August 05, 2022
On July 28, 2022, the Department of Health and Human Services (HHS), together with the Department of Labor (DOL) and the Department of the Treasury (collectively, the “federal agencies”), released new contraceptive coverage guidance in the form of FAQs.
The federal agencies released these FAQs in response to reports that individuals are experiencing difficulty accessing free contraceptive coverage in accordance with the Affordable Care Act (ACA).
The ACA guarantees coverage of women’s preventative services, including birth control and contraceptive counseling, at no cost.[1] The recent guidance underscores the legal requirements for group health plans and health insurers (“plans”) to provide contraceptive coverage — including emergency contraception — at no cost to participants and that the federal agencies are prepared to take enforcement action for violations, as necessary.
Highlights of these FAQs include the following plan coverage clarifications for non-grandfathered plans[2]:
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Emergency Contraception: FDA-approved emergency contraception, including those available over-the-counter (OTC), must be covered without cost-sharing when prescribed by an individual’s medical provider. The guidance encourages, but does not require, plans to cover OTC emergency contraceptive products without cost-sharing when purchased without a prescription.
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FSA/HRA/HSA Reimbursement: OTC contraception obtained without a prescription is eligible for reimbursement by health care flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs) if the cost is not paid for or reimbursed by a plan or other coverage. Conversely, any OTC contraception paid for or reimbursed by a plan or insurer cannot also be reimbursed by an FSA, HRA, or HSA (“no double dipping” rule). Plans and issuers that cover the costs of OTC contraceptives without a prescription (as noted above) should advise individuals not to seek reimbursement from an HSA, health care FSA, or HRA for the cost. If an individual inadvertently receives reimbursement from an FSA, HRA, or HSA for contraception costs paid or reimbursed by a plan or insurer, they should contact the administrators of the plan regarding correction procedures and HSA rules regarding non-qualified medical expenses.
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12-Month Supply: Plans are encouraged, but not required, to cover the dispensing of a 12-month supply of contraceptives at one time for efficacy and cost savings purposes.
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Preventative Services Coverage: Services provided as part of preventative services coverage, such as anesthesia necessary for a tubal ligation procedure and pregnancy tests required before an intrauterine device (IUD) insertion procedure, must be covered without cost-sharing, regardless of whether these items or services are billed separately. Moreover, plans must cover, without cost-sharing, instruction in fertility awareness-based methods of contraception, such as lactation amenorrhea.
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Reasonable Medical Management Techniques: Plans may utilize reasonable medical management techniques within specified parameters for contraception coverage determinations. For clarity, the guidance lists several examples of unreasonable medical management techniques that are not permitted including:
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Denying coverage for all or particular brand name contraceptives, even when determined to be medical necessary by an individual’s medical provider.
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Fail first requirements for certain contraceptive products before a plan will cover other products.
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Imposing an age limit on contraceptive coverage instead of providing coverage to all individuals with reproductive capacity.
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Exceptions Process: For denied contraceptive coverage claims, plans must offer participants an accessible and convenient exceptions process that is not overly burdensome on the individual or their medical provider. This means that plans must notify participants and providers of the existence of an exceptions process and the steps necessary and information required to complete the process. As such, plans must develop and use a standard exceptions form that is readily available on a website with other plan materials[3] and provide participants with contact information for a plan representative to answer questions.
The guidance encourages plans to develop a standard exceptions form and instructions document similar to the Medicare Part D Coverage Determination Request Form. Further, the guidance confirms that plans may not require participants to first appeal an adverse benefit determination (using the internal claims and appeals process) in order to obtain an exception.
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Enforcement Action: The guidance emphasizes that the federal agencies are prepared to take enforcement action within their respective authorities against states, plans, and/or insurers for violations of the law.
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Access Resources: The FAQs close off with a list of governmental agency resources for individuals to contact if they experience difficulty accessing contraceptive coverage under their group health plan or health insurance coverage.
Next Steps for Employers
While this recent guidance is consistent with prior federal agency guidance[4] and not necessarily new, it serves as an important reminder to employers sponsoring group health plans regarding their obligations to provide the full range of contraceptive coverage at no cost to plan participants, in accordance with the law.
Employers sponsoring self-funded group health plans are advised to liaise with their third-party administrator and pharmacy benefit manager to ensure compliance with this recent contraceptive coverage guidance.
Employers sponsoring fully insured group health plans should liaise with their health insurance carrier to ensure compliance.
Reach out to your Risk Strategies Account team for further assistance or with any questions.
[1] The following is a non-exhaustive list of contraceptive items and services required to be covered by plans without cost-sharing, in accordance with the ACA:
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Hormonal methods, such as birth control pills and vaginal rings.
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Implanted devices, such as intrauterine devices (IUDs).
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Emergency contraception.
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Barrier methods, like diaphragms and sponges.
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Patient education and counseling.
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Sterilization procedures.
[2] Grandfathered plans are not subject to this guidance under the ACA.
[3] For example, in a Summary Plan Description (SPD) and in a prescription drug formulary list.
[4] The federal agencies released a letter on June 27, 2022 addressed to group health plans and health insurance issuers reminding them of their obligations under the ACA to provide contraceptive coverage to individuals and covered dependents at no cost.
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