funding 
opportunity that charged the IOM to conduct a review of effective 
preventive services to ensure women's health and well-being.\6\
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    \6\ Because section 2713(a)(4) of the PHS Act specifies that the 
HRSA Guidelines shall include preventive care and screenings ``with 
respect to women,'' the Guidelines exclude services relating to a 
man's reproductive capacity, such as vasectomies and condoms.
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    The IOM made a number of recommendations with respect to women's 
preventive services. As relevant here, the IOM recommended that the 
Guidelines cover the full range of Food and Drug Administration (FDA)-
approved contraceptive methods, sterilization procedures, and patient 
education and counseling for women with reproductive capacity. Because 
FDA includes in the category of ``contraceptives'' certain drugs and 
devices that may not only prevent conception (fertilization), but may 
also prevent implantation of an embryo,\7\ the IOM's recommendation 
included several contraceptive methods that many persons and 
organizations believe are abortifacient--that is, as causing early 
abortion--and which they conscientiously oppose for that reason

[[Page 47795]]

distinct from whether they also oppose contraception or sterilization.
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    \7\ FDA's guide ``Birth Control: Medicines To Help You,'' 
specifies that various approved contraceptives, including 
Levonorgestrel, Ulipristal Acetate, and IUDs, work mainly by 
preventing fertilization and ``may also work * * * by preventing 
attachment (implantation) to the womb (uterus)'' of a human embryo 
after fertilization. Available at https://www.fda.gov/forconsumers/byaudience/forwomen/freepublications/ucm313215.htm.
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    One of the 16 members of the IOM committee, Dr. Anthony LoSasso, a 
Professor at the University of Illinois at Chicago School of Public 
Health, wrote a formal dissenting opinion. He argued that the IOM 
committee did not have sufficient time to evaluate fully the evidence 
on whether the use of preventive services beyond those encompassed by 
the United States Preventive Services Task Force (USPSTF), HRSA's 
Bright Futures Project, and the Advisory Committee on Immunization 
Practices (ACIP) leads to lower rates of disability or disease and 
increased rates of well-being. He further argued that ``the 
recommendations were made without high quality, systematic evidence of 
the preventive nature of the services considered,'' and that ``the 
committee process for evaluation of the evidence lacked transparency 
and was largely subject to the preferences of the committee's 
composition. Troublingly, the process tended to result in a mix of 
objective and subjective determinations filtered through a lens of 
advocacy.'' Dr. LoSasso also raised concerns that the committee did not 
have time to develop a framework for determining whether coverage of 
any given preventive service leads to a reduction in healthcare 
expenditure.\8\ (IOM 2011 at 231-32). In its response to Dr. LoSasso, 
the other 15 committee members stated, in part, that ``At the first 
committee meeting, it was agreed that cost considerations were outside 
the scope of the charge, and that the committee should not attempt to 
duplicate the disparate review processes used by other bodies, such as 
the USPSTF, ACIP, and Bright Futures. HHS, with input from this 
committee, may consider other factors including cost in its development 
of coverage decisions.''
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    \8\ The Departments do not relay these dissenting remarks as an 
endorsement of the remarks, but to describe the history of the 
Guidelines, which includes this part of the report that IOM provided 
to HRSA.
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2. HRSA's 2011 Guidelines and the Departments' Second Interim Final 
Rules
    On August 1, 2011, HRSA released onto its Web site its Guidelines 
for women's preventive services, adopting the recommendations of the 
IOM https://www.hrsa.gov/womensguidelines/. The Guidelines included 
coverage for all FDA-approved contraceptives, sterilization procedures, 
and related patient education and counseling for women with 
reproductive capacity, as prescribed by a health care provider.
    In administering this Mandate, on August 1, 2011, the Departments 
promulgated interim final rules amending our 2010 interim final rules 
(76 FR 46621) (2011 interim final rules). The 2011 interim final rules 
specify that HRSA has the authority to establish exemptions from the 
contraceptive coverage requirement for certain group health plans 
established or maintained by certain religious employers and for health 
insurance coverage provided in connection with such plans.\9\ The 2011 
interim final rules defined an exempt ``religious employer'' narrowly 
as one that: (1) Had the inculcation of religious values as its 
purpose; (2) primarily employed persons who shared its religious 
tenets; (3) primarily served persons who shared its religious tenets; 
and (4) was a nonprofit organization, as described in section 
6033(a)(1) and (a)(3)(A)(i) or (iii) of the Code. Those relevant 
sections of the Code include only churches, their integrated 
auxiliaries, conventions or associations of churches, and the 
exclusively religious activities of a religious order. The practical 
effect of the rules' definition of ``religious employer'' was to create 
potential uncertainty about whether employers, including many of those 
houses of worship or their integrated auxiliaries, would fail to 
qualify for the exemption if they engaged in outreach activities toward 
persons who did not share their religious tenets.\10\ As the basis for 
adopting that limited definition of religious employer, the 2011 
interim final rules stated that they relied on the laws of some 
``States that exempt certain religious employers from having to comply 
with State law requirements to cover contraceptive services.'' (76 FR 
46623). That same day, HRSA exercised the discretion described in the 
2011 interim final rules to provide the exemption.
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    \9\ The 2011 amended interim final rules were issued and 
effective on August 1, 2011, and published in the Federal Register 
on August 3, 2011 (76 FR 46621).
    \10\ See, for example, Comments of the United States Conference 
of Catholic Bishops on Interim Final Rules on Preventive Services, 
File Code CMS-9992-IFC2 (Aug. 31, 2011).
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3. The Departments' Subsequent Rulemaking on the Accommodation and 
Third Interim Final Rules
    Final regulations issued on February 10, 2012, adopted the 
definition of ``religious employer'' in the 2011 interim final rules 
without modification (2012 final regulations).\11\ (77 FR 8725). The 
exemption did not require religious employers to file any certification 
form or comply with any other information collection process.
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    \11\ The 2012 final regulations were published on February 15, 
2012 (77 FR 8725).
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    Contemporaneous with the issuance of the 2012 final regulations, 
HHS--with the agreement of the Department of Labor (DOL) and the 
Department of the Treasury--issued guidance establishing a temporary 
safe harbor from enforcement of the contraceptive coverage requirement 
by the Departments with respect to group health plans established or 
maintained by certain nonprofit organizations with religious objections 
to contraceptive coverage (and the group health insurance coverage 
provided in connection with such plans).\12\ The guidance provided that 
the temporary safe harbor would remain in effect until the first plan 
year beginning on or after August 1, 2013. The temporary safe harbor 
did not apply to for-profit entities. The Departments stated that, 
during the temporary safe harbor, the Departments would engage in 
rulemaking to achieve ``two goals--providing contraceptive coverage 
without cost-sharing to individuals who want it and accommodating non-
exempted, nonprofit organizations' religious objections to covering 
contraceptive services.'' (77 FR 8727).
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    \12\ Guidance on the Temporary Enforcement Safe Harbor for 
Certain Employers, Group Health Plans, and Group Health Insurance 
Issuers with Respect to the Requirement to Cover Contraceptive 
Services Without Cost Sharing Under section 2713 of the Public 
Health Service Act, Section 715(a)(1) of the Employee Retirement 
Income Security Act, and Section 9815(a)(1) of the Internal Revenue 
Code, issued on February 10, 2012, and reissued on August 15, 2012. 
Available at: http://www.lb7.uscourts.gov/documents/12cv3932.pdf. 
The guidance, as reissued on August 15, 2012, clarified, among other 
things, that plans that took some action before February 10, 2012, 
to try, without success, to exclude or limit contraceptive coverage 
were not precluded from eligibility for the safe harbor. The 
temporary enforcement safe harbor was also available to insured 
student health insurance coverage arranged by nonprofit institutions 
of higher education with religious objections to contraceptive 
coverage that met the conditions set forth in the guidance. See 
final rule entitled ``Student Health Insurance Coverage'' published 
March 21, 2012 (77 FR 16457).
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    On March 21, 2012, the Departments published an advance notice of 
proposed rulemaking (ANPRM) that described possible approaches to 
achieve those goals with respect to religious nonprofit organizations, 
and solicited public comments on the same. (77 FR 16501). Following 
review of the comments on the ANPRM, the Departments published proposed 
regulations on February 6, 2013 (2013 NPRM) (78 FR 8456).
    The 2013 NPRM proposed to expand the definition of ``religious 
employer'' for purposes of the religious employer

[[Page 47796]]

exemption. Specifically, it proposed to require only that the religious 
employer be organized and operate as a nonprofit entity and be referred 
to in section 6033(a)(3)(A)(i) or (iii) of the Code, eliminating the 
requirements that a religious employer (1) have the inculcation of 
religious values as its purpose, (2) primarily employ persons who share 
its religious tenets, and (3) primarily serve persons who share its 
religious tenets.
    The 2013 NPRM also proposed to create a compliance process, which 
it called an accommodation, for group health plans established, 
maintained, or arranged by certain eligible religious nonprofit 
organizations that fell outside the houses of worship and integrated 
auxiliaries covered by section 6033(a)(3)(A)(i) or (iii) of the Code 
(and, thus, outside of the religious employer exemption). The 2013 NPRM 
proposed to define such eligible organizations as nonprofit entities 
that hold themselves out as religious, oppose providing coverage for 
certain contraceptive items on account of religious objections, and 
maintain a certification to this effect in their records. The 2013 NPRM 
stated, without citing a supporting source, that employees of eligible 
organizations ``may be less likely than'' employees of exempt houses of 
worship and integrated auxiliaries to share their employer's faith and 
opposition to contraception on religious grounds. (78 FR 8461). The 
2013 NPRM therefore proposed that, in the case of an insured group 
health plan established or maintained by an eligible organization, the 
health insurance issuer providing group health insurance coverage in 
connection with the plan would provide contraceptive coverage to plan 
participants and beneficiaries without cost sharing, premium, fee, or 
other charge to plan participants or beneficiaries enrolled in the 
eligible organization's plan--and without any cost to the eligible 
organization.\13\ In the case of a self-insured group health plan 
established or maintained by an eligible organization, the 2013 NPRM 
presented potential approaches under which the third party 
administrator of the plan would provide or arrange for contraceptive 
coverage to plan participants and beneficiaries.
---------------------------------------------------------------------------

    \13\ The NPRM proposed to treat student health insurance 
coverage arranged by eligible organizations that are institutions of 
higher education in a similar manner.
---------------------------------------------------------------------------

    On August 15, 2012, the Departments also extended our temporary 
safe harbor until the first plan year beginning on or after August 1, 
2013.
    The Departments published final regulations on July 2, 2013 (July 
2013 final regulations) (78 FR 39869). The July 2013 final regulations 
finalized the expansion of the exemption for houses of worship and 
their integrated auxiliaries. Although some commenters had suggested 
that the exemption be further expanded, the Departments declined to 
adopt that approach. The July 2013 regulations stated that, because 
employees of objecting houses of worship and integrated auxiliaries are 
relatively likely to oppose contraception, exempting those 
organizations ``does not undermine the governmental interests furthered 
by the contraceptive coverage requirement.'' (78 FR 39874). But, like 
the 2013 NPRM, the July 2013 regulations assumed that ``[h]ouses of 
worship and their integrated auxiliaries that object to contraceptive 
coverage on religious grounds are more likely than other employers to 
employ people of the same faith who share the same objection'' to 
contraceptives (Id.).
    The July 2013 regulations also finalized an accommodation for 
eligible organizations. Under the accommodation, an eligible 
organization was required to submit a self-certification to its group 
health insurance issuer or third party administrator, as applicable. 
Upon receiving that self-certification, the issuer or third party 
administrator would provide or arrange for payments for the 
contraceptive services to the plan participants and beneficiaries 
enrolled in the eligible organization's plan, without requiring any 
cost sharing on the part of plan participants and beneficiaries and 
without cost to the eligible organization. With respect to self-insured 
plans, the third party administrators (or issuers they contracted with) 
could receive reimbursements by reducing user fee payments (to 
Federally facilitated Exchanges) by the amounts paid out for 
contraceptive services under the accommodation, plus an allowance for 
certain administrative costs, as long as the Secretary of the 
Department of Health and Human Services requests and an authorizing 
exception under OMB Circular No. A-25R is in effect.\14\ With respect 
to fully insured group health plans, the issuer was expected to bear 
the cost of such payments,\15\ and HHS intended to clarify in guidance 
that the issuer could treat those payments as an adjustment to claims 
costs for purposes of medical loss ratio and risk corridor program 
calculations.
---------------------------------------------------------------------------

    \14\ See also 45 CFR 156.50. Under the regulations, if the third 
party administrator does not participate in a Federally facilitated 
Exchange as an issuer, it is permitted to contract with an insurer 
which does so participate, in order to obtain such reimbursement. 
The total contraceptive user fee adjustment for the 2015 benefit 
year was $33 million.
    \15\ ``[P]roviding payments for contraceptive services is cost 
neutral for issuers.'' (78 FR 39877).
---------------------------------------------------------------------------

    With respect to self-insured group health plans, the July 2013 
final regulations specified that the self-certification was an 
instrument under which the plan was operated and that it obligated the 
third party administrator to provide or arrange for contraceptive 
coverage by operation of section 3(16) of ERISA. The regulations stated 
that, by submitting the self-certification form, the eligible 
organization ``complies'' with the contraceptive coverage requirement 
and does not have to contract, arrange, pay, or refer for contraceptive 
coverage. See, for example, Id. at 39874, 39896. Consistent with these 
statements, the Departments, through the Department of Labor, issued a 
self-certification form, EBSA Form 700. The form stated, in indented 
text labeled as a ``Notice to Third Party Administrators of Self-
Insured Health Plans,'' that ``[t]he obligations of the third party 
administrator are set forth in 26 CFR 54.9815-2713A, 29 CFR 2510.3-16, 
and 29 CFR 2590.715-2713A'' and concluded, in unindented text, that 
``[t]his form is an instrument under which the plan is operated.''
    The Departments extended the temporary safe harbor again on June 
20, 2013, to encompass plan years beginning on or after August 1, 2013, 
and before January 1, 2014. The guidance extending the safe harbor 
included a form to be used by an organization during this temporary 
period to self-certify that its plan qualified for the temporary safe 
harbor if no prior form had been submitted.
4. Litigation Over the Mandate and the Accommodation Process
    During the period when the Departments were publishing and 
modifying our regulations, organizations and individuals filed dozens 
of lawsuits challenging the Mandate. Plaintiffs included religious 
nonprofit organizations, businesses run by religious families, 
individuals, and others. Religious plaintiffs principally argued that 
the Mandate violated the Religious Freedom Restoration Act of 1993 
(RFRA) by forcing them to provide coverage or payments for 
sterilization and contraceptive services, including what they viewed as 
early abortifacient items, contrary to their religious beliefs. Based 
on this claim, in July 2012 a

[[Page 47797]]

Federal district court issued a preliminary injunction barring the 
Departments from enforcing the Mandate against a family-owned business. 
Newland v. Sebelius, 881 F. Supp. 2d. 1287 (D. Colo. 2012). Multiple 
other courts proceeded to issue similar injunctions against the 
Mandate, although a minority of courts ruled in the Departments' favor. 
Compare Tyndale House Publishers, Inc. v. Sebelius, 904 F. Supp. 2d 106 
(D.D.C. 2012), and The Seneca Hardwood Lumber Company, Inc. v. Sebelius 
(sub nom Geneva Coll. v. Sebelius), 941 F. Supp. 2d 672 (W.D. Pa. 
2013), with O'Brien v. U.S. Dep't of Health & Human Servs., 894 F. 
Supp. 2d 1149 (E.D. Mo. 2012).
    A circuit split swiftly developed in cases filed by religiously 
motivated for-profit businesses, to which neither the religious 
employer exemption nor the eligible organization accommodation (as then 
promulgated) applied. Several for-profit businesses won rulings against 
the Mandate before the Unites States Court of Appeals for the Tenth 
Circuit, sitting en banc, while similar rulings against the Departments 
were issued by the Seventh and District of Columbia (DC) Circuits. 
Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013); 
Korte v. Sebelius, 735 F.3d 654 (7th Cir. 2013); Gilardi v. U.S. Dep't 
of Health & Human Servs., 733 F.3d 1208 (D.C. Cir. 2013). The Third and 
Sixth Circuits disagreed with similar plaintiffs, and in November 2013 
the U.S. Supreme Court granted certiorari in Hobby Lobby and Conestoga 
Wood Specialties Corp. v. Secretary of U.S. Department of Health & 
Human Services, 724 F.3d 377 (3d Cir. 2013), to resolve the circuit 
split.
    On June 30, 2014, the Supreme Court ruled against the Departments 
and held that, under RFRA, the Mandate could not be applied to the 
closely held for-profit corporations before the Court because their 
owners had religious objections to providing such coverage.\16\ Burwell 
v. Hobby Lobby Stores, Inc. 134 S. Ct. 2751 (2014). The Court held that 
the ``contraceptive mandate `substantially burdens' the exercise of 
religion'' as applied to employers that object to providing 
contraceptive coverage on religious grounds, and that the plaintiffs 
were therefore entitled to an exemption unless the Mandate was the 
least restrictive means of furthering a compelling governmental 
interest. Id. at 2775. The Court observed that, under the compelling 
interest test of RFRA, the Departments could not rely on interests 
``couched in very broad terms, such as promoting `public health' and 
`gender equality,' but rather, had to demonstrate that a compelling 
interest was served by refusing an exemption to the ``particular 
claimant[s]'' seeking an exemption. Id. at 2779. Assuming without 
deciding that a compelling interest existed, the Court held that the 
Government's goal of guaranteeing coverage for contraceptive methods 
without cost sharing could be achieved in a less restrictive manner. 
The Court observed that ``[t]he most straightforward way of doing this 
would be for the Government to assume the cost of providing the four 
contraceptives at issue to any women who are unable to obtain them 
under their health-insurance policies due to their employers' religious 
objections.'' Id. at 2780. The Court also observed that the Departments 
had ``not provided any estimate of the average cost per employee of 
providing access to these contraceptives,'' nor ``any statistics 
regarding the number of employees who might be affected because they 
work for corporations like Hobby Lobby, Conestoga, and Mardel''. Id. at 
2780-81. But the Court ultimately concluded that it ``need not rely on 
the option of a new, government-funded program in order to conclude 
that the HHS regulations fail the least-restrictive means test'' 
because ``HHS itself ha[d] demonstrated that it ha[d] at its disposal 
an approach that is less restrictive than requiring employers to fund 
contraceptive methods that violate their religious beliefs.'' Id. at 
2781-82. The Court explained that the ``already established'' 
accommodation process available to nonprofit organizations was a less-
restrictive alternative that ``serve[d] HHS's stated interests equally 
well,'' although the Court emphasized that its ruling did not decide 
whether the accommodation process ``complie[d] with RFRA for purposes 
of all religious claims''. Id. at 2788-82.
---------------------------------------------------------------------------

    \16\ The Supreme Court did not decide whether RFRA would apply 
to publicly traded for-profit corporations. See 134 S. Ct. at 2774.
---------------------------------------------------------------------------

    Meanwhile, another plaintiff obtained temporary relief from the 
Supreme Court in a case challenging the accommodation under RFRA. 
Wheaton College, a Christian liberal arts college in Illinois, objected 
that the accommodation was a compliance process that rendered it 
complicit in delivering payments for abortifacient contraceptive 
services to its employees. Wheaton College refused to execute the EBSA 
Form 700 required under the July 2013 final regulations. It was denied 
a preliminary injunction in the Federal district and appellate courts, 
and sought an emergency injunction pending appeal from the Unites 
States Supreme Court on June 30, 2014. On July 3, 2014, the Supreme 
Court issued an interim order in favor of the College, stating that, 
``[i]f the [plaintiff] informs the Secretary of Health and Human 
Services in writing that it is a nonprofit organization that holds 
itself out as religious and has religious objections to providing 
coverage for contraceptive services, the [Departments of Labor, Health 
and Human Services, and the Treasury] are enjoined from enforcing [the 
Mandate] against the [plaintiff] . . . pending final disposition of 
appellate review.'' Wheaton College v. Burwell. 134 S. Ct. 2806, 2807 
(2014). The order stated that Wheaton College did not need to use EBSA 
Form 700 or send a copy of the executed form to its health insurance 
issuers or third party administrators to meet the condition for 
injunctive relief. Id.
    In response to this litigation, on August 27, 2014, the Departments 
simultaneously issued a third set of interim final rules (August 2014 
interim final rules) (79 FR 51092), and a notice of proposed rulemaking 
(August 2014 proposed rules) (79 FR 51118). The August 2014 interim 
final rules changed the accommodation process so that it could be 
initiated either by self-certification using EBSA Form 700 or through a 
notice informing the Secretary of the Department of Health and Human 
Services that an eligible organization had religious objections to 
coverage of all or a subset of contraceptive services. (79 FR 51092). 
In response to Hobby Lobby, the August 2014 proposed rules extended the 
accommodation process to closely held for-profit entities with 
religious objections to contraceptive coverage, by including them in 
the definition of eligible organizations. (79 FR 51118). Neither the 
August 2014 interim final rules nor the August 2014 proposed rules 
extended the exemption, and neither added a certification requirement 
for exempt entities.
    In October 2014, based on an interpretation of the Supreme Court's 
interim order, HHS deemed Wheaton College as having submitted a 
sufficient notice to HHS. HHS conveyed that interpretation to the DOL, 
so as to trigger the accommodation process.
    On July 14, 2015, the Departments finalized both the August 2014 
interim final rules and the August 2014 proposed rules in a set of 
final regulations (the July 2015 final regulations) (80 FR 41318). (The 
July 2015 final regulations also encompassed issues related to other 
preventive services coverage.) The preamble to the July 2015 final 
regulations stated that, through the accommodation, payments

[[Page 47798]]

for contraceptives and sterilization would be provided in a way that is 
``seamless'' with the coverage that eligible employers provide to their 
plan participants and beneficiaries. Id. at 41328. The July 2015 final 
regulations allowed eligible organizations to submit a notice to HHS as 
an alternative to submitting the EBSA Form 700, but specified that such 
notice must include the eligible organization's name and an expression 
of its religious objection, along with the plan name, plan type, and 
name and contact information for any of the plan's third party 
administrators or health insurance issuers. The Departments indicated 
that such information represents the minimum information necessary for 
us to administer the accommodation process.
    When an eligible organization maintains an insured group health 
plan or student health plan and provides the alternative notice, the 
July 2015 final regulations provide that HHS will inform the health 
insurance issuer of its obligations to cover contraceptive services to 
which the eligible organization objects. Where an eligible organization 
maintains a self-insured plan under ERISA and provides the alternative 
notice, the regulations provide that DOL will work with HHS to send a 
separate notification to the self-insured plan's third party 
administrator(s). The regulations further provide that such 
notification is an instrument under which the plan is operated for the 
purposes of section 3(16) of ERISA, and the instrument would designate 
the third party administrator as the entity obligated to provide or 
arrange for payments for contraceptives to which the eligible 
organization objects. The July 2015 final regulations continue to apply 
the amended notice requirement to eligible organizations that sponsor 
church plans exempt from ERISA pursuant to section 4(b)(2) of ERISA, 
but acknowledge that, with respect to the operation of the 
accommodation process, section 3(16) of ERISA does not provide a 
mechanism to impose an obligation to provide contraceptive coverage as 
a plan administrator on those eligible organizations' third party 
administrators. (80 FR 41323).
    Meanwhile, a second split among Federal appeals courts had 
developed involving challenges to the Mandate's accommodation. Many 
religious nonprofit organizations argued that the accommodation 
impermissibly burdened their religious beliefs because it utilized the 
plans the organizations themselves sponsored to provide services to 
which they objected on religious grounds. They objected to the self-
certification requirement on the same basis. Federal district courts 
split in the cases, granting preliminary injunction motions to 
religious groups in the majority of cases, but denying them to others. 
In most appellate cases, religious nonprofit organizations lost their 
challenges, where the courts often concluded that the accommodation 
imposed no substantial burden on their religious exercise under RFRA. 
For example, Priests for Life v. U.S. Dep't of Health and Human Servs., 
772 F. 3d 229 (D.C. Cir. 2014); Little Sisters of the Poor Home for the 
Aged v. Burwell, 794 F.3d 1151 (10th Cir. 2015); Geneva Coll. v. Sec'y 
U.S. Dep't of Health & Human Servs., 778 F.3d 422 (3d Cir. 2015). But 
the Eighth Circuit disagreed and ruled in favor of religious nonprofit 
employers. Dordt College v. Burwell, 801 F.3d 946, 949-50 (8th Cir. 
2015) (relying on Sharpe Holdings, Inc. v. U.S. Dep't of Health & Human 
Servs., 801 F.3d 927 (8th Cir. 2015)).
    On November 6, 2015, the U.S. Supreme Court granted certiorari in 
seven similar cases under the title of a filing from the Third Circuit, 
Zubik v. Burwell. The Court held oral argument on March 23, 2016, and, 
after the argument, asked the parties to submit supplemental briefs 
addressing ``whether and how contraceptive coverage may be obtained by 
petitioners' employees through petitioners' insurance companies, but in 
a way that does not require any involvement of petitioners beyond their 
own decision to provide health insurance without contraceptive coverage 
to their employees''. In a brief filed with the Supreme Court on April 
12, 2016, the Government stated on behalf of the Departments that the 
accommodation process for eligible organizations with insured plans 
could operate without any self-certification or written notice being 
submitted by eligible organizations.
    On May 16, 2016, the Supreme Court issued a per curiam opinion in 
Zubik, vacating the judgments of the Courts of Appeals and remanding 
the cases ``in light of the substantial clarification and refinement in 
the positions of the parties'' in their supplemental briefs. (136 S. 
Ct. 1557, 1560 (2016).) The Court stated that it anticipated that, on 
remand, the Courts of Appeals would ``allow the parties sufficient time 
to resolve any outstanding issues between them.'' Id. The Court also 
specified that ``the Government may not impose taxes or penalties on 
petitioners for failure to provide the relevant notice'' while the 
cases remained pending. Id. at 1561.
    After remand, as indicated by the Departments in court filings, 
some meetings were held between attorneys for the Government and for 
the plaintiffs in those cases. Separately, at various times after the 
Supreme Court's remand order, HHS and DOL sent letters to the issuers 
and third party administrators of certain plaintiffs in Zubik and other 
pending cases, directing the issuers and third party administrators to 
provide contraceptive coverage for participants in those plaintiffs' 
group health plans under the accommodation. The Departments also issued 
a Request for Information (RFI) on July 26, 2016, seeking public 
comment on options for modifying the accommodation process in light of 
the supplemental briefing in Zubik and the Supreme Court's remand 
order. (81 FR 47741). Public comments were submitted in response to the 
RFI, during a comment period that closed on September 20, 2016.
    On December 20, 2016, HRSA updated the Guidelines via its Web site, 
https://www.hrsa.gov/womensguidelines2016/index.html. HRSA announced 
that, for plans subject to the Guidelines, the updated Guidelines would 
apply to the first plan year beginning after December 20, 2017. Among 
other changes, the updated Guidelines specified that the required 
contraceptive coverage includes follow-up care (for example, management 
and evaluation, as well as changes to, and removal or discontinuation 
of, the contraceptive method). They also specified that coverage should 
include instruction in fertility awareness-based methods for women 
desiring an alternative method of family planning. HRSA stated that, 
with the input of a committee operating under a cooperative agreement, 
HRSA would review and periodically update the Women's Preventive 
Services' Guidelines. The updated Guidelines did not alter the 
religious employer exemption or accommodation process.
    On January 9, 2017, the Departments issued a document entitled, 
``FAQs About Affordable Care Act Implementation Part 36'' (FAQ).\17\ 
The FAQ stated that, after reviewing comments submitted in response to 
the 2016 RFI and considering various options, the Departments could not 
find a way at that time to amend the accommodation so as to satisfy 
objecting eligible organizations while pursuing the Departments' policy 
goals. Thus, the

[[Page 47799]]

litigation on remand from the Supreme Court remains unresolved.
---------------------------------------------------------------------------

    \17\ Available at: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-36.pdf and 
https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ACA-FAQs-Part36_1-9-17-Final.pdf.
---------------------------------------------------------------------------

    A separate category of unresolved litigation involved religious 
employees as plaintiffs. For example, in two cases, the plaintiff-
employees work for a nonprofit organization that agrees with the 
employees (on moral grounds) in opposing coverage of certain 
contraceptives they believe to be abortifacient, and that is willing to 
offer them insurance coverage that omits such services. See March for 
Life v. Burwell, 128 F. Supp. 3d 116 (D.D.C. 2015); Real Alternatives, 
150 F. Supp. 3d 419, affirmed by 867 F.3d 338 (3d Cir. 2017). In 
another case, the plaintiff-employees work for a State government 
entity that the employees claim is willing, under State law, to provide 
a plan omitting contraception consistent with the employees' religious 
beliefs. See Wieland v. HHS, 196 F. Supp. 3d 1010 (E.D. Mo. 2016). 
Those and similar employee-plaintiffs generally contend that the 
Mandate violates their rights under RFRA by making it impossible for 
them to obtain health insurance consistent with their religious 
beliefs, either from their willing employer or in the individual 
market, because the Departments offer no exemptions encompassing either 
circumstance. Such challenges have seen mixed success. Compare, for 
example, Wieland, 196 F. Supp. 3d at 1020 (concluding that the Mandate 
violates the employee plaintiffs' rights under RFRA and permanently 
enjoining the Departments) and March for Life, 128 F. Supp. 3d at 133-
34 (same), with Real Alternatives, 2017 WL 3324690 at *18 (affirming 
dismissal of employee plaintiffs' RFRA claim).
    On May 4, 2017, the President issued an ``Executive Order Promoting 
Free Speech and Religious Liberty.'' Regarding ``Conscience Protections 
with Respect to Preventive-Care Mandate,'' that order instructs ``[t]he 
Secretary of the Treasury, the Secretary of Labor, and the Secretary of 
Health and Human Services [to] consider issuing amended regulations, 
consistent with applicable law, to address conscience-based objections 
to the preventive-care mandate promulgated under section 300gg-13(a)(4) 
of title 42, United States Code.''

II. RFRA and Government Interests Underlying the Mandate

    RFRA provides that the Government ``shall not substantially burden 
a person's exercise of religion even if the burden results from a rule 
of general applicability'' unless the Government ``demonstrates that 
application of the burden to the person--(1) is in furtherance of a 
compelling governmental interest; and (2) is the least restrictive 
means of furthering that compelling governmental interest.'' 42 U.S.C. 
2000bb-1(a) and (b). In Hobby Lobby, the Supreme Court had ``little 
trouble concluding'' that, in the absence of an accommodation or 
exemption, ``the HHS contraceptive mandate `substantially burden[s]' 
the exercise of religion. 42 U.S.C. 2000bb-1(a).'' 134 S. Ct. at 2775. 
And although the Supreme Court did not resolve the RFRA claims 
presented in Zubik on their merits, it instructed the parties to 
consider alternative accommodations for the objecting plaintiffs, after 
the Government suggested that such alternatives might be possible.
    Despite multiple rounds of rulemaking, however, the Departments 
have not assuaged the sincere religious objections to contraceptive 
coverage of numerous organizations, nor have we resolved the pending 
litigation. To the contrary, the Departments have been litigating RFRA 
challenges to the Mandate and related regulations for more than 5 
years, and dozens of those challenges remain pending today. That 
litigation, and the related modifications to the accommodation, have 
consumed substantial governmental resources while creating uncertainty 
for objecting organizations, issuers, third party administrators, 
employees, and beneficiaries. Consistent with the President's Executive 
Order and the Government's desire to resolve the pending litigation and 
prevent future litigation from similar plaintiffs, the Departments have 
concluded that it is appropriate to reexamine the exemption and 
accommodation scheme currently in place for the Mandate.
    These interim final rules (and the companion interim final rules 
published elsewhere in this Federal Register) are the result of that 
reexamination. The Departments acknowledge that coverage of 
contraception is an important and highly sensitive issue, implicating 
many different views, as reflected in the comments received on multiple 
rulemakings over the course of implementation of section 2713(a)(4) of 
the PHS Act. After reconsidering the interests served by the Mandate in 
this particular context, the objections raised, and the applicable 
Federal law, the Departments have determined that an expanded 
exemption, rather than the existing accommodation, is the most 
appropriate administrative response to the religious objections raised 
by certain entities and organizations concerning the Mandate. The 
Departments have accordingly decided to revise the regulations 
channeling HRSA authority under section 2713(a)(4) of the PHS to 
provide an exemption from the Mandate to a broader range of entities 
and individuals that object to contraceptive coverage on religious 
grounds, while continuing to offer the existing accommodation as an 
optional alternative. The Departments have also decided to create a 
process by which a willing employer and issuer may allow an objecting 
individual employee to obtain health coverage without contraceptive 
coverage. These interim final rules leave unchanged HRSA's authority to 
decide whether to include contraceptives in the women's preventive 
services Guidelines for entities that are not exempted by law, 
regulation, or the Guidelines. These rules also do not change the many 
other mechanisms by which the Government advances contraceptive 
coverage, particularly for low-income women.
    In addition to relying on the text of section 2713(a)(4) of the PHS 
Act and the Departments' discretion to promulgate rules to carry out 
the provisions of the PHS Act, the Departments also draw on Congress' 
decision in the Affordable Care Act neither to specify that 
contraception must be covered nor to require inflexible across-the-
board application of section 2713 of the PHS Act. The Departments 
further consider Congress' extensive history of protecting religious 
objections when certain matters in health care are specifically 
regulated--often specifically with respect to contraception, 
sterilization, abortion, and activities connected to abortion.
    Notable among the many statutes (listed in footnote 1 in Section I-
Background) that include protections for religious beliefs are, not 
only the Church Amendments, but also protections for health plans or 
health care organizations in Medicaid or Medicare Advantage to object 
``on moral or religious grounds'' to providing coverage of certain 
counseling or referral services. (42 U.S.C. 1395w-22(j)(3)(B); 42 
U.S.C. 1396u-2(b)(3)). In addition, Congress has protected individuals 
who object to prescribing or providing contraceptives contrary to their 
religious beliefs. Consolidated Appropriations Act of 2017, Division C, 
Title VII, Sec. 726(c) (Financial Services and General Government 
Appropriations Act), Public Law 115-31 (May 5, 2017). Congress likewise 
provided that, if the District of Columbia requires ``the provision of 
contraceptive coverage by health insurance plans,'' ``it is the intent 
of Congress that any legislation enacted on such issue should include a 
`conscience clause' which provides exceptions for

[[Page 47800]]

religious beliefs and moral convictions''. Id. at Division C, Title 
VIII, Sec. 808. In light of the fact that Congress did not require HRSA 
to include contraception in Guidelines issued under section 2713 of the 
PHS Act, we consider it significant, in support of the implementation 
of those Guidelines by the expanded exemption in these interim final 
rules, that Congress' most recent statement on the prospect of 
Government mandated contraceptive coverage was to express the specific 
intent that a conscience clause be provided and that it should protect 
religious beliefs.
    The Departments' authority to guide HRSA's discretion in 
determining the scope of any contraceptive coverage requirement under 
section 2713(a)(4) of the PHS Act includes the authority to provide 
exemptions and independently justifies this rulemaking. The Departments 
have also determined that requiring certain objecting entities or 
individuals to choose between the Mandate, the accommodation, or 
penalties for noncompliance violates their rights under RFRA.

