By: Kelly Dempsey, Esq.
It is time to hit the pause button one more time on a regulation change. As noted in a prior blog post, the contraceptive coverage requirement for non-grandfathered plans is one of the ACA rules the Trump administration has already modified. The prior accommodation rules that allowed some employers to decline an offer of coverage for contraceptives had a narrow definition of religious entity, while the new rule created an exemption that broadened the scope of employers who could decline to offer contraceptive coverage. Thus the new rules essentially allow any company that is not publically traded the ability to refuse to cover contraceptives on moral or religious grounds. The process for the exemption is also much more relaxed than the accommodation process.
Several states have sued the Trump administration over the rules, including Pennsylvania, California, Washington, and Massachusetts. Several states (Delaware, Maryland, New York and Virginia) have joined California in efforts.
Two of these cases, Pennsylvania and California, have now created a pause in enforcement of the Trump administration’s rules that applies nationwide. On Friday, December 15, a federal court judge in Philadelphia issued an injunction that ordered the Trump administration not to enforce the new rules. The lawsuit alleges that the new rules violate the Firth Amendment (the rules apply to only women) and the First Amendment (the rules place employers’ religious beliefs over the constitutional rights of women). On Thursday, December 21, a federal court judge in California took a slightly different approach and issued an injunction on the basis that the administration failed to include a notice and comment process before implementing the new rules.
It appears the Trump administration is evaluating options on how to proceed – which likely means there will be an appeal.
From a self-funded plan perspective, employers that have obtained an accommodation under the prior rules should seek to maintain that accommodation instead of seeking an exemption under the new rule.
As with any court case, the timeline for resolution is unclear, so employers and TPAs should stay tuned for developments.