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ACA Watch: Updates to Contraceptive Coverage Rules

Challenges continue on the Department of Health and Human Service’s (HHS’s) final rule on contraceptives, “Moral Exemptions and Accommodations for Coverage of Certain Preventive Services under the Affordable Care Act (ACA).”

This final rule expands prior interim rules exempting certain entities and individuals with objections based on sincerely held religious beliefs or moral convictions from the ACA’s contraceptive rules. Moral exemption includes entities or individuals objecting to some or all contraceptives based on sincerely held moral convictions, including nonprofit organizations, closely-held businesses (not publicly traded), higher education, health insurers serving exempt entities and individuals, and association health plans with no publicly traded ownership interests.

Timeline of events challenging HHS’s interim and final rule expanding exemptions to include moral-based objections:

  • December 2017 - District courts in both California and Pennsylvania were granted preliminary injunctions blocking the interim final rule’s enforcement – California’s (Ninth Circuit) challenge applies to plaintiff states (CA, DE, MD, NY, VA) only while Pennsylvania (Third Circuit) applies nationwide
  • December 2018 - Additional states join California as it further amended its original complaint stating HHS had violated the Administrative Procedures Act (APA), i.e., that the Department lacks the authority to issue the final rules and that the rules are most likely arbitrary and capricious. Here the district court issued a partial preliminary injunction limited to the plaintiff’s states and DC
  • June 2019 – Texas district court issues permanent injunction barring the government from enforcing the ACA contraceptive mandate against any group health plan or related health insurance coverage sponsored by a class of objecting employers – in appeals with the Fifth Circuit
  • October 22, 2019 – U.S. Court of Appeals for the Ninth Circuit affirms the district court’s preliminary injunction blocking this rule for 13 states and DC

The Ninth Circuit court’s findings include:

  • The states were entitled to a preliminary injunction;
  • Confirmation that the plaintiff states were likely to succeed regarding the complaint of the APA violation;
  • Agrees that HHS does not have “significant discretion” over the preventive care guidelines to exempt entities from the ACA;
  • Affirms that a core purpose of the ACA’s preventive care mandate is to provide free contraceptive services;
  • Likelihood that the Religious Freedom Reformation Act (RFRA), the law that HHS bases the expansion on, does not authorize HHS to grant religious exemptions;
  • The act of completing a self-certification form to exercise rights to opt-out does not excessively burden religious entities; and
  • States would likely suffer irreparable harm economically

While litigation continues in both the Texas case in the Fifth Circuit and the nationwide preliminary injunction in the Third Circuit, employers and individuals covered by the Texas injunction need not comply with the ACA contraceptive mandate. We can also expect to see Little Sisters of the Poor appeal this decision, as it did for the Third Circuit court, ultimately wanting a Supreme Court decision to decide once and for all whether the mandate violates the RFRA.

Stay tuned for more developments. OneDigital’s team of compliance experts are closely monitoring any updates or legislative changes and translating them on behalf of our clients. Visit OneDigital’s Compliance Confidence page to stay informed.


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