Question: As soon as possible, our business intends to stop covering certain contraceptive services under the company's health plan, which is compliant with the Employee Retirement Income Security Act (ERISA).
The owners have strongly held religious beliefs against contraception and have been using the accommodation process whereby the insurer has provided contraceptive coverage to participants and beneficiaries outside of the group health plan. The owners, however, now wish to revoke the accommodation and exclude certain contraceptive coverage under the plan. Do we need to inform participants and beneficiaries about this change?
Answer: Yes, advance written notice is required to inform plan participants and beneficiaries of the revocation of the accommodation. And it's important for employers to fully understand the regulatory background behind such a decision.
The Affordable Care Act generally requires, as part of women's preventive health services, that nongrandfathered, nonexcepted group health plans provide — without cost-sharing — coverage for all contraceptive methods approved by the Food and Drug Administration, as prescribed by an in-network health care provider.
As mentioned in your question, previous guidance allowed certain employers asserting religious objections to contraceptives to avoid the coverage mandate by engaging in an accommodation process under which an insurer or third-party administrator arranged for the contraceptive coverage. Regulations issued in October 2017 expanded the exemption for objecting employers, so that they no longer need to use the accommodation process to avoid the coverage mandate.
The regulations state that eligible employers that want to revoke their use of the accommodation process must provide written notice to participants and beneficiaries. If the change will be effective as of the beginning of a plan year, participants and beneficiaries must be notified at least 30 days before the first day of the plan year in which the revocation will become effective.
Alternatively, the change can be effective during a plan year so long as written notice is given at least 60 days before the effective date of the change. The change and notice must be consistent with other applicable law and contract provisions regarding modification of benefits.
Broadly, ERISA requires that a group health plan summary plan description (SPD) describe the extent to which the plan covers preventive services, including contraceptive services.
This means that your plan's SPD will need to describe the exclusion of any contraceptive services going forward. Note that other disclosure requirements may also apply — for example, under state insurance law applicable to health insurers.
Guidance on this topic continues to evolve, and there have been ongoing court challenges to the scope and nature of the exemptions and accommodations. It is important for a business like yours to monitor further developments.
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