A. Elements of RFRA

1. Substantial Burden
    The Departments believe that agencies charged with administering a 
statute or associated regulations or guidance that imposes a 
substantial burden on the exercise of religion under RFRA have 
discretion in determining how to avoid the imposition of such burden. 
The Departments have previously contended that the Mandate does not 
impose a substantial burden on entities and individuals. With respect 
to the coverage Mandate itself, apart from the accommodation, and as 
applied to entities with religious objections, our argument was 
rejected in Hobby Lobby, which held that the Mandate imposes a 
substantial burden. (134 S. Ct. at 2775-79.) With respect to whether 
the Mandate imposes a substantial burden on entities that may choose 
the accommodation, but must choose between the accommodation, the 
Mandate, or penalties for noncompliance, a majority of Federal appeals 
courts have held that the accommodation does not impose a substantial 
burden on such entities (mostly religious nonprofit entities).
    The Departments have reevaluated our position on this question, 
however, in light of all the arguments made in various cases, public 
comments that have been submitted, and the concerns discussed 
throughout these rules. We have concluded that requiring certain 
objecting entities or individuals to choose between the Mandate, the 
accommodation, or penalties for noncompliance imposes a substantial 
burden on religious exercise under RFRA. We believe that the Court's 
analysis in Hobby Lobby extends, for the purposes of analyzing a 
substantial burden, to the burdens that an entity faces when it 
religiously opposes participating in the accommodation process or the 
straightforward Mandate, and is subject to penalties or disadvantages 
that apply in this context if it chooses neither. As the Eighth Circuit 
stated in Sharpe Holdings, ``[i]n light of [nonprofit religious 
organizations'] sincerely held religious beliefs, we conclude that 
compelling their participation in the accommodation process by threat 
of severe monetary penalty is a substantial burden on their exercise of 
religion. . . . That they themselves do not have to arrange or pay for 
objectionable contraceptive coverage is not determinative of whether 
the required or forbidden act is or is not religiously offensive''. 
(801 F.3d at 942.)
    Our reconsideration of these issues has also led us to conclude, 
consistent with the rulings in favor of religious employee plaintiffs 
in Wieland and March for Life cited above, that the Mandate imposes a 
substantial burden on the religious beliefs of individual employees who 
oppose contraceptive coverage and would be able to obtain a plan that 
omits contraception from a willing employer or issuer (as applicable), 
but cannot obtain one solely because of the Mandate's prohibition on 
that employer and/or issuer providing them with such a plan.
    Consistent with our conclusion earlier this year after the remand 
of cases in Zubik and our reviewing of comments submitted in response 
to the 2016 RFI, the Departments believe there is not a way to satisfy 
all religious objections by amending the accommodation. Accordingly, 
the Departments have decided it is necessary and appropriate to provide 
the expanded exemptions set forth herein.
2. Compelling Interest
    Although the Departments previously took the position that the 
application of the Mandate to certain objecting employers was necessary 
to serve a compelling governmental interest, the Departments have now 
concluded, after reassessing the relevant interests and for the reasons 
stated below, that it does not. Under such circumstances, the 
Departments are required by law to alleviate the substantial burden 
created by the Mandate. Here, informed by the Departments' reassessment 
of the relevant interests, as well as by our desire to bring to a close 
the more than 5 years of litigation over RFRA challenges to the 
Mandate, the Departments have determined that the appropriate 
administrative response is to create a broader exemption, rather than 
simply adjusting the accommodation process.
    RFRA requires the Government to respect religious beliefs under 
``the most demanding test known to constitutional law'': Where the 
Government imposes a substantial burden on religious exercise, it must 
demonstrate a compelling governmental interest and show that the law or 
requirement is the least restrictive means of furthering that interest. 
City of Boerne v. Flores, 521 U.S. 507, 534 (1997). For an interest to 
be compelling, its rank must be of the ``highest order''. Church of the 
Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 546 (1993); 
see also Sherbert v. Verner, 374 U.S. 398, 406-09 (1963); Wisconsin v. 
Yoder, 406 U.S. 205, 221-29 (1972). In applying RFRA, the Supreme Court 
has ``looked beyond broadly formulated interests justifying the general 
applicability of government mandates and scrutinized the asserted harm 
of granting specific exemptions to particular religious claimants.'' 
Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 
418, 431 (2006). To justify a substantial burden on religious exercise 
under RFRA, the Government must show it has a compelling interest in 
applying the requirement to the ``particular claimant[s] whose sincere 
exercise of religion is being substantially burdened.'' Id. at 430-31. 
Moreover, the Government must meet the ``exceptionally demanding'' 
least-restrictive-means standard. Hobby Lobby, 134 S. Ct. at 2780. 
Under that standard, the Government must establish that ``it lacks 
other means of achieving its desired goal without imposing a 
substantial burden on the exercise of religion by the objecting 
parties.'' Id.
    Upon further examination of the relevant provisions of the 
Affordable Care Act and the administrative record on which the Mandate 
was based, the Departments have concluded that the application of the 
Mandate to entities with sincerely held religious objections to it does 
not serve a compelling governmental interest. The Departments have 
reached that conclusion for multiple reasons, no one of which is 
dispositive.
    First, Congress did not mandate that contraception be covered at 
all under the Affordable Care Act. Instead, Congress merely provided 
for coverage

[[Page 47801]]

of ``such additional preventive care and screenings'' for women 
``provided for in comprehensive guidelines supported by [HRSA].'' 
Congress, thus, left the identification of any additional required 
preventive services for women to administrative discretion. The fact 
that Congress granted the Departments the authority to promulgate all 
rules appropriate and necessary for the administration of the relevant 
provisions of the Code, ERISA, and the PHS Act, including by channeling 
the discretion Congress afforded to HRSA to decide whether to require 
contraceptive coverage, indicates that the Departments' judgment should 
carry particular weight in considering the relative importance of the 
Government's interest in applying the Mandate to the narrow population 
of entities exempted in these rules.
    Second, while Congress specified that many health insurance 
requirements added by the Affordable Care Act--including provisions 
adjacent to section 2713 of the PHS Act--were so important that they 
needed to be applied to all health plans immediately, the preventive 
services requirement in section 2713 of the PHS Act was not made 
applicable to ``grandfathered plans.'' That feature of the Affordable 
Care Act is significant: As cited above, seven years after the 
Affordable Care Act's enactment, approximately 25.5 million people are 
estimated to be enrolled in grandfathered plans not subject to section 
2713 of the PHS Act. We do not suggest that a requirement that is 
inapplicable to grandfathered plans or otherwise subject to exceptions 
could never qualify as a serving a compelling interest under RFRA. For 
example, ``[e]ven a compelling interest may be outweighed in some 
circumstances by another even weightier consideration.'' Hobby Lobby, 
134 S. Ct. at 2780. But Congress' decision not to apply section 2713 of 
the PHS Act to grandfathered plans, while deeming other requirements 
closely associated in the same statute as sufficiently important to 
impose immediately, is relevant to our assessment of the importance of 
the Government interests served by the Mandate. As the Departments 
observed in 2010, those immediately applicable requirements were 
``particularly significant.'' (75 FR 34540). Congress' decision to 
leave section 2713 out of that category informs the Departments' 
assessment of the weight of the Government's interest in applying the 
Guidelines issued pursuant to section 2713 of the PHS Act to religious 
objectors.
    Third, various entities that brought legal challenges to the 
Mandate (including some of the largest employers) have been willing to 
provide coverage of some, though not all, contraceptives. For example, 
the plaintiffs in Hobby Lobby were willing to provide coverage with no 
cost sharing of 14 of 18 FDA-approved women's contraceptive and 
sterilization methods. (134 S. Ct. at 2766.) With respect to 
organizations and entities holding those beliefs, the fact that they 
are willing to provide coverage for various contraceptive methods 
significantly detracts from the government interest in requiring that 
they provide coverage for other contraceptive methods to which they 
object.
    Fourth, the case for a compelling interest is undermined by the 
existing accommodation process, and how it applies to certain similarly 
situated entities based on whether or not they participate in certain 
self-insured group health plans, known as church plans, under 
applicable law. The Departments previously exempted eligible 
organizations from the contraceptive coverage requirement, and created 
an accommodation under which those organizations bore no obligation to 
provide for such coverage after submitting a self-certification or 
notice. Where a non-exempt religious organization uses an insured group 
health plan instead of a self-insured church plan, the health insurance 
issuer would be obliged to provide contraceptive coverage or payments 
to the plan's participants under the accommodation. Even in a self-
insured church plan context, the preventive services requirement in 
section 2713(a)(4) of the PHS Act applies to the plan, and through the 
Code, to the religious organization that sponsors the plan. But under 
the accommodation, once a self-insured church plan files a self-
certification or notice, the accommodation relieves it of any further 
obligation with respect to contraceptive services coverage. Having done 
so, the accommodation process would normally transfer the obligation to 
provide or arrange for contraceptive coverage to a self-insured plan's 
third party administrator (TPA). But the Departments lack authority to 
compel church plan TPAs to provide contraceptive coverage or levy fines 
against those TPAs for failing to provide it. This is because church 
plans are exempt from ERISA pursuant to section 4(b)(2) of ERISA. 
Section 2761(a) of the PHS Act provides that States may enforce the 
provisions of title XXVII of the PHS Act as they pertain to issuers, 
but not as they pertain to church plans that do not provide coverage 
through a policy issued by a health insurance issuer. The combined 
result of PHS Act section 2713's authority to remove contraceptive 
coverage obligations from self-insured church plans, and HHS's and 
DOL's lack of authority under the PHS Act or ERISA to require TPAs to 
become administrators of those plans to provide such coverage, has led 
to significant incongruity in the requirement to provide contraceptive 
coverage among nonprofit organizations with religious objections to the 
coverage.
    More specifically, issuers and third party administrators for some, 
but not all, religious nonprofit organizations are subject to 
enforcement for failure to provide contraceptive coverage under the 
accommodation, depending on whether they participate in a self-insured 
church plan. Notably, many of those nonprofit organizations are not 
houses of worship or integrated auxiliaries. Under section 3(33)(C)(iv) 
of ERISA, many organizations in self-insured church plans need not be 
churches, but can merely ``share[] common religious bonds and 
convictions with [a] church or convention or association of churches''. 
The effect is that many similar religious organizations are being 
treated very differently with respect to their employees receiving 
contraceptive coverage--depending on whether the organization is part 
of a church plan--even though the Departments claimed a compelling 
interest to deny exemptions to all such organizations. In this context, 
the fact that the Mandate and the Departments' application thereof 
``leaves appreciable damage to [their] supposedly vital interest 
unprohibited'' is strong evidence that the Mandate ``cannot be regarded 
as protecting an interest `of the highest order.' '' Lukumi, 508 U.S. 
at 520 (citation and quotation marks omitted).
    Fifth, the Departments' previous assertion that the exemption for 
houses of worship was offered to respect a certain sphere of church 
autonomy (80 FR 41325) does not adequately explain some of the 
disparate results of the existing rules. And the desire to respect 
church autonomy is not grounds to prevent the Departments from 
expanding the exemption to other religious entities. The Departments 
previously treated religious organizations that operate in a similar 
fashion very differently for the purposes of the Mandate. For example, 
the Departments exempted houses of worship and integrated auxiliaries 
that may conduct activities, such as the

[[Page 47802]]

operating of schools, that are also conducted by non-exempt religious 
nonprofit organizations. Likewise, among religious nonprofit groups 
that were not exempt as houses of worship or integrated auxiliaries, 
many operate their religious activities similarly even if they differ 
in whether they participate in self-insured church plans. As another 
example, two religious colleges might have the same level of 
religiosity and commitment to defined ideals, but one might identify 
with a specific large denomination and choose to be in a self-insured 
church plan offered by that denomination, while another might not be so 
associated or might not have as ready access to a church plan and so 
might offer its employees a fully insured health plan. Under the 
accommodation, employees of the college using a fully insured plan (or 
a self-insured plan that is not a church plan) would receive coverage 
of contraceptive services without cost sharing, while employees of the 
college participating in the self-insured church plan would not receive 
the coverage where that plan required its third party administrator to 
not offer the coverage.
    As the Supreme Court recently confirmed, a self-insured church plan 
exempt from ERISA through ERISA 3(33) can include a plan that is not 
actually established or maintained by a church or by a convention or 
association of churches, but is maintained by ``an organization . . . 
the principal purpose or function of which is the administration or 
funding of a plan or program for the provision of retirement benefits 
or welfare benefits, or both, for the employees of a church or a 
convention or association of churches, if such organization is 
controlled by or associated with a church or a convention or 
association of churches'' (a so-called ``principal-purpose 
organization''). See Advocate Health Care Network v. Stapleton, 137 S. 
Ct. 1652, 1656-57 (U.S. June 5, 2017); ERISA 3(33)(C). While the 
Departments take no view on the status of these particular plans, the 
Departments acknowledge that the church plan exemption not only 
includes some non-houses-of-worship as organizations whose employees 
can be covered by the plan, but also, in certain circumstances, may 
include plans that are not themselves established and maintained by 
houses of worship. Yet, such entities and plans--if they file a self-
certification or notice through the existing accommodation--are 
relieved of obligations under the contraceptive Mandate and their third 
party administrators are not subject to a requirement that they provide 
contraceptive coverage to their plan participants and beneficiaries.
    After considering the differential treatment of various religious 
nonprofit organizations under the previous accommodation, the 
Departments conclude that it is appropriate to expand the exemption to 
other religious nonprofit organizations with sincerely held religious 
beliefs opposed to contraceptive coverage. We also conclude that it is 
not appropriate to limit the scope of a religious exemption by relying 
upon a small minority of State laws that contain narrow exemptions that 
focus on houses of worship and integrated auxiliaries. (76 FR 46623.)
    Sixth, the Government's interest in ensuring contraceptive coverage 
for employees of particular objecting employers is undermined by the 
characteristics of many of those employers, especially nonprofit 
employers. The plaintiffs challenging the existing accommodation 
include, among other organizations, religious colleges and 
universities, and religious orders that provide health care or other 
charitable services. Based in part on our experience litigating against 
such organizations, the Departments now disagree with our previous 
assertion that ``[h]ouses of worship and their integrated auxiliaries 
that object to contraceptive coverage on religious grounds are more 
likely than other employers to employ people of the same faith who 
share the same objection.'' \18\ (78 FR 39874.) Although empirical data 
was not required to reach our previous conclusion, we note that the 
conclusion was not supported by any specific data or other source, but 
instead was intended to be a reasonable assumption. Nevertheless, in 
the litigation and in numerous public comments submitted throughout the 
regulatory processes described above, many religious nonprofit 
organizations have indicated that they possess deep religious 
commitments even if they are not houses of worship or their integrated 
auxiliaries. Some of the religious nonprofit groups challenging the 
accommodation claim that their employees are required to adhere to a 
statement of faith which includes the entities' views on certain 
contraceptive items.\19\ The Departments recognize, of course, that not 
all of the plaintiffs challenging the accommodation require all of 
their employees (or covered students) to share their religious 
objections to contraceptives. At the same time, it has become apparent 
from public comments and from court filings in dozens of cases--
encompassing hundreds of organizations--that many religious nonprofit 
organizations express their beliefs publicly and hold themselves out as 
organizations for whom their religious beliefs are vitally important. 
Employees of such organizations, even if not required to sign a 
statement of faith, often have access to, and knowledge of, the views 
of their employers on contraceptive coverage, whether through the 
organization's published mission statement or statement of beliefs, 
through employee benefits disclosures and other communications with 
employees and prospective employees, or through publicly filed lawsuits 
objecting to providing such coverage and attendant media coverage. In 
many cases, the employees of religious organizations will have chosen 
to work for those organizations with an understanding--explicit or 
implicit--that they were being employed to advance the organization's 
goals and to be respectful of the organization's beliefs even if they 
do not share all of those beliefs. Religious nonprofit organizations 
that engage in expressive activity generally have a First Amendment 
right of expressive association and religious free exercise to choose 
to hire persons (or, in the case of students, to admit them) based on 
whether they share, or at least will be respectful of, their 
beliefs.\20\
---------------------------------------------------------------------------

    \18\ In changing its position, an agency ``need not demonstrate 
to a court's satisfaction that the reasons for the new policy are 
better than the reasons for the old one; it suffices that the new 
policy is permissible under the statute, that there are good reasons 
for it, and that the agency believes it to be better, which the 
conscious change of course adequately indicates.'' FCC v. Fox 
Television Stations, Inc., 556 U.S. 502, 515 (2009).
    \19\ See, for example, Geneva College v. Sebelius, 929 F. Supp. 
2d 402, 411 (W.D. Pa. 2013); Grace Schools v. Sebelius, 988 F. Supp. 
2d 935, 943 (N.D. Ind. 2013); Comments of the Council for Christian 
Colleges & Universities, re: CMS-9968-P (filed Apr. 8, 2013) (``On 
behalf of [] 172 higher education institutions . . . a requirement 
for membership in the CCCU is that full-time administrators and 
faculty at our institutions share the Christian faith of the 
institution.'').
    \20\ Notably, ``the First Amendment simply does not require that 
every member of a group agree on every issue in order for the 
group's policy to be `expressive association.''' Boy Scouts of 
America v. Dale, 530 U.S. 640, 655 (2000).
---------------------------------------------------------------------------

    Given the sincerely held religious beliefs of many religious 
organizations, imposing the contraceptive-coverage requirement on those 
that object based on such beliefs might undermine the Government's 
broader interests in ensuring health coverage by causing the entities 
to stop providing health coverage. For example, because the Affordable 
Care Act does not require

[[Page 47803]]

institutions of higher education to arrange student coverage, some 
institutions of higher education that object to the Mandate appear to 
have chosen to stop arranging student plans rather than comply with the 
Mandate or be subject to the accommodation with respect to such 
populations.\21\
---------------------------------------------------------------------------

    \21\ See, for example, Manya Brachear Pashman, ``Wheaton College 
ends coverage amid fight against birth control mandate,'' Chicago 
Tribune (July 29, 2015); Laura Bassett, ``Franciscan University 
Drops Entire Student Health Insurance Plan Over Birth Control 
Mandate,'' HuffPost (May 15, 2012).
---------------------------------------------------------------------------

    Seventh, we now believe the administrative record on which the 
Mandate rests is insufficient to meet the high threshold to establish a 
compelling governmental interest in ensuring that women covered by 
plans of objecting organizations receive cost-free contraceptive 
coverage through those plans. To begin, in support of the IOM's 
recommendations, which HRSA adopted, the IOM identified several studies 
showing a preventive services gap because women require more preventive 
care than men. (IOM 2011 at 19-21). Those studies did not identify 
contraceptives or sterilization as composing a specific portion of that 
gap, and the IOM did not consider or establish in the report whether 
any cost associated with that gap remains after all other women's 
preventive services are covered without cost-sharing. Id. Even without 
knowing what the empirical data would show about that gap, the coverage 
of the other women's preventive services required under both the HRSA 
Guidelines and throughout section 2713(a) of the PHS Act--including 
annual well-woman visits and a variety of tests, screenings, and 
counseling services--serves at a minimum to diminish the cost gap 
identified by IOM for women whose employers decline to cover some or 
all contraceptives on religious grounds.\22\
---------------------------------------------------------------------------

    \22\ The Departments are not aware of any objectors to the 
contraceptive Mandate that are unwilling to cover any of the other 
preventive services without cost sharing as required by PHS Act 
section 2713.
---------------------------------------------------------------------------

    Moreover, there are multiple Federal, State, and local programs 
that provide free or subsidized contraceptives for low-income women. 
Such Federal programs include, among others, Medicaid (with a 90 
percent Federal match for family planning services), Title X, community 
health center grants, and Temporary Assistance for Needy Families. 
According to the Guttmacher Institute, government-subsidized family 
planning services are provided at 8,409 health centers overall.\23\ The 
Title X program, for example, administered by the HHS Office of 
Population Affairs (OPA), provides a wide variety of voluntary family 
planning information and services for clients based on their ability to 
pay, through a network that includes nearly 4,000 family planning 
centers. http://www.hhs.gov/opa/title-x-family-planning/ Individuals 
with family incomes at or below the HHS poverty guideline (for 2017, 
$24,600 for a family of four in the 48 contiguous States and the 
District of Columbia) receive services at no charge unless a third 
party (governmental or private) is authorized or obligated to pay for 
these services. Individuals with incomes in excess of 100 percent up to 
250 percent of the poverty guideline are charged for services using a 
sliding fee scale based on family size and income. Unemancipated minors 
seeking confidential services are assessed fees based on their own 
income level rather than their family's income. The availability of 
such programs to serve the most at-risk women (as defined in the IOM 
report) diminishes the Government's interest in applying the Mandate to 
objecting employers. Many forms of contraception are available for 
around $50 per month, including long-acting methods such as the birth 
control shot and intrauterine devices (IUDs).\24\ Other, more permanent 
forms of contraception like implantables bear a higher one-time cost, 
but when calculated over the duration of use, cost a similar 
amount.\25\ Various State programs supplement the Federal programs 
referenced above, and 28 States have their own mandates of 
contraceptive coverage as a matter of State law. This existing inter-
governmental structure for obtaining contraceptives significantly 
diminishes the Government's interest in applying the Mandate to 
employers over their sincerely held religious objections.
---------------------------------------------------------------------------

    \23\ ``Facts on Publicly Funded Contraceptive Services in the 
United States,'' March 2016.
    \24\ See, for example, Caroline Cunningham, ``How Much Will Your 
Birth Control Cost Once the Affordable Care Act Is Repealed?'' 
Washingtonian (Jan. 17, 2017), available at https://www.washingtonian.com/2017/01/17/how-much-will-your-birth-control-cost-once-the-affordable-care-act-is-repealed/; also, see https://www.plannedparenthood.org/learn/birth-control.
    \25\ Id.
---------------------------------------------------------------------------

    The record also does not reflect that the Mandate is tailored to 
the women most likely to experience unintended pregnancy, identified by 
the 2011 IOM report as ``women who are aged 18 to 24 years and 
unmarried, who have a low income, who are not high school graduates, 
and who are members of a racial or ethnic minority''. (IOM 2011 at 
102). For example, with respect to religiously objecting organizations, 
the Mandate applies in employer-based group health plans and student 
insurance at private colleges and universities. It is not clear that 
applying the Mandate among those objecting entities is a narrowly 
tailored way to benefit the most at-risk population. The entities 
appear to encompass some such women, but also appear to omit many of 
them and to include a significantly larger cross-section of women as 
employees or plan participants. At the same time, the Mandate as 
applied to objecting employers appears to encompass a relatively small 
percentage of the number of women impacted by the Mandate overall, 
since most employers do not appear to have conscientious objections to 
the Mandate.\26\ The Guttmacher Institute, on which the IOM relied, 
further reported that 89 percent of women who are at risk of unintended 
pregnancy and are living at 0 through 149 percent of the poverty line 
are already using contraceptives, as are 92 percent of those with 
incomes of 300 percent or more of the Federal poverty level.\27\
---------------------------------------------------------------------------

    \26\ Prior to the implementation of the Affordable Care Act 
approximately 6 percent of employer survey respondents did not offer 
contraceptive coverage, with 31 percent of respondents not knowing 
whether they offered such coverage Kaiser Family Foundation & Health 
Research & Educational Trust, ``Employer Health Benefits, 2010 
Annual Survey'' at 196, available at https://kaiserfamilyfoundation.files.wordpress.com/2013/04/8085.pdf. It is 
not clear whether the minority of employers who did not cover 
contraception refrained from doing so for conscientious reasons or 
for other reasons. Estimates of the number of women who might be 
impacted by the exemptions offered in these rules, as compared to 
the total number of women who will likely continue to receive 
contraceptive coverage, is discussed in more detail below.
    \27\ ``Contraceptive Use in the United States,'' September 2016.
---------------------------------------------------------------------------

    The rates of--and reasons for--unintended pregnancy are notoriously 
difficult to measure.\28\ In particular, association and causality can 
be hard to disentangle, and the studies referred to by the 2011 IOM 
Report speak more to association than causality. For example, IOM 2011 
references Boonstra, et al.

[[Page 47804]]

(2006), as finding that, ``as the rate of contraceptive use by 
unmarried women increased in the United States between 1982 and 2002, 
rates of unintended pregnancy and abortion for unmarried women also 
declined,'' \29\ and Santelli and Melnikas as finding that ``increased 
rates of contraceptive use by adolescents from the early 1990s to the 
early 2000s was associated with a decline in teen pregnancies and that 
periodic increases in the teen pregnancy rate are associated with lower 
rates of contraceptive use''. IOM 2011 at 105.\30\ In this respect, the 
report does not show that access to contraception causes decreased 
incidents of unintended pregnancy, because both of the assertions rely 
on association rather than causation, and they associate reduction in 
unintended pregnancy with increased use of contraception, not merely 
with increased access to such contraceptives.
---------------------------------------------------------------------------

    \28\ The IOM 2011 Report reflected this when it cited the IOM's 
own 1995 report on unintended pregnancy, ``The Best Intentions'' 
(IOM 1995). IOM 1995 identifies various methodological difficulties 
in demonstrating the interest in reducing unintended pregnancies by 
means of a coverage mandate in employer plans. These include: The 
ambiguity of intent as an evidence-based measure (does it refer to 
mistimed pregnancy or unwanted pregnancy, and do studies make that 
distinction?); ``the problem of determining parental attitudes at 
conception'' and inaccurate methods often used for that assessment, 
such as ``to use the request for an abortion as a marker''; and the 
overarching problem of ``association versus causality,'' that is, 
whether intent causes certain negative outcomes or is merely 
correlated with them. IOM 1995 at 64-66. See also IOM 1995 at 222 
(``the largest public sector funding efforts, Title X and Medicaid, 
have not been well evaluated in terms of their net effectiveness, 
including their precise impact on unintended pregnancy'').
    \29\ H. Boonstra, et al., ``Abortion in Women's Lives'' at 18, 
Guttmacher Inst. (2006).
    \30\ Citing John S. Santelli & Andrea J. Melnikas, ``Teen 
Fertility in Transition: Recent and Historic Trends in the United 
States,'' 31 Ann. Rev. Pub. Health 371 (2010).
---------------------------------------------------------------------------

    Similarly, in a study involving over 8,000 women between 2012 and 
2015, conducted to determine whether contraceptive coverage under the 
Mandate changed contraceptive use patterns, the Guttmacher Institute 
concluded that ``[w]e observed no changes in contraceptive use patterns 
among sexually active women.'' \31\ With respect to teens, the Santelli 
and Melnikas study cited by IOM 2011 observes that, between 1960 and 
1990, as contraceptive use increased, teen sexual activity outside of 
marriage likewise increased (although the study does not assert a 
causal relationship).\32\ Another study, which proposed an economic 
model for the decision to engage in sexual activity, stated that 
``[p]rograms that increase access to contraception are found to 
decrease teen pregnancies in the short run but increase teen 
pregnancies in the long run.'' \33\ Regarding emergency contraception 
in particular, ``[i]ncreased access to emergency contraceptive pills 
enhances use but has not been shown to reduce unintended pregnancy 
rates.''\34\ In the longer term--from 1972 through 2002--while the 
percentage of sexually experienced women who had ever used some form of 
contraception rose to 98 percent,\35\ unintended pregnancy rates in the 
Unites States rose from 35.4 percent\36\ to 49 percent.''\37\ The 
Departments note these and other studies\38\ to observe the complexity 
and uncertainty in the relationship between contraceptive access, 
contraceptive use, and unintended pregnancy.
---------------------------------------------------------------------------

    \31\ Bearak, J.M. and Jones, R.K., ``Did Contraceptive Use 
Patterns Change after the Affordable Care Act? A Descriptive 
Analysis,'' 27 Women's Health Issues 316 (Guttmacher Inst. May-June 
2017), available at http://www.whijournal.com/article/S1049-3867(17)30029-4/fulltext.
    \32\ 31 Ann. Rev. Pub. Health at 375-76.
    \33\ Peter Arcidiacono, et al., ``Habit Persistence and Teen 
Sex: Could Increased Access to Contraception Have Unintended 
Consequences for Teen Pregnancies?'' (2005), available at http://
public.econ.duke.edu/~psarcidi/teensex.pdf.
    \34\ G. Raymond et al., ``Population effect of increased access 
to emergency contraceptive pills: a systematic review,'' 109 Obstet. 
Gynecol. 181 (2007).
    \35\ William D. Mosher & Jo Jones, U.S. Dep't of HHS, CDC, 
National Center for Health Statistics, ``Use of Contraception in the 
United States: 1982-2008'' at 5 fig. 1, 23 Vital and Health 
Statistics 29 (Aug. 2010), available at https://www.cdc.gov/nchs/data/series/sr_23/sr23_029.pdf.
    \36\ Helen M. Alvar[eacute], ``No Compelling Interest: The 
`Birth Control' Mandate and Religious Freedom,'' 58 Vill. L. Rev. 
379, 404-05 & n.128 (2013), available at http://digitalcommons.law.villanova.edu/vlr/vol58/iss3/2 (quoting 
Christopher Tietze, ``Unintended Pregnancies in the United States, 
1970-1972,'' 11 Fam. Plan. Persp. 186, 186 n.* (1979) (``in 1972, 
35.4 percent percent of all U.S. pregnancies were `unwanted' or 
`wanted later''')).
    \37\ Id. (citing Lawrence B. Finer & Stanley K. Henshaw, 
``Disparities in Rates of Unintended Pregnancy in the United States, 
1994 and 2001'' 38 Persp. on Sexual Reprod. Health 90 (2006) (``In 
2001, 49 percent of pregnancies in the United States were 
unintended'')).
    \38\ See, for example, J.L Due[ntilde]as, et al., ``Trends in 
the Use of Contraceptive Methods and Voluntary Interruption of 
Pregnancy in the Spanish Population during 1997-2007,'' 83 
Contraception 82 (2011) (as use of contraceptives increased from 49 
percent to 80 percent, the elective abortion rate more than 
doubled); D. Paton, ``The economics of family planning and underage 
conceptions,'' 21 J. Health Econ. 207 (2002) (data from the UK 
confirms an economic model which suggests improved family planning 
access for females under 16 increases underage sexual activity and 
has an ambiguous impact on underage conception rates); T. Raine et 
al., ``Emergency contraception: advance provision in a young, high-
risk clinic population,'' 96 Obstet. Gynecol. 1 (2000) (providing 
advance provision of emergency contraception at family planning 
clinics to women aged 16-24 was associated with the usage of less 
effective and less consistently used contraception by other 
methods); M. Belzer et al., ``Advance supply of emergency 
contraception: a randomized trial in adolescent mothers,'' 18 J. 
Pediatr. Adolesc. Gynecol. 347 (2005) (advance provision of 
emergency contraception to mothers aged 13-20 was associated with 
increased unprotected sex at the 12-month follow up).
---------------------------------------------------------------------------

