Obama Administration Releases New Accommodation Process for Religiously Affiliated Nonprofits

Instead of notifying insurers of their objections, religiously affiliated nonprofits will now file their objection directly with the Department of Health and Human Services.

Instead of notifying insurers of their objections, religiously affiliated nonprofits will now file their objection directly with the Department of Health and Human Services. White House via Shutterstock

Read more of our coverage on the Wheaton College case here.

On Friday, the Obama administration announced new rules for religiously affiliated nonprofits that object to complying with the birth control benefit under the Affordable Care Act.

The rules, released in part in response to the U.S. Supreme Court’s order in the Wheaton College case, which threw into doubt the current exemption process for religiously affiliated nonprofits, provide an alternative process for those institutions to follow in order to exempt themselves from providing contraceptive coverage for those employees and students who want it.

The rules start out by making the economic case for contraceptive coverage and the compelling government interest in equal access to health care before detailing the new accommodation process, which shifts the burden of coordinating coverage from third-party administrators to the federal government. According to the new rules, those objecting institutions can now send opt-out notification directly to the Department of Health and Human Services (HHS), rather than their third-party administrator. HHS and the Department of Labor (DOL) will then notify insurers and third-party notifiers of the objection so that those enrolled in health insurance plans of those organizations can receive separate coverage for contraceptive services, with no additional cost to the enrollee or the employer. The accommodation process also applies to student health plans like those at the University of Notre Dame. The rules also make it clear that plan participants can always decline contraceptive coverage.

The administration also announced that it was beginning the process of addressing the Hobby Lobby decision in crafting still another accommodation process. Along with the latest accommodation for religiously affiliated nonprofits, HHS will begin soliciting comments on how it might extend to certain closely held for-profit entities like Hobby Lobby the same accommodation that is available to religious nonprofits. Under the proposal, these companies “would not have to contract, arrange, pay or refer for contraceptive coverage to which they object on religious grounds.”

The proposal also seeks comments on how to define a closely held for-profit company and whether other steps might be appropriate to implement this policy.

Those institutions challenging the birth control benefit are not likely to be satisfied by the administration’s latest attempts to address their objections given that they argue the very act of having to identify as a religious objector for purposes of receiving an accommodation to the law unduly burdens their religious beliefs, and many object to their employees accessing contraception at all. The new rule also presents some administrative challenges for HHS in oversight and compliance. Organizations simply need to notify HHS of their objection, and it will be up to HHS and the DOL to contact the insurers and coordinate that coverage.

In a previous court filing with the U.S. Court of Appeals for the Tenth Circuit, the Obama administration asked that those institutions challenging the nonprofit accommodation notify the court by September 2 if they will continue with their legal challenges.