Proposed rule would expand ACA coverage of contraception

The Departments of Health and Human Services, Labor and the Treasury have released a proposed rule titled “Enhancing Coverage of Preventive Services Under the Affordable Care Act.” The proposed rule would expand access to coverage of recommended preventive services without cost sharing, with a particular focus on reducing barriers to coverage of contraceptive services, including over-the-counter (OTC) contraceptives.

As background, the Affordable Care Act (ACA) requires non-grandfathered group health plans to cover certain recommended preventive services without a cost-sharing requirement, such as a copayment, coinsurance or deductible.

These preventive services include: (1) certain evidence-based items or services recommended by the United States Preventive Services Task Force; (2) immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention; (3) preventive care and screenings for infants, children and adolescents recommended by the Health Resources and Services Administration (HRSA); and (4) preventive care and screenings for women as provided for in comprehensive guidelines supported by HRSA.

Note: The departments plan to issue another proposed rule soon to address additional issues related to coverage of all preventive services (beyond contraceptive).

Proposal background and details

After becoming aware of reports of plans failing to provide coverage of the full range of contraceptive services, as well as the U.S. Food and Drug Administration (FDA) approval in July 2023 of an OTC oral contraceptive, the departments proposed amendments to the regulations governing how plans cover ACA preventive services and how they communicate information about this coverage to participants or beneficiaries.

Contraceptive coverage and disclosure

The proposed rule would:

• Require non-grandfathered group health plans to cover recommended OTC contraceptive items without requiring a prescription and without cost sharing. Previously issued government guidance required a prescription for OTC preventive healthcare items (such as folic acid and certain contraceptive products, including contraceptive sponges, spermicides and emergency contraception) in order for them to be covered with no copay or deductible. Neither the ACA nor its implementing regulations, nor the current HRSA-supported guidelines, require a prescription as a condition of coverage without cost sharing for recommended contraceptives that are available OTC. If finalized, the proposed rule would better align coverage requirements with the statute and remove barriers that make it more difficult to access contraception.
• Reinforce the responsibility of group health plans to cover FDA-approved, -cleared and -granted birth control methods without cost sharing. This would give participants more choices of covered contraceptives, such as a broader array of contraceptive drugs (e.g., a wider selection of covered oral contraceptive pills) and drug-led combination products (e.g., a wider selection of covered IUDs).
• Require plans to cover certain recommended contraceptive items that are drugs and drug-led combination products without cost sharing, unless at least one therapeutic equivalent of the product is covered without cost sharing.^[1]
• Require plans to add a disclosure to the results of any Transparency in Coverage (TiC) self-service tool search, for covered contraceptives, that explains that OTC contraceptive items are covered without a prescription and without cost sharing and includes a phone number and internet link to where a participant or beneficiary can learn more. The departments expect self-insured group health plans to rely on third-party administrators (TPAs) to implement the proposed requirements and to compensate them accordingly.

Note: The proposed rule would not modify federal conscience protections (i.e., religious objections) related to contraceptive coverage for employers or plans.

Exceptions process for all recommended preventive services

The proposed exceptions process is intended to ensure that medically necessary recommended preventive services are covered without cost sharing and that medical management is not a barrier to this coverage.

The departments propose to codify previous guidance on the use of reasonable medical management techniques by group health plans, including FAQs Part XII, FAQs Part XXVI and FAQs Part 31.

As proposed, plans using reasonable medical management techniques for any ACA recommended preventive services must provide an easily accessible, transparent and sufficiently expedient exceptions process allowing an individual to receive coverage without cost sharing for the preventive service according to the frequency, method, treatment or setting that is medically necessary for them (as determined by the individual’s attending provider), even if that service is not generally covered under the plan. This means that if an individual’s attending provider recommends a particular service or FDA-approved item based on medical necessity, the plan must cover that service or item without cost sharing. Medical necessity may include considerations such as severity of side effects, differences in permanence and reversibility of contraceptives, and ability to adhere to the appropriate use of the item or service.

The exceptions process would need to be included in plan documents (including summary plan descriptions) and in any other plan materials, including on the plan’s website, which describes the terms of preventive services coverage.

The departments would determine whether a group health plan’s exceptions process is easily accessible, transparent, sufficiently expedient and not unduly burdensome based on all relevant facts and circumstances, including (1) whether and how a plan notifies individuals of the availability of an exceptions process; and (2) what steps individuals, their provider or other authorized representatives must take to seek an exception.

The departments request comment on how the proposed exceptions process requirement should apply to OTC contraceptive items, for which no provider involvement is generally required.

Effective dates

As proposed, the changes specific to contraceptive coverage (including the OTC contraceptive coverage proposal, therapeutic equivalence proposal and TiC disclosure proposal related to OTC contraceptive coverage information) would be applicable for plan years beginning on or after January 1, 2026.

The requirement to provide an exceptions process for all recommended preventive services would be applicable on the effective date of the final rule.

Going forward

• Employer sponsors of group health plans should review the proposed rule and decide if they want to comment (e.g., the departments seek comment on whether proposals related to coverage of recommended contraceptive items should be extended to other or all recommended preventive services).
• If finalized as proposed, the rule would require both substantive changes in plan coverage (e.g., health plans would be required to cover every FDA-approved contraceptive drug or drug-led combination product without cost sharing unless the plan also covers a therapeutic equivalent), as well as process changes (i.e., an exceptions process that satisfies the proposed rule). These changes also would need to be coordinated by all plan vendors and carriers, and plan documents would need to be amended accordingly.
• If finalized as proposed, the rule would require employer plan sponsors to disclose information on the OTC contraceptive coverage to plan participants via the TiC self-service tool and coordinate with their TPA/carrier to make sure this tool is updated properly and that the information is available, if requested, on paper.

Note: It is unknown at this time whether the agencies will look to finalize this rule before the change in the administration as a result of the election. The proposed rule covers a topic that the Trump administration may not support, so employer plan sponsors will need to consider whether these proposed regulations are withdrawn (or not finalized) before taking any action to comply.

Footnotes

1. For more information, see “FAQs issued on ACA required contraceptive drug coverage,” Insider, February 2024. Return to article undo