    Contraception's association with positive health effects might also 
be partially offset by an association with negative health effects. In 
2013 the National Institutes of Health indicated, in funding 
opportunity announcement for the development of new clinically useful 
female contraceptive products, that ``hormonal contraceptives have the 
disadvantage of having many undesirable side effects[,] are associated 
with adverse events, and obese women are at higher risk for serious 
complications such as deep venous thrombosis.'' \39\ In addition, IOM 
2011 stated that ``[l]ong-term use of oral contraceptives has been 
shown to reduce a woman's risk of endometrial cancer, as well as 
protect against pelvic inflammatory disease and some benign breast 
diseases (PRB, 1998). The Agency for Healthcare Research and Quality 
(AHRQ) is currently undertaking a systematic evidence review to 
evaluate the effectiveness of oral contraceptives as primary prevention 
for ovarian cancer (AHRQ, 2011).'' (IOM 2011 at 107). However, after 
IOM 2011 made this statement, AHRQ (a component of HHS) completed its 
systematic evidence review.\40\ Based on its review, AHRQ stated that: 
``[o]varian cancer incidence was significantly reduced in OC [oral 
contraceptive] users''; ``[b]reast cancer incidence was slightly but 
significantly increased in OC users''; ``[t]he risk of cervical cancer 
was significantly increased in women with persistent human 
papillomavirus infection who used OCs, but heterogeneity prevented a 
formal meta-analysis''; ``[i]ncidences of both colorectal cancer [] and 
endometrial cancer [] were significantly reduced by OC use''; ``[t]he 
risk of vascular events was increased in current OC users compared with 
nonusers, although the increase in myocardial infarction was not 
statistically significant''; ``[t]he overall strength of evidence for 
ovarian cancer prevention was moderate to low''; and ``[t]he simulation 
model predicted that the combined increase in risk of breast and 
cervical cancers and vascular events was likely to be equivalent to or 
greater than the decreased risk in ovarian cancer.''\41\ Based on these 
findings, AHRQ concluded that ``[t]here is insufficient evidence to 
recommend for or against the use of OCs solely for the primary 
prevention of ovarian cancer . . . . the harm/benefit ratio for ovarian 
cancer prevention alone is uncertain, particularly when the

[[Page 47805]]

potential quality-of-life impact of breast cancer and vascular events 
are considered.''\42\
---------------------------------------------------------------------------

    \39\ NIH, ``Female Contraceptive Development Program (U01)'' 
(Nov. 5, 2013), available at https://grants.nih.gov/grants/guide/rfa-files/RFA-HD-14-024.html. Thirty six percent of women in the 
United States are obese. https://www.niddk.nih.gov/health-information/health-statistics/overweight-obesity. Also see ``Does 
birth control raise my risk for health problems?'' and ``What are 
the health risks for smokers who use birth control?'' HHS Office on 
Women's Health, available at https://www.womenshealth.gov/a-z-topics/birth-control-methods; Skovlund, CW, ``Association of 
Hormonal Contraception with Depression,'' 73 JAMA Psychiatry 1154 
(Nov. 1, 2016), available at https://www.ncbi.nlm.nih.gov/pubmed/27680324.
    \40\ Havrilesky, L.J, et al., ``Oral Contraceptive User for the 
Primary Prevention of Ovarian Cancer,'' Agency for Healthcare 
Research and Quality, Report No.: 13-E002-EF (June 2013), available 
at https://archive.ahrq.gov/research/findings/evidence-based-reports/ocusetp.html.
    \41\ Id.
    \42\ Id. Also, see Kelli Miller, ``Birth Control & Cancer: Which 
Methods Raise, Lower Risk,'' The Am. Cancer Society, (Jan. 21, 
2016), available at http://www.cancer.org/cancer/news/features/birth-control-cancer-which-methods-raise-lower-risk.
---------------------------------------------------------------------------

    In addition, in relation to several studies cited above, imposing a 
coverage Mandate on objecting entities whose plans cover many enrollee 
families who may share objections to contraception could, among some 
populations, affect risky sexual behavior in a negative way. For 
example, it may not be a narrowly tailored way to advance the 
Government interests identified here to mandate contraceptive access to 
teenagers and young adults who are not already sexually active and at 
significant risk of unintended pregnancy.\43\
---------------------------------------------------------------------------

    \43\ For further discussion, see Alvar[eacute], 58 Vill. L. Rev. 
at 400-02 (discussing the Santelli & Melnikas study and the 
Arcidiacono study cited above, and other research that considers the 
extent to which reduction in teen pregnancy is attributable to 
sexual risk avoidance rather than to contraception access).
---------------------------------------------------------------------------

    Finally, evidence from studies that post-date the Mandate is not 
inconsistent with the observations the Departments make here. In 2016, 
HRSA awarded a 5-year cooperative agreement to the American College of 
Obstetricians and Gynecologists to develop recommendations for updated 
Women's Preventive Services Guidelines. The awardee formed an expert 
panel called the Women's Preventive Services Initiative that issued a 
report (the WPSI report).\44\ After observing that ``[p]rivate 
companies are increasingly challenging the contraception provisions in 
the Affordable Care Act,'' the WPSI report cited studies through 2013 
stating that application of HRSA Guidelines had applied preventive 
services coverage to 55.6 million women and had led to a 70 percent 
decrease in out-of-pocket expenses for contraceptive services among 
commercially insured women. Id. at 57-58. The WPSI report relied on a 
2015 report of the HHS Office of the Assistant Secretary for Planning 
and Evaluation (ASPE), ``The Affordable Care Act Is Improving Access to 
Preventive Services for Millions of Americans,'' which estimated that 
persons who have private insurance coverage of preventive services 
without cost sharing includes 55.6 million women.\45\
---------------------------------------------------------------------------

    \44\ ``WPSI 2016 Recommendations: Evidence Summaries and 
Appendices,'' at 54-64, available at https://www.womenspreventivehealth.org/wp-content/uploads/2016/12/Evidence-Summaries-and-Appendices.pdf.
    \45\ Available at https://aspe.hhs.gov/pdf-report/affordable-care-act-improving-access-preventive-services-millions-americans; 
also, see Abridged Report, available at https://www.womenspreventivehealth.org/wp-content/uploads/2017/01/WPSI_2016AbridgedReport.pdf.
---------------------------------------------------------------------------

    As discussed above and based on the Departments' knowledge of 
litigation challenging the Mandate, during the time ASPE estimated the 
scope of preventive services coverage (2011-2013), houses of worship 
and integrated auxiliaries were exempt from the Mandate, other 
objecting religious nonprofit organizations were protected by the 
temporary safe harbor, and hundreds of accommodated self-insured church 
plan entities were not subject to enforcement of the Mandate through 
their third party administrators. In addition, dozens of for-profit 
entities that had filed lawsuits challenging the Mandate were protected 
by court orders pending the Supreme Court's resolution of Hobby Lobby 
in June 2014. It would therefore appear that the benefits recorded by 
the report occurred even though most objecting entities were not in 
compliance.\46\ Additional data indicates that, in 28 States where 
contraceptive coverage mandates have been imposed statewide, those 
mandates have not necessarily lowered rates of unintended pregnancy (or 
abortion) overall.\47\
---------------------------------------------------------------------------

    \46\ In addition, as in IOM 2011, the WPSI report bases its 
evidentiary conclusions relating to contraceptive coverage, use, 
unintended pregnancy, and health benefits, on conclusions that the 
phenomena are ``associated'' with the intended outcomes, without 
showing there is a causal relationship. For example, the WPSI report 
states that ``[c]ontraceptive counseling in primary care may 
increase the uptake of hormonal methods and [long-acting reversible 
contraceptives], although data on structured counseling in 
specialized reproductive health settings demonstrated no such 
effect.'' Id. at 63. The WPSI report also acknowledges that a large-
scale study evaluating the effects of providing no-cost 
contraception had ``no randomization or control group.'' Id. at 63.
    The WPSI report also identifies the at-risk population as young, 
low-income, and/or minority women: ``[u]nintended pregnancies 
disproportionately occur in women age 18 to 24 years, especially 
among those with low incomes or from racial/ethnic minorities.'' Id. 
at 58. The WPSI report acknowledges that many in this population are 
already served by Title X programs, which provide family planning 
services to ``approximately 1 million teens each year.'' Id. at 58. 
The WPSI report observes that between 2008 and 2011--before the 
contraceptive coverage requirement was implemented--unintended 
pregnancy decreased to the lowest rate in 30 years. Id. at 58. The 
WPSI report does not address how to balance contraceptive coverage 
interests with religious objections, nor does it specify the extent 
to which applying the Mandate among commercially insured at 
objecting entities serves to deliver contraceptive coverage to women 
most at risk of unintended pregnancy.
    \47\ See Michael J. New, ``Analyzing the Impact of State Level 
Contraception Mandates on Public Health Outcomes,'' 13 Ave Maria L. 
Rev. 345 (2015), available at http://avemarialaw-law-review.avemarialaw.edu/Content/articles/vXIII.i2.new.final.0809.pdf.
---------------------------------------------------------------------------

    The Departments need not take a position on these empirical 
questions. Our review is sufficient to lead us to conclude that 
significantly more uncertainty and ambiguity exists in the record than 
the Departments previously acknowledged when we declined to extend the 
exemption to certain objecting organizations and individuals as set 
forth herein, and that no compelling interest exists to counsel against 
us extending the exemption.
    During public comment periods, some commenters noted that some 
drugs included in the preventive services contraceptive Mandate can 
also be useful for treating certain existing health conditions. The IOM 
similarly stated that ``the non-contraceptive benefits of hormonal 
contraception include treatment of menstrual disorders, acne or 
hirsutism, and pelvic pain.'' IOM 2011 at 107. Consequently, some 
commenters suggested that religious objections to the Mandate should 
not be permitted in cases where such methods are used to treat such 
conditions, even if those methods can also be used for contraceptive 
purposes. Section 2713(a)(4) of the PHS Act does not, however, apply to 
non-preventive care provided solely for treatment of an existing 
condition. It applies only to ``such additional preventive care and 
screenings . . . as provided for'' by HRSA (Section 2713(a)(4) of the 
PHS Act). HRSA's Guidelines implementing this section state repeatedly 
that they apply to ``preventive'' services or care, and with respect to 
the coverage of contraception specifically, they declare that the 
methods covered are ``contraceptive'' methods as a ``Type of Preventive 
Service,'' and that they are to be covered only ``[a]s prescribed'' by 
a physician or other health care provider. https://www.hrsa.gov/womensguidelines/ The contraceptive coverage requirement in the 
Guidelines also only applies for ``women with reproductive capacity.'' 
https://www.hrsa.gov/womensguidelines/; (80 FR 40318). Therefore, the 
Guidelines' inclusion of contraceptive services requires coverage of 
contraceptive methods as a type of preventive service only when a drug 
that the FDA has approved for contraceptive use is prescribed in whole 
or in part for such use. The Guidelines and section 2713(a)(4) of the 
PHS Act do not require coverage of such drugs where they are prescribed 
exclusively for a non-contraceptive and non-preventive use to treat an 
existing condition.\48\ As discussed above, the last

[[Page 47806]]

Administration decided to exempt houses of worship and their integrated 
auxiliaries from the Mandate, and to relieve hundreds of religious 
nonprofit organizations of their obligations under the Mandate and not 
further require contraceptive coverage to their employees. In several 
of the lawsuits challenging the Mandate, some religious plaintiffs 
stated that they do not object and are willing to cover drugs 
prescribed for the treatment of an existing condition and not for 
contraceptive purposes--even if those drugs are also approved by the 
FDA for contraceptive uses. Therefore, the Departments conclude that 
the fact that some drugs that are approved for preventive contraceptive 
purposes can also be used for exclusively non-preventive purposes to 
treat existing conditions is not a sufficient reason to refrain from 
expanding the exemption to the Mandate.
---------------------------------------------------------------------------

    \48\ The Departments previously cited the IOM's listing of 
existing conditions that contraceptive drugs can be used to treat 
(menstrual disorders, acne, and pelvic pain), and said of those uses 
that ``there are demonstrated preventive health benefits from 
contraceptives relating to conditions other than pregnancy.'' 77 FR 
8727 & n.7. This was not, however, an assertion that PHS Act section 
2713(a)(4) or the Guidelines require coverage of ``contraceptive'' 
methods when prescribed for an exclusively non-contraceptive, non-
preventive use. Instead it was an observation that such drugs--
generally referred to as ``contraceptives''--also have some 
alternate beneficial uses to treat existing conditions. For the 
purposes of these interim final rules, the Departments clarify here 
that our previous reference to the benefits of using contraceptive 
drugs exclusively for some non-contraceptive and non-preventive uses 
to treat existing conditions did not mean that the Guidelines 
require coverage of such uses, and consequently is not a reason to 
refrain from offering the expanded exemptions provided here. Where a 
drug approved by the FDA for contraceptive use is prescribed for 
both a contraceptive use and a non-contraceptive use, the Guidelines 
(to the extent they apply) would require its coverage. Where a drug 
approved by the FDA for contraceptive use is prescribed exclusively 
for a non-contraceptive and non-preventive use to treat an existing 
condition, it would be outside the scope of the Guidelines.
---------------------------------------------------------------------------

    An additional consideration supporting the Departments' present 
view is that alternative approaches can further the interests the 
Departments previously identified behind the Mandate. As noted above, 
the Government already engages in dozens of programs that subsidize 
contraception for the low-income women identified by the IOM as the 
most at risk for unintended pregnancy. The Departments have also 
acknowledged in legal briefing that contraception access can be 
provided through means other than coverage offered by religious 
objectors, for example, through ``a family member's employer,'' ``an 
Exchange,'' or ``another government program.'' \49\
---------------------------------------------------------------------------

    \49\ Brief for the Respondents at 65, Zubik v. Burwell, 136 S. 
Ct. 1557 (2016) (No. 14-1418).
---------------------------------------------------------------------------

    Many employer plan sponsors, institutions of education arranging 
student health coverage, and individuals enrolled in plans where their 
employers or issuers (as applicable) are willing to offer them a 
religiously acceptable plan, hold sincerely held religious beliefs 
against (respectively) providing, arranging, or participating in plans 
that comply with the Mandate either by providing contraceptive coverage 
or by using the accommodation. Because we have concluded that requiring 
such compliance through the Mandate or accommodation has constituted a 
substantial burden on the religious exercise of many such entities or 
individuals, and because we conclude requiring such compliance did not 
serve a compelling interest and was not the least restrictive means of 
serving a compelling interest, we now believe that requiring such 
compliance led to the violation of RFRA in many instances. We recognize 
that this is a change of position on this issue, and we make that 
change based on all the matters discussed in this preamble.

B. Discretion To Provide Religious Exemptions

    Even if RFRA does not compel the religious exemptions provided in 
these interim final rules, the Departments believe they are the most 
appropriate administrative response to the religious objections that 
have been raised. RFRA identifies certain circumstance under which 
government must accommodate religious exercise-when a government action 
imposes a substantial burden on the religious exercise of an adherent 
and imposition of that burden is not the least restrictive means of 
achieving a compelling government interest. RFRA does not, however, 
prescribe the accommodation that the government must adopt. Rather, 
agencies have discretion to fashion an appropriate and administrable 
response to respect religious liberty interests implicated by their own 
regulations. We know from Hobby Lobby that, in the absence of any 
accommodation, the contraceptive-coverage requirement imposes a 
substantial burden on certain objecting employers. We know from other 
lawsuits and public comments that many religious entities have 
objections to complying with the accommodation based on their sincerely 
held religious beliefs. Previously, the Departments attempted to 
develop an accommodation that would either alleviate the substantial 
burden imposed on religious exercise or satisfy RFRA's requirements for 
imposing that burden.
    Now, however, the Departments have reassessed the relevant 
interests and determined that, even if exemptions are not required by 
RFRA, they would exercise their discretion to address the substantial 
burden identified in Hobby Lobby by expanding the exemptions from the 
Mandate instead of revising accommodations previously offered. In the 
Departments' view, a broader exemption is a more direct, effective 
means of satisfying all bona fide religious objectors. This view is 
informed by the fact that the Departments' previous attempt to develop 
an appropriate accommodation did not satisfy all objectors. That 
previous accommodation consumed Departmental resources not only through 
the regulatory process, but in persistent litigation and negotiations. 
Offering exemptions as described in these interim final rules is a more 
workable way to respond to the substantial burden identified in Hobby 
Lobby and bring years of litigation concerning the Mandate to a close.

C. General Scope of Expanded Religious Exemptions

1. Exemption and Accommodation for Religious Employers, Plan Sponsors, 
and Institutions of Higher Education
    For all of these reasons, and as further explained below, the 
Departments now believe it is appropriate to modify the scope of the 
discretion afforded to HRSA in the July 2015 final regulations to 
direct HRSA to provide the expanded exemptions and change the 
accommodation to an optional process if HRSA continues to otherwise 
provide for contraceptive coverage in the Guidelines. As set forth 
below, the expanded exemption encompasses non-governmental plan 
sponsors that object based on sincerely held religious beliefs, and 
institutions of higher education in their arrangement of student health 
plans. The accommodation is also maintained as an optional process for 
exempt employers, and will provide contraceptive availability for 
persons covered by the plans of entities that use it (a legitimate 
program purpose).
    The Departments believe this approach is sufficiently respectful of 
religious objections while still allowing the Government to advance 
other interests. Even with the expanded exemption, HRSA maintains the 
discretion to require contraceptive coverage for nearly all entities to 
which the Mandate previously applied (since most plan sponsors do not 
appear to possess the requisite religious objections), and to 
reconsider those interests in the future where no covered objection 
exists. Other Government subsidies of contraception are likewise not 
affected by this rule.

[[Page 47807]]

2. Exemption for Objecting Individuals Covered by Willing Employers and 
Issuers
    As noted above, some individuals have brought suit objecting to 
being covered under an insurance policy that includes coverage for 
contraceptives. See, for example, Wieland v. HHS, 196 F. Supp. 3d 1010 
(E.D. Mo. 2016); Soda v. McGettigan, No. 15-cv-00898 (D. Md.). Just as 
the Departments have determined that the Government does not have a 
compelling interest in applying the Mandate to employers that object to 
contraceptive coverage on religious grounds, we have also concluded 
that the Government does not have a compelling interest in requiring 
individuals to be covered by policies that include contraceptive 
coverage when the individuals have sincerely held religious objections 
to that coverage. The Government does not have an interest in ensuring 
the provision of contraceptive coverage to individuals who do not wish 
to have such coverage. Especially relevant to this conclusion is the 
fact that the Departments have described their interests of health and 
gender equality as being advanced among women who ``want'' the coverage 
so as to prevent ``unintended'' pregnancy. (77 FR 8727).\50\ No 
asserted interest is served by denying an exemption to individuals who 
object to it. No unintended pregnancies will be avoided or costs 
reduced by imposing the coverage on those individuals.
---------------------------------------------------------------------------

    \50\ In this respect, the Government's interest in contraceptive 
coverage is different than its interest in persons receiving some 
other kinds of health coverage or coverage in general, which can 
lead to important benefits that are not necessarily conditional on 
the recipient's desire to use the coverage and the specific benefits 
that may result from their choice to use it.
---------------------------------------------------------------------------

    Although the Departments previously took the position that allowing 
individual religious exemptions would undermine the workability of the 
insurance system, the Departments now agree with those district courts 
that have concluded that an exemption that allows--but does not 
require--issuers and employers to omit contraceptives from coverage 
provided to objecting individuals does not undermine any compelling 
interest. See Wieland, 196 F. Supp. 3d at 1019-20; March for Life, 128 
F. Supp. 3d at 132. The individual exemption will only apply where the 
employer and issuer (or, in the individual market, the issuer) are 
willing to offer a policy accommodating the objecting individual. As a 
result, the Departments consider it likely that where an individual 
exemption is invoked, it will impose no burdens on the insurance market 
because such burdens may be factored into the willingness of an 
employer or issuer to offer such coverage. At the level of plan 
offerings, the extent to which plans cover contraception under the 
prior rules is already far from uniform. Congress did not require 
compliance with section 2713 of the PHS Act by all entities--in 
particular by grandfathered plans. The Departments' previous exemption 
for houses of worship and integrated auxiliaries, and our lack of 
authority to enforce the accommodation with respect to self-insured 
church plans, show that the importance of a uniform health insurance 
system is not significantly harmed by allowing plans to omit 
contraception in many contexts.\51\ Furthermore, granting exemptions to 
individuals who do not wish to receive contraceptive coverage where the 
plan and, as applicable, issuer and plan sponsor are willing, does not 
undermine the Government's interest in ensuring the provision of such 
coverage to other individuals who wish to receive it. Nor do such 
exemptions undermine the operation of the many other programs 
subsidizing contraception. Rather, such exemptions serve the 
Government's interest in accommodating religious exercise. Accordingly, 
as further explained below, the Departments have provided an exemption 
to address the concerns of objecting individuals.
---------------------------------------------------------------------------

    \51\ Also, see Real Alternatives, 2017 WL 3324690 at *36 (3d 
Cir. Aug. 4, 2017) (Jordan, J., concurring in part and dissenting in 
part) (``Because insurance companies would offer such plans as a 
result of market forces, doing so would not undermine the 
government's interest in a sustainable and functioning market. . . . 
Because the government has failed to demonstrate why allowing such a 
system (not unlike the one that allowed wider choice before the 
Affordable Care Act) would be unworkable, it has not satisfied 
strict scrutiny.'' (citation and internal quotation marks omitted)).
---------------------------------------------------------------------------

D. Effects on Third Parties of Exemptions

    The Departments note that the exemptions created here, like the 
exemptions created by the last Administration, do not burden third 
parties to a degree that counsels against providing the exemptions. 
Congress did not create a right to receive contraceptive coverage, and 
Congress explicitly chose not to impose the section 2713 of the PHS Act 
requirements on grandfathered plans that cover millions of people. 
Individuals who are unable to obtain contraceptive coverage through 
their employer-sponsored health plans because of the exemptions created 
in these interim final rules, or because of other exemptions to the 
Mandate, have other avenues for obtaining contraception, including the 
various governmental programs discussed above. As the Government is 
under no constitutional obligation to fund contraception, cf. Harris v. 
McRae, 448 United States 297 (1980), even more so may the Government 
refrain from requiring private citizens to cover contraception for 
other citizens in violation of their religious beliefs. Cf. Rust v. 
Sullivan, 500 U.S. 173, 192-93 (1991) (``A refusal to fund protected 
activity, without more, cannot be equated with the imposition of a 
`penalty' on that activity.'').\52\
---------------------------------------------------------------------------

    \52\ Cf. also Planned Parenthood Ariz., Inc. v. Am. Ass'n of 
Pro-Life Obstetricians & Gynecologists, 257 P.3d 181, 196 (Ariz. Ct. 
App. 2011) (``a woman's right to an abortion or to contraception 
does not compel a private person or entity to facilitate either.'').
---------------------------------------------------------------------------

    That conclusion is consistent with the Supreme Court's observation 
that RFRA may require exemptions even from laws requiring claimants 
``to confer benefits on third parties.'' Hobby Lobby, 134 S. Ct. at 
2781 n.37. The burdens imposed on such third parties may be relevant to 
the RFRA analysis, but they cannot be dispositive. ``Otherwise, for 
example, the Government could decide that all supermarkets must sell 
alcohol for the convenience of customers (and thereby exclude Muslims 
with religious objections from owning supermarkets), or it could decide 
that all restaurants must remain open on Saturdays to give employees an 
opportunity to earn tips (and thereby exclude Jews with religious 
objections from owning restaurants).'' Id. Where, as here, 
contraceptives are readily accessible and, for many low income persons, 
are available at reduced cost or for free through various governmental 
programs, and contraceptive coverage may be available through State 
sources or family plans obtained through non-objecting employers, the 
Departments have determined that the expanded exemptions rather than 
accommodations are the appropriate response to the substantial burden 
that the Mandate has placed upon the religious exercise of many 
religious employers.

III. Provisions of the Interim Final Rules With Comment Period

    The Departments are issuing these interim final rules in light of 
the full history of relevant rulemaking (including prior interim final 
rules), public comments, and litigation throughout the Federal court 
system. The interim final rules seek to resolve this matter and the 
long-running litigation with respect to religious

[[Page 47808]]

objections by extending the exemption under the HRSA Guidelines to 
encompass entities, and individuals, with sincerely held religious 
beliefs objecting to contraceptive or sterilization coverage, and by 
making the accommodation process optional for eligible organizations.
    The Departments acknowledge that the foregoing analysis represents 
a change from the policies and interpretations we previously adopted 
with respect to the Mandate and the governmental interests that 
underlie the Mandate. These changes in policy are within the 
Departments' authority. As the Supreme Court has acknowledged, 
``[a]gencies are free to change their existing policies as long as they 
provide a reasoned explanation for the change.'' Encino Motorcars, LLC 
v. Navarro, 136 S. Ct. 2117, 2125 (2016). This ``reasoned analysis'' 
requirement does not demand that an agency ``demonstrate to a court's 
satisfaction that the reasons for the new policy are better than the 
reasons for the old one; it suffices that the new policy is permissible 
under the statute, that there are good reasons for it, and that the 
agency believes it to be better, which the conscious change of course 
adequately indicates''. United Student Aid Funds, Inc. v. King, 200 F. 
Supp. 3d 163, 169-70 (D.D.C. 2016) (citing FCC v. Fox Television 
Stations, Inc., 556 U.S. 502, 515 (2009)); also, see New Edge Network, 
Inc. v. FCC, 461 F.3d 1105, 1112-13 (9th Cir. 2006) (rejecting an 
argument that ``an agency changing its course by rescinding a rule is 
obligated to supply a reasoned analysis for the change beyond that 
which may be required when an agency does not act in the first 
instance'').
    Here, for all of the reasons discussed above, the Departments have 
determined that the Government's interest in the application of 
contraceptive coverage requirements in this specific context to the 
plans of certain entities and individuals does not outweigh the 
sincerely held religious objections of those entities and individuals 
based on the analyses set forth above. Thus, these interim final rules 
amend the Departments' July 2015 final regulations to expand the 
exemption to include additional entities and persons that object based 
on sincerely held religious beliefs. These rules leave in place HRSA's 
discretion to continue to require contraceptive and sterilization 
coverage where no such objection exists, and to the extent that section 
2713 of the PHS Act applies. These interim final rules also maintain 
the existence of an accommodation process, but consistent with our 
expansion of the exemption, we make the process optional for eligible 
organizations. HRSA is simultaneously updating its Guidelines to 
reflect the requirements of these interim final rules.\53\
---------------------------------------------------------------------------

    \53\ See https://www.hrsa.gov/womensguidelines/ and https://www.hrsa.gov/womensguidelines2016/index.html.
---------------------------------------------------------------------------

A. Regulatory Restatements of Section 2713(a) and (a)(4) of the PHS Act

    These interim final rules modify the restatements of the 
requirements of section 2713(a) and (a)(4) of the PHS Act, contained in 
26 CFR 54.9815-2713(a)(1) introductory text and (a)(1)(iv), 29 CFR 
2590.715-2713(a)(1) introductory text and (a)(1)(iv), and 45 CFR 
147.130(a)(1) introductory text and (a)(1)(iv), so that they conform to 
the statutory text of section 2713 of the PHS Act.

B. Prefatory Language of the Exemption in 45 CFR 147.132

    These interim final rules move the religious exemption from 45 CFR 
147.131 to a new Sec.  147.132 and expand it as follows. In the 
prefatory language of Sec.  147.132, these interim final rules specify 
that not only are certain entities ``exempt,'' but the Guidelines shall 
not support or provide for an imposition of the contraceptive coverage 
requirement to such entities. This is an acknowledgement that section 
2713(a)(4) of the PHS Act requires women's preventive services coverage 
only ``as provided for in comprehensive guidelines supported by the 
Health Resources and Services Administration.'' To the extent the HRSA 
Guidelines do not provide for or support the application of such 
coverage to exempt entities, the Affordable Care Act does not require 
the coverage. Section 147.132 not only describes the exemption of 
certain entities and plans, but does so by specifying that the HRSA 
Guidelines do not provide for, or support the application of, such 
coverage to exempt entities and plans.

C. General Scope of Exemption for Objecting Entities

    In the new 45 CFR 147.132 as created by these interim final rules, 
these rules expand the exemption that was previously located in Sec.  
147.131(a). With respect to employers that sponsor group health plans, 
the new language of Sec.  147.132(a)(1) introductory text and (a)(1)(i) 
provides exemptions for employers that object to coverage of all or a 
subset of contraceptives or sterilization and related patient education 
and counseling based on sincerely held religious beliefs.
    For avoidance of doubt, the Departments wish to make clear that the 
expanded exemption created in Sec.  147.132(a) applies to several 
distinct entities involved in the provision of coverage to the 
objecting employer's employees. This explanation is consistent with how 
prior rules have worked by means of similar language. Section 
147.132(a)(1) introductory text and (a)(1)(i), by specifying that ``[a] 
group health plan and health insurance coverage provided in connection 
with a group health plan'' is exempt ``to the extent the plan sponsor 
objects as specified in paragraph (a)(2),'' exempt the group health 
plans the sponsors of which object, and exempt their health insurance 
issuers from providing the coverage in those plans (whether or not the 
issuers have their own objections). Consequently, with respect to 
Guidelines issued under Sec.  147.130(a)(1)(iv), or the parallel 
provisions in 26 CFR 54.9815-2713(a)(1)(iv) and 29 CFR 2590.715-
2713(a)(1)(iv), the plan sponsor, issuer, and plan covered in the 
exemption of that paragraph would face no penalty as a result of 
omitting contraceptive coverage from the benefits of the plan 
participants and beneficiaries.
    Consistent with the restated exemption, exempt entities will not be 
required to comply with a self-certification process. Although exempt 
entities do not need to file notices or certifications of their 
exemption, and these interim final rules do not impose any new notice 
requirements on them, existing ERISA rules governing group health plans 
require that, with respect to plans subject to ERISA, a plan document 
must include a comprehensive summary of the benefits covered by the 
plan and a statement of the conditions for eligibility to receive 
benefits. Under ERISA, the plan document provides what benefits are 
provided to participants and beneficiaries under the plan and, 
therefore, if an objecting employer would like to exclude all or a 
subset of contraceptive services, it must ensure that the exclusion is 
clear in the plan document. Moreover, if there is a reduction in a 
covered service or benefit, the plan has to disclose that change to 
plan participants.\54\ Thus, where an exemption applies and all or a 
subset of contraceptive services are omitted from a plan's coverage,

[[Page 47809]]

otherwise applicable ERISA disclosures must reflect the omission of 
coverage in ERISA plans. These existing disclosure requirements serve 
to help provide notice to participants and beneficiaries of what ERISA 
plans do and do not cover. The Departments invite public comment on 
whether exempt entities, or others, would find value either in being 
able to maintain or submit a specific form of certification to claim 
their exemption, or in otherwise receiving guidance on a way to 
document their exemption.
---------------------------------------------------------------------------

    \54\ See, for example, 29 U.S.C. 1022, 1024(b), 29 CFR 2520.102-
2, 2520.102-3, & 2520.104b-3(d), and 29 CFR 2590.715-2715. Also, see 
45 CFR 147.200 (requiring disclosure of the ``exceptions, 
reductions, and limitations of the coverage,'' including group 
health plans and group & individual issuers).
---------------------------------------------------------------------------

    The exemptions in Sec.  147.132(a) apply ``to the extent'' of the 
objecting entities' sincerely held religious beliefs. Thus, entities 
that hold a requisite objection to covering some, but not all, 
contraceptive items would be exempt with respect to the items to which 
they object, but not with respect to the items to which they do not 
object. Likewise, the requisite objection of a plan sponsor or 
institution of higher education in Sec.  147.132(a)(1)(i) and (ii) 
exempts its group health plan, health insurance coverage offered by a 
health insurance issuer in connection with such plan, and its issuer in 
its offering of such coverage, but that exemption does not extend to 
coverage provided by that issuer to other group health plans where the 
plan sponsor has no qualifying objection. The objection of a health 
insurance issuer in Sec.  147.132(a)(1)(iii) similarly operates only to 
the extent of its objection, and as otherwise limited as described 
below.

