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Discussion leaves a sense of uncertainty as to how coverage rules will play out
The Supreme Court’s decision in late November to hear arguments in two cases challenging the federal government’s contraceptive mandate should provide clarity as health insurers work to comply with the Affordable Care Act (ACA), according to a lawyer who advises managed care organizations.
George B. Breen, a partner in the Washington, D.C., law firm of Epstein Becker Green, says conflicting decisions in more than 80 pending lawsuits challenging the mandate’s constitutionality have rendered a Supreme Court decision imperative. ACA rules require health plans to offer members coverage for FDA-approved contraceptives with no cost-sharing.
While religious organizations are exempt and religiously affiliated organizations have a workaround, private, for-profit employers do not. The center of the issue calls into question whether a corporation-perhaps one that is family-owned, such as retailer Hobby Lobby-can object to providing employees free contraceptives, based on religious objections.
A high-court decision either for or against the ACA mandate will impact claims adjudication, financial management, customer service, medical policy and more, Breen says.
“There are a number of potential repercussions that come into play in the event there is a decision made that it’s unconstitutional or whether there’s provision that there are certain types of contraceptive services somehow permitted to not be subject to the requirement. It creates further confusion in the industry at a number of levels,” he says.
With regard to pricing, for example, plans are left to wonder how services will be provided and who pays for it.
“The law, as it stands now, says this is an essential health benefit that cannot have any cost-sharing on the part of the member,” Breen says. “How do costs get accounted for if you now have a change in the law?”
It’s a continuation of the confusion that insurers have faced. Breen says it leaves a sense of uncertainty as to how the contraceptive coverage rules will ultimately play out.
The court is expected to hear arguments this spring regarding two cases, Kathleen Sebelius v. Hobby Lobby and Conestoga Wood Specialties v. Sebelius, in which for-profit corporations claim that the mandate violates their company’s religious freedom. Both companies take exception with four drugs the FDA classifies as contraception that prevent implantation of a fertilized egg, which those who believe life begins at conception say is tantamount to abortion.
In both cases, the firms argue that they are protected by the Religious Freedom Restoration Act (RFRA)signed into law in 1993. The act protects “a person’s exercise of religion,” and, according to Congress’s Dictionary Act, a corporation is a person under the law.
At issue, then, are whether a for-profit corporation can be protected by RFRA, and whether it is a violation to require a business to provide insurance for contraceptives when that coverage violates the owners’ personal religious beliefs, according to the Kaiser Family Foundation.
The court also must decide whether the contraceptive coverage requirement violates the First Amendment’s protection for free exercise of religion and if the owners’ rights are violated by the mandate, the brief explains.
The decision, which is expected by summer, impacts most health plans, except those that are grandfathered.
“Any new, private plan that’s been changed since March 23, 2010, is not grandfathered and must provide coverage for all prescribed, FDA-approved methods of contraception,” says Laurie Sobel, senior health policy analyst with KFF’s women’s health policy team.
Sobel, who co-authored the policy brief, sees broad ramifications ranging from additional health procedures such as blood transfusions and vaccinations to civil rights and fair housing protections, if an exception to the mandate is granted to corporations. Breen said such ramifications were unlikely.
Briefs are due to the Supreme Court by the end of January.
In the meantime, a federal judge in New York ruled last month that ArchCare, the New York Catholic archdiocese, and several Catholic hospitals and organizations do not have to provide contraceptive coverage for their employees. The ruling overshoots the Obama administration workaround created earlier, which allows religiously affiliated employers to leave coverage up to a third party.
U.S. District Judge Brian Cogan said in a preliminary injunction that the mandate violates religious freedom.
UPDATE: The Supreme Court will hear the Hobby Lobby case on March 25, 2014.