Contraception coverage must be disclosed
If closely held companies choose not to provide contraceptive coverage for employees, they can’t do so in secret.
The U.S. Department of Labor announced last week that in the wake of the U.S. Supreme Court decision in Burwell v. Hobby Lobby Stores, employers must formally notify workers if they remove birth control from the health coverage they provide. The change comes as Congress appears deadlocked on a Democratic-sponsored bill to restore the Patient Protection and Affordable Care Act’s requirement for employers to cover contraceptives.
“We are making clear that if a corporation like Hobby Lobby drops coverage of contraceptive services from its health plan, it must do so in the light of day by letting its workers and their families know,” a senior Obama administration official said.
The Labor Department rule says companies have up to 60 days to tell employees after making such a change.
In its 5-4 ruling June 30, the Supreme Court held that “closely held” corporations can exercise religious beliefs. That meant the Affordable Care Act cannot force those companies to provide all forms of Food and Drug Administrationapproved contraceptives.
The court’s decision left many unanswered questions, including whether cuts to birth-control services would have to be announced to employees. “You don’t want anyone going to fill a prescription and then finding out at the pharmacy counter that this is no longer covered under the plan,” said Amy Gordon, a partner in benefits law at McDermott Will and Emery in Chicago.
Gordon said she has already been approached by companies that have decided they fit the definition of a “closely held” company and want to cancel coverage for some or all of the 20 forms of FDA-approved birth con- trol. The Labor Department posting said such changes would be considered “material reductions in covered services,” which must be disclosed. The Hobby Lobby case targeted only four forms of birth control, but lawsuits challenging requirements to cover all forms of birth control are still pending in court.
At least 28 states have laws on the books that require health plans to cover the full range of contraceptive drugs and devices if they offer prescription drugs in their plans, according to the Guttmacher Institute, a not-for-profit organization that works to advance reproductive rights and health.
Those laws remain in place because the Hobby Lobby decision applied only to the federal regulation, legal experts say. But it’s not clear if companies that claim religious objections will follow them.
“You don’t want anyone going to fill a prescription and then finding out at the pharmacy counter that this is no longer covered under the plan.” AMY GORDON PARTNER IN BENEFITS LAW MCDERMOTT WILL AND EMERY