D. Exemption of Employers and Institutions of Higher Education

    The scope of the exemption is expanded for non-governmental plan 
sponsors and certain entities that arrange health coverage under these 
interim final rules. The Departments have consistently taken the 
position that section 2713(a)(4) of the PHS Act grants HRSA authority 
to issue Guidelines that provide for and support exemptions from a 
contraceptive coverage requirement. Since the beginning of rulemaking 
concerning the Mandate, HRSA and the Departments have repeatedly 
exercised their discretion to create and modify various exemptions 
within the Guidelines.\55\
---------------------------------------------------------------------------

    \55\ ``The fact that the agency has adopted different 
definitions in different contexts adds force to the argument that 
the definition itself is flexible, particularly since Congress has 
never indicated any disapproval of a flexible reading of the 
statute.'' Chevron, U.S.A., Inc. v. Natural Resources Defense 
Council, Inc., 467 U.S. 837, 863-64 (1984).
---------------------------------------------------------------------------

    The Departments believe the approach of these interim final rules 
better aligns our implementation of section 2713(a)(4) of the PHS Act 
with Congress' intent in the Affordable Care Act and throughout other 
Federal health care laws. As discussed above, many Federal health care 
laws and regulations provide exemptions for objections based on 
religious beliefs, and RFRA applies to the Affordable Care Act. 
Expanding the exemption removes religious obstacles that entities and 
certain individuals may face when they otherwise wish to participate in 
the health care market. This advances the Affordable Care Acts goal of 
expanding health coverage among entities and individuals that might 
otherwise be reluctant to participate. These rules also leave in place 
many Federal programs that subsidize contraceptives for women who are 
most at risk of unintended pregnancy and who may have more limited 
access to contraceptives.\56\ These interim final rules achieve greater 
uniformity and simplicity in the regulation of health insurance by 
expanding the exemptions to include entities that object to the Mandate 
based on their sincerely held religious beliefs.
---------------------------------------------------------------------------

    \56\ See, for example, Family Planning grants in 42 U.S.C. 300, 
et seq.; the Teenage Pregnancy Prevention Program, Public Law 112-74 
(125 Stat 786, 1080); the Healthy Start Program, 42 U.S.C. 254c-8; 
the Maternal, Infant, and Early Childhood Home Visiting Program, 42 
U.S.C. 711; Maternal and Child Health Block Grants, 42 U.S.C. 703; 
42 U.S.C. 247b-12; Title XIX of the Social Security Act, 42 U.S.C. 
1396, et seq.; the Indian Health Service, 25 U.S.C. 13, 42 U.S.C. 
2001(a), & 25 U.S.C. 1601, et seq.; Health center grants, 42 U.S.C. 
254b(e), (g), (h), & (i); the NIH Clinical Center, 42 U.S.C. 248; 
and the Personal Responsibility Education Program, 42 U.S.C. 713.
---------------------------------------------------------------------------

    The Departments further conclude that it would be inadequate to 
merely attempt to amend the accommodation process instead of expand the 
exemption. The Departments have stated in our regulations and court 
briefings that the existing accommodation with respect to self-insured 
plans requires contraceptive coverage as part of the same plan as the 
coverage provided by the employer, and operates in a way ``seamless'' 
to those plans. As a result, in significant respects, the accommodation 
process does not actually accommodate the objections of many entities. 
The Departments have engaged in an effort to attempt to identify an 
accommodation that would eliminate the plaintiffs' religious 
objections, including seeking public comment through an RFI, but we 
stated in January 2017 that we were unable to develop such an approach 
at that time.
1. Plan Sponsors Generally
    The expanded exemptions in these interim final rules cover any kind 
of non-governmental employer plan sponsor with the requisite objections 
but, for the sake of clarity, they include an illustrative, non-
exhaustive list of employers whose objections qualify the plans they 
sponsor for an exemption.
    Under these interim final rules, the Departments do not limit the 
Guidelines exemption with reference to nonprofit status or to sections 
6033(a)(3)(A)(i) or (iii) of the Code, as previous rules have done. A 
significant majority of States either impose no contraceptive coverage 
requirement or offer broader exemptions than the exemption contained in 
the July 2015 final regulations.\57\ Although the practice of States is 
by no means a limit on the discretion delegated to HRSA by the 
Affordable Care Act, nor a statement about what the Federal Government 
may do consistent with RFRA or other limitations in federal law, such 
State practice can be informative as to the viability of broad 
protections for religious liberty. In this case, such practice supports 
the Departments' decision to expand the federal exemption, bringing the 
Federal Government's practice into greater alignment with the practices 
of the majority of the States.
---------------------------------------------------------------------------

    \57\ See Guttmacher Institute, ``Insurance Coverage of 
Contraceptives'' available at https://www.guttmacher.org/state-policy/explore/insurance-coverage-contraceptives.
---------------------------------------------------------------------------

2. Section 147.132(a)(1)(i)(A)
    Despite not limiting the exemption to certain organizations 
referred to in section 6033(a)(3)(A)(i) or (iii) of the Code, the 
exemption in these rules includes such organizations. Section 
147.132(a)(1)(i)(A) specifies, as under the prior exemption, that the 
exemption covers ``a group health plan established or maintained by . . 
. [a] church, the integrated auxiliary of a church, a convention or 
association of churches, or a religious order.'' In the preamble to 
rules setting forth the prior exemption at Sec.  147.132(a), the 
Departments interpreted this same language used in those rules by 
declaring that ``[t]he final regulations continue to provide that the 
availability of the exemption or accommodation be determined on an 
employer by employer basis, which the Departments continue to believe 
best balances the interests of religious employers and eligible 
organizations and those of employees and their dependents.'' (78 FR 
39886). Therefore, under the prior exemption, if an employer 
participated in a house of worship's plan--perhaps because it was 
affiliated with a house of worship--but was not an integrated auxiliary 
or a house of worship itself, that employer was not considered to be 
covered by the

[[Page 47810]]

exemption, even though it was, in the ordinary meaning of the text of 
the prior regulation, participating in a ``plan established or 
maintained by a [house of worship].''
    Under these interim final rules, however, the Departments intend 
that, when this regulation text exempts a plan ``established or 
maintained by'' a house of worship or integrated auxiliary, such 
exemption will no longer ``be determined on an employer by employer 
basis,'' but will be determined on a plan basis--that is, by whether 
the plan is a ``plan established or maintained by'' a house of worship 
or integrated auxiliary. This interpretation better conforms to the 
text of the regulation setting forth the exemption--in both the prior 
regulation and in the text set forth in these interim final rules. It 
also offers appropriate respect to houses of worship and their 
integrated auxiliaries not only in their internal employment practices 
but in their choice of organizational form and/or in their activity of 
establishing or maintaining health plans for employees of associated 
employers that do not meet the threshold of being integrated 
auxiliaries. Moreover, under this interpretation, houses of worship 
would not be faced with the potential prospect of services to which 
they have a religious objection being covered for employees of an 
associated employer participating in a plan they have established and 
maintain.
    The Departments do not believe there is a sufficient factual basis 
to exclude from this part of the exemption entities that are so closely 
associated with a house of worship or integrated auxiliary that they 
are permitted participation in its health plan, but are not themselves 
integrated auxiliaries. Additionally, this interpretation is not 
inconsistent with the operation of the accommodation under the prior 
rule, to the extent that, in practice and as discussed elsewhere 
herein, it does not force contraceptive coverage to be provided on 
behalf of the plan participants of many religious organizations in a 
self-insured church plan exempt from ERISA--which are exempt in part 
because the plans are established and maintained by a church. (Section 
3(33)(A) of ERISA) In several lawsuits challenging the Mandate, the 
Departments took the position that some plans established and 
maintained by houses of worship, but that included entities that were 
not integrated auxiliaries, were church plans under section 3(33) of 
ERISA and, thus, the Government ``has no authority to require the 
plaintiffs' TPAs to provide contraceptive coverage at this time.'' 
Roman Catholic Archdiocese of N.Y. v. Sebelius, 987 F. Supp. 2d 232, 
242 (E.D.N.Y. 2013). Therefore the Departments believe it is most 
appropriate to use a plan basis, not an employer by employer basis, to 
determine the scope of an exemption for a group health plan established 
or maintained by a house of worship or integrated auxiliary.
3. Section 147.132(a)(1)(i)(B)
    Section 147.132(a)(1)(i)(B) of the rules specifies that the 
exemption includes the plans of plan sponsors that are nonprofit 
organizations.
4. Section 147.132(a)(1)(i)(C)
    Under Sec.  147.132(a)(1)(i)(C), the rules extend the exemption to 
the plans of closely held for-profit entities. This is consistent with 
the Supreme Court's ruling in Hobby Lobby, which declared that a 
corporate entity is capable of possessing and pursuing non-pecuniary 
goals (in Hobby Lobby, religion), regardless of whether the entity 
operates as a nonprofit organization, and rejecting the Departments' 
argument to the contrary. (134 S. Ct. 2768-75) Some reports and 
industry experts have indicated that not many for-profit entities 
beyond those that had originally brought suit have sought relief from 
the Mandate after Hobby Lobby.\58\
---------------------------------------------------------------------------

    \58\ See Jennifer Haberkorn, ``Two years later, few Hobby Lobby 
copycats emerge,'' Politico (Oct. 11, 2016), available at http://www.politico.com/story/2016/10/obamacare-birth-control-mandate-employers-229627.
---------------------------------------------------------------------------

5. Section 147.132(a)(1)(i)(D)
    Under Sec.  147.132(a)(1)(i)(D), the rules extend the exemption to 
the plans of for-profit entities that are not closely held. The July 
2015 final regulations extended the accommodation to for-profit 
entities only if they are closely held, by positively defining what 
constitutes a closely held entity. The Departments implicitly 
recognized the difficulty of providing an affirmative definition of 
closely held entities in the July 2015 final regulations when we 
adopted a definition that included entities that are merely 
``substantially similar'' to certain specified parameters, and we 
allowed entities that were not sure if they met the definition to 
inquire with HHS; HHS was permitted to decline to answer the inquiry, 
at which time the entity would be deemed to qualify as an eligible 
organization. The exemptions in these interim final rules do not need 
to address this difficulty because they include both for-profit 
entities that are closely held and for-profit entities that are not 
closely held.\59\ The mechanisms for determining whether a company has 
adopted and holds such principles or views is a matter of well-
established State law with respect to corporate decision-making,\60\ 
and the Departments expect that application of such laws would cabin 
the scope of this exemption.
---------------------------------------------------------------------------

    \59\ In the companion interim final rules published elsewhere in 
this Federal Register, the Departments provide an exemption on an 
interim final basis to closely held entities by using a negative 
definition: entities that do not have publicly traded ownership 
interests as defined by certain securities required to be registered 
under section 12 of the Securities Exchange Act of 1934. Although 
this is a more workable definition than set forth in our previous 
rules, we have determined that it is appropriate to offer the 
expanded religious exemptions to certain entities whether or not 
they have publicly traded ownership interests.
    \60\ Although the Departments do not prescribe any form or 
notification, they would expect that such principles or views would 
have been adopted and documented in accordance with the laws of the 
jurisdiction under which they are incorporated or organized.
---------------------------------------------------------------------------

    In including entities in the exemption that are not closely held, 
these interim final rules provide for the possibility that some 
publicly traded entities may use the exemption. Even though the Supreme 
Court did not extend its holding in Hobby Lobby to publicly traded 
corporations (the matter could be resolved without deciding that 
question), the Court did instruct that RFRA applies to corporations 
because they are ``persons'' as that term is defined in 1 U.S.C. 1. 
Given that the definition under 1 U.S.C. 1 applies to any corporation, 
the Departments consider it appropriate to extend the exemption set 
forth in these interim final rules to for-profit corporations whether 
or not they are closely held. The Departments are generally aware that 
in a country as large as America comprised of a supermajority of 
religious persons, some publicly traded entities might claim a 
religious character for their company, or that the majority of shares 
(or voting shares) of some publicly traded companies might be 
controlled by a small group of religiously devout persons so as to set 
forth such a religious character.\61\ The fact that such a company is 
religious does not mean that it will have an objection to contraceptive 
coverage, and there are many fewer publicly traded companies than there 
are closely held ones. But our experience with closely held companies 
is that some, albeit a small minority, do have religious objections to 
contraceptive coverage. Thus we consider it possible, though very 
unlikely, that a religious publicly

[[Page 47811]]

traded company might have objections to contraceptive coverage. At the 
same time, we are not aware of any publicly traded entities that 
challenged the Mandate specifically either publicly or in court. The 
Departments agree with the Supreme Court that it is improbable that 
many publicly traded companies with numerous ``unrelated shareholders--
including institutional investors with their own set of stakeholders--
would agree to run a corporation under the same religious beliefs'' and 
thereby qualify for the exemption. (134 S. Ct. at 2774)
---------------------------------------------------------------------------

    \61\ See, e.g., Nasdaq.com, ``4 Publicly Traded Religious 
Companies if You're Looking to Invest in Faith'' (Feb. 7, 2014), 
available at http://www.nasdaq.com/article/4-publicly-traded-religious-companies-if-youre-looking-to-invest-in-faith-cm324665.
---------------------------------------------------------------------------

6. Section 147.132(a)(1)(i)(E)
    Under Sec.  147.132(a)(1)(i)(E), the rules extend the exemption to 
the plans of any other non-governmental employer. The plans of 
governmental employers are not covered by the plan sponsor exemption of 
Sec.  147.132(a)(1)(i). The Departments are not aware of reasons why it 
would be appropriate or necessary to offer religious exemptions to 
governmental employer plan sponsors in the United States with respect 
to the contraceptive Mandate. But, as discussed below, governmental 
employers are permitted to respect an individual's objection under 
Sec.  147.132(b) and thus to provide health insurance coverage without 
the objected-to contraceptive coverage to such individual. Where that 
exemption is operative, the Guidelines may not be construed to prevent 
a willing governmental plan sponsor of a group health plan from 
offering a separate benefit package option, or a separate policy, 
certificate or contract of insurance, to any individual who objects to 
coverage or payments for some or all contraceptive services based on 
sincerely held religious beliefs.
    By the general extension of the exemption to the plans of plan 
sponsors in Sec.  147.132(a)(1)(i), these interim final rules also 
exempt group health plans sponsored by an entity other than an employer 
(for example, a union) that objects based on sincerely held religious 
beliefs to coverage of contraceptives or sterilization.
7. Section 147.132(a)(1)(ii)
    As in the previous rules, the plans of institutions of higher 
education that arrange student health insurance coverage will continue 
to be treated similarly to the way in which the plans of employers are 
treated, but for the purposes of such plans being exempt or electing 
the optional accommodation, rather than merely being eligible for the 
accommodation as in the previous rule. These interim final rules 
specify, in Sec.  147.132(a)(1)(ii), that the exemption is extended, in 
the case of institutions of higher education (as defined in 20 U.S.C. 
1002), to their arrangement of student health insurance coverage, in a 
manner comparable to the applicability of the exemption for group 
health insurance coverage provided in connection with a group health 
plan established or maintained by a plan sponsor. As mentioned above, 
because the Affordable Care Act does not require institutions of higher 
education to arrange student coverage, some institutions of higher 
education that object to the Mandate appear to have chosen to stop 
arranging student plans rather than comply with the Mandate or use the 
accommodation. Extending the exemption in these interim final rules may 
remove an obstacle to such entities deciding to offer student plans, 
thereby giving students another health insurance option.

E. Exemption for Issuers

    These interim final rules extend the exemption, in Sec.  
147.132(a)(1)(iii), to health insurance issuers offering group or 
individual health insurance coverage that sincerely hold their own 
religious objections to providing coverage for contraceptive services.
    The Departments are not currently aware of health insurance issuers 
that possess their own religious objections to offering contraceptive 
coverage. Nevertheless, many Federal health care conscience laws and 
regulations protect issuers or plans specifically. For example, 42 
U.S.C. 1395w-22(j)(3)(B) and 1396u-2(b)(3) protect plans or managed 
care organizations in Medicaid or Medicare Advantage. The Weldon 
Amendment protects HMOs, health insurance plans, and any other health 
care organizations are protected from being required to provide 
coverage or pay for abortions. See, for example, Consolidated 
Appropriations Act of 2017, Public Law 115-31, Div. H, Title V, Sec. 
507(d). Congress also declared this year that ``it is the intent of 
Congress'' to include a ``conscience clause'' which provides exceptions 
for religious beliefs if the District of Columbia requires ``the 
provision of contraceptive coverage by health insurance plans.'' See 
Id. at Div. C, Title VIII, Sec. 808. In light of the clearly expressed 
intent of Congress to protect religious liberty, particularly in 
certain health care contexts, along with the specific efforts to 
protect issuers, the Departments have concluded that an exemption for 
issuers is appropriate.
    As discussed above, where the exemption for plan sponsors or 
institutions of higher education applies, issuers are exempt under 
those sections with respect to providing coverage in those plans. The 
issuer exemption in Sec.  147.132(a)(1)(iii) adds to that protection, 
but the additional protection operates in a different way than the plan 
sponsor exemption operates. As set forth in these interim final rules, 
the only plan sponsors, or in the case of individual insurance 
coverage, individuals, who are eligible to purchase or enroll in health 
insurance coverage offered by an exempt issuer that does not cover some 
or all contraceptive services are plan sponsors or individuals who 
themselves object and are otherwise exempt based on their objection. 
Thus, the issuer exemption specifies that where a health insurance 
issuer providing group health insurance coverage is exempt under 
paragraph (a)(1)(iii), the plan remains subject to any requirement to 
provide coverage for contraceptive services under Guidelines issued 
under 42 CFR 147.130(a)(1)(iv) unless the plan is otherwise exempt from 
that requirement. Accordingly, the only plan sponsors, or in the case 
of individual insurance coverage, individuals, who are eligible to 
purchase or enroll in health insurance coverage offered by an issuer 
that is exempt under this paragraph (a)(1)(iii) that does not include 
coverage for some or all contraceptive services are plan sponsors or 
individuals who themselves object and are exempt. Issuers that hold 
religious objections should identify to plan sponsors the lack of 
contraceptive coverage in any health insurance coverage being offered 
that is based on the issuer's exemption, and communicate the group 
health plan's independent obligation to provide contraceptive coverage, 
unless the group health plan itself is exempt under regulations 
governing the Mandate.
    In this way, the issuer exemption serves to protect objecting 
issuers both from being asked or required to issue policies that cover 
contraception in violation of the issuers' sincerely held religious 
beliefs, and from being asked or required to issue policies that omit 
contraceptive coverage to non-exempt entities or individuals, thus 
subjecting the issuers to potential liability if those plans are not 
exempt from the Guidelines. At the same time, the issuer exemption will 
not serve to remove contraceptive coverage obligations from any plan or 
plan sponsor that is not also exempt, nor will it prevent other issuers 
from being required to provide contraceptive coverage in individual 
insurance coverage. Permitting issuers to object to offering 
contraceptive coverage based on sincerely held religious beliefs will 
allow issuers to

[[Page 47812]]

continue to offer coverage to plan sponsors and individuals, without 
subjecting them to liability under section 2713(a)(4) of the PHS Act or 
related provisions for their failure to provide contraceptive coverage.
    The issuer exemption does not specifically include third party 
administrators, although the optional accommodation process provided 
under these interim final rules specifies that third party 
administrators cannot be required to contract with an entity that 
invokes that process. Some religious third party administrators have 
brought suit in conjunction with suits brought by organizations 
enrolled in ERISA-exempt church plans. Such plans are now exempt under 
these interim final rules, and their third party administrators, as 
claims processors, are under no obligation under section 2713(a)(4) of 
the PHS Act to provide benefits for contraceptive services, as that 
section applies only to plans and issuers. In the case of ERISA-covered 
plans, plan administrators are obligated under ERISA to follow the plan 
terms, but it is the Departments' understanding that third party 
administrators are not typically designated as plan administrators 
under section 3(16) of ERISA and, therefore, would not normally act as 
plan administrators under section 3(16) of ERISA. Therefore, to the 
Departments' knowledge, it is only under the existing accommodation 
process that third party administrators are required to undertake any 
obligations to provide or arrange for contraceptive coverage to which 
they might object. These interim final rules make the accommodation 
process optional for employers and other plan sponsors, and specify 
that third party administrators that have their own objection to 
complying with the accommodation process may decline to enter into, or 
continue, contracts as third party administrators of such plans. For 
these reasons, these interim final rules do not otherwise exempt third 
party administrators. The Departments solicit public comment, however, 
on whether there are situations where there may be an additional need 
to provide distinct protections for third party administrators that may 
have religious beliefs implicated by the Mandate.

F. Scope of Objections Needed for the Objecting Entity Exemption

    Exemptions for objecting entities specify that they apply where the 
entities object as specified in Sec.  147.132(a)(2). That paragraph 
specifies that exemptions for objecting entities will apply to the 
extent that an entity described in Sec.  147.132(a)(1) objects to its 
establishing, maintaining, providing, offering, or arranging (as 
applicable) coverage, payments, or a plan that provides coverage or 
payments for some or all contraceptive services, based on its sincerely 
held religious beliefs.

G. Individual Exemption

    These interim final rules include a special rule pertaining to 
individuals (referred to here as the ``individual exemption''). Section 
147.132(b) provides that nothing in Sec.  147.130(a)(1)(iv), 26 CFR 
54.9815-2713(a) (1)(iv), or 29 CFR 2590.715-2713(a)(1)(iv), may be 
construed to prevent a willing plan sponsor of a group health plan or a 
willing health insurance issuer offering group or individual health 
insurance coverage, from offering a separate benefit package option, or 
a separate policy, certificate, or contract of insurance, to any 
individual who objects to coverage or payments for some or all 
contraceptive services based on the individual's sincerely held 
religious beliefs. The individual exemption extends to the coverage 
unit in which the plan participant, or subscriber in the individual 
market, is enrolled (for instance, to family coverage covering the 
participant and his or her beneficiaries enrolled under the plan), but 
does not relieve the plan's or issuer's obligation to comply with the 
Mandate with respect to the group health plan at large or, as 
applicable, to any other individual policies the issuer offers.
    This individual exemption allows plan sponsors and issuers that do 
not specifically object to contraceptive coverage to offer religiously 
acceptable coverage to their participants or subscribers who do object, 
while offering coverage that includes contraception to participants or 
subscribers who do not object. This individual exemption can apply with 
respect to individuals in plans sponsored by private employers or 
governmental employers. For example, in one case brought against the 
Departments, the State of Missouri enacted a law under which the State 
is not permitted to discriminate against insurance issuers that offer 
health plans without coverage for contraception based on employees' 
religious beliefs, or against the individual employees who accept such 
offers. See Wieland, 196 F. Supp. 3d at 1015-16 (quoting Mo. Rev. Stat. 
191.724). Under the individual exemption of these interim final rules, 
employers sponsoring governmental plans would be free to honor the 
objections of individual employees by offering them plans that omit 
contraceptive coverage, even if those governmental entities do not 
object to offering contraceptive coverage in general.
    This ``individual exemption'' cannot be used to force a plan (or 
its sponsor) or an issuer to provide coverage omitting contraception, 
or, with respect to health insurance coverage, to prevent the 
application of State law that requires coverage of such contraceptives 
or sterilization. Nor can the individual exemption be construed to 
require the guaranteed availability of coverage omitting contraception 
to a plan sponsor or individual who does not have a sincerely held 
religious objection. This individual exemption is limited to the 
requirement to provide contraceptive coverage under section 2713(a)(4) 
of the PHS Act, and does not affect any other Federal or State law 
governing the plan or coverage. Thus, if there are other applicable 
laws or plan terms governing the benefits, these interim final rules do 
not affect such other laws or terms.
    The Departments believe the individual exemption will help to meet 
the Affordable Care Act's goal of increasing health coverage because it 
will reduce the incidence of certain individuals choosing to forego 
health coverage because the only coverage available would violate their 
sincerely held religious beliefs.\62\ At the same time, this individual 
exemption ``does not undermine the governmental interests furthered by 
the contraceptive coverage requirement,'' \63\ because, when the 
exemption is applicable, the individual does not want the coverage, and 
therefore would not use the objectionable items even if they were 
covered.
---------------------------------------------------------------------------

    \62\ See, for example, Wieland, 196 F. Supp. 3d at 1017, and 
March for Life, 128 F. Supp. 3d at 130, where the courts noted that 
the individual employee plaintiffs indicated that they viewed the 
Mandate as pressuring them to ``forgo health insurance altogether.''
    \63\ 78 FR 39874.
---------------------------------------------------------------------------

H. Optional Accommodation

    Despite expanding the scope of the exemption, these rules also keep 
the accommodation process, but revise it so as to make it optional. In 
this way, objecting employers are no longer required to choose between 
direct compliance or compliance through the accommodation. These rules 
maintain the location of the accommodation process in the Code of 
Federal Regulations at 45 CFR 147.131, 26 CFR 54.9815-2713A, and 29 CFR 
2590.715-2713A. These rules, by virtue of expanding the plan sponsor 
exemption beyond houses of worship and integrated auxiliaries that were

[[Page 47813]]

previously exempt, and beyond religious nonprofit groups that were 
previously accommodated, and by defining eligible organizations for the 
accommodation with reference to those covered by the exemption, 
likewise expand the kinds of entities that may use the optional 
accommodation. This includes plan sponsors with sincerely held 
religious beliefs for the reasons described above. Consequently, under 
these interim final rules, objecting employers may make use of the 
exemption, or may choose to pursue the optional accommodation process. 
If an eligible organization pursues the optional accommodation process 
through the EBSA Form 700 or other specified notice to HHS, it 
voluntarily shifts an obligation to provide separate but seamless 
contraceptive coverage to its issuer or third party administrator.
    The fees adjustment process for qualifying health issuers or third 
party administrators pursuant to 45 CFR 156.50 is not modified, and (as 
specified therein) requires for its applicability that an exception 
under OMB Circular No. A-25R be in effect as the Secretary of the 
Department of Health and Human Services requests.
    If an eligible organization wishes to revoke its use of the 
accommodation, it can do so under these interim final rules and operate 
under its exempt status. As part of its revocation, the issuer or third 
party administrator of the eligible organization must provide 
participants and beneficiaries written notice of such revocation as 
specified in guidance issued by the Secretary of the Department of 
Health and Human Services. This revocation process applies both 
prospectively to eligible organizations who decide at a later date to 
avail themselves of the optional accommodation and then decide to 
revoke that accommodation, as well as to organizations that were 
included in the accommodation prior to the effective date of these 
interim final rules either by their submission of an EBSA Form 700 or 
notification, or by some other means under which their third party 
administrator or issuer was notified by DOL or HHS that the 
accommodation applies. Consistent with other applicable laws, the 
issuer or third party administrator of an eligible organization must 
promptly notify plan participants and beneficiaries of the change of 
status to the extent such participants and beneficiaries are currently 
being offered contraceptive coverage at the time the accommodated 
organization invokes its exemption. If contraceptive coverage is being 
offered by an issuer or third party administrator through the 
accommodation process, the revocation will be effective on the 1st day 
of the 1st plan year that begins on or after 30 days after the date of 
the revocation (to allow for the provision of notice to plan 
participants in cases where contraceptive benefits will no longer be 
provided). Alternatively, an eligible organization may give 60-days 
notice pursuant to section 2715(d)(4) of the PHS Act,\64\ if 
applicable, to revoke its use of the accommodation process.
---------------------------------------------------------------------------

    \64\ See also 26 CFR 54.9815-2715(b); 29 CFR 2590.715-2715(b); 
45 CFR 147.200(b).
---------------------------------------------------------------------------

    The Departments have eliminated the provision in the previous 
accommodation under which an issuer is deemed to have complied with the 
Mandate where the issuer relied reasonably and in good faith on a 
representation by an eligible organization as to its eligibility for 
the accommodation, even if that representation was later determined to 
be incorrect. Because any organization with a sincerely held religious 
objection to contraceptive coverage is now eligible for the optional 
accommodation under these interim final rules and is also exempt, the 
Departments believe there is minimal opportunity for mistake or 
misrepresentation by the organization, and the reliance provision is no 
longer necessary.

I. Definition of Contraceptive Services for the Purpose of These Rules

    The interim final rules specify that when the rules refer to 
``contraceptive'' services, benefits, or coverage, such terms include 
contraceptive or sterilization items, services, or related patient 
education or counseling, to the extent specified for purposes of Sec.  
147.130(a)(1)(iv). This was the case under the previous rules, as 
expressed in the preamble text of the various iterations of the 
regulations, but the Departments wish to make the scope clear by 
specifying it in the regulatory text.

J. Conclusion

    The Departments believe that the Guidelines and the exemptions 
expanded herein will advance the limited purposes for which Congress 
imposed section 2713 of the PHS Act, while acting consistently with 
Congress' well-established record of allowing for religious exemptions 
with respect to especially sensitive health care and health insurance 
requirements. These interim final rules leave fully in place over a 
dozen Federal programs that provide, or subsidize, contraceptives for 
women, including for low income women based on financial need. These 
interim final rules also maintain HRSA's discretion to decide whether 
to continue to require contraceptive coverage under the Guidelines (in 
plans where Congress applied section 2713 of the PHS Act) if no 
objection exists. The Departments believe this array of programs and 
requirements better serves the interest of providing contraceptive 
coverage while protecting the conscience rights of entities that have 
sincerely held religious objections to some or all contraceptive or 
sterilization services.
    The Departments request and encourage public comments on all 
matters addressed in these interim final rules.

