The Catholic Health Association and the U.S. bishops have parted ways over the final wording of a Department of Health and Human Services exemption and accommodation for religious employers related to its mandate for contraception coverage in new health insurance packages.
Michael Sean Winters at National Catholic Reporter released a copy of a memorandum issued yesterday afternoon by CHA to its membership (confirmed by a copy of same e-mailed to this office this morning), explaining the organization’s reasons for coming to terms with the final language of the accommodation on contraception coverage offered to objecting religious employees.
According to the memorandum: “Since the original [HHS] rule was issued over a year ago, there has been considerable concern raised by many parties including CHA. CHA had two principal concerns. The first was the four-part definition of what constituted a ‘religious employer.’ That concern has been eliminated. CHA’s second concern was establishing a federal precedent that mandated our members would have to include in their health plans services they had well-established moral objections to. HHS has now established an accommodation that will allow our ministries to continue offering health insurance plans for their employees as they have always done.”
Throughout the protracted effort to nail down the language on exemptions and accommodations to religious employers who objected to the mandate the “CHA has been in dialogue with the leadership of the Bishops’ Conference, the Administration and HHS,” according to its memorandum. “We are pleased that our members now have an accommodation that will not require them to contract, provide, pay or refer for contraceptive coverage.
“We also recognize that this resolution has not been what some organizations, including the Bishops’ Conference, asked for on behalf of a wider group. Our contribution to the process has been to work for the protection of religious organizations, especially our members. We recognize the broader issues will continue to be debated and litigated by others.”
Sister Mary Ann Walsh, spokesperson for the bishops' conference, said the U.S. bishops did not contribute to the CHA analysis of the accommodation language or to its statement yesterday. She said there was “no way to predict” if the CHA decision would lead to a falling out between the bishops and the CHA, but that “no one” was seeking to contribute to a rupture like the one that followed the CHA’s decision to endorse health care reform over the bishops’ objections in 2010.
Sister Walsh said the bishops were still studying the accommodation language, noting that the “the bishops have very broad concerns. They have concerns related to the entire church, and they have to bring those concerns to the discussion.”
UPDATED: Sister Carol Keehan, President and CEO of the CHA, said, “I don’t see our decision about the mandate as any kind of a break with the bishops. It’s simply they have a very, very wide, broad set of issues; we had a very narrow issue.” CHA's focus was on how to get the mandate challange resolved for its hospital members "as best we could without compromising our principles.
"We didn’t see it as a break; we saw it as contribution to resolving the overall issue."
On July 3, the U.S. bishops rejected the same final accommodation language offered by the Obama administration on its Affordable Care Act mandate on women’s preventive services, which now requires that contraception, including sterilization and the availability of drugs some regard as abortifacients, be included free of co-pays or other charges in new health insurance plans. In a statement signed by U.S. Conference of Catholic Bishops President Cardinal Timothy Dolan, Archbishop of New York, the conference said the final ruling does not appear to eliminate "the need to continue defending our rights in Congress and the courts."
The bishops continued to express concerns about the mandate concerning its “narrow” definition of "religious employers" that are exempted and the fact that businesses run by individuals who may object to the coverage are not considered at all for exemption or accommodation. The bishops continued to express reservations about the accommodation offered to religious institutional employers and those religious employers that are self-insured. The HHS ruling seeks to remove such objecting institutions from any role in the provision of contraception services through third-party processing and by throwing the responsibility for administering and paying for such services on to insurance providers.
According to the final HHS ruling issued June 28, a religious emplyer exempt from the mandate completely is an organization that is referred to in Section 6033(a)(3)(A)(i) and (iii) of the Internal Revenue Code, which describes those entities that are exempt from filing a Form 990. This includes churches, their integrated auxiliaries and conventions or associations of churches, as well as the exclusively religious activities of any religious order.
The final rules define an “eligible organization” for purposes of the accommodation as an organization that meets all of the following criteria:
• The organization opposes providing coverage for some or all of the contraceptive services required to be covered under the ACA on account of religious objections.
• The organization is organized and operates as a nonprofit entity.
• The organization holds itself out as a religious organization.
• The organization self-certifies that it satisfies the first three criteria.
After a year and a half of wrangling over the accomdation's language, the CHA has pronounced itself satisfied with the procedures offered by HHS. In a addendum on the process, the CHA attempts to explain to its members how the accommodation with practically work:
For eligible organizations that have insured plans, the first step will be to have an authorized individual execute a self-certification in the form specified by HHS prior to the first day of its first plan year beginning on or after January 1, 2014. All that will be asked on the form is for the organization to confirm that it satisfies the first three criteria of the “eligible organization” definition. The form does not have to be filed with any governmental agency, but does have to be maintained under the record retention requirements of ERISA and be made available for inspection on request.
The second step is for the organization to present the self-certification to its insurer. Once that is done, the eligible organization has no further obligations regarding contraceptive coverage, even if the insurer does not satisfy the requirements regarding contraceptive coverage imposed on it by the final regulations. Upon receiving the self-certification, the insurer is required by the federal government to assume sole responsibility, independent of the eligible organization and its plan, to pay for contraceptive services without cost-sharing, premium, fee, or other charge to plan participants and beneficiaries. One change from the proposed rules in this area is that under the final rules, the insurer will not issue the participants a separate contraceptive policy. Instead, the insurer must notify the participants (separately from any application or other materials distributed with regard to enrollment in the insured group health plan) that it will make payment for contraceptive services. The insurer is required to segregate premium payments made by eligible organizations and to pay for contraceptive services from other funds.
The plan issued to the eligible organization must specifically exclude coverage of contraceptive services.In addition, the rules require the insurer to ensure that such coverage is not reflected in the group health insurance premium, and that no fee or other charge in connection with such coverage is imposed on the eligible organization or its plan. In other words, the eligible organization will continue to purchase insurance without contraceptive coverage just as it did prior to ACA.
A similar process applies to self-insured entities which would pass on any role regarding the contraception mandate to its third party insurance administrator (TPA). According to the CHA memo:
"[T]he TPA will then decide whether it chooses to become the plan administrator and claims administrator under ERISA for the contraceptive services. There is no legal requirement that a TPA accept this role. However, because the TPA will receive an allowance for administrative costs plus a margin, it will have an incentive to do so. If the TPA does agree to this role, it would then have the legal obligation to provide or arrange for separate payments for contraceptive services for plan participants and beneficiaries without cost. It also would be responsible for notifying participants (separately from any application or other materials distributed with regard to enrollment in the insured group health plan) of the availability of separate payments for contraceptive services. The TPA must ensure that no fee or other charge in connection with such services is imposed on the eligible organization or its plan.