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Religious Accommodation and Exemptions Expanded

Note: On December 15, 2017, the United States District Court for the Eastern District of Pennsylvania entered a preliminary injunction on the executive orders that had expanded the criteria for religious accommodation as discussed below. As a result of this injunction, employers will be required to adhere to all rules in effect prior to October 6, 2017, when the executive orders were initially signed. If an employer wants to seek a religious accommodation under the prior regulations, all prior steps and guidance must be followed.


 

On October 6, 2017, the Departments of Health and Human Services, Treasury and Labor (the Departments) collectively released two interim rules. These expand the criteria for employers to qualify for religious exemptions and accommodations under the Affordable Care Act’s (ACA’s) preventive services mandate. These rules are effective immediately. No action is required of employers that currently have a religious exemption or accommodation under the prior rules. 


 

Religious Exemption and Accommodation Expanded


 

As a reminder, religious exemptions and religious accommodation exceptions have been available for religious employers and eligible organizations that object to covering some or all birth control and other contraceptive devices that are required to be covered by non-grandfathered plans at no cost to the member under the ACA’s preventive services mandate. As of October 6, 2017, the criteria for qualifying for these exceptions have been expanded to include certain employers with a moral objection to this coverage.
The chart below explains what each of these exceptions mean and how they have been expanded by the interim rules:

Type of ExceptionWhat it meansHow the qualifying criteria has been expanded under the interim rules

Religious or Moral Exemption

An exemption means a *religious or eligible employer is exempt from complying with the contraceptive services coverage requirements and may exclude some or all birth control and contraceptive devices based on religious beliefs or moral convictions. This coverage will not be provided separately to plan participants through their TPA or insurance issuer. 


 


*A religious employer is defined as a non-profit organization that has a mandatory exception from filing taxes based on one of the following factors:

 
 


• The employer is a church, its integrated auxiliaries, a convention  or an association of churches,

 

OR

 

• The employer conducts exclusively religious activities of any religious order.

The criteria for employers that qualify for an exemption have been expanded beyond religious employers to include the following eligible employers:


 1. Non-governmental employers and institutions of higher education with sincerely held religious beliefs


 2. Employers that have a moral objection to birth control and/or abortifacient drugs, including nonprofit entities and closely held for-profit entities.


Employers who currently have an accommodation under the prior rules are permitted to change to an exemption under these expanded rules if they now qualify. 

Religious or Moral Accommodation

An accommodation means the eligible employer may exclude some or all birth control and contraceptive devices based on religious beliefs or moral convictions, but separate arrangements will be made for its plan participants to be offered this coverage through its TPA or insurance issuer.


The criteria for employers that qualify for an accommodation have been expanded beyond certain non-profit organizations and closely held for-profit entities* with religious objections to include nonprofit entities and institutions of higher education that have a moral objection to birth control and/or abortifacient drugs.


The new regulations no longer require employers to self-certify they are eligible for an accommodation. This may be done voluntarily following the process in place prior to these new regulations.

*Closely held for-profit entities are defined as entities that are not publicly traded and have more than 50 percent of their ownership interest owned by five or fewer individuals.

 

Plan Changes

 

As a reminder, employers that make changes to their contraceptive coverage based on these expanded exceptions will need to provide participants with advanced notice of any specific plan changes.

 

Also, it is important to note the new regulations allow for exemptions and accommodations to be made on a per-plan basis rather than for the entire entity. This means an employer could have one exempted plan and others that are not.

 

Please note that while these interim rules take effect immediately, lawsuits have already been filed to challenge them.  In addition, as these are interim rules, HHS will take written comments until December 5, 2017, which may result in further changes.

 

Please contact your Client Solutions team if you have any questions.