V. Interim Final Rules, Request for Comments and Waiver of Delay of 
Effective Date

    Section 9833 of the Code, section 734 of ERISA, and section 2792 of 
the PHS Act authorize the Secretaries of the Treasury, Labor, and HHS 
(collectively, the Secretaries) to promulgate any interim final rules 
that they determine are appropriate to carry out the provisions of 
chapter 100 of the Code, part 7 of subtitle B of title I of ERISA, and 
part A of title XXVII of the PHS Act, which include sections 2701 
through 2728 of the PHS Act and the incorporation of those sections 
into section 715 of ERISA and section 9815 of the Code. These interim 
final rules fall under those statutory authorized justifications, as 
did previous rules on this matter (75 FR 41726; 76 FR 46621; 79 FR 
51092).
    Section 553(b) of the Administrative Procedure Act (APA) requires 
notice and comment rulemaking, involving a notice of proposed 
rulemaking and a comment period prior to finalization of regulatory 
requirements--except when an agency, for good cause, finds that notice 
and public comment thereon are impracticable, unnecessary, or contrary 
to the public interest. These provisions of the APA do not apply here 
because of the specific authority granted to the Secretaries by section 
9833 of the Code, section 734 of ERISA, and section 2792 of the PHS 
Act.
    Even if these provisions of the APA applied, they would be 
satisfied: The Departments have determined that it would be 
impracticable and contrary to the public interest to delay putting 
these provisions in place until a full public notice-and-comment 
process is completed. As discussed earlier, the Departments have issued 
three interim final rules implementing this section of the PHS Act 
because of the immediate needs of covered entities and the weighty 
matters implicated by the HRSA Guidelines. As recently as December 20, 
2016, HRSA updated

[[Page 47814]]

those Guidelines without engaging in the regulatory process (because 
doing so is not a legal requirement), and announced that it plans to 
continue to update the Guidelines.
    Dozens of lawsuits over the Mandate have been pending for nearly 5 
years. The Supreme Court remanded several of those cases more than a 
year ago, stating that on remand ``[w]e anticipate that the Courts of 
Appeals will allow the parties sufficient time to resolve any 
outstanding issues between them''. Zubik, 136 S. Ct. at 1560. During 
that time, Courts of Appeals have been asking the parties in those 
cases to submit status reports every 30 through 90 days. Those status 
reports have informed the courts that the parties were in discussions, 
and about the RFI issued in late 2016 and its subsequent comment 
process and the FAQ the Departments issued indicating that we could not 
find a way at that time to amend the accommodation process so as to 
satisfy objecting eligible organizations while pursuing the 
Departments' policy goals. Since then, several courts have issued 
orders setting more pressing deadlines. For example, on March 10, 2017, 
the United States Court of Appeals for the Seventh Circuit ordered 
that, by May 1, 2017, ``the court expects to see either a report of an 
agreement to resolve the case or detailed reports on the parties' 
respective positions. In the event no agreement is reported on or 
before May 1, 2017, the court will plan to schedule oral argument on 
the merits of the case on short notice after that date''. The 
Departments submitted a status report but were unable to set forth 
their specific position because this interim final rule was not yet on 
public display. Instead, the Departments informed the Court that we 
``are now considering whether further administrative action would be 
appropriate''. In response, the court extended the deadline to June 1, 
2017, again declaring the court expected ``to see either a report of an 
agreement to resolve the case or detailed reports on the parties' 
respective positions''. The Departments were again unable to set forth 
their position in that status report, but were able to state that the 
``Departments of Health and Human Services, Labor, and the Treasury are 
engaged in rulemaking to reconsider the regulations at issue here,'' 
citing https://www.reginfo.gov/public/do/eoDetails?rrid=127381.
    As discussed above, the Departments have concluded that, in many 
instances, requiring certain objecting entities or individuals to 
choose between the Mandate, the accommodation, or penalties for 
noncomplaince has violated RFRA. Good cause exists to issue the 
expanded exemption in these interim final rules in order to cure such 
violations (whether among litigants or among similarly situated parties 
that have not litigated), to help settle or resolve cases, and to 
ensure, moving forward, that our regulations are consistent with any 
approach we have taken in resolving certain litigation matters.
    The Departments have also been subject to temporary injunctions 
protecting many religious nonprofit organizations from being subject to 
the accommodation process against their wishes, while many other 
organizations are fully exempt, have permanent court orders blocking 
the contraceptive coverage requirement, or are not subject to section 
2713 of the PHS Act and its enforcement due to Congress' limited 
application of that requirement. Good cause exists to change the 
Departments' previous rules to direct HRSA to bring its Guidelines in 
accord with the legal realities and remove the threat of a future 
violation of religious beliefs, including where such violations are 
contrary to Federal law.
    Other objecting entities similarly have not had the protection of 
court injunctions. This includes some nonprofit entities that have sued 
the Departments, but it also includes some organizations that do not 
have lawsuits pending against us. For example, many of the closely held 
for-profit companies that brought the array of lawsuits challenging the 
Mandate leading up to the decision in Hobby Lobby are not protected by 
injunctions from the current rules, including the requirement that they 
either fully comply with the Mandate or subject themselves to the 
accommodation. Continuing to apply the Mandate's regulatory burden on 
individuals and organizations with religious beliefs against it could 
serve as a deterrent for citizens who might consider forming new 
entities--nonprofit or for-profit--and to offering health insurance in 
employer-sponsored plans or plans arranged by institutions of higher 
education. Delaying the protection afforded by these interim final 
rules would be contrary to the public interest because it would serve 
to extend for many months the harm caused to all entities and 
individuals with religious objections to the Mandate. Good cause exists 
to provide immediate resolution to this myriad of situations rather 
than leaving them to continued uncertainty, inconsistency, and cost 
during litigation challenging the previous rules.
    These interim final rules provide a specific policy resolution that 
courts have been waiting to receive from the Departments for more than 
a year. If the Departments were to publish a notice of proposed 
rulemaking instead of these interim final rules, many more months could 
pass before the current Mandate is lifted from the entities receiving 
the expanded exemption, during which time those entities would be 
deprived of the relief clearly set forth in these interim final rules. 
In response to several of the previous rules on this issue--including 
three issued as interim final rules under the statutory authority cited 
above--the Departments received more than 100,000 public comments on 
multiple occasions. Those comments included extensive discussion about 
whether and by what extent to expand the exemption. Most recently, on 
July 26, 2016, the Departments issued a request for information (81 FR 
47741) and received over 54,000 public comments about different 
possible ways to resolve these issues. In connection with past 
regulations, the Departments have offered or expanded a temporary safe 
harbor allowing organizations that were not exempt from the HRSA 
Guidelines to operate out of compliance with the Guidelines. The 
Departments will fully consider comments submitted in response to these 
interim final rules, but believe that good cause exists to issue the 
rules on an interim final basis before the comments are submitted and 
reviewed.
    As the United States Court of Appeals for the D.C. Circuit stated 
with respect to an earlier interim final rule promulgated with respect 
to this issue in Priests for Life v. U.S. Department of Health and 
Human Services, 772 F.3d 229, 276 (D.C. Cir. 2014), vacated on other 
grounds, Zubik v. Burwell, 136 S. Ct. 1557 (2016), ``[S]everal reasons 
support HHS's decision not to engage in notice and comment here''. 
Among other things, the Court noted that ``the agency made a good cause 
finding in the rule it issued''; that ``the regulations the interim 
final rule modifies were recently enacted pursuant to notice and 
comment rulemaking, and presented virtually identical issues''; that 
``HHS will expose its interim rule to notice and comment before its 
permanent implementation''; and that ``delay in implementation of the 
rule would interfere with the prompt availability of contraceptive 
coverage and delay the implementation of the alternative opt-out for 
religious objectors''. Id. at 277.
    Delaying the availability of the expanded exemption would delay the 
ability of those organizations and individuals to avail themselves of 
the relief afforded by these interim final rules. Good cause is 
supported by

[[Page 47815]]

providing relief for entities and individuals for whom the Mandate 
operates in violation of their sincerely held religious beliefs, but 
who would have to experience that burden for many more months under the 
prior regulations if these rules are not issued on an interim final 
basis. Good cause is also supported by the effect of these interim 
final rules in bringing to a close the uncertainty caused by years of 
litigation and regulatory changes made under section 2713(a)(4) of the 
PHS Act. Issuing interim final rules with a comment period provides the 
public with an opportunity to comment on whether these regulations 
expanding the exemption should be made permanent or subject to 
modification without delaying the effective date of the regulations.
    Delaying the availability of the expanded exemption would also 
increase the costs of health insurance. As reflected in litigation 
pertaining to the Mandate, some entities are in grandfathered health 
plans that do not cover contraception. They wish to make changes to 
their health plans that will reduce the costs of insurance coverage for 
their beneficiaries or policyholders, but which would cause the plans 
to lose grandfathered status. They are refraining from making those 
changes--and therefore are continuing to incur and pass on higher 
insurance costs--to prevent the Mandate from applying to their plans in 
violation of their consciences. Issuing these rules on an interim final 
basis is necessary in order to help reduce the costs of health 
insurance for such entities and their plan participants.
    These interim final rules also set forth an optional accommodation 
process, and expand eligibility for that process to a broader category 
of entities. Delaying the availability of the optional accommodation 
process would delay the ability of organizations that do not now 
qualify for the accommodation, but wish to opt into it, to be able to 
do so and therefore to provide a mechanism for contraceptive coverage 
to be provided to their employees while the organization's religious 
objections are accommodated.
    For the foregoing reasons, the Departments have determined that it 
would be impracticable and contrary to the public interest to engage in 
full notice and comment rulemaking before putting these interim final 
rules into effect, and that it is in the public interest to promulgate 
interim final rules. For the same reasons, the Departments have 
determined, consistent with section 553(d) of the APA (5 U.S.C. 
553(d)), that there is good cause to make these interim final rules 
effective immediately upon filing at the Office of the Federal 
Register.

VI. Economic Impact and Paperwork Burden

    We have examined the impacts of the interim final rules as required 
by Executive Order 12866 on Regulatory Planning and Review (September 
30, 1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), 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), Executive Order 13132 on Federalism 
(August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2) and 
Executive Order 13771 on Reducing Regulation and Controlling Regulatory 
Costs (January 30, 2017).

A. Executive Orders 12866 and 13563--Department of HHS and Department 
of Labor

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, and public 
health and safety effects; distributive impacts; and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility.
    Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a 
regulation: (1) Having an annual effect on the economy of $100 million 
or more in any one year, or adversely and materially affecting a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local, or tribal governments or 
communities (also referred to as ``economically significant''); (2) 
creating a serious inconsistency or otherwise interfering with an 
action taken or planned by another agency; (3) materially altering the 
budgetary impacts of entitlement grants, user fees, or loan programs or 
the rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.
    A regulatory impact analysis must be prepared for major rules with 
economically significant effects ($100 million or more in any one 
year), and an ``economically significant'' regulatory action is subject 
to review by the Office of Management and Budget (OMB). As discussed 
below regarding anticipated effects of these rules and the Paperwork 
Reduction Act, these interim final rules are not likely to have 
economic impacts of $100 million or more in any 1 year, and therefore 
do not meet the definition of ``economically significant'' under 
Executive Order 12866. However, OMB has determined that the actions are 
significant within the meaning of section 3(f)(4) of the Executive 
Order. Therefore, OMB has reviewed these final regulations, and the 
Departments have provided the following assessment of their impact.
1. Need for Regulatory Action
    These interim final rules amend the Departments' July 2015 final 
regulations to expand the exemption from the requirement to provide 
coverage for contraceptives and sterilization, established under the 
HRSA Guidelines, promulgated under section 2713(a)(4) of the PHS Act, 
section 715(a)(1) of the ERISA, and section 9815(a)(1) of the Code, and 
to revise the accommodation process to make it optional for eligible 
organizations. The expanded exemption would apply to individuals and 
entities that have religious objections to some (or all) of the 
contraceptive and/or sterilization services that would be covered under 
the Guidelines. Such action is taken, among other reasons, to provide 
for participation in the health insurance market by certain entities or 
individuals free from penalties for violating sincerely held religious 
beliefs opposed to providing or receiving coverage of contraceptive 
services, and to resolve many of the lawsuits that have been filed 
against the Departments.
2. Anticipated Effects
    The Departments assess this interim final rule together with a 
companion interim final rule concerning moral but non-religious 
conscientious objections to contraception, published elsewhere in this 
Federal Register. Regarding entities that are extended an exemption, 
absent expansion of the exemption the Guidelines would require many of 
these entities and individuals to either: Pay for coverage of 
contraceptive services that they find religiously objectionable; submit 
self-certifications that would result in their issuer or third party 
administrator paying for such services for their employees, which some 
entities also believe entangles them in the provision of such 
objectionable coverage; or, pay tax penalties or be

[[Page 47816]]

subject to other adverse consequences for non-compliance with these 
requirements. These interim final rules remove certain associated 
burdens imposed on these entities and individuals--that is, by 
recognizing their religious objections and exempting them--on the basis 
of such objections--from the contraceptive and/or sterilization 
coverage requirement of the HRSA Guidelines and making the 
accommodation process optional for eligible organizations.
    To the extent that entities choose to revoke their accommodated 
status to make use of the expanded exemption immediately, a notice will 
need to be sent to enrollees (either by the entity or by the issuer or 
third party administrator) that their contraceptive coverage is 
changing, and guidance will reflect that such a notice requirement is 
imposed no more than is already required by preexisting rules that 
require notices to be sent to enrollees of changes to coverage during a 
plan year. If the entities wait until the start of their next plan year 
to change to exempt status, instead of doing so during a plan year, 
those entities generally will also be able to avoid sending any 
supplementary notices in addition to what they would otherwise normally 
send prior to the start of a new plan year. Additionally, these interim 
final rules provide such entities with an offsetting regulatory benefit 
by the exemption itself and its relief of burdens on their religious 
beliefs. As discussed below, assuming that more than half of entities 
that have been using the previous accommodation will seek immediate 
revocation of their accommodated status and notices will be sent to all 
their enrollees, the total estimated cost of sending those notices will 
be $51,990.
    The Departments estimate that these interim final rules will not 
result in any additional burdens or costs on issuers or third party 
administrators. As discussed below, the Departments believe that 109 of 
the 209 entities making use of the accommodation process will instead 
make use of their newly exempt status. In contrast, the Departments 
expect that a much smaller number (which we assume to be 9) will make 
use of the accommodation that were not provided access to it 
previously. Reduced burdens for issuers and third party administrators 
due to reductions in use of the accommodation will more than offset 
increased obligations on issuers and third party administrators serving 
the fewer number of entities that will newly opt into the 
accommodation. This will lead to a net decrease in burdens and costs on 
issuers and third party administrators, who will no longer have 
continuing obligations imposed on them by the accommodation.
    These interim final rules will result in some persons covered in 
plans of newly exempt entities not receiving coverage or payments for 
contraceptive services. The Departments do not have sufficient data to 
determine the actual effect of these rules on plan participants and 
beneficiaries, including for costs they may incur for contraceptive 
coverage, nor of unintended pregnancies that may occur. As discussed 
above and for reasons explained here, there are multiple levels of 
uncertainty involved in measuring the effect of the expanded exemption, 
including but not limited to--
    <bullet> How many entities will make use of their newly exempt 
status.
    <bullet> how many entities will opt into the accommodation 
maintained by these rules, under which their plan participants will 
continue receiving contraceptive coverage.
    <bullet> which contraceptive methods some newly exempt entities 
will continue to provide without cost-sharing despite the entity 
objecting to other methods (for example, as reflected in Hobby Lobby, 
several objecting entities still provide coverage for 14 of the 18 
women's contraceptive or sterilization methods, 134 S. Ct. at 2766).
    <bullet> how many women will be covered by plans of entities using 
their newly exempt status.
    <bullet> which of the women covered by those plans want and would 
have used contraceptive coverage or payments for contraceptive methods 
that are no longer covered by such plans.
    <bullet> whether, given the broad availability of contraceptives 
and their relatively low cost, such women will obtain and use 
contraception even if it is not covered.
    <bullet> the degree to which such women are in the category of 
women identified by IOM as most at risk of unintended pregnancy.
    <bullet> the degree to which unintended pregnancies may result 
among those women, which would be attributable as an effect of these 
rules only if the women did not otherwise use contraception or a 
particular contraceptive method due to their plan making use of its 
newly exempt status.
    <bullet> the degree to which such unintended pregnancies may be 
associated with negative health effects, or whether such effects may be 
offset by other factors, such as the fact that those women will be 
otherwise enrolled in insurance coverage.
    <bullet> the extent to which such women will qualify for 
alternative sources of contraceptive access, such as through a parent's 
or spouse's plan, or through one of the many governmental programs that 
subsidize contraceptive coverage to supplement their access.
    The Departments have access to sources of information discussed in 
the following paragraphs that are relevant to this issue, but those 
sources do not provide a full picture of the impact of these interim 
final rules.
    First, the prior rules already exempted certain houses of worship 
and their integrated auxiliaries. Further, as discussed above, the 
prior accommodation process allows hundreds of additional religious 
nonprofit organizations in self-insured church plans that are exempt 
from ERISA to file a self-certification or notice that relieves not 
only themselves but, in effect, their third party administrators of any 
obligation to provide contraceptive coverage or payments. Although in 
the latter case, third party administrators are legally permitted to 
provide the coverage, several self-insured church plans themselves have 
expressed an objection in litigation to allowing such contraceptive 
coverage to be provided, and according to information received during 
litigation, it appears that such contraceptive coverage has not been 
provided. In addition, a significant portion of the lawsuits 
challenging the Mandate were brought by a single firm representing 
Catholic dioceses and related entities covered by their diocese-
sponsored plans. In that litigation, the Departments took the position 
that, where those diocese-sponsored plans are self-insured, those plans 
are likely church plans exempt from ERISA.\65\ For the purposes of 
considering whether the expanded exemption in these rules affects the 
persons covered by such diocese-sponsored plans, the Departments 
continue to assume that such plans are similar to other objecting 
entities using self-insured church plans with respect to their third 
party administrators being unlikely to provide contraceptive coverage 
to plan participants and beneficiaries under the previous rule. 
Therefore the

[[Page 47817]]

Departments estimate that these interim final rules have no significant 
effect on the contraceptive coverage of women covered by plans of 
houses of worship and their integrated auxiliaries, entities using a 
self-insured church plan, or church dioceses sponsoring self-insured 
plans.
---------------------------------------------------------------------------

    \65\ See, for example, Brief in Opp. To Pls.' Mot. for Prelim. 
Inj., Brandt v. Burwell, No. 2:14-cv-681-AJS, doc. #23 (W.D. Pa. 
filed June 10, 2014) (arguing that ``plaintiffs have not established 
an injury in fact to the degree plaintiffs have a self-insured 
church plan,'' based on the fact that ``the same law firm 
representing the plaintiffs here has suggested in another similar 
case that all `Catholic entities like the Archdiocese participate in 
``church plans.'' '); Roman Catholic Archdiocese of N.Y. v. 
Sebelius, 987 F. Supp. 2d 232, 242 (E.D.N.Y. 2013) (``because 
plaintiffs' self-insured plans are church plans, their third party 
administrators would not be required to provide contraceptive 
coverage'').
---------------------------------------------------------------------------

    It is possible that an even greater number of litigating or 
accommodated plans might have made use of self-insured church plan 
status under the previous accommodation. Notably, one of the largest 
nonprofit employers that had filed suit challenging the Mandate had, 
under these prior rules, shifted most of their employees into self-
insured church plans, and the Departments have taken the position that 
various other employers that filed suit were eligible to assume self-
insured church plan status.\66\ The Supreme Court's recent decision in 
Advocate Health Care Network, while not involving this Mandate, also 
clarifies certain circumstances under which religious hospitals may be 
eligible for self-insured church plan status. See 137 S. Ct. at 1656-
57, 1663 (holding that a church plan under ERISA can be a plan not 
established and maintained by a church, if it is maintained by a 
principal-purpose organization).
---------------------------------------------------------------------------

    \66\ See https://www.franciscanhealth.org/sites/default/files/2015%20employee%20benefit%20booklet.pdf.; see, for example, Roman 
Catholic Archdiocese of N.Y. v. Sebelius, 987 F. Supp. 2d 232, 242 
(E.D.N.Y. 2013).
---------------------------------------------------------------------------

    Second, when the Departments previously created the exemption, 
expanded its application, and provided an accommodation (which, as 
mentioned, can lift obligations on self-insured church plans for 
hundreds of nonprofit organizations), we concluded that no significant 
burden or costs would result at all. (76 FR 46625; 78 FR 39889.) We 
reached this conclusion despite the impact, just described, whereby the 
previous rule apparently lead to women not receiving contraceptive 
coverage through hundreds of nonprofit entities using self-insured 
church plans. We also reached this conclusion without counting any 
significant burden or cost to some women covered in the plans of houses 
of worship or integrated auxiliaries that might want contraceptive 
coverage. This conclusion was based in part on the assertion, set forth 
in previous regulations, that employees of houses of worship and 
integrated auxiliaries likely share their employers' opposition to 
contraception. Many other religious nonprofit entities, however, both 
adopt and implement religious principles with similar fervency. For the 
reasons discussed above, the Departments no longer believe we can 
distinguish many of the women covered in the plans of religious 
nonprofit entities from the women covered in the plans of houses of 
worship and integrated auxiliaries regarding which the Departments 
assumed share their employers' objection to contraception, nor from 
women covered in the plans of religious entities using self-insured 
church plans regarding which we chose not to calculate any anticipated 
effect even though we conceded we were not requiring their third party 
administrators to provide contraceptive coverage. In the estimates and 
assumptions below, we include the potential effect of these interim 
rules on women covered by such entities, in order to capture all of the 
anticipated effects of these rules.
    Third, these interim final rules extend the exemption to for-profit 
entities. Among the for-profit employers that filed suit challenging 
the Mandate, the one with the most employees was Hobby Lobby.\67\ As 
noted above, and like some similar entities, the plaintiffs in Hobby 
Lobby were willing to provide coverage with no cost sharing of various 
contraceptive services: 14 of 18 FDA-approved women's contraceptive and 
sterilization methods.\68\ (134 S. Ct. at 2766.) The effect of 
expanding the exemption to for-profit entities is therefore mitigated 
to the extent many of the persons covered by such entities' plans may 
receive coverage for at least some contraceptive services. No publicly 
traded for-profit entities have filed lawsuits challenging the Mandate. 
The Departments agree with the Supreme Court's expectation in this 
regard: ``it seems unlikely that the sort of corporate giants to which 
HHS refers will often assert RFRA claims. HHS has not pointed to any 
example of a publicly traded corporation asserting RFRA rights, and 
numerous practical restraints would likely prevent that from occurring. 
For example, the idea that unrelated shareholders--including 
institutional investors with their own set of stakeholders--would agree 
to run a corporation under the same religious beliefs seems 
improbable''. Hobby Lobby, 134 S. Ct. at 2774. Therefore, although 
publicly traded entities could make use of exempt status under these 
interim final rules, the Departments do not expect that very many will 
do so, as compared to the 87 religious closely held for-profit entities 
that brought litigation challenging the Mandate (some of which might be 
content with the accommodation).
---------------------------------------------------------------------------

    \67\ Verified Complaint ] 34, Hobby Lobby Stores, Inc., et al. 
v. Sebelius, No. 5:12-cv-01000-HE (Sept. 12, 2012 W.D. Okla.) 
(13,240 employees).
    \68\ By reference to the FDA Birth Control Guide's list of 18 
birth control methods for women and 2 for men, https://www.fda.gov/downloads/forconsumers/byaudience/forwomen/freepublications/ucm517406.pdf, Hobby Lobby and entities with similar beliefs were 
not willing to cover: IUD copper; IUD with progestin; emergency 
contraceptive (Levonorgestrel); and emergency contraceptive 
(Ulipristal Acetate). See 134 S. Ct. at 2765-66. Hobby Lobby was 
willing to cover: Sterilization surgery for women; sterilization 
implant for women; implantable rod; shot/injection; oral 
contraceptives (``the Pill''--combined pill); oral contraceptives 
(``the Pill''--extended/continuous use/combined pill); oral 
contraceptives (``the Mini Pill''--progestin only); patch; vaginal 
contraceptive ring; diaphragm with spermicide; sponge with 
spermicide; cervical cap with spermicide; female condom; spermicide 
alone. Id. Among women using these 18 female contraceptive methods, 
85 percent use the 14 methods that Hobby Lobby and entities with 
similar beliefs were willing to cover (22,446,000 out of 
26,436,000), and ``[t]he pill and female sterilization have been the 
two most commonly used methods since 1982.'' See Guttmacher 
Institute, ``Contraceptive Use in the United States'' (Sept. 2016), 
available at https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states.
---------------------------------------------------------------------------

    Fourth, the Departments have a limited amount of information about 
entities that have made use of the accommodation process as set forth 
in the previous rules. HHS previously estimated that 209 entities would 
make use of the accommodation process. That estimate was based on HHS's 
observation in its August 2014 interim final rules and July 2015 final 
regulations that there were 122 eligible entities that had filed 
litigation challenging the accommodation process, and 87 closely held 
for-profit entities that had filed suit challenging the Mandate in 
general. (79 FR 51096; 80 FR 41336). The Departments acknowledged that 
entities that had not litigated might make use of the accommodation, 
but we stated we did not have better data to estimate how many might 
use the accommodation overall.
    After issuing those rules, the Departments have not received 
complete data on the number of entities actually using the 
accommodation, because the accommodation does not require many 
accommodated entities to submit information to us. Our limited records 
indicate that approximately 63 entities have affirmatively submitted 
notices to HHS to use the accommodation. This includes some fully 
insured and some self-insured plans, but it does not include entities 
that may have used the accommodation by submitting an EBSA form 700 
self-certification directly to their issuer or third party 
administrator. We have deemed some other entities as being subject to 
the accommodation through their litigation filings, but that might not 
have led to contraceptive coverage being

[[Page 47818]]

provided to persons covered in some of those plans, either because they 
are exempt as houses of worship or integrated auxiliaries, they are in 
self-insured church plans, or we were not aware of their issuers or 
third party administrators so as to send them letters obligating them 
to provide such coverage. Our records also indicate that 60 plans used 
the contraceptive user fees adjustments in the 2015 plan year, the last 
year for which we have data. This includes only self-insured plans, and 
it includes some plans that self-certified through submitting notices 
and other plans that, presumably, self-certified through the EBSA form 
700.
    These sets of data are not inconsistent with our previous estimate 
that 209 entities would use the accommodation, but they indicate that 
some non-litigating entities used the accommodation, and some 
litigating entities did not, possibly amounting to a similar number. 
For this reason, and because we do not have more complete data 
available, we believe the previous estimate of 209 accommodated 
entities is still the best estimate available for how many entities 
have used the accommodation under the previous rule. This assumes that 
the number of litigating entities that did not use the accommodation is 
approximately the same as the number of non-litigating entities that 
did use it.
    In considering how many entities will use the voluntary 
accommodation moving forward--and how many will use the expanded 
exemption--we also do not have specific data. We expect the 122 
nonprofit entities that specifically challenged the accommodation in 
court to use the expanded exemption. But, as noted above, we believe a 
significant number of them are not presently participating in the 
accommodation, and that some nonprofit entities in self-insured church 
plans are not providing contraceptive coverage through their third 
party administrators even if they are using the accommodation. Among 
the 87 for-profit entities that filed suit challenging the Mandate in 
general, few if any filed suit challenging the accommodation. We do not 
know how many of those entities are using the accommodation, how many 
may be complying with the Mandate fully, how many may be relying on 
court injunctions to do neither, or how many will use the expanded 
exemption moving forward. Among entities that never litigated but used 
the accommodation, we expect many but not all of them to continue using 
the accommodation, and we do not have data to estimate how many such 
entities there are or how many will choose either option.
    Overall, therefore, without sufficient data to estimate what the 
estimated 209 previously accommodated entities will do under these 
interim final rules, we assume that just over half of them will use the 
expanded exemption, and just under half will continue their 
accommodated status under the voluntary process set forth in these 
rules. Specifically, we assume that 109 previously accommodated 
entities will make use of their exempt status, and 100 will continue 
using the accommodation. This estimate is based in part on our view 
that most litigating nonprofit entities would prefer the exemption to 
the accommodation, but that many of either have not been using the 
accommodation or, if they have been using it, it is not providing 
contraceptive coverage for women in their plans where they participate 
in self-insured church plans. This estimate is also consistent with our 
lack of knowledge of how many for-profit entities were using the 
accommodation and will choose the exemption or the accommodation, given 
that many of them did not bring legal challenges against the 
accommodation after Hobby Lobby. This estimate is further consistent 
with our view, explained in more detail below, that some entities that 
are using the accommodation and did not bring litigation will use the 
exemption, but many accommodated, non-litigating entities--including 
the ones with the largest relative workforces among accommodated 
entities--will continue using the accommodation. The Departments 
recognize that we do not have better data to estimate the effects of 
these interim final rules on such entities.
    In addition to these factors, we recognize that the expanded 
exemption and accommodation are newly available to religious for-profit 
entities that are not closely held and some other plan sponsors. As 
explained above, the Departments believe religious for-profit entities 
that are not closely held may exist, or may wish to come into being. 
HHS does not anticipate that there will be significant number of such 
entities, and among those, we believe that very few if any will use the 
accommodation. All of the for-profit entities that have challenged the 
Mandate have been religious closely held entities.
    It is also possible that religious nonprofit or closely held for-
profit entities that were already eligible for the accommodation but 
did not previously use it will opt into it moving forward, but because 
they could have done so under the previous rules, their opting into the 
accommodation is not caused by these rules.
    Without any data to estimate how many of any entities newly 
eligible for and interested in using the accommodation might exist, HHS 
assumes for the purposes of estimating the anticipated effect of these 
rules that less than 10 entities (9) will do so. Therefore, we estimate 
that 109 entities will use the voluntary accommodation moving forward, 
100 of which were already using the previous accommodation, and that 
109 entities that have been using the previous accommodation will use 
the expanded exemption instead.
    Fifth, in attempting to estimate the anticipated effect of these 
interim final rules on women receiving contraceptive coverage, the 
Departments have limited information about the entities that have filed 
suit challenging the Mandate. Approximately 209 entities have brought 
suit challenging the Mandate over more than 5 years. They have included 
a broad range of nonprofit entities and closely held for-profit 
entities. We discuss a number of potentially relevant points:
    First, the Departments do not believe that out-of-pocket litigation 
costs have been a significant barrier to entities choosing to file 
suit. Based on the Departments' knowledge of these cases through public 
sources and litigation, nearly all the entities were represented pro 
bono and were subject to little or no discovery during the cases, and 
multiple public interest law firms publicly provided legal services for 
entities willing to challenge the Mandate.\69\ (It is noteworthy, 
however, that such pro bono arrangements and minimization of discovery 
do not eliminate 100 percent of the time costs of participating in 
litigation or, as discussed in more detail below, the potential for 
negative

[[Page 47819]]

publicity. Both concerns could have dissuaded participation in 
lawsuits, and the potential for negative publicity may also dissuade 
participation in the expanded exemptions.)
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    \69\ See, for example, Catholic Diocese of Pittsburgh, ``Award-
winning attorney `humbled' by recognition,'' Pittsburgh Catholic 
(``Jones Day is doing the cases `pro bono,' or voluntarily and 
without payment.'') (quoting Paul M. Pohl, Partner, Jones Day), 
available at http://diopitt.org/pittsburgh-catholic/award-winning-attorney-humbled-recognition; ``Little Sisters Fight for Religious 
Freedom,'' National Review (Oct. 2, 2013) (``the Becket Fund for 
Religious Liberty is representing us pro bono, as they do all their 
clients.'') (quoting Sister Constance Veit, L.S.P., communications 
director for the Little Sisters of the Poor), available at http://www.nationalreview.com/article/360103/little-sisters-fight-religious-freedom-interview; Suzanne Cassidy, ``Meet the major legal 
players in the Conestoga Wood Specialties Supreme Court case,'' 
LancasterOnline (Mar. 25, 2014) (``Cortman and the other lawyers 
arguing on behalf of Conestoga Wood Specialties and Hobby Lobby are 
offering their services pro bono.''), available at http://lancasteronline.com/news/local/meet-the-major-legal-players-in-the-conestoga-wood-specialties/article_302bc8e2-b379-11e3-b669-001a4bcf6878.html.
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    Second, prior to the Affordable Care Act, the vast majority of 
entities already covered contraception, albeit not always without cost-
sharing The Departments do not have data to indicate why entities that 
did not cover contraception prior to the Affordable Care Act chose not 
to cover it. As noted above, however, the Departments have maintained 
that compliance with the contraceptive Mandate is cost-neutral to 
issuers, which indicates that no significant financial incentive exists 
to omit contraceptive coverage. As indicated by the report by HHS ASPE 
discussed above, we have assumed that millions of women received 
preventive services after the Mandate went into effect because nearly 
all entities complied with the Guidelines. We are not aware of 
expressions from most of those entities indicating that they would have 
sincerely held religious objections to complying with the Mandate, and 
therefore that they would make use of the expanded exemption provided 
here.
    Third, omitting contraceptive coverage has subjected some entities 
to serious public criticism and in some cases organized boycotts or 
opposition campaigns that have been reported in various media and 
online outlets regarding entities that have filed suit. The Departments 
expect that even if some entities might not receive such criticism, 
many entities will be reluctant to use the expanded exemption unless 
they are committed to their views to a significant degree.
    Overall, the Departments do not know how many entities will use the 
expanded exemption. We expect that some non-litigating entities will 
use it, but given the aforementioned considerations, we believe it 
might not be very many more. Moreover, many litigating entities are 
already exempt or are not providing contraceptive coverage to women in 
their plans due to their participating in self-insured church plans, so 
the effect of the expanded exemption among litigating entities is 
significantly lower than it would be if all the women in their plans 
were already receiving the coverage.
    To calculate the anticipated effects of this rule on contraceptive 
coverage among women covered by plans provided by litigating entities, 
we start by examining court documents and other public sources.\70\ 
These sources provide some information, albeit incomplete, about how 
many people are employed by these entities. As noted above, however, 
contraceptive coverage among the employees of many litigating entities 
will not be affected by these rules because some litigating entities 
were exempt under the prior rule, while others were or appeared to be 
in self-insured church plans so that women covered in their plans were 
already not receiving contraceptive coverage.
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    \70\ Where complaints, affidavits, or other documents filed in 
court did not indicate the number of employees that work for an 
entity, and that entity was not apparently exempt as a house of 
worship or integrated auxiliary, and it was not using the kind of 
plan that we have stated in litigation qualifies for self-insured 
church plan status (see, for example, Roman Catholic Archdiocese of 
N.Y. v. Sebelius, 987 F. Supp. 2d 232, 242 (E.D.N.Y. 2013)), we 
examined employment data contained in some IRS form W-3's that are 
publicly available online for certain nonprofit groups, and looked 
at other Web sites discussing the number of people employed at 
certain entities.
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    Among litigating entities that were neither exempt nor likely using 
self-insured church plans, our best estimate based on court documents 
and public sources is that such entities employed approximately 65,000 
persons, male and female.\71\ The average number of workers at firms 
offering health benefits that are actually covered by those benefits is 
62 percent.\72\ This amounts to approximately 34,000 employees covered 
under those plans. DOL estimates that for each employee policyholder, 
there is approximately one dependent.\73\ This amounts to approximately 
68,000 covered persons. Census data indicate that women of childbearing 
age--that is, women aged 15-44--compose 20.2 percent of the general 
population.\74\ In addition, approximately 44.3 percent of women of 
childbearing age use women's contraceptive methods covered by the 
Guidelines.\75\ Therefore, we estimate that approximately 7,221 women 
of childbearing age that use contraception covered by the Guidelines 
are covered by employer sponsored plans of entities that have filed 
lawsuits challenging the Mandate, where those plans are neither exempt 
under the prior rule nor are self-insured church plans.
---------------------------------------------------------------------------

    \71\ In a small number of lawsuits, named plaintiffs include 
organizations claiming to have members that seek an exemption. We 
have very little information about the number, size, and types of 
entities those members. Based on limited information from those 
cases, however, their membership appears to consist mainly, although 
not entirely, of houses of worship, integrated auxiliaries, and 
participants in self-insured plans of churches. As explained above, 
the contraceptive coverage of women covered by such plans is not 
likely to be affected by the expanded exemption in these rules. 
However, to account for plans subject to contraceptive coverage 
obligations among those members we have added 10,000 to our estimate 
of the number of persons among litigants that may be impacted by 
these rules.
    \72\ See Kaiser Family Foundation and Health Research and 
Educational Trust, ``Employer Health Benefits: 2017 Annual Survey'' 
at 57, available at http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2017.
    \73\ ``Health Insurance Coverage Bulletin'' Table 4, page 21. 
Using March 2015 Annual Social and Economic Supplement to the 
Current Population Survey. https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf.
    \74\ United States Census Bureau, ``Age and Sex Composition: 
2010'' (May 2011), available at https://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf. The Guidelines' requirement of contraceptive 
coverage only applies ``for all women with reproductive capacity.'' 
https://www.hrsa.gov/womensguidelines/; also, see 80 FR 40318. In 
addition, studies commonly consider the 15-44 age range to assess 
contraceptive use by women of childbearing age. See, for example, 
Guttmacher Institute, ``Contraceptive Use in the United States'' 
(Sept. 2016), available at https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states.
    \75\ See https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states (reporting that of 60,877,000 women aged 15-44, 
26,945,000 use women's contraceptive methods covered by the 
Guidelines).
---------------------------------------------------------------------------

