1. News Flash: July 1, 2013 – Final Regulations Modify Contraceptive Coverage
Requirements for Religious Organizations
For most employers, the final rules on coverage of contraceptives as preventive services will have
no effect on their current obligations: non-grandfathered plans generally are required to provide
coverage of certain contraceptive services with no cost-sharing requirements. For many employers,
however, the final regulations are of vital interest because they define which entities qualify as
“religious employers” that are exempt from the contraceptive coverage requirement and set out an
“accommodation” for certain non-profit religious organizations such as hospitals and universities
affiliated with religious groups. Willis’ National Legal & Research Group is reviewing the new
regulations and will provide detailed analysis in a future publication.
Background
The health care reform law requires coverage without cost sharing of certain preventive health
services by non-grandfathered employer-sponsored health plans. The initial requirement was
effective for plan years starting on or after September 23, 2010, with women's preventive health
services being added effective for plan years starting on or after August 1, 2012. Women’s
preventive health services include contraceptives.
When the contraceptive coverage requirement was added in 2011, regulators created an exemption
for certain religious employers. The scope of that exemption has remained a subject of intense
debate and, in 2012, the agencies put in place a temporary safe harbor exemption for nonprofit
organizations that have religious objections to contraceptive coverage. The safe harbor was
intended to allow time for development of rules that would provide no-cost contraceptive care
without qualifying organizations being required to offer, arrange or pay for it. The safe harbor was
due to expire at the beginning of the plan year starting on or after August 1, 2013 (January 1, 2014
for calendar year plans). For details on the safe harbor as currently in effect, see Willis Human
Capital Practice HR Focus, Issue #64, October 2012, “Temporary Contraceptive Coverage Safe
Harbor Clarified.” For information on the regulations implementing the preventive care mandate
generally and the addition of women’s preventive health services see, respectively, Willis Human
Capital Practice Alert, September 2010, “Interim Final Rules on Preventive Care” and Willis
Human Capital Practice Alert, September 2011, “Expanded Women's Preventive Services:
Required Health Plan Coverage.”
New Final Regulations
The final regulations modify the definition of religious employers that are exempt from the
contraceptive coverage requirement. This change is effective for plan years starting on or after
August 1, 2013. Note that this one provision has a different start date than the remainder of the
regulations (see below).

2. The stated intention for modifying the definition was to clarify that a house of worship is not
excluded from the exemption because it provides charitable social services to, or employs, people
of different religious faiths. A religious employer will include primarily churches, other houses of
worship, and affiliated organizations.
The final regulations also establish “accommodations” with respect to the contraceptive coverage
requirement for health plans established or maintained by certain employers. An “eligible
organization” that qualifies for accommodations is one that:
• Opposes providing coverage for some or all of the required contraceptive services on
account of religious objections
• Is organized and operates as a nonprofit entity
• Holds itself out as a religious organization
• Self-certifies that it satisfies the first three criteria
Eligible organizations are not required to contract, arrange, pay or refer for contraceptive coverage.
Enrollees in a plan maintained by an eligible organization will receive separate payments for
contraceptive services without cost sharing from the plan’s insurer or TPA. The specific
mechanisms for making and financing those payments are set out in the final regulations.
The accommodations arrangements apply to plan years starting on or after January 1, 2014.
Safe Harbor Extended for a Few Plans
The safe harbor for nonprofit organizations has been extended so that it will now expire at the start
of the first plan year on or after January 1, 2014. Previously, it was to expire at the start of the first
plan year on or after August 1, 2013. This extension will have no effect on application of the safe
harbor to any employer whose plan operates on a calendar year basis (or whose next plan year
otherwise begins after December 31, 2013 and before August 1, 2014). It will, however, extend the
safe harbor a full year for plans that have plan years beginning on or after August 1, 2013 and
before January 1, 2014.
The extension makes no change to the substance of the temporary enforcement safe harbor. The
stated intention for the extension is to maintain the status quo for employers that qualify for the
safe harbor until the final regulations become applicable. (The general applicability date for the
final regulations is plan years starting on or after January 1, 2014.) Organizations that previously
qualified under the safe harbor are not required to execute another self-certification, but are
required to provide another notice to plan enrollees in connection with any new plan year. For
details on the safe harbor as currently in effect, see Willis Human Capital Practice HR Focus, Issue
#64, October 2012, “Temporary Contraceptive Coverage Safe Harbor Clarified.”
This information is not intended to represent legal or tax advice and has been prepared solely for informational
purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this publication.