Bloomberg News

Critics Want More Exemptions From U.S. Birth-Control Rule

February 02, 2013

Religious Nonprofits Won’t Pay for Birth Control

Demonstrators in New York protest a requirement that most employers provide health care insurance coverage for contraception as part of the federal health care overhaul. Photographer: Timothy A. Clary/AFP via Getty Images

The Obama administration’s revised rules on insurance coverage for birth control designed to dispel concerns of religious groups haven’t appeased critics who say the policy violates employers’ rights.

Insurers who provide coverage for religious nonprofits, or companies that administer the benefits, will provide contraceptive coverage without cost to the organization or its workers should the group object on religious grounds, the government said yesterday.

The rules provide a broad exemption for nonprofit organizations, but not for-profit companies, from a requirement of the 2010 health-care law that health plans cover birth control without cost to their workers. Senator Orrin Hatch, a Utah Republican, said the requirement violates a 1993 law on religious freedom because for-profit companies don’t get the exemption under the compromise announced yesterday.

“Freedom of religion and the right of peoples of faith to be protected against government intrusion must be sacrosanct,” Hatch said in a statement. “Unfortunately, this White House doesn’t seem to believe in that constitutional guarantee -- forcing private companies to provide health-care services in violation of their beliefs.”

Fourteen for-profit firms have sued the government over the mandate; 10 have won an injunction against complying, according to the Becket Fund for Religious Liberty, a legal group fighting the requirement.

Health Law

The Affordable Care Act requires insurers and employers who provide health coverage to their workers to pay for government- recommended preventive services without co-payments. In August 2011, the Obama administration said those services would include contraception such as birth control pills, implants and sterilization procedures. The decision was backed by a recommendation from the Institute of Medicine, nonpartisan scientific advisers to the government.

Religious organizations opposed to birth control demanded an exception to the requirement. The Obama administration initially provided a one-year delay until this August to allow the groups to comply, while promising further compromise.

“The administration is taking the next step in providing women across the nation with coverage of recommended preventive care at no cost, while respecting religious concerns,” Health and Human Services Secretary Kathleen Sebelius said yesterday in a statement.

The issue has drawn enormous scrutiny. About 200,000 people and organizations sent formal comments on preliminary rules outlining a compromise the administration issued in March 2012.

Broadening Eligibility

The government said the rules announced yesterday would broaden the types of organizations eligible for an exemption from the birth-control mandate and make it easier for them to escape it. Nonprofits that object to the requirement need only lodge a protest with the health insurer that covers their workers, or the company that administers their health benefits if they are self-insured.

The rule “would limit any accommodation to nonprofit organizations that hold themselves out as religious,” the administration said, a definition that may include church- affiliated hospitals and universities that weren’t previously exempt.

It’s unclear how the new rules affect 30 lawsuits filed against the government by nonprofits, said Kyle Duncan, general counsel for the Becket Fund.

The owners of for-profit companies that have sued object to covering certain types of birth control such as Teva Pharmaceutical Industries Ltd. (TEVA)’s morning-after pill, Plan B One- Step.

“Today’s proposed rule does nothing to protect the religious liberty of millions of Americans,” Duncan said.

Rights Advocates

Groups that advocate for civil liberties and abortion rights, including the Planned Parenthood Federation of America and the American Civil Liberties Union, have argued that employers shouldn’t be able to decide whether Americans have insurance coverage for birth control. They applauded the government’s proposal.

“Over the last year, we’ve seen a disturbing number of instances where employers are trying to impose their religious beliefs on a diverse workforce that does not share them, and opponents of the law have made it clear that they won’t rest until no insurance plan, whatever the source, is required to cover contraception,” said Sarah Lipton-Lubet, policy counsel for the American Civil Liberties Union, in a statement.

Women’s Issue

The Obama administration, she said, “continues to stand with women.”

According to the new rules, if a nonprofit’s workers get health insurance through a plan offered by companies such as UnitedHealth Group Inc. (UNH:US), the insurer will have to arrange coverage of birth control without any cost to the nonprofit or to workers.

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s main trade group, said the organization is reviewing the proposal. “We will be talking with our members and will submit comments through the regulatory process,” he said.

Matt Stearns, a spokesman for Minnetonka, Minnesota-based UnitedHealth, the biggest U.S. health insurance company, declined to comment.

“Actuaries, economists and insurers estimate that providing contraceptive coverage is at least cost neutral, and may result in cost savings when taking into account all costs and benefits for the insurer,” the government said in a regulatory filing.

Complicated Coverage

For nonprofits that are self-insured, birth-control coverage for their workers may be more complicated.

The responsibility will fall to companies that manage benefits for the nonprofits, called third-party administrators. While many insurers including UnitedHealth act as third-party administrators, other companies that aren’t insurers also perform the service.

If there is a cost to third-party administrators for the coverage, the government will reimburse them by reducing the fees their insurers pay to offer plans in new health insurance marketplaces, called exchanges, which are being established under the health law.

The government has no estimate of how much the reimbursements may cost, said Chiquita Brooks-LaSure, deputy director of policy and regulation at the Center for Consumer Information and Insurance Oversight, which administers much of the health law.

The government said almost all self-insured nonprofits employ an independent company to administer their benefits.

One atheist advocacy group, The Secular Coalition, warned that the exemption for nonprofits is too broad, and women working for the groups risk not having coverage for birth control if the alternative insurance mechanism doesn’t work.

“These accommodations set a terrible precedent for religious interference in individual choice,” Edwina Rogers, the group’s executive director, said in a statement.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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