    We also estimate that for the educational institutions objecting to 
the Mandate as applied to student coverage that they arranged, where 
the entities were neither exempt under the prior rule nor were their 
student plans self-insured, such student plans likely covered 
approximately 3,300 students. On average, we expect that approximately 
half of those students (1,650) are female. For the purposes of this 
estimate, we also assume that female policyholders covered by plans 
arranged by institutions of higher education are women of childbearing 
age. We expect that they would have less than the average number of 
dependents per policyholder than exists in standard plans, but for the 
purposes of providing an upper bound to this estimate, we assume that 
they would have an average of one dependent per policyholder, thus 
bringing the number of policyholders and dependents back up to 3,300. 
Many of those dependents are likely not to be women of childbearing 
age, but in order to provide an upper bound to this estimate, we assume 
they are. Therefore, for the purposes of this estimate, we assume that 
the effect of these expanded exemptions on student plans of litigating 
entities includes 3,300 women. Assuming that 44.3 perecent of such 
women use contraception covered by the Guidelines,\76\ we estimate that

[[Page 47820]]

1,462 of those women would be affected by these rules.
---------------------------------------------------------------------------

    \76\ It would appear that a smaller percentage of college-aged 
women use contraception--and use more expensive methods such as long 
acting methods or sterilization--than among other women of 
childbearing age. See NCHS Data Brief, ``Current Contraceptive 
Status Among Women Aged 15-44: United States, 2011-2013'' (Dec. 
2014), available at https://www.cdc.gov/nchs/data/databriefs/db173.pdf.
---------------------------------------------------------------------------

    Together, this leads the Departments to estimate that approximately 
8,700 women of childbearing age may have their contraception costs 
affected by plans of litigating entities using these expanded 
exemptions. As noted above, the Departments do not have data indicating 
how many of those women agree with their employers' or educational 
institutions' opposition to contraception (so that fewer of them than 
the national average might actually use contraception). Nor do we know 
how many would have alternative contraceptive access from a parent's or 
spouse's plan, or from Federal, State, or local governmental programs, 
nor how many of those women would fall in the category of being most at 
risk of unintended pregnancy, nor how many of those entities would 
provide some contraception in their plans while only objecting to 
certain contraceptives.
    Sixth, in a brief filed in the Zubik litigation, the Departments 
stated that ``in 2014, [HHS] provided user-fee reductions to compensate 
TPAs for making contraceptive coverage available to more than 600,000 
employees and beneficiaries,'' and that ``[t]hat figure includes both 
men and women covered under the relevant plans.'' \77\ HHS has reviewed 
the information giving rise to that estimate, and has received updated 
information for 2015. In 2014, 612,000 persons were covered by plans 
claiming contraceptive user fees adjustments, and in 2015, 576,000 
persons were covered by such plans. These numbers include all persons 
in such plans, not just women of childbearing age.
---------------------------------------------------------------------------

    \77\ Brief of Respondents at 18-19 & n.7, Zubik v. Burwell, No. 
14-1418, et al. (U.S. filed Feb. 10, 2016). The actual number is 
612,487.
---------------------------------------------------------------------------

    HHS's information indicates that religious nonprofit hospitals or 
health systems sponsored a significant minority of the accommodated 
self-insured plans that were using contraceptive user fees adjustments, 
yet those plans covered more than 80 percent of the persons covered in 
all plans using contraceptive user fees adjustments. Some of those 
plans cover nearly 100,000 persons each, and several others cover 
approximately 40,000 persons each. In other words, these plans were 
proportionately much larger than the plans provided by other entities 
using the contraceptive user fees adjustments.
    There are two reasons to believe that a significant fraction of the 
persons covered by previously accommodated plans provided by religious 
nonprofit hospitals or health systems may not be affected by the 
expanded exemption. A broad range of religious hospitals or health 
systems have publicly indicated that they do not conscientiously oppose 
participating in the accommodation.\78\ Of course, some of these 
religious hospitals or health systems may opt for the expanded 
exemption under these interim final rules, but others might not. In 
addition, among plans of religious nonprofit hospitals or health 
systems, some have indicated that they might be eligible for status as 
a self-insured church plan.\79\ As discussed above, some litigants 
challenging the Mandate have appeared, after their complaints were 
filed, to make use of self-insured church plan status.\80\ (The 
Departments take no view on the status of these particular plans under 
ERISA, but simply make this observation for the purpose of seeking to 
estimate the impact of these interim final rules.) Nevertheless, 
overall it seems likely that many of the remaining religious hospital 
or health systems plans previously using the accommodation will 
continue to opt into the voluntary accommodation under these interim 
final rules, under which their employees will still receive 
contraceptive coverage. To the extent that plans of religious hospitals 
or health systems are able to make use of self-insured church plan 
status, the previous accommodation rule would already have allowed them 
to relieve themselves and their third party administrators of 
obligations to provide contraceptive coverage or payments. Therefore, 
in such situations these interim final rules would not have an 
anticipated effect on the contraceptive coverage of women in those 
plans.
---------------------------------------------------------------------------

    \78\ See, for example, https://www.chausa.org/newsroom/women%27s-preventive-health-services-final-rule (``HHS has now 
established an accommodation that will allow our ministries to 
continue offering health insurance plans for their employees as they 
have always done. . . . We are pleased that our members now have an 
accommodation that will not require them to contract, provide, pay 
or refer for contraceptive coverage. . . . We will work with our 
members to implement this accommodation.'') In comments submitted in 
previous rules concerning this Mandate, the Catholic Health 
Association has stated it ``is the national leadership organization 
for the Catholic health ministry, consisting of more than 2,000 
Catholic health care sponsors, systems, hospitals, long-term care 
facilities, and related organizations. Our ministry is represented 
in all 50 states and the District of Columbia.'' Comments on CMS-
9968-ANPRM (dated June 15, 2012).
    \79\ See, for example, Brief of the Catholic Health Association 
of the United States as Amicus Curiae in Support of Petitioners, 
Advocate Health Care Network, Nos. 16-74, 16-86, 16-258, 2017 WL 
371934 at *1 (U.S. filed Jan. 24, 2017) (``CHA members have relied 
for decades that the `church plan' exemption contained in'' ERISA.).
    \80\ See supra note 66.
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    Considering all these data points and limitations, the Departments 
offer the following estimate of the number of women who will be 
impacted by the expanded exemption in these interim final rules. The 
Departments begin with the 8,700 women of childbearing age that use 
contraception who we estimate will be affected by use of the expanded 
exemption among litigating entities. In addition to that number, we 
calculate the following number of women affected by accommodated 
entities using the expanded exemption. As noted above, approximately 
576,000 plan participants and beneficiaries were covered by self-
insured plans that received contraceptive user fee adjustments in 2014. 
Although additional self-insured entities may have participated in the 
accommodation without making use of contraceptive user fees 
adjustments, we do not know what number of entities did so. We consider 
it likely that self-insured entities with relatively larger numbers of 
covered persons had sufficient financial incentive to make use of the 
contraceptive user fees adjustments. Therefore, without better data 
available, we assume that the number of persons covered by self-insured 
plans using contraceptive user fees adjustments approximates the number 
of persons covered by all self-insured plans using the accommodation.
    An additional but unknown number of persons were likely covered in 
fully insured plans using the accommodation. The Departments do not 
have data on how many fully insured plans have been using the 
accommodation, nor on how many persons were covered by those plans. DOL 
estimates that, among persons covered by employer sponsored insurance, 
56.1 percent are covered by self-insured plans and 43.9 percent are 
covered by fully insured plans.\81\ Therefore, corresponding to the 
576,000 persons covered by self-insured plans using user fee 
adjustments, we estimate an additional 451,000 persons were covered by 
fully insured plans using the accommodation. This yields an estimate of 
1,027,000 covered persons of all ages and sexes in plans using the 
previous accommodation.
---------------------------------------------------------------------------

    \81\ ``Health Insurance Coverage Bulletin'' Table 3A, page 15. 
Using March 2015 Annual Social and Economic Supplement to the 
Current Population Survey. https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf.
---------------------------------------------------------------------------

    As discussed below, and recognizing the limited data available for 
our estimates, the Departments estimate that 100 of the 209 entities 
that were using the accommodation under the prior rule

[[Page 47821]]

will continue to opt into it under these interim final rules. Notably, 
however, the data concerning accommodated self-insured plans indicates 
that plans sponsored by religious hospitals and health systems 
encompass more than 80 percent of the persons covered in such plans. In 
other words, plans sponsored by such entities have a proportionately 
larger number of covered persons than do plans sponsored by other 
accommodated entities, which have smaller numbers of covered persons. 
As also cited above, many religious hospitals and health systems have 
indicated that they do not object to the accommodation, and some of 
those entities might also qualify as self-insured church plans, so that 
these interim final rules would not impact the contraceptive coverage 
their employees receive. We do not have specific data on which plans of 
which sizes will actually continue to opt into the accommodation, nor 
how many will make use of self-insured church plan status. We assume 
that the proportions of covered persons in self-insured plans using 
contraceptive user fees adjustments also apply in fully insured plans, 
for which we lack representative data. Based on these assumptions and 
without better data available, we assume that the 100 accommodated 
entities that will remain in the accommodation will account for 75 
percent of all the persons previously covered in accommodated plans. In 
comparison, we assume the 109 accommodated entities that will make use 
of the expanded exemption will encompass 25 percent of persons 
previously covered in accommodated plans.
    Applying these percentages to the total number of 1,027,000 persons 
we estimate are covered in accommodated plans, we estimate that 
approximately 257,000 persons previously covered in accommodated plans 
will be covered in the 109 plans that use the expanded exemption, and 
770,000 persons will be covered in the estimated 100 plans that 
continue to use the accommodation. According to the Census data cited 
above, 20.2 percent of these persons are women of childbearing age, 
which amounts to approximately 51,900 women of childbearing age in 
previously accommodated plans that we estimate will use the expanded 
exemption. As noted above, approximately 44.3 percent of women of 
childbearing age use women's contraceptive methods covered by the 
Guidelines, so that we expect approximately 23,000 women that use 
contraception covered by the Guidelines to be affected by accommodated 
entities using the expanded exemption.
    It is not clear the extent to which this number overlaps with the 
number estimated above of 8,700 women in plans of litigating entities 
that may be affected by these rules. Based on our limited information 
from the litigation and accommodation notices, we expect that the 
overlap is significant. Nevertheless, in order to estimate the possible 
effects of these rules, we assume there is no overlap between these two 
numbers, and therefore that these interim final rules would affect the 
contraceptive costs of approximately 31,700 women.
    Under the assumptions just discussed, the number of women whose 
contraceptive costs will be impacted by the expanded exemption in these 
interim final rules is less than 0.1 percent of the 55.6 million women 
in private plans that HHS ASPE estimated \82\ receive preventive 
services coverage under the Guidelines.
---------------------------------------------------------------------------

    \82\ Available at https://aspe.hhs.gov/pdf-report/affordable-care-act-improving-access-preventive-services-millions-americans; 
also, see Abridged Report, available at https://www.womenspreventivehealth.org/wp-content/uploads/2017/01/WPSI_2016AbridgedReport.pdf.
---------------------------------------------------------------------------

    In order to estimate the cost of contraception to women affected by 
the expanded exemption, the Departments are aware that, under the prior 
accommodation process, the total user fee adjustment amount for self-
insured plans for the 2015 benefit year was $33 million. These 
adjustments covered the cost of contraceptive coverage provided to 
women participants and beneficiaries in self-insured plans where the 
employer objected and made use of the accommodation, and where an 
authorizing exception under OMB Circular No. A-25R was in effect as the 
Secretary of the Department of Health and Human Services requests. Nine 
percent of that amount was attributable to administrative costs and 
margin, according to the provisions of 45 CFR 156.50(d)(3)(ii). Thus 
the amount of the adjustments attributable to the cost of contraceptive 
services was about $30 million. As discussed above, in 2015 that amount 
corresponded to 576,000 persons covered by such plans. Among those 
persons, as cited above, approximately 20.2 percent on average were 
women of childbearing age--that is, approximately 116,000 women. As 
noted above, approximately 44.3 percent of women of childbearing age 
use women's contraceptive methods covered by the Guidelines, which 
includes 51,400 women in those plans. Therefore, entities using 
contraceptive user fees adjustments received approximately $584 per 
year per woman of childbearing age that use contraception covered by 
the Guidelines and are covered in their plans.
    As discussed above, the Departments estimate that the expanded 
exemptions will impact the contraceptive costs of approximately 31,700 
women of childbearing age that use contraception covered by the 
Guidelines. At an average of $584 per year, the financial transfer 
effects attributable to the interim final rules on those women would be 
approximately $18.5 million.\83 84\
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    \83\ As noted above, the Departments have taken the position 
that providing contraceptive coverage is cost neutral to issuers. 
(78 FR 39877). At the same time, because of the up-front costs of 
some contraceptive or sterilization methods, and because some 
entities did not cover contraception prior to the Affordable Care 
Act, premiums may be expected to adjust to reflect changes in 
coverage, thus partially offsetting the transfer experienced by 
women who use the affected contraceptives. As discussed elsewhere in 
this analysis, such women may make up approximately 8.9 percent (= 
20.2 percent x 44.3 percent) of the covered population, in which 
case the offset would also be approximately 8.9 percent.
    \84\ Describing this impact as a transfer reflects an implicit 
assumption that the same products and services would be used with or 
without the rule. Such an assumption is somewhat oversimplified 
because the interim final rules shift cost burden to consumption 
decision-makers (that is, the women who choose whether or not to use 
the relevant contraceptives) and thus can be expected to lead to 
some decrease in use of the affected drugs and devices and a 
potential increase in pregnancy--thus leading to a decrease and an 
increase, respectively, in medical expenditures.
---------------------------------------------------------------------------

    To account for uncertainty in the estimate, we conducted a second 
analysis using an alternative framework, in order to thoroughly 
consider the possible upper bound economic impact of these interim 
final rules.
    As noted above, the HHS ASPE report estimated that 55.6 million 
women aged 15 to 64 and covered by private insurance had preventive 
services coverage under the Affordable Care Act. Approximately 16.2 
percent of those women were enrolled in plans on exchanges or were 
otherwise not covered by employer sponsored insurance, so only 46.6 
million women aged 15 to 64 received the coverage through employer 
sponsored private insurance plans.\85\ In addition, some of those 
private insurance plans were offered by government employers, 
encompassing approximately 10.5 million of those women aged 15 to 
64.\86\

[[Page 47822]]

The expanded exemption in these interim final rules does not apply to 
government plan sponsors. Thus we estimate that the number of women 
aged 15 to 64 covered by private sector employer sponsored insurance 
who receive preventive services coverage under the Affordable Care Act 
is approximately 36 million.
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    \85\ Available at https://aspe.hhs.gov/system/files/pdf/139221/The%20Affordable%20Care%20Act%20is%20Improving%20Access%20to%20Preventive%20Services%20for%20Millions%20of%20Americans.pdf.
    \86\ The ASPE study relied on Census data of private health 
insurance plans, which included plans sponsored by either private or 
public sector employers. See Table 2, notes 2 & 3 (explaining the 
scope of private plans and government plans for purposes of Table 
2), available at https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-250.pdf.
    According to data tables from the Medical Expenditure Panel 
Survey (MEPS) of the Agency for Healthcare Research and Quality of 
HHS (https://meps.ahrq.gov/mepsweb/), State and local governments 
employ 19,297,960 persons; 99.2 percent of those employers offer 
health insurance; and 67.4 percent of employees that work at such 
entities where insurance is offered are enrolled in those plans, 
amounting to 12.9 million persons enrolled. DOL estimates that in 
the public sector, for each policyholder there is an average of 
slightly less than one dependent. ``Health Insurance Coverage 
Bulletin'' Table 4, page 21. https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf. Therefore, State and local government 
employer plans cover approximately 24.8 million persons of all ages. 
Census data indicates that on average, 12 percent of persons covered 
by private insurance plans are aged 65 and older. Using these 
numbers, we estimate that State and local government employer plans 
cover approximately 21.9 million persons under age 65.
    The Federal Government has approximately 8.2 million persons 
covered in its employee health plans. According to information we 
received from the Office of Personnel Management, this includes 2.1 
million employees having 3.2 million dependents, and 1.9 million 
retirees (annuitants) having 1 million dependents. We do not have 
information about the ages of these policyholders and dependents, 
but for the purposes of this estimate we assume the annuitants and 
their dependents are aged 65 or older and the employees and their 
dependents are under age 65, so that the Federal Government's 
employee health plans cover 5.3 million persons under age 65.
    Thus, overall we estimate there are 27.2 million persons under 
age 65 enrolled in private health insurance sponsored by government 
employers. Of those, 38.3 percent are women aged 15-64, that is, 
10.5 million.
---------------------------------------------------------------------------

    Prior to the implementation of the Affordable Care Act, 
approximately 6 percent of employer survey respondents did not offer 
contraceptive coverage, with 31 percent of respondents not knowing 
whether they offered such coverage.\87\ The 6 percent may have included 
approximately 2.16 million of the women aged 15-64 covered by employer 
sponsored insurance plans in the private sector. According to Census 
data, 59.9 percent of women aged 15 to 64 are of childbearing age (aged 
15 to 44), in this case, 1.3 million. And as noted above, approximately 
44.3 percent of women of childbearing age use women's contraceptive 
methods covered by the Guidelines. Therefore we estimate that 574,000 
women of childbearing age that use contraceptives covered by the 
Guidelines were covered by plans that omitted contraceptive coverage 
prior to the Affordable Care Act.\88\
---------------------------------------------------------------------------

    \87\ Kaiser Family Foundation & Health Research & Educational 
Trust, ``Employer Health Benefits, 2010 Annual Survey'' at 196, 
available at https://kaiserfamilyfoundation.files.wordpress.com/2013/04/8085.pdf.
    \88\ Some of the 31 percent of survey respondents that did not 
know about contraceptive coverage may not have offered such 
coverage. If it were possible to account for this non-coverage, the 
estimate of potentially affected covered women could increase. On 
the other hand, these employers' lack of knowledge about 
contraceptive coverage suggests that they lacked sincerely held 
religious beliefs specifically objecting to such coverage--beliefs 
without which they would not qualify for the expanded exemptions 
offered by these rules. In that case, omission of such employers and 
covered women from this estimation approach would be appropriate. 
Correspondingly, the 6 percent of employers that had direct 
knowledge about the absence of coverage may be more likely to have 
omitted such coverage on the basis of religious beliefs than were 
the 31 percent of survey respondents who did not know whether the 
coverage was offered. Yet an entity's mere knowledge about its 
coverage status does not itself reflect its motive for omitting 
coverage. In responding to the survey, the entity may have simply 
examined its plan document to determine whether or not contraceptive 
coverage was offered. As will be relevant in a later portion of the 
analysis, we have no data indicating what portion of the entities 
that omitted contraceptive coverage pre-Affordable Care Act did so 
on the basis of sincerely held religious beliefs, as opposed to 
doing so for other reasons that would not qualify them for the 
expanded exemption offered in these interim final rules.
---------------------------------------------------------------------------

    It is unknown what motivated those employers to omit contraceptive 
coverage--whether they did so for conscientious reasons, or for other 
reasons. Despite our lack of information about their motives, we 
attempt to make a reasonable estimate of the upper bound of the number 
of those employers that omitted contraception before the Affordable 
Care Act and that would make use of these expanded exemptions based on 
sincerely held religious beliefs.
    To begin, we estimate that publicly traded companies would not 
likely make use of these expanded exemptions. Even though the rule does 
not preclude publicly traded companies from dropping coverage based on 
a sincerely held religious belief, it is likely that attempts to object 
on religious grounds by publicly traded companies would be rare. The 
Departments take note of the Supreme Court's decision in Hobby Lobby, 
where the Court observed that ``HHS has not pointed to any example of a 
publicly traded corporation asserting RFRA rights, and numerous 
practical restraints would likely prevent that from occurring. For 
example, the idea that unrelated shareholders--including institutional 
investors with their own set of stakeholders--would agree to run a 
corporation under the same religious beliefs seems improbable''. 134 S. 
Ct. at 2774. The Departments are aware of several Federal health care 
conscience laws \89\ that in some cases have existed for decades and 
that protect companies, including publicly traded companies, from 
discrimination if, for example, they decline to facilitate abortion, 
but we are not aware of examples where publicly traded companies have 
made use of these exemptions. Thus, while we consider it important to 
include publicly traded companies in the scope of these expanded 
exemptions for reasons similar to those used by the Congress in RFRA 
and some health care conscience laws, in estimating the anticipated 
effects of the expanded exemptions we agree with the Supreme Court that 
it is improbable any will do so.
---------------------------------------------------------------------------

    \89\ For example, 42 U.S.C. 300a-7(b), 42 U.S.C. 238n, and 
Consolidated Appropriations Act of 2017, Div. H, Title V, Sec. 
507(d), Public Law 115-31.
---------------------------------------------------------------------------

    This assumption is significant because 31.3 percent of employees in 
the private sector work for publicly traded companies.\90\ That means 
that only approximately 394,000 women aged 15 to 44 that use 
contraceptives covered by the Guidelines were covered by plans of non-
publicly traded companies that did not provide contraceptive coverage 
pre-Affordable Care Act.
---------------------------------------------------------------------------

    \90\ John Asker, et al., ``Corporate Investment and Stock Market 
Listing: A Puzzle?'' 28 Review of Financial Studies Issue 2, at 342-
390 (Oct. 7, 2014), available at https://doi.org/10.1093/rfs/hhu077. 
This is true even though there are only about 4,300 publicly traded 
companies in the U.S. See Rayhanul Ibrahim, ``The number of 
publicly-traded US companies is down 46% in the past two decades,'' 
Yahoo! Finance (Aug. 8, 2016), available at https://finance.yahoo.com/news/jp-startup-public-companies-fewer-000000709.html.
---------------------------------------------------------------------------

    Moreover, these interim final rules build on existing rules that 
already exempt houses of worship and integrated auxiliaries and, as 
explained above, effectively remove obligations to provide 
contraceptive coverage within objecting self-insured church plans. 
These rules will therefore not effect transfers to women in the plans 
of such employers. In attempting to estimate the number of such 
employers, we consider the following information. Many Catholic 
dioceses have litigated or filed public comments opposing the Mandate, 
representing to the Departments and to courts around the country that 
official Catholic Church teaching opposes contraception. There are 
17,651 Catholic parishes in the

[[Page 47823]]

United States,\91\ 197 Catholic dioceses,\92\ 5,224 Catholic elementary 
schools, and 1,205 Catholic secondary schools.\93\ Not all Catholic 
schools are integrated auxiliaries of Catholic churches, but there are 
other Catholic entities that are integrated auxiliaries that are not 
schools, so we use the number of schools to estimate of the number of 
integrated auxiliaries. Among self-insured church plans that oppose the 
Mandate, the Department has been sued by two--Guidestone and Christian 
Brothers. Guidestone is a plan organized by the Southern Baptist 
convention. It covers 38,000 employers, some of which are exempt as 
churches or integrated auxiliaries, and some of which are not.\94\ 
Christian Brothers is a plan that covers Catholic organizations. It 
covers Catholic churches and integrated auxiliaries, which are 
estimated above, but also it has said in litigation that it also covers 
about 500 additional entities that are not exempt as churches. In 
total, therefore, we estimate that approximately 62,000 employers among 
houses of worship, integrated auxiliaries, and church plans, were 
exempt or relieved of contraceptive coverage obligations under the 
previous rules. We do not know how many persons are covered in the 
plans of those employers. Guidestone reports that among its 38,000 
employers, its plan covers approximately 220,000 persons, and its 
employers include ``churches, mission-sending agencies, hospitals, 
educational institutions and other related ministries.'' Using that 
ratio, we estimate that the 62,000 church and church plan employers 
among Guidestone, Christian Brothers, and Catholic churches would 
include 359,000 persons. Among them, as referenced above, 72,500 would 
be of childbearing age, and 32,100 would use contraceptives covered by 
the Guidelines. Therefore, we estimate that the private, non-publicly 
traded employers that did not cover contraception pre-Affordable Care 
Act, and that were not exempt by the previous rules nor were 
participants in self-insured church plans that oppose contraceptive 
coverage, covered 362,100 women aged 15 to 44 that use contraceptives 
covered by the Guidelines. As noted above, we estimate an average 
annual expenditure on contraceptive products and services of $584 per 
user. That would amount to $211.5 million in potential transfer impact 
among entities that did not cover contraception pre- Affordable Care 
Act for any reason.
---------------------------------------------------------------------------

    \91\ Roman Catholic Diocese of Reno, ``Diocese of Reno 
Directory: 2016-2017,'' available at http://www.renodiocese.org/documents/2016/9/2016%202017%20directory.pdf.
    \92\ Wikipedia, ``List of Catholic dioceses in the United 
States,'' available at https://en.wikipedia.org/wiki/List_of_Catholic_dioceses_in_the_United_States.
    \93\ National Catholic Educational Association, ``Catholic 
School Data,'' available at http://www.ncea.org/NCEA/Proclaim/Catholic_School_Data/Catholic_School_Data.aspx.
    \94\ Guidestone Financial Resources, ``Who We Serve,'' available 
at https://www.guidestone.org/AboutUs/WhoWeServe.
---------------------------------------------------------------------------

    We do not have data indicating how many of the entities that 
omitted coverage of contraception pre-Affordable Care Act did so on the 
basis of sincerely held religious beliefs that might qualify them for 
exempt status under these interim final rules, as opposed to having 
done so for other reasons. Besides the entities that filed lawsuits or 
submitted public comments concerning previous rules on this matter, we 
are not aware of entities that omitted contraception pre-Affordable 
Care Act and then opposed the contraceptive coverage requirement after 
it was imposed by the Guidelines. For the following reasons, however, 
we believe that a reasonable estimate is that no more than 
approximately one third of the persons covered by relevant entities--
that is, no more than approximately 120,000 affected women--would 
likely be subject to potential transfer impacts under the expanded 
religious exemptions offered in these interim final rules. 
Consequently, as explained below, we believe that the potential impact 
of these interim final rules falls substantially below the $100 million 
threshold for economically significant and major rules.
    First, as mentioned, we are not aware of information that would 
lead us to estimate that all or most entities that omitted coverage of 
contraception pre-Affordable Care Act did so on the basis of sincerely 
held conscientious objections in general or religious beliefs 
specifically, as opposed to having done so for other reasons. Moreover, 
as suggested by the Guidestone data mentioned previously, employers 
with conscientious objections may tend to have relatively few 
employees. Also, avoiding negative publicity, the difficulty of taking 
away a fringe benefit that employees have become accustomed to having, 
and avoiding the administrative cost of renegotiating insurance 
contracts, all provide reasons for some employers not to return to pre-
Affordable Care Act lack of contraceptive coverage. Additionally, as 
discussed above, many employers with objections to contraception, 
including several of the largest litigants, only object to some 
contraceptives and cover as many as 14 of 18 of the contraceptive 
methods included in the Guidelines. This will reduce, and potentially 
eliminate, the contraceptive cost transfer for women covered in their 
plans.\95\ Furthermore, among nonprofit entities that object to the 
Mandate, it is possible that a greater share of their employees oppose 
contraception than among the general population, which should lead to a 
reduction in the estimate of how many women in those plans actually use 
contraception.
---------------------------------------------------------------------------

    \95\ On the other hand, a key input in the approach that 
generated the one third threshold estimate was a survey indicating 
that six percent of employers did not provide contraceptive coverage 
pre-Affordable Care Act. Employers that covered some contraceptives 
pre-Affordable Care Act may have answered ``yes'' or ``don't know'' 
to the survey. In such cases, the potential transfer estimate has a 
tendency toward underestimation because the rule's effects on such 
women--causing their contraceptive coverage to be reduced from all 
18 methods to some smaller subset--have been omitted from the 
calculation.
---------------------------------------------------------------------------

    In addition, not all sincerely held conscientious objections to 
contraceptive coverage are likely to be held by persons with religious 
beliefs as distinct from persons with sincerely held non-religious 
moral convictions, whose objections would not be encompassed by these 
interim final rules.\96\ We do not have data to indicate, among 
entities that did not cover contraception pre-Affordable Care Act based 
on sincerely held conscientious objections as opposed to other reasons, 
which ones did so based on religious beliefs and which ones did so 
instead based on non-religious moral convictions. Among the general 
public, polls vary about religious beliefs but one prominent poll shows 
that 89 percent of Americans say they believe in God, while 11 percent 
say they do not or are agnostic.\97\ Therefore, we estimate that for 
every ten entities that omitted contraception pre-Affordable Care Act 
based on sincerely held conscientious objections as opposed to other 
reasons, one did so based on sincerely held non-religious moral 
convictions, and therefore are not affected by the expanded exemption 
provided by these interim final rules for religious beliefs.
---------------------------------------------------------------------------

    \96\ Such objections may be encompassed by companion interim 
final rules published elsewhere in this Federal Register. Those 
rules, however, as an interim final matter, are more narrow in scope 
than these rules. For example, in providing expanded exemptions for 
plan sponsors, they do not encompass companies with certain publicly 
traded ownership interests.
    \97\ Gallup, ``Most Americans Still Believe in God'' (June 14-
23, 2016), available at http://www.gallup.com/poll/193271/americans-believe-god.aspx.
---------------------------------------------------------------------------

    Based on our estimate of an average annual expenditure on 
contraceptive products and services of $584 per user,

[[Page 47824]]

the effect of the expanded exemptions on 120,000 women would give rise 
to approximately $70.1 million in potential transfer impact. This falls 
substantially below the $100 million threshold for economically 
significant and major rules. In addition, as noted above, premiums may 
be expected to adjust to reflect changes in coverage, thus partially 
offsetting the transfer experienced by women who use the affected 
contraceptives. As discussed elsewhere in this analysis, such women may 
make up approximately 8.9 percent (= 20.2 percent x 44.3 percent) of 
the covered population, in which case the offset would also be 
approximately 8.9 percent, yielding a potential transfer of $63.8 
million.
    We request comment on all aspects of the preceding regulatory 
impact analysis, as well as on how to attribute impacts to this interim 
final rule and the companion interim final rule concerning exemptions 
provided based on sincerely held (non-religious) moral convictions 
published elsewhere in this Federal Register.

B. Special Analyses--Department of the Treasury

    For purposes of the Department of the Treasury, certain Internal 
Revenue Service (IRS) regulations, including this one, are exempt from 
the requirements in Executive Order 12866, as supplemented by Executive 
Order 13563. The Departments anticipate that there will be more 
entities reluctantly using the existing accommodation that will choose 
to operate under the newly expanded exemption, than entities that are 
not currently eligible to use the accommodation that will opt into it. 
The effect of this rule will therefore be that fewer overall 
adjustments are made to the Federally facilitated Exchange user fees 
for entities using the accommodation process, as long as the Secretary 
of the Department of Health and Human Services requests and an 
authorizing exception under OMB Circular No. A-25R is in effect, than 
would have occurred under the previous rule if this rule were not 
finalized. Therefore, a regulatory assessment is not required.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the APA (5 
U.S.C. 551 et seq.) and that are likely to have a significant economic 
impact on a substantial number of small entities. Under Section 553(b) 
of the APA, a general notice of proposed rulemaking is not required 
when an agency, for good cause, finds that notice and public comment 
thereon are impracticable, unnecessary, or contrary to the public 
interest. The interim final rules are exempt from the APA, both because 
the PHS Act, ERISA, and the Code contain specific provisions under 
which the Secretaries may adopt regulations by interim final rule and 
because the Departments have made a good cause finding that a general 
notice of proposed rulemaking is not necessary earlier in this 
preamble. Therefore, the RFA does not apply and the Departments are not 
required to either certify that the regulations or this amendment would 
not have a significant economic impact on a substantial number of small 
entities or conduct a regulatory flexibility analysis.
    Nevertheless, the Departments carefully considered the likely 
impact of the rule on small entities in connection with their 
assessment under Executive Order 12866. The Departments do not expect 
that these interim final rules will have a significant economic effect 
on a substantial number of small entities, because they will not result 
in any additional costs to affected entities, and in many cases will 
relieve burdens and costs from such entities. By exempting from the 
Mandate small businesses and nonprofit organizations with religious 
objections to some (or all) contraceptives and/or sterilization, the 
Departments have reduced regulatory burden on such small entities. 
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.

