The Departments of Labor, Health and Human Services, and the Treasury have recently provided crucial guidance on the Affordable Care Act’s (ACA) contraception coverage mandate. This move, aimed at clarifying and ensuring compliance, significantly impacts employers, insurance carriers, and plan participants. This blog post delves into the new FAQs issued on January 22, 2024, which address the requirement for non-grandfathered medical plans to cover preventive services, including contraceptives, without cost-sharing.
Key Highlights of the New Guidance
Under the ACA, non-grandfathered health plans must cover at least one form of contraception in various categories without cost-sharing. These include sterilization surgery, implantable rods, various intrauterine devices, oral contraceptives, contraceptive patches, and emergency contraception, among others.
Medical Management Techniques
The guidance allows plans to use reasonable medical management techniques for newer products and procedures, provided that there is at least one similar product or service available without cost-sharing.
The Departments acknowledge reports of plans using unreasonable medical management techniques, such as overly restrictive step therapy protocols, age-related restrictions, and burdensome administrative requirements. This new guidance aims to address these concerns.
Therapeutic Equivalence and Exceptions Process
Therapeutic Equivalence Approach
Plans may opt for coverage consistent with the therapeutic equivalence approach. This involves covering all FDA-approved contraceptive drugs and devices in a category without cost sharing, except where a therapeutically equivalent product is covered. The FDA’s “Orange Book” is used to determine therapeutic equivalence.
Regardless of the approach, plans must have an exceptions process allowing individuals to access medically necessary products or services without cost sharing, as determined by their provider.
Implications for Employers
Employer Action Required
- Understanding the Guidance: It’s crucial for plan sponsors to comprehend this new guidance. While it doesn’t add new requirements, it clarifies existing ones.
- Plan Compliance: Employers, especially those with self-insured plans, should review their plan design and medical management techniques to ensure compliance with the ACA’s contraceptive care requirements.
Fully Insured vs. Self-Insured Plans
- Fully Insured Plans: Employers with fully insured plans can generally rely on their insurance carriers to implement appropriate medical management techniques.
- Self-Insured Plans: Those with self-insured plans should work closely with their third-party administrators to ensure compliance.
Controversies and Challenges
The new guidance, while aimed at ensuring broader access to contraceptive care, does not come without its challenges. There are concerns about the complexity of implementing these requirements, especially for self-insured plans. Additionally, the exemptions for religious employers and certain organizations continue to be a point of debate.
The updated FAQs on the ACA’s contraception coverage mandate represent a significant step towards ensuring that individuals have access to a range of contraceptive options without cost-sharing. Employers and plan sponsors must carefully navigate these changes to ensure compliance, while also being mindful of the complexities and controversies involved. By doing so, they can provide comprehensive health coverage that aligns with legal requirements and meets the needs of their workforce.