D. Paperwork Reduction Act--Department of Health and Human Services

    Under the Paperwork Reduction Act of 1995 (the PRA), Federal 
agencies are required to publish notice in the Federal Register 
concerning each proposed collection of information. Interested persons 
are invited to send comments regarding our burden estimates or any 
other aspect of this collection of information, including any of the 
following subjects: (1) The necessity and utility of the proposed 
information collection for the proper performance of the agency's 
functions; (2) the accuracy of the estimated burden; (3) ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and (4) the use of automated collection techniques or other 
forms of information technology to minimize the information collection 
burden.
    However, we are requesting an emergency review of the information 
collection referenced later in this section. In compliance with the 
requirement of section 3506(c)(2)(A) of the PRA, we have submitted the 
following for emergency review to the Office of Management and Budget 
(OMB). We are requesting an emergency review and approval under both 5 
CFR 1320.13(a)(2)(i) and (iii) of the implementing regulations of the 
PRA in order to implement provisions regarding self-certification or 
notices to HHS from eligible organizations (Sec.  147.131(c)(3)), 
notice of availability of separate payments for contraceptive services 
(Sec.  147.131(f)), and notice of revocation of accommodation (Sec.  
147.131(c)(4)). In accordance with 5 CFR 1320.13(a)(2)(i), we believe 
public harm is reasonably likely to ensue if the normal clearance 
procedures are followed. The use of normal clearance procedures is 
reasonably likely to prevent or disrupt the collection of information. 
Similarly, in accordance with 5 CFR 1320.13(a)(2)(iii), we believe the 
use of normal clearance procedures is reasonably likely to cause a 
statutory or court ordered deadline to be missed. Many cases have been 
on remand for over a year from the Supreme Court, asking the 
Departments and the parties to resolve this matter. These interim final 
rules extend exemptions to entities, which involves no collection of 
information and which the Departments have statutory authority to do by 
the use of interim final rules. If the information collection involved 
in the amended accommodation process is not approved on an emergency 
basis, newly exempt entities that wish to opt into the amended 
accommodation process might not be able to do so until normal clearance 
procedures are completed.
    A description of the information collection provisions implicated 
in these interim final rules is given in the following section with an 
estimate of the annual burden. Average labor costs (including 100 
percent fringe benefits) used to estimate the costs are calculated 
using data available from the Bureau of Labor Statistics.\98\
---------------------------------------------------------------------------

    \98\ May 2016 National Occupational Employment and Wage 
Estimates United States found at https://www.bls.gov/oes/current/oes_nat.htm.
---------------------------------------------------------------------------

a. ICRs Regarding Self-Certification or Notices to HHS (Sec.  
147.131(c)(3))
    Each organization seeking to be treated as an eligible organization 
that wishes to use the optional accommodation process offered under

[[Page 47825]]

these interim final rules must either use the EBSA Form 700 method of 
self-certification or provide notice to HHS of its religious objection 
to coverage of all or a subset of contraceptive services. Specifically, 
these interim final rules continue to allow eligible organizations to 
notify an issuer or third party administrator using EBSA Form 700, or 
to notify HHS, of their religious objection to coverage of all or a 
subset of contraceptive services, as set forth in the July 2015 final 
regulations. The burden related to the notice to HHS is currently 
approved under OMB Control Number 0938-1248 and the burden related to 
the self-certification (EBSA Form 700) is currently approved under OMB 
control number 0938-1292.
    Notably, however, entities that are participating in the previous 
accommodation process, where a self-certification or notice has already 
been submitted, and where the entities choose to continue their 
accommodated status under these interim final rules, generally do not 
need to file a new self-certification or notice (unless they change 
their issuer or third party administrator). As explained above, HHS 
assumes that, among the 209 entities we estimated are using the 
previous accommodation, 109 will use the expanded exemption and 100 
will continue under the voluntary accommodation. Those 100 entities 
will not need to file additional self-certifications or notices. HHS 
also assumes that an additional 9 entities that were not using the 
previous accommodation will opt into it. Those entities will be subject 
to the self-certification or notice requirement.
    In order to estimate the cost for an entity that chooses to opt 
into the accommodation process, HHS assumes, as it did in its August 
2014 interim final rules, that clerical staff for each eligible 
organization will gather and enter the necessary information and send 
the self-certification to the issuer or third party administrator as 
appropriate, or send the notice to HHS.\99\ HHS assumes that a 
compensation and benefits manager and inside legal counsel will review 
the self-certification or notice to HHS and a senior executive would 
execute it. HHS estimates that an eligible organization would spend 
approximately 50 minutes (30 minutes of clerical labor at a cost of 
$55.68 per hour,\100\ 10 minutes for a compensation and benefits 
manager at a cost of $122.02 per hour,\101\ 5 minutes for legal counsel 
at a cost of $134.50 per hour,\102\ and 5 minutes by a senior executive 
at a cost of $186.88 per hour \103\) preparing and sending the self-
certification or notice to HHS and filing it to meet the recordkeeping 
requirement. Therefore, the total annual burden for preparing and 
providing the information in the self-certification or notice to HHS 
will require approximately 50 minutes for each eligible organization 
with an equivalent cost burden of approximately $74.96 for a total hour 
burden of approximately 7.5 hours with an equivalent cost of 
approximately $675 for 9 entities. As DOL and HHS share jurisdiction, 
they are splitting the hour burden so each will account for 
approximately 3.75 burden hours with an equivalent cost of 
approximately $337.
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    \99\ For purposes of this analysis, the Department assumes that 
the same amount of time will be required to prepare the self-
certification and the notice to HHS.
    \100\ Occupation code 43-6011 for Executive Secretaries and 
Executive Administrative Assistants with mean hourly wage $27.84, 
https://www.bls.gov/oes/current/oes436011.htm.
    \101\ Occupation code 11-3111 for Compensation and Benefits 
Managers with mean hourly wage $61.01, https://www.bls.gov/oes/current/oes113111.htm.
    \102\ Occupation code 23-1011 for Lawyers with mean hourly wage 
$67.25, https://www.bls.gov/oes/current/oes231011.htm.
    \103\ Occupation code11-1011 for Chief Executives with mean 
hourly wage $93.44, https://www.bls.gov/oes/current/oes111011.htm.
---------------------------------------------------------------------------

    HHS estimates that each self-certification or notice to HHS will 
require $0.49 in postage and $0.05 in materials cost (paper and ink) 
and the total postage and materials cost for each self-certification or 
notice sent via mail will be $0.54. For purposes of this analysis, HHS 
assumes that 50 percent of self-certifications or notices to HHS will 
be mailed. The total cost for sending the self-certifications or 
notices to HHS by mail is approximately $2.70 for 5 entities. As DOL 
and HHS share jurisdiction they are splitting the cost burden so each 
will account for $1.35 of the cost burden.
b. ICRs Regarding Notice of Availability of Separate Payments for 
Contraceptive Services (Sec.  147.131(e))
    As required by the July 2015 final regulations, a health insurance 
issuer or third party administrator providing or arranging separate 
payments for contraceptive services for participants and beneficiaries 
in insured or self-insured group health plans (or student enrollees and 
covered dependents in student health insurance coverage) of eligible 
organizations is required to provide a written notice to plan 
participants and beneficiaries (or student enrollees and covered 
dependents) informing them of the availability of such payments. The 
notice must be separate from, but contemporaneous with (to the extent 
possible), any application materials distributed in connection with 
enrollment (or re-enrollment) in group or student coverage of the 
eligible organization in any plan year to which the accommodation is to 
apply and will be provided annually. To satisfy the notice requirement, 
issuers and third party administrators may, but are not required to, 
use the model language set forth previously by HHS or substantially 
similar language. The burden for this ICR is currently approved under 
OMB control number 0938-1292.
    As mentioned, HHS is anticipating that approximately 109 entities 
will use the optional accommodation (100 that used it previously, and 9 
that will newly opt into it). It is unknown how many issuers or third 
party administrators provide health insurance coverage or services in 
connection with health plans of eligible organizations, but HHS will 
assume at least 109. It is estimated that each issuer or third party 
administrator will need approximately 1 hour of clerical labor (at 
$55.68 per hour) \104\ and 15 minutes of management review (at $117.40 
per hour) \105\ to prepare the notices. The total burden for each 
issuer or third party administrator to prepare notices will be 1.25 
hours with an equivalent cost of approximately $85.03. The total burden 
for all issuers or third party administrators will be 136 hours, with 
an equivalent cost of $9,268. As DOL and HHS share jurisdiction, they 
are splitting the hour burden so each will account for 68 burden hours 
with an equivalent cost of $4,634, with approximately 55 respondents.
---------------------------------------------------------------------------

    \104\ Occupation code 43-6011 for Executive Secretaries and 
Executive Administrative Assistants with mean hourly wage $27.84.
    \105\ Occupation code 11-1021 General and Operations Managers 
with mean hourly wage $58.70.
---------------------------------------------------------------------------

    As discussed above, the Departments estimate that 770,000 persons 
will be covered in the plans of the 100 entities that previously used 
the accommodation and will continue doing so, and that an additional 9 
entities will newly opt into the accommodation. It is not known how 
many persons will be covered in the plans of the 9 entities newly using 
the accommodation. Assuming that those 9 entities will have a similar 
number of covered persons per entity, we estimate that all 109 
accommodated entities will encompass 839,300 covered persons. We assume 
that sending one notice to each participant will satisfy the need to 
send the notices to all participants and dependents. Among persons 
covered by plans, approximately 50.1 percent are participants and 49.9 
percent are

[[Page 47826]]

dependents.\106\ For 109 entities, the total number of notices will be 
420,490. For purposes of this analysis, the Departments also assume 
that 53.7 percent of notices will be sent electronically, and 46.3 
percent will be mailed.\107\ Therefore, approximately 194,687 notices 
will be mailed. HHS estimates that each notice will require $0.49 in 
postage and $0.05 in materials cost (paper and ink) and the total 
postage and materials cost for each notice sent via mail will be $0.54. 
The total cost for sending approximately 194,687 notices by mail is 
approximately $105,131. As DOL and HHS share jurisdiction, they are 
splitting the cost burden so each will account for $52,565 of the cost 
burden.
---------------------------------------------------------------------------

    \106\ ``Health Insurance Coverage Bulletin'' Table 4, page 21. 
Using March 2015 Annual Social and Economic Supplement to the 
Current Population Survey. https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf.
    \107\ According to data from the National Telecommunications and 
Information Agency (NTIA), 36.0 percent of individuals age 25 and 
over have access to the Internet at work. According to a Greenwald & 
Associates survey, 84 percent of plan participants find it 
acceptable to make electronic delivery the default option, which is 
used as the proxy for the number of participants who will not opt 
out that are automatically enrolled (for a total of 30.2 percent 
receiving electronic disclosure at work). Additionally, the NTIA 
reports that 38.5 percent of individuals age 25 and over have access 
to the Internet outside of work. According to a Pew Research Center 
survey, 61 percent of Internet users use online banking, which is 
used as the proxy for the number of Internet users who will opt in 
for electronic disclosure (for a total of 23.5 percent receiving 
electronic disclosure outside of work). Combining the 30.2 percent 
who receive electronic disclosure at work with the 23.5 percent who 
receive electronic disclosure outside of work produces a total of 
53.7 percent who will receive electronic disclosure overall.
---------------------------------------------------------------------------

c. ICRs Regarding Notice of Revocation of Accommodation (Sec.  
147.131(c)(4))
    An eligible organization may revoke its use of the accommodation 
process; its issuer or third party administrator must provide written 
notice of such revocation to participants and beneficiaries as soon as 
practicable. As discussed above, HHS estimates that 109 entities that 
are using the accommodation process will revoke their use of the 
accommodation, and will therefore be required to cause the notification 
to be sent (the issuer or third party administrator can send the notice 
on behalf of the entity). For the purpose of calculating ICRs 
associated with revocations of the accommodation, and for various 
reasons discussed above, HHS assumes that litigating entities that were 
previously using the accommodation and that will revoke it fall within 
the estimated 109 entities that will revoke the accommodation overall.
    As before, HHS assumes that, for each issuer or third party 
administrator, a manager and inside legal counsel and clerical staff 
will need approximately 2 hours to prepare and send the notification to 
participants and beneficiaries and maintain records (30 minutes for a 
manager at a cost of $117.40 per hour,\108\ 30 minutes for legal 
counsel at a cost of $134.50 per hour \109\, 1 hour for clerical labor 
at a cost of $55.68 per hour \110\). The burden per respondent will be 
2 hours with an equivalent cost of $181.63; for 109 entities, the total 
burden will be 218 hours with an equivalent cost of approximately 
$19,798. As DOL and HHS share jurisdiction, they are splitting the hour 
burden so each will account for 109 burden hours with an equivalent 
cost of approximately $9,899.
---------------------------------------------------------------------------

    \108\ Occupation code 11-1021 for General and Operations 
Managers with mean hourly wage $58.70, https://www.bls.gov/oes/current/oes111021.htm.
    \109\ Occupation code 23-1011 for Lawyers with mean hourly wage 
$67.25, https://www.bls.gov/oes/current/oes231011.htm.
    \110\ Occupation code 43-6011 for Executive Secretaries and 
Executive Administrative Assistants with mean hourly wage $27.84, 
https://www.bls.gov/oes/current/oes436011.htm.
---------------------------------------------------------------------------

    As discussed above, HHS estimates that there are 257,000 covered 
persons in accommodated plans that will revoke their accommodated 
status and use the expanded exemption.\111\ As before, we use the 
average of 50.1 percent of covered persons who are policyholders, and 
estimate that an average of 53.7 percent of notices will be sent 
electronically and 46.3 percent by mail. Therefore, approximately 
128,757 notices will be sent, of which 59,615 notices will be mailed. 
HHS estimates that each notice will require $0.49 in postage and $0.05 
in materials cost (paper and ink) and the total postage and materials 
cost for each notice sent via mail will be $0.54. The total cost for 
sending approximately 59,615 notices by mail is approximately $32,192. 
As DOL and HHS share jurisdiction, they are splitting the hour burden 
so each will account for 64,379 notices, with an equivalent cost of 
approximately $16,096.
---------------------------------------------------------------------------

    \111\ In estimating the number of women that might have their 
contraceptive coverage affected by the expanded exemption, we 
indicated that we do not know the extent to which the number of 
women in accommodated plans affected by these rules overlap with the 
number of women in plans offered by litigating entities that will be 
affected by these rules, though we assume there is significant 
overlap. That uncertainty should not affect the calculation of the 
ICRs for revocation notices, however. If the two numbers overlap, 
the estimates of plans revoking the accommodation and policyholders 
covered in those plans would already include plans and policyholders 
of litigating entities. If the numbers do not overlap, those 
litigating entity plans would not presently be enrolled in the 
accommodation, and therefore would not need to send notices 
concerning revocation of accommodated status.

                                                   Table 1--Summary of Information Collection Burdens
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Hourly labor   Total labor
                                                              Number of                Burden per   Total annual     cost of       cost of    Total cost
        Regulation section             OMB  control No.      respondents   Responses   respondent       burden      reporting     reporting       ($)
                                                                                         (hours)       (hours)         ($)           ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Self-Certification or Notices to    0938--NEW.............            *5           5          0.83          3.75        $89.95       $337.31     $338.66
 HHS.
Notice of Availability of Separate  0938--NEW.............           *55     210,245          1.25         68.13         68.02      4,634.14   57,199.59
 Payments for Contraceptive
 Services.
Notice of Revocation of             0938--NEW.............           *55      64,379          2.00           109         90.82      9,898.84   25,994.75
 Accommodation.
                                                           ---------------------------------------------------------------------------------------------
    Total.........................  ......................          *115     274,629          4.08        180.88  ............     14,870.29   83,533.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The total number of respondents is 227 (= 9+109+109) for both HHS and DOL, but the summaries here and below exceed that total because of rounding up
  that occurs when sharing the burden between HHS and DOL.
Note: There are no capital/maintenance costs associated with the ICRs contained in this rule; therefore, we have removed the associated column from
  Table 1. Postage and material costs are included in Total Cost.

    We are soliciting comments on all of the information collection 
requirements contained in these interim final rules. In addition, we 
are also soliciting comments on all of the related information 
collection requirements currently approved under 0938-1292 and 0938-
1248. HHS is requesting a new OMB control number that will ultimately 
contain the approval for the new information collection requirements 
contained in these interim

[[Page 47827]]

final rules as well as the related requirements currently approved 
under 0938-1292 and 0938-1248. In an effort to consolidate the number 
of information collection requests, we will formally discontinue the 
control numbers 0938-1292 and 0938-1248 once the new information 
collection request associated with these interim final rules is 
approved.
    To obtain copies of a supporting statement and any related forms 
for the proposed collection(s) summarized in this notice, you may make 
your request using one of following:
    1. Access CMS' Web site address at https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html.
    2. Email your request, including your address, phone number, OMB 
number, and CMS document identifier, to <a href="/cdn-cgi/l/email-protection#2a7a4b5a4f585d4558416a49475904424259044d455c"><span class="__cf_email__" data-cfemail="c090a1b0a5b2b7afb2ab80a3adb3eea8a8b3eea7afb6">[email protected]</span></a>.
    3. Call the Reports Clearance Office at (410) 786-1326.
    If you comment on these information collections, that is, 
reporting, recordkeeping or third-party disclosure requirements, please 
submit your comments electronically as specified in the ADDRESSES 
section of these interim final rules with comment period.

E. Paperwork Reduction Act--Department of Labor

    Under the Paperwork Reduction Act, 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. In 
accordance with the requirements of the PRA, the ICR for the EBSA Form 
700 and alternative notice have previously been approved by OMB under 
control numbers 1210-0150 and 1210-0152. A copy of the ICR may be 
obtained by contacting the PRA addressee shown below or at http://www.RegInfo.gov. PRA ADDRESSEE: G. Christopher Cosby, Office of Policy 
and Research, U.S. Department of Labor, Employee Benefits Security 
Administration, 200 Constitution Avenue NW., Room N-5718, Washington, 
DC 20210. Telephone: 202-693-8410; Fax: 202-219-4745. These are not 
toll-free numbers.
    These interim final rules amend the ICR by changing the 
accommodation process to an optional process for exempt organizations 
and requiring a notice of revocation to be sent by the issuer or third 
party administrator to participants and beneficiaries in plans whose 
employer who revokes their accommodation. DOL submitted the ICRs in 
order to obtain OMB approval under the PRA for the regulatory revision. 
The request was made under emergency clearance procedures specified in 
regulations at 5 CFR 1320.13. In an effort to consolidate the number of 
information collection requests, DOL will combine the ICR related to 
the OMB control number 1210-0152 with the ICR related to the OMB 
control number 1210-0150. Once the ICR is approved DOL will discontinue 
1210-0152. A copy of the information collection request may be obtained 
free of charge on the RegInfo.gov Web site at http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201705-1210-001. This approval will allow 
respondents to temporarily utilize the additional flexibility these 
interim final regulations provide, while DOL seeks public comment on 
the collection methods--including their utility and burden.
    Consistent with the analysis in the HHS PRA section above, the 
Departments expect that each of the estimated 9 eligible organizations 
newly opting into the accommodation will spend approximately 50 minutes 
in preparation time and incur $0.54 mailing cost to self-certify or 
notify HHS. Each of the 109 issuers or third party administrators for 
the 109 eligible organizations that make use of the accommodation 
overall will distribute Notices of Availability of Separate Payments 
for Contraceptive Services. These issuers and third party 
administrators will spend approximately 1.25 hours in preparation time 
and incur $0.54 cost per mailed notice. Notices of Availability of 
Separate Payments for Contraceptive Services will need to be sent to 
420,489 policyholders, and 53.7 percent of the notices will be sent 
electronically, while 46.3 percent will be mailed. Finally, 109 
entities using the previous accommodation process will revoke its use 
and will therefore be required to cause the Notice of Revocation of 
Accommodation to be sent (the issuer or third party administrator can 
send the notice on behalf of the entity). These entities will spend 
approximately two hours in preparation time and incur $0.54 cost per 
mailed notice. Notice of Revocation of Accommodation will need to be 
sent to an average of 128,757 policyholders and 53.7 percent of the 
notices will be sent electronically. The DOL information collections in 
this rule are found in 29 CFR 2510.3-16 and 2590.715-2713A and are 
summarized as follows:
    Type of Review: Revised Collection.
    Agency: DOL-EBSA.
    Title: Coverage of Certain Preventive Services under the Affordable 
Care Act--Private Sector.
    OMB Numbers: 1210-0150.
    Affected Public: Private Sector--Not for profit and religious 
organizations; businesses or other for-profits.
    Total Respondents: 114 \112\ (combined with HHS total is 227).
---------------------------------------------------------------------------

    \112\ Denotes that there is an overlap between jurisdiction 
shared by HHS and DOL over these respondents and therefore they are 
included only once in the total.
---------------------------------------------------------------------------

    Total Responses: 274,628 (combined with HHS total is 549,255).
    Frequency of Response: On occasion.
    Estimated Total Annual Burden Hours: 181 (combined with HHS total 
is 362 hours).
    Estimated Total Annual Burden Cost: $68,662 (combined with HHS 
total is $137,325).
    Type of Review: Revised Collection.
    Agency: DOL-EBSA.

F. Regulatory Reform Executive Orders 13765, 13771 and 13777

    Executive Order 13765 (January 20, 2017) directs that, ``[t]o the 
maximum extent permitted by law, the Secretary of the Department of 
Health and Human Services and the heads of all other executive 
departments and agencies (agencies) with authorities and 
responsibilities under the Act shall exercise all authority and 
discretion available to them to waive, defer, grant exemptions from, or 
delay the implementation of any provision or requirement of the Act 
that would impose a fiscal burden on any State or a cost, fee, tax, 
penalty, or regulatory burden on individuals, families, healthcare 
providers, health insurers, patients, recipients of healthcare 
services, purchasers of health insurance, or makers of medical devices, 
products, or medications.'' In addition, agencies are directed to 
``take all actions consistent with law to minimize the unwarranted 
economic and regulatory burdens of the [Affordable Care Act], and 
prepare to afford the States more flexibility and control to create a 
more free and open healthcare market.'' These interim final rules 
exercise the discretion provided to the Departments under the 
Affordable Care Act, RFRA, and other laws to grant exemptions and 
thereby minimize regulatory burdens of the Affordable Care Act on the 
affected entities and recipients of health care services.
    Consistent with Executive Order 13771 (82 FR 9339, February 3, 
2017), we have estimated the costs and cost savings attributable to 
this interim final rule. As discussed in more detail in the preceding 
analysis, this interim final rule lessens incremental reporting

[[Page 47828]]

costs.\113\ Therefore, this interim final rule is considered an 
Executive Order 13771 deregulatory action.
---------------------------------------------------------------------------

    \113\ Other noteworthy potential impacts encompass potential 
changes in medical expenditures, including potential decreased 
expenditures on contraceptive devices and drugs and potential 
increased expenditures on pregnancy-related medical services. OMB's 
guidance on E.O. 13771 implementation (https://www.whitehouse.gov/the-press-office/2017/04/05/memorandum-implementing-executive-order-13771-titled-reducing-regulation) states that impacts should be 
categorized as consistently as possible within Departments. The Food 
and Drug Administration, within HHS, and the Occupational Safety and 
Health Administration (OSHA) and Mine Safety and Health 
Administration (MSHA), within DOL, regularly estimate medical 
expenditure impacts in the analyses that accompany their 
regulations, with the results being categorized as benefits 
(positive benefits if expenditures are reduced, negative benefits if 
expenditures are raised). Following the FDA, OSHA and MSHA 
accounting convention leads to this interim final rule's medical 
expenditure impacts being categorized as (positive or negative) 
benefits, rather than as costs, thus placing them outside of 
consideration for E.O. 13771 designation purposes.
---------------------------------------------------------------------------

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (section 202(a) of Pub. L. 
104-4), requires the Departments to prepare a written statement, which 
includes an assessment of anticipated costs and benefits, before 
issuing ``any rule that includes any Federal mandate that may result in 
the expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100,000,000 or more (adjusted 
annually for inflation) in any one year.'' The current threshold after 
adjustment for inflation is $148 million, using the most current (2016) 
Implicit Price Deflater for the Gross Domestic Product. For purposes of 
the Unfunded Mandates Reform Act, these interim final rules 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.

G. Federalism

    Executive Order 13132 outlines fundamental principles of 
federalism, and requires the adherence to specific criteria by Federal 
agencies in the process of their formulation and implementation of 
policies that have ``substantial direct effects'' on States, the 
relationship between the Federal Government and States, or the 
distribution of power and responsibilities among the various levels of 
Government. Federal agencies promulgating regulations that have these 
federalism implications must consult with State and local officials, 
and describe the extent of their consultation and the nature of the 
concerns of State and local officials in the preamble to the 
regulation.
    These interim final rules do not have any Federalism implications, 
since they only provide exemptions from the contraceptive and 
sterilization coverage requirement in HRSA Guidelines supplied under 
section 2713 of the PHS Act.

VII. Statutory Authority

    The Department of the Treasury temporary regulations are adopted 
pursuant to the authority contained in sections 7805 and 9833 of the 
Code.
    The Department of Labor regulations are adopted pursuant to the 
authority contained in 29 U.S.C. 1002(16), 1027, 1059, 1135, 1161-1168, 
1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1185d, 1191, 1191a, 
1191b, and 1191c; sec. 101(g), Public Law 104-191, 110 Stat. 1936; sec. 
401(b), Public Law 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 
512(d), Public Law 110-343, 122 Stat. 3881; sec. 1001, 1201, and 
1562(e), Public Law 111-148, 124 Stat. 119, as amended by Public Law 
111-152, 124 Stat. 1029; Secretary of Labor's Order 1-2011, 77 FR 1088 
(Jan. 9, 2012).
    The Department of Health and Human Services regulations are adopted 
pursuant to the authority contained in sections 2701 through 2763, 
2791, and 2792 of the PHS Act (42 U.S.C. 300gg through 300gg-63, 300gg-
91, and 300gg-92), as amended; and Title I of the Affordable Care Act, 
sections 1301-1304, 1311-1312, 1321-1322, 1324, 1334, 1342-1343, 1401-
1402, and 1412, Public Law 111-148, 124 Stat. 119 (42 U.S.C. 18021-
18024, 18031-18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 
18082, 26 U.S.C. 36B, and 31 U.S.C. 9701).

List of Subjects

26 CFR Part 54

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

29 CFR Part 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, State regulation of health insurance.

Kirsten B. Wielobob,
Deputy Commissioner for Services and Enforcement.
    Approved: October 2, 2017.
David J. Kautter,
Assistant Secretary for Tax Policy.
    Signed this 4th day of October, 2017.
Timothy D. Hauser,
Deputy Assistant Secretary for Program Operations, Employee Benefits 
Security Administration, Department of Labor.
    Dated: October 4, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: October 4, 2017.
Donald Wright,
Acting Secretary, Department of Health and Human Services.

DEPARTMENT OF THE TREASURY

Internal Revenue Service

    For the reasons set forth in this preamble, 26 CFR part 54 is 
amended as follows:

PART 54--PENSION EXCISE TAXES

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

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


0
2. Section 54.9815-2713 is amended by revising paragraphs (a)(1) 
introductory text and (a)(1)(iv) to read as follows:


Sec.  54.9815-2713  Coverage of preventive health services.

    (a) * * *
    (1) In general. [Reserved]. For further guidance, see Sec.  
54.9815-2713T(a)(1) introductory text.
* * * * *
    (iv) [Reserved]. For further guidance, see Sec.  54.9815-
2713T(a)(1)(iv).
* * * * *


0
3. Section 54.9815-2713T is added to read as follows:


Sec.  54.9815-2713T  Coverage of preventive health services 
(temporary).

    (a) Services--(1) In general. Beginning at the time described in 
paragraph (b) of Sec.  54.9815-2713 and subject to Sec.  54.9815-2713A, 
a group health plan, or a health insurance issuer offering group health 
insurance coverage, must provide coverage for and must not impose any 
cost-sharing requirements (such as a copayment, coinsurance, or a 
deductible) for--
    (i)-(iii) [Reserved]. For further guidance, see Sec.  54.9815-
2713(a)(1)(i) through (iii).

[[Page 47829]]

    (iv) With respect to women, such additional preventive care and 
screenings not described in paragraph (a)(1)(i) of Sec.  54.9815-2713 
as provided for in comprehensive guidelines supported by the Health 
Resources and Services Administration for purposes of section 
2713(a)(4) of the Public Health Service Act, subject to 45 CFR 147.131 
and 147.132.
    (2)-(c) [Reserved]. For further guidance, see Sec.  54.9815-
2713(a)(2) through (c).
    (d) Effective/Applicability date. (1) Paragraphs (a) through (c) of 
this section are applicable beginning on April 16, 2012, except--
    (2) Paragraphs (a)(1) introductory text and (a)(1)(iv) of this 
section are effective on October 6, 2017.
    (e) Expiration date. This section expires on October 6, 2020.


0
4. Section 54.9815-2713A is revised to read as follows:


Sec.  54.9815-2713A  Accommodations in connection with coverage of 
preventive health services.

    (a) through (f) [Reserved]. For further guidance, see Sec.  
54.9815-2713AT.

    (b)

0
5. Section 54.9815-2713AT is added to read as follows:


Sec.  54.9815-2713AT   Accommodations in connection with coverage of 
preventive health services (temporary).

    (a) Eligible organizations for optional accommodation. An eligible 
organization is an organization that meets the criteria of paragraphs 
(a)(1) through (4) of this section.
    (1) The organization is an objecting entity described in 45 CFR 
147.132(a)(1)(i) or (ii);
    (2) Notwithstanding its status under paragraph (a)(1) of this 
section and under 45 CFR 147.132(a), the organization voluntarily seeks 
to be considered an eligible organization to invoke the optional 
accommodation under paragraph (b) or (c) of this section as applicable; 
and
    (3) [Reserved]
    (4) The organization self-certifies in the form and manner 
specified by the Secretary of Labor or provides notice to the Secretary 
of the Department of Health and Human Services as described in 
paragraph (b) or (c) of this section. To qualify as an eligible 
organization, the organization must make such self-certification or 
notice available for examination upon request by the first day of the 
first plan year to which the accommodation in paragraph (b) or (c) of 
this section applies. The self-certification or notice must be executed 
by a person authorized to make the certification or provide the notice 
on behalf of the organization, and must be maintained in a manner 
consistent with the record retention requirements under section 107 of 
ERISA.
    (5) An eligible organization may revoke its use of the 
accommodation process, and its issuer or third party administrator must 
provide participants and beneficiaries written notice of such 
revocation as specified in guidance issued by the Secretary of the 
Department of Health and Human Services. If contraceptive coverage is 
currently being offered by an issuer or third party administrator 
through the accommodation process, the revocation will be effective on 
the first day of the first plan year that begins on or after 30 days 
after the date of the revocation (to allow for the provision of notice 
to plan participants in cases where contraceptive benefits will no 
longer be provided). Alternatively, an eligible organization may give 
sixty-days notice pursuant to section 2715(d)(4) of the PHS Act and 
Sec.  54.9815-2715(b), if applicable, to revoke its use of the 
accommodation process.
    (b) Optional accommodation--self-insured group health plans. (1) A 
group health plan established or maintained by an eligible organization 
that provides benefits on a self-insured basis may voluntarily elect an 
optional accommodation under which its third party administrator(s) 
will provide or arrange payments for all or a subset of contraceptive 
services for one or more plan years. To invoke the optional 
accommodation process:
    (i) The eligible organization or its plan must contract with one or 
more third party administrators.
    (ii) The eligible organization must provide either a copy of the 
self-certification to each third party administrator or a notice to the 
Secretary of the Department of Health and Human Services that it is an 
eligible organization and of its objection as described in 45 CFR 
147.132 to coverage of all or a subset of contraceptive services.
    (A) When a copy of the self-certification is provided directly to a 
third party administrator, such self-certification must include notice 
that obligations of the third party administrator are set forth in 29 
CFR 2510.3-16 and this section.
    (B) When a notice is provided to the Secretary of Health and Human 
Services, the notice must include the name of the eligible 
organization; a statement that it objects as described in 45 CFR 
147.132 to coverage of some or all contraceptive services (including an 
identification of the subset of contraceptive services to which 
coverage the eligible organization objects, if applicable), but that it 
would like to elect the optional accommodation process; the plan name 
and type (that is, whether it is a student health insurance plan within 
the meaning of 45 CFR 147.145(a) or a church plan within the meaning of 
section 3(33) of ERISA); and the name and contact information for any 
of the plan's third party administrators. If there is a change in any 
of the information required to be included in the notice, the eligible 
organization must provide updated information to the Secretary of the 
Department of Health and Human Services for the optional accommodation 
process to remain in effect. The Department of Labor (working with the 
Department of Health and Human Services), will send a separate 
notification to each of the plan's third party administrators informing 
the third party administrator that the Secretary of the Department of 
Health and Human Services has received a notice under paragraph 
(b)(1)(ii) of this section and describing the obligations of the third 
party administrator under 29 CFR 2510.3-16 and this section.
    (2) If a third party administrator receives a copy of the self-
certification from an eligible organization or a notification from the 
Department of Labor, as described in paragraph (b)(1)(ii) of this 
section, and is willing to enter into or remain in a contractual 
relationship with the eligible organization or its plan to provide 
administrative services for the plan, then the third party 
administrator will provide or arrange payments for contraceptive 
services, using one of the following methods--
    (i) Provide payments for the contraceptive services for plan 
participants and beneficiaries without imposing any cost-sharing 
requirements (such as a copayment, coinsurance, or a deductible), 
premium, fee, or other charge, or any portion thereof, directly or 
indirectly, on the eligible organization, the group health plan, or 
plan participants or beneficiaries; or
    (ii) Arrange for an issuer or other entity to provide payments for 
the contraceptive services for plan participants and beneficiaries 
without imposing any cost-sharing requirements (such as a copayment, 
coinsurance, or a deductible), premium, fee, or other charge, or any 
portion thereof, directly or indirectly, on the eligible organization, 
the group health plan, or plan participants or beneficiaries.

[[Page 47830]]

    (3) If a third party administrator provides or arranges payments 
for contraceptive services in accordance with either paragraph 
(b)(2)(i) or (ii) of this section, the costs of providing or arranging 
such payments may be reimbursed through an adjustment to the Federally 
facilitated Exchange user fee for a participating issuer pursuant to 45 
CFR 156.50(d).
    (4) A third party administrator may not require any documentation 
other than a copy of the self-certification from the eligible 
organization or notification from the Department of Labor described in 
paragraph (b)(1)(ii) of this section.
    (5) Where an otherwise eligible organization does not contract with 
a third party administrator and files a self-certification or notice 
under paragraph (b)(1)(ii) of this section, the obligations under 
paragraph (b)(2) of this section do not apply, and the otherwise 
eligible organization is under no requirement to provide coverage or 
payments for contraceptive services to which it objects. The plan 
administrator for that otherwise eligible organization may, if it and 
the otherwise eligible organization choose, arrange for payments for 
contraceptive services from an issuer or other entity in accordance 
with paragraph (b)(2)(ii) of this section, and such issuer or other 
entity may receive reimbursements in accordance with paragraph (b)(3) 
of this section.
    (6) Where an otherwise eligible organization is an ERISA-exempt 
church plan within the meaning of section 3(33) of ERISA and it files a 
self-certification or notice under paragraph (b)(1)(ii) of this 
section, the obligations under paragraph (b)(2) of this section do not 
apply, and the otherwise eligible organization is under no requirement 
to provide coverage or payments for contraceptive services to which it 
objects. The third party administrator for that otherwise eligible 
organization may, if it and the otherwise eligible organization choose, 
provide or arrange payments for contraceptive services in accordance 
with paragraphs (b)(2)(i) or (ii) of this section, and receive 
reimbursements in accordance with paragraph (b)(3) of this section.
    (c) Optional accommodation--insured group health plans--(1) General 
rule. A group health plan established or maintained by an eligible 
organization that provides benefits through one or more group health 
insurance issuers may voluntarily elect an optional accommodation under 
which its health insurance issuer(s) will provide payments for all or a 
subset of contraceptive services for one or more plan years. To invoke 
the optional accommodation process--
    (i) The eligible organization or its plan must contract with one or 
more health insurance issuers.
    (ii) The eligible organization must provide either a copy of the 
self-certification to each issuer providing coverage in connection with 
the plan or a notice to the Secretary of the Department of Health and 
Human Services that it is an eligible organization and of its objection 
as described in 45 CFR 147.132 to coverage for all or a subset of 
contraceptive services.
    (A) When a self-certification is provided directly to an issuer, 
the issuer has sole responsibility for providing such coverage in 
accordance with Sec.  54.9815-2713.
    (B) When a notice is provided to the Secretary of the Department 
Health and Human Services, the notice must include the name of the 
eligible organization; a statement that it objects as described in 45 
CFR 147.132 to coverage of some or all contraceptive services 
(including an identification of the subset of contraceptive services to 
which coverage the eligible organization objects, if applicable) but 
that it would like to elect the optional accommodation process; the 
plan name and type (that is, whether it is a student health insurance 
plan within the meaning of 45 CFR 147.145(a) or a church plan within 
the meaning of section 3(33) of ERISA); and the name and contact 
information for any of the plan's health insurance issuers. If there is 
a change in any of the information required to be included in the 
notice, the eligible organization must provide updated information to 
the Secretary of Department of Health and Human Services for the 
optional accommodation process to remain in effect. The Department of 
Health and Human Services will send a separate notification to each of 
the plan's health insurance issuers informing the issuer that the 
Secretary of the Department Health and Human Services has received a 
notice under paragraph (c)(2)(ii) of this section and describing the 
obligations of the issuer under this section.
    (2) If an issuer receives a copy of the self-certification from an 
eligible organization or the notification from the Department of Health 
and Human Services as described in paragraph (c)(2)(ii) of this section 
and does not have its own objection as described in 45 CFR 147.132 to 
providing the contraceptive services to which the eligible organization 
objects, then the issuer will provide payments for contraceptive 
services as follows--
    (i) The issuer must expressly exclude contraceptive coverage from 
the group health insurance coverage provided in connection with the 
group health plan and provide separate payments for any contraceptive 
services required to be covered under Sec.  54.9815-2713(a)(1)(iv) for 
plan participants and beneficiaries for so long as they remain enrolled 
in the plan.
    (ii) With respect to payments for contraceptive services, the 
issuer may not impose any cost-sharing requirements (such as a 
copayment, coinsurance, or a deductible), or impose any premium, fee, 
or other charge, or any portion thereof, directly or indirectly, on the 
eligible organization, the group health plan, or plan participants or 
beneficiaries. The issuer must segregate premium revenue collected from 
the eligible organization from the monies used to provide payments for 
contraceptive services. The issuer must provide payments for 
contraceptive services in a manner that is consistent with the 
requirements under sections 2706, 2709, 2711, 2713, 2719, and 2719A of 
the PHS Act, as incorporated into section 9815 of the PHS Act. If the 
group health plan of the eligible organization provides coverage for 
some but not all of any contraceptive services required to be covered 
under Sec.  54.9815-2713(a)(1)(iv), the issuer is required to provide 
payments only for those contraceptive services for which the group 
health plan does not provide coverage. However, the issuer may provide 
payments for all contraceptive services, at the issuer's option.
    (3) A health insurance issuer may not require any documentation 
other than a copy of the self-certification from the eligible 
organization or the notification from the Department of Health and 
Human Services described in paragraph (c)(1)(ii) of this section.
    (d) Notice of availability of separate payments for contraceptive 
services--self-insured and insured group health plans. For each plan 
year to which the optional accommodation in paragraph (b) or (c) of 
this section is to apply, a third party administrator required to 
provide or arrange payments for contraceptive services pursuant to 
paragraph (b) of this section, and an issuer required to provide 
payments for contraceptive services pursuant to paragraph (c) of this 
section, must provide to plan participants and beneficiaries written 
notice of the availability of separate payments for contraceptive 
services contemporaneous with (to the extent possible), but separate 
from, any application materials distributed in connection with 
enrollment (or re-enrollment) in group

[[Page 47831]]

health coverage that is effective beginning on the first day of each 
applicable plan year. The notice must specify that the eligible 
organization does not administer or fund contraceptive benefits, but 
that the third party administrator or issuer, as applicable, provides 
or arranges separate payments for contraceptive services, and must 
provide contact information for questions and complaints. The following 
model language, or substantially similar language, may be used to 
satisfy the notice requirement of this paragraph (d): ``Your employer 
has certified that your group health plan qualifies for an 
accommodation with respect to the Federal requirement to cover all Food 
and Drug Administration-approved contraceptive services for women, as 
prescribed by a health care provider, without cost sharing. This means 
that your employer will not contract, arrange, pay, or refer for 
contraceptive coverage. Instead, [name of third party administrator/
health insurance issuer] will provide or arrange separate payments for 
contraceptive services that you use, without cost sharing and at no 
other cost, for so long as you are enrolled in your group health plan. 
Your employer will not administer or fund these payments. If you have 
any questions about this notice, contact [contact information for third 
party administrator/health insurance issuer].''
    (e) Definition. For the purposes of this section, reference to 
``contraceptive'' services, benefits, or coverage includes 
contraceptive or sterilization items, procedures, or services, or 
related patient education or counseling, to the extent specified for 
purposes of Sec.  54.9815-2713(a)(1)(iv).
    (f) Severability. Any provision of this section held to be invalid 
or unenforceable by its terms, or as applied to any person or 
circumstance, shall be construed so as to continue to give maximum 
effect to the provision permitted by law, unless such holding shall be 
one of utter invalidity or unenforceability, in which event the 
provision shall be severable from this section and shall not affect the 
remainder thereof or the application of the provision to persons not 
similarly situated or to dissimilar circumstances.
    (g) Expiration date. This section expires on October 6, 2020.

DEPARTMENT OF LABOR

Employee Benefits Security Administration

    For the reasons set forth in the preamble, the Department of Labor 
amends 29 CFR part 2590 as follows:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
6. 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, 1185b, 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; Secretary of Labor's 
Order 1-2011, 77 FR 1088 (Jan. 9, 2012).


0
7. Section 2590.715-2713 is amended by revising paragraphs (a)(1) 
introductory text and (a)(1)(iv) to read as follows:


Sec.  2590.715-2713  Coverage of preventive health services.

    (a) Services--(1) In general. Beginning at the time described in 
paragraph (b) of this section and subject to Sec.  2590.715-2713A, a 
group health plan, or a health insurance issuer offering group health 
insurance coverage, must provide coverage for and must not impose any 
cost-sharing requirements (such as a copayment, coinsurance, or a 
deductible) for--
* * * * *
    (iv) With respect to women, such additional preventive care and 
screenings not described in paragraph (a)(1)(i) of this section as 
provided for in comprehensive guidelines supported by the Health 
Resources and Services Administration for purposes of section 
2713(a)(4) of the Public Health Service Act, subject to 45 CFR 147.131 
and 147.132.
* * * * *


0
8. Section 2590.715-2713A is revised to read as follows:


Sec.  2590.715-2713A   Accommodations in connection with coverage of 
preventive health services.

    (a) Eligible organizations for optional accommodation. An eligible 
organization is an organization that meets the criteria of paragraphs 
(a)(1) through (4) of this section.
    (1) The organization is an objecting entity described in 45 CFR 
147.132(a)(1)(i) or (ii);
    (2) Notwithstanding its exempt status under 45 CFR 147.132(a), the 
organization voluntarily seeks to be considered an eligible 
organization to invoke the optional accommodation under paragraph (b) 
or (c) of this section as applicable; and
    (3) [Reserved]
    (4) The organization self-certifies in the form and manner 
specified by the Secretary or provides notice to the Secretary of the 
Department of Health and Human Services as described in paragraph (b) 
or (c) of this section. To qualify as an eligible organization, the 
organization must make such self-certification or notice available for 
examination upon request by the first day of the first plan year to 
which the accommodation in paragraph (b) or (c) of this section 
applies. The self-certification or notice must be executed by a person 
authorized to make the certification or provide the notice on behalf of 
the organization, and must be maintained in a manner consistent with 
the record retention requirements under section 107 of ERISA.
    (5) An eligible organization may revoke its use of the 
accommodation process, and its issuer or third party administrator must 
provide participants and beneficiaries written notice of such 
revocation as specified in guidance issued by the Secretary of the 
Department of Health and Human Services. If contraceptive coverage is 
currently being offered by an issuer or third party administrator 
through the accommodation process, the revocation will be effective on 
the first day of the first plan year that begins on or after 30 days 
after the date of the revocation (to allow for the provision of notice 
to plan participants in cases where contraceptive benefits will no 
longer be provided). Alternatively, an eligible organization may give 
60-days notice pursuant to PHS Act section 2715(d)(4) and Sec.  
2590.715-2715(b), if applicable, to revoke its use of the accommodation 
process.
    (b) Optional accommodation--self-insured group health plans. (1) A 
group health plan established or maintained by an eligible organization 
that provides benefits on a self-insured basis may voluntarily elect an 
optional accommodation under which its third party administrator(s) 
will provide or arrange payments for all or a subset of contraceptive 
services for one or more plan years. To invoke the optional 
accommodation process:
    (i) The eligible organization or its plan must contract with one or 
more third party administrators.
    (ii) The eligible organization must provide either a copy of the 
self-certification to each third party administrator or a notice to the 
Secretary of the Department of Health and Human Services that it is an 
eligible organization and of its objection as described in 45 CFR 
147.132 to coverage of all or a subset of contraceptive services.

[[Page 47832]]

    (A) When a copy of the self-certification is provided directly to a 
third party administrator, such self-certification must include notice 
that obligations of the third party administrator are set forth in 
Sec.  2510.3-16 of this chapter and this section.
    (B) When a notice is provided to the Secretary of Health and Human 
Services, the notice must include the name of the eligible 
organization; a statement that it objects as described in 45 CFR 
147.132 to coverage of some or all contraceptive services (including an 
identification of the subset of contraceptive services to which 
coverage the eligible organization objects, if applicable), but that it 
would like to elect the optional accommodation process; the plan name 
and type (that is, whether it is a student health insurance plan within 
the meaning of 45 CFR 147.145(a) or a church plan within the meaning of 
section 3(33) of ERISA); and the name and contact information for any 
of the plan's third party administrators. If there is a change in any 
of the information required to be included in the notice, the eligible 
organization must provide updated information to the Secretary of the 
Department of Health and Human Services for the optional accommodation 
process to remain in effect. The Department of Labor (working with the 
Department of Health and Human Services), will send a separate 
notification to each of the plan's third party administrators informing 
the third party administrator that the Secretary of the Department of 
Health and Human Services has received a notice under paragraph 
(b)(1)(ii) of this section and describing the obligations of the third 
party administrator under Sec.  2510.3-16 of this chapter and this 
section.
    (2) If a third party administrator receives a copy of the self-
certification from an eligible organization or a notification from the 
Department of Labor, as described in paragraph (b)(1)(ii) of this 
section, and is willing to enter into or remain in a contractual 
relationship with the eligible organization or its plan to provide 
administrative services for the plan, then the third party 
administrator will provide or arrange payments for contraceptive 
services, using one of the following methods--
    (i) Provide payments for the contraceptive services for plan 
participants and beneficiaries without imposing any cost-sharing 
requirements (such as a copayment, coinsurance, or a deductible), 
premium, fee, or other charge, or any portion thereof, directly or 
indirectly, on the eligible organization, the group health plan, or 
plan participants or beneficiaries; or
    (ii) Arrange for an issuer or other entity to provide payments for 
contraceptive services for plan participants and beneficiaries without 
imposing any cost-sharing requirements (such as a copayment, 
coinsurance, or a deductible), premium, fee, or other charge, or any 
portion thereof, directly or indirectly, on the eligible organization, 
the group health plan, or plan participants or beneficiaries.
    (3) If a third party administrator provides or arranges payments 
for contraceptive services in accordance with either paragraph 
(b)(2)(i) or (ii) of this section, the costs of providing or arranging 
such payments may be reimbursed through an adjustment to the Federally 
facilitated Exchange user fee for a participating issuer pursuant to 45 
CFR 156.50(d).
    (4) A third party administrator may not require any documentation 
other than a copy of the self-certification from the eligible 
organization or notification from the Department of Labor described in 
paragraph (b)(1)(ii) of this section.
    (5) Where an otherwise eligible organization does not contract with 
a third party administrator and it files a self-certification or notice 
under paragraph (b)(1)(ii) of this section, the obligations under 
paragraph (b)(2) of this section do not apply, and the otherwise 
eligible organization is under no requirement to provide coverage or 
payments for contraceptive services to which it objects. The plan 
administrator for that otherwise eligible organization may, if it and 
the otherwise eligible organization choose, arrange for payments for 
contraceptive services from an issuer or other entity in accordance 
with paragraph (b)(2)(ii) of this section, and such issuer or other 
entity may receive reimbursements in accordance with paragraph (b)(3) 
of this section.
    (c) Optional accommodation--insured group health plans--(1) General 
rule. A group health plan established or maintained by an eligible 
organization that provides benefits through one or more group health 
insurance issuers may voluntarily elect an optional accommodation under 
which its health insurance issuer(s) will provide payments for all or a 
subset of contraceptive services for one or more plan years. To invoke 
the optional accommodation process:
    (i) The eligible organization or its plan must contract with one or 
more health insurance issuers.
    (ii) The eligible organization must provide either a copy of the 
self-certification to each issuer providing coverage in connection with 
the plan or a notice to the Secretary of the Department of Health and 
Human Services that it is an eligible organization and of its objection 
as described in 45 CFR 147.132 to coverage for all or a subset of 
contraceptive services.
    (A) When a self-certification is provided directly to an issuer, 
the issuer has sole responsibility for providing such coverage in 
accordance with Sec.  2590.715-2713.
    (B) When a notice is provided to the Secretary of the Department of 
Health and Human Services, the notice must include the name of the 
eligible organization; a statement that it objects as described in 45 
CFR 147.132 to coverage of some or all contraceptive services 
(including an identification of the subset of contraceptive services to 
which coverage the eligible organization objects, if applicable) but 
that it would like to elect the optional accommodation process; the 
plan name and type (that is, whether it is a student health insurance 
plan within the meaning of 45 CFR 147.145(a) or a church plan within 
the meaning of section 3(33) of ERISA); and the name and contact 
information for any of the plan's health insurance issuers. If there is 
a change in any of the information required to be included in the 
notice, the eligible organization must provide updated information to 
the Secretary of Department Health and Human Services for the optional 
accommodation process to remain in effect. The Department of Health and 
Human Services will send a separate notification to each of the plan's 
health insurance issuers informing the issuer that the Secretary of 
Health and Human Services has received a notice under paragraph 
(c)(2)(ii) of this section and describing the obligations of the issuer 
under this section.
    (2) If an issuer receives a copy of the self-certification from an 
eligible organization or the notification from the Department of Health 
and Human Services as described in paragraph (c)(2)(ii) of this section 
and does not have its own objection as described in 45 CFR 147.132 to 
providing the contraceptive services to which the eligible organization 
objects, then the issuer will provide payments for contraceptive 
services as follows--
    (i) The issuer must expressly exclude contraceptive coverage from 
the group health insurance coverage provided in connection with the 
group health plan and provide separate payments for any contraceptive 
services required to be covered under Sec.  2590.715-2713(a)(1)(iv) for 
plan participants and beneficiaries

[[Page 47833]]

for so long as they remain enrolled in the plan.
    (ii) With respect to payments for contraceptive services, the 
issuer may not impose any cost-sharing requirements (such as a 
copayment, coinsurance, or a deductible), or impose any premium, fee, 
or other charge, or any portion thereof, directly or indirectly, on the 
eligible organization, the group health plan, or plan participants or 
beneficiaries. The issuer must segregate premium revenue collected from 
the eligible organization from the monies used to provide payments for 
contraceptive services. The issuer must provide payments for 
contraceptive services in a manner that is consistent with the 
requirements under sections 2706, 2709, 2711, 2713, 2719, and 2719A of 
the PHS Act, as incorporated into section 715 of ERISA. If the group 
health plan of the eligible organization provides coverage for some but 
not all of any contraceptive services required to be covered under 
Sec.  2590.715-2713(a)(1)(iv), the issuer is required to provide 
payments only for those contraceptive services for which the group 
health plan does not provide coverage. However, the issuer may provide 
payments for all contraceptive services, at the issuer's option.
    (3) A health insurance issuer may not require any documentation 
other than a copy of the self-certification from the eligible 
organization or the notification from the Department of Health and 
Human Services described in paragraph (c)(1)(ii) of this section.
    (d) Notice of availability of separate payments for contraceptive 
services--self-insured and insured group health plans. For each plan 
year to which the optional accommodation in paragraph (b) or (c) of 
this section is to apply, a third party administrator required to 
provide or arrange payments for contraceptive services pursuant to 
paragraph (b) of this section, and an issuer required to provide 
payments for contraceptive services pursuant to paragraph (c) of this 
section, must provide to plan participants and beneficiaries written 
notice of the availability of separate payments for contraceptive 
services contemporaneous with (to the extent possible), but separate 
from, any application materials distributed in connection with 
enrollment (or re-enrollment) in group health coverage that is 
effective beginning on the first day of each applicable plan year. The 
notice must specify that the eligible organization does not administer 
or fund contraceptive benefits, but that the third party administrator 
or issuer, as applicable, provides or arranges separate payments for 
contraceptive services, and must provide contact information for 
questions and complaints. The following model language, or 
substantially similar language, may be used to satisfy the notice 
requirement of this paragraph (d): ``Your employer has certified that 
your group health plan qualifies for an accommodation with respect to 
the Federal requirement to cover all Food and Drug Administration-
approved contraceptive services for women, as prescribed by a health 
care provider, without cost sharing. This means that your employer will 
not contract, arrange, pay, or refer for contraceptive coverage. 
Instead, [name of third party administrator/health insurance issuer] 
will provide or arrange separate payments for contraceptive services 
that you use, without cost sharing and at no other cost, for so long as 
you are enrolled in your group health plan. Your employer will not 
administer or fund these payments. If you have any questions about this 
notice, contact [contact information for third party administrator/
health insurance issuer].''
    (e) Definition. For the purposes of this section, reference to 
``contraceptive'' services, benefits, or coverage includes 
contraceptive or sterilization items, procedures, or services, or 
related patient education or counseling, to the extent specified for 
purposes of Sec.  2590.715-2713(a)(1)(iv).
    (f) Severability. Any provision of this section held to be invalid 
or unenforceable by its terms, or as applied to any person or 
circumstance, shall be construed so as to continue to give maximum 
effect to the provision permitted by law, unless such holding shall be 
one of utter invalidity or unenforceability, in which event the 
provision shall be severable from this section and shall not affect the 
remainder thereof or the application of the provision to persons not 
similarly situated or to dissimilar circumstances.

DEPARTMENT OF HEALTH AND HUMAN SERVICES

    For the reasons set forth in the preamble, the Department of Health 
and Human Services amends 45 CFR part 147 as follows:

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

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

    Authority: Secs 2701 through 2763, 2791, and 2792 of the Public 
Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and 
300gg-92), as amended.

0
10. Section 147.130 is amended by revising paragraphs (a)(1) 
introductory text and (a)(1)(iv) to read as follows:


Sec.  147.130   Coverage of preventive health services.

    (a) * * *
    (1) In general. Beginning at the time described in paragraph (b) of 
this section and subject to Sec. Sec.  147.131 and 147.132, a group 
health plan, or a health insurance issuer offering group or individual 
health insurance coverage, must provide coverage for and must not 
impose any cost-sharing requirements (such as a copayment, coinsurance, 
or a deductible) for--
* * * * *
    (iv) With respect to women, such additional preventive care and 
screenings not described in paragraph (a)(1)(i) of this section as 
provided for in comprehensive guidelines supported by the Health 
Resources and Services Administration for purposes of section 
2713(a)(4) of the Public Health Service Act, subject to Sec. Sec.  
147.131 and 147.132.
* * * * *

0
11. Section 147.131 is revised to read as follows:


Sec.  147.131  Accommodations in connection with coverage of certain 
preventive health services.

    (a)-(b) [Reserved]
    (c) Eligible organizations for optional accommodation. An eligible 
organization is an organization that meets the criteria of paragraphs 
(c)(1) through (3) of this section.
    (1) The organization is an objecting entity described in Sec.  
147.132(a)(1)(i) or (ii).
    (2) Notwithstanding its exempt status under Sec.  147.132(a), the 
organization voluntarily seeks to be considered an eligible 
organization to invoke the optional accommodation under paragraph (d) 
of this section; and
    (3) The organization self-certifies in the form and manner 
specified by the Secretary or provides notice to the Secretary as 
described in paragraph (d) of this section. To qualify as an eligible 
organization, the organization must make such self-certification or 
notice available for examination upon request by the first day of the 
first plan year to which the accommodation in paragraph (d) of this 
section applies. The self-certification or notice must be executed by a 
person authorized to make the certification or provide the notice on 
behalf of the organization, and must be maintained in a manner 
consistent with the record retention requirements under section 107 of 
ERISA.

[[Page 47834]]

    (4) An eligible organization may revoke its use of the 
accommodation process, and its issuer must provide participants and 
beneficiaries written notice of such revocation as specified in 
guidance issued by the Secretary of the Department of Health and Human 
Services. If contraceptive coverage is currently being offered by an 
issuer through the accommodation process, the revocation will be 
effective on the first day of the first plan year that begins on or 
after 30 days after the date of the revocation (to allow for the 
provision of notice to plan participants in cases where contraceptive 
benefits will no longer be provided). Alternatively, an eligible 
organization may give 60-days notice pursuant to section 2715(d)(4) of 
the PHS Act and Sec.  147.200(b), if applicable, to revoke its use of 
the accommodation process.
    (d) Optional accommodation--insured group health plans--(1) General 
rule. A group health plan established or maintained by an eligible 
organization that provides benefits through one or more group health 
insurance issuers may voluntarily elect an optional accommodation under 
which its health insurance issuer(s) will provide payments for all or a 
subset of contraceptive services for one or more plan years. To invoke 
the optional accommodation process:
    (i) The eligible organization or its plan must contract with one or 
more health insurance issuers.
    (ii) The eligible organization must provide either a copy of the 
self-certification to each issuer providing coverage in connection with 
the plan or a notice to the Secretary of the Department of Health and 
Human Services that it is an eligible organization and of its objection 
as described in Sec.  147.132 to coverage for all or a subset of 
contraceptive services.
    (A) When a self-certification is provided directly to an issuer, 
the issuer has sole responsibility for providing such coverage in 
accordance with Sec.  147.130(a)(iv).
    (B) When a notice is provided to the Secretary of the Department of 
Health and Human Services, the notice must include the name of the 
eligible organization; a statement that it objects as described in 
Sec.  147.132 to coverage of some or all contraceptive services 
(including an identification of the subset of contraceptive services to 
which coverage the eligible organization objects, if applicable) but 
that it would like to elect the optional accommodation process; the 
plan name and type (that is, whether it is a student health insurance 
plan within the meaning of Sec.  147.145(a) or a church plan within the 
meaning of section 3(33) of ERISA); and the name and contact 
information for any of the plan's health insurance issuers. If there is 
a change in any of the information required to be included in the 
notice, the eligible organization must provide updated information to 
the Secretary of the Department of Health and Human Services for the 
optional accommodation to remain in effect. The Department of Health 
and Human Services will send a separate notification to each of the 
plan's health insurance issuers informing the issuer that the Secretary 
of the Deparement of Health and Human Services has received a notice 
under paragraph (d)(1)(ii) of this section and describing the 
obligations of the issuer under this section.
    (2) If an issuer receives a copy of the self-certification from an 
eligible organization or the notification from the Department of Health 
and Human Services as described in paragraph (d)(1)(ii) of this section 
and does not have an objection as described in Sec.  147.132 to 
providing the contraceptive services identified in the self-
certification or the notification from the Department of Health and 
Human Services, then the issuer will provide payments for contraceptive 
services as follows--
    (i) The issuer must expressly exclude contraceptive coverage from 
the group health insurance coverage provided in connection with the 
group health plan and provide separate payments for any contraceptive 
services required to be covered under Sec.  141.130(a)(1)(iv) for plan 
participants and beneficiaries for so long as they remain enrolled in 
the plan.
    (ii) With respect to payments for contraceptive services, the 
issuer may not impose any cost-sharing requirements (such as a 
copayment, coinsurance, or a deductible), premium, fee, or other 
charge, or any portion thereof, directly or indirectly, on the eligible 
organization, the group health plan, or plan participants or 
beneficiaries. The issuer must segregate premium revenue collected from 
the eligible organization from the monies used to provide payments for 
contraceptive services. The issuer must provide payments for 
contraceptive services in a manner that is consistent with the 
requirements under sections 2706, 2709, 2711, 2713, 2719, and 2719A of 
the PHS Act. If the group health plan of the eligible organization 
provides coverage for some but not all of any contraceptive services 
required to be covered under Sec.  147.130(a)(1)(iv), the issuer is 
required to provide payments only for those contraceptive services for 
which the group health plan does not provide coverage. However, the 
issuer may provide payments for all contraceptive services, at the 
issuer's option.
    (3) A health insurance issuer may not require any documentation 
other than a copy of the self-certification from the eligible 
organization or the notification from the Department of Health and 
Human Services described in paragraph (d)(1)(ii) of this section.
    (e) Notice of availability of separate payments for contraceptive 
services--insured group health plans and student health insurance 
coverage. For each plan year to which the optional accommodation in 
paragraph (d) of this section is to apply, an issuer required to 
provide payments for contraceptive services pursuant to paragraph (d) 
of this section must provide to plan participants and beneficiaries 
written notice of the availability of separate payments for 
contraceptive services contemporaneous with (to the extent possible), 
but separate from, any application materials distributed in connection 
with enrollment (or re-enrollment) in group health coverage that is 
effective beginning on the first day of each applicable plan year. The 
notice must specify that the eligible organization does not administer 
or fund contraceptive benefits, but that the issuer provides separate 
payments for contraceptive services, and must provide contact 
information for questions and complaints. The following model language, 
or substantially similar language, may be used to satisfy the notice 
requirement of this paragraph (e) ``Your [employer/institution of 
higher education] has certified that your [group health plan/student 
health insurance coverage] qualifies for an accommodation with respect 
to the Federal requirement to cover all Food and Drug Administration-
approved contraceptive services for women, as prescribed by a health 
care provider, without cost sharing. This means that your [employer/
institution of higher education] will not contract, arrange, pay, or 
refer for contraceptive coverage. Instead, [name of health insurance 
issuer] will provide separate payments for contraceptive services that 
you use, without cost sharing and at no other cost, for so long as you 
are enrolled in your [group health plan/student health insurance 
coverage]. Your [employer/institution of higher education] will not 
administer or fund these payments . If you have any questions about 
this notice, contact [contact information for health insurance 
issuer].''

[[Page 47835]]

    (f) Definition. For the purposes of this section, reference to 
``contraceptive'' services, benefits, or coverage includes 
contraceptive or sterilization items, procedures, or services, or 
related patient education or counseling, to the extent specified for 
purposes of Sec.  147.130(a)(1)(iv).
    (g) Severability. Any provision of this section held to be invalid 
or unenforceable by its terms, or as applied to any person or 
circumstance, shall be construed so as to continue to give maximum 
effect to the provision permitted by law, unless such holding shall be 
one of utter invalidity or unenforceability, in which event the 
provision shall be severable from this section and shall not affect the 
remainder thereof or the application of the provision to persons not 
similarly situated or to dissimilar circumstances.


0
12. Add Sec.  147.132 to read as follows:


Sec.  147.132  Religious exemptions in connection with coverage of 
certain preventive health services.

    (a) Objecting entities. (1) Guidelines issued under Sec.  
147.130(a)(1)(iv) by the Health Resources and Services Administration 
must not provide for or support the requirement of coverage or payments 
for contraceptive services with respect to a group health plan 
established or maintained by an objecting organization, or health 
insurance coverage offered or arranged by an objecting organization, 
and thus the Health Resources and Service Administration will exempt 
from any guidelines' requirements that relate to the provision of 
contraceptive services:
    (i) A group health plan and health insurance coverage provided in 
connection with a group health plan to the extent the non-governmental 
plan sponsor objects as specified in paragraph (a)(2) of this section. 
Such non-governmental plan sponsors include, but are not limited to, 
the following entities--
    (A) A church, an integrated auxiliary of a church, a convention or 
association of churches, or a religious order.
    (B) A nonprofit organization.
    (C) A closely held for-profit entity.
    (D) A for-profit entity that is not closely held.
    (E) Any other non-governmental employer.
    (ii) An institution of higher education as defined in 20 U.S.C. 
1002 in its arrangement of student health insurance coverage, to the 
extent that institution objects as specified in paragraph (a)(2) of 
this section. In the case of student health insurance coverage, this 
section is applicable in a manner comparable to its applicability to 
group health insurance coverage provided in connection with a group 
health plan established or maintained by a plan sponsor that is an 
employer, and references to ``plan participants and beneficiaries'' 
will be interpreted as references to student enrollees and their 
covered dependents; and
    (iii) A health insurance issuer offering group or individual 
insurance coverage to the extent the issuer objects as specified in 
paragraph (a)(2) of this section. Where a health insurance issuer 
providing group health insurance coverage is exempt under this 
paragraph (a)(1)(iii), the plan remains subject to any requirement to 
provide coverage for contraceptive services under Guidelines issued 
under Sec.  147.130(a)(1)(iv) unless it is also exempt from that 
requirement.
    (2) The exemption of this paragraph (a) will apply to the extent 
that an entity described in paragraph (a)(1) of this section objects to 
its establishing, maintaining, providing, offering, or arranging (as 
applicable) coverage, payments, or a plan that provides coverage or 
payments for some or all contraceptive services, based on its sincerely 
held religious beliefs.
    (b) Objecting individuals. Guidelines issued under Sec.  
147.130(a)(1)(iv) by the Health Resources and Services Administration 
must not provide for or support the requirement of coverage or payments 
for contraceptive services with respect to individuals who object as 
specified in this paragraph (b), and nothing in Sec.  
147.130(a)(1)(iv), 26 CFR 54.9815-2713(a)(1)(iv), or 29 CFR 2590.715-
2713(a)(1)(iv) may be construed to prevent a willing health insurance 
issuer offering group or individual health insurance coverage, and as 
applicable, a willing plan sponsor of a group health plan, from 
offering a separate benefit package option, or a separate policy, 
certificate or contract of insurance, to any individual who objects to 
coverage or payments for some or all contraceptive services based on 
sincerely held religious beliefs.
    (c) Definition. For the purposes of this section, reference to 
``contraceptive'' services, benefits, or coverage includes 
contraceptive or sterilization items, procedures, or services, or 
related patient education or counseling, to the extent specified for 
purposes of Sec.  147.130(a)(1)(iv).
    (d) Severability. Any provision of this section held to be invalid 
or unenforceable by its terms, or as applied to any person or 
circumstance, shall be construed so as to continue to give maximum 
effect to the provision permitted by law, unless such holding shall be 
one of utter invalidity or unenforceability, in which event the 
provision shall be severable from this section and shall not affect the 
remainder thereof or the application of the provision to persons not 
similarly situated or to dissimilar circumstances.

[FR Doc. 2017-21851 Filed 10-6-17; 11:15 am]
 BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P; 6325-64-P


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