New Regulations Broadening Employer Exemptions to Contraceptive Coverage: For Many Women, Their Employers Will Determine Whether They Have No-cost Coverage to the Full Range of FDA Approved Methods

How has the contraceptive coverage rule affected women?

Contraceptive use among women is widespread, with over 99% of sexually-active women using at least one method at some point during their lifetime.3 Contraceptives make up an estimated 30-44% of out-of-pocket health care spending for women.4 Since the implementation of the ACA, out-of-pocket spending on prescription drugs has decreased dramatically (Figure 2). The majority of this decline (63%) can be attributed to the drop in out-of-pocket expenses on the oral contraceptive pill for women.5 One study estimates that roughly $1.4 billion dollars per year in out-of-pocket savings on the pill resulted from the ACA’s contraceptive mandate.6 By 2013, most women had no out-of-pocket costs for their contraception, as median expenses for most contraceptive methods, including the IUD and the pill, dropped to zero.7

Figure 2: The Contraceptive Coverage Policy Has Had a Large Impact on Out-Of-Pocket Spending in a Short Amount of Time

This provision has also influenced the decisions women make in their choice of method. After implementation of the ACA contraceptive coverage requirement, women were more likely to choose any method of prescription contraceptive, with a shift towards more effective long-term methods.8 High upfront costs of long-acting methods, such as the IUD and implant, had been a barrier to women who might otherwise prefer these more effective methods. When faced with no cost-sharing, women choose these methods more often9, with significant implications for the rate of unintended pregnancy and associated costs of childbirth.10

Finally, decreases in cost-sharing were associated with better adherence and more consistent use of the pill. This was especially true among users of generic pills. One study showed that even copayments as low as $6 were associated with higher levels of discontinuation and non-adherence,11 increasing the risk of unintended pregnancy.

Do states with no-cost contraceptive coverage laws allow exemptions to objecting entities?

The federal standards under Affordable Care Act created a minimum set of preventive benefits that applied to most health plans regulated by the federal government (self-funded plans, federal employee plans) and states (individual, small and large group plans), including contraceptive coverage for women with no cost-sharing. States have also historically regulated insurance, and many have had mandated minimum benefits for decades. State laws, however, have more limited reach in that they only apply to state regulated fully insured plans, do not have jurisdiction over self-funded plans, where 61% of covered workers are insured.12 In self-funded plans, the employer assumes the risk of providing covered services and usually contracts with a third party administrator (TPA) to manage the claims payment process. These plans are overseen by the Federal Department of Labor under the Employer Retirement Income Security Act (ERISA) and are only subject to federally established regulations.13 The ACA sets a minimum standard of coverage for preventive services for all plans. However, state laws regulating insurance, including contraceptive coverage, can require fully insured plans to provide coverage beyond the federal standards.

Eight states have strengthened and expanded the federal contraceptive coverage requirement (CA, IL, MD, ME, NV, NY, OR, VT). Another 20 states have contraceptive equity laws that require plans to cover contraceptives if they also provide coverage for prescription drugs but they do not necessarily require coverage of all FDA-approved contraceptives or ban cost-sharing (Figure 3).

Figure 3: Many States Have Contraceptive Coverage Requirements

Many of the 28 states that have passed contraceptive coverage laws (both equity and no-cost coverage) have a provision for exemptions, but the laws vary from state to state and only apply to fully insured plans. This means that there may be a conflict between the state and federal requirements when it comes to religious exemptions. In some states with a contraceptive coverage requirement, some employers who are eligible for an exemption under federal law will not qualify for an exemption under state law (Table 2). Employers in those states will have to have to meet the standards established by their state even though they may qualify for an exemption based on the new federal regulations. This conflict may set the stage for future litigation.

Table 2: State Requirements for No-Cost Contraceptive Coverage
State *Date Effective*	Applies to		Coverage required without cost sharing			Exemptions allowed
	Private plans	Medicaid	With RX all FDA approved	OTC	Vasectomy	Religious	Moral
California January 2015	X	MCOs	X			Narrowly defined nonprofit religious employers	None
Illinois January 2017	X		X	X except male condoms		Any employer, or insurer with a religious objection	Any employer, or insurer with a moral objection
Maryland January 2018	X	X	X	X	X	Religious organizations if the coverage conflicts with the organization’s bona fide religious beliefs and practices	None
Maine January 2019	X		X			Narrowly defined nonprofit religious employers	None
Nevada January 2018	X	X	X			Insurers affiliated with a religious organization	None
New York August 2017	X		X			Narrowly defined nonprofit religious employers*	None
OR August 2017	X			X	X	Narrowly defined nonprofit religious employers	None
VT October 2016	X	X – and all other public health assistance programs	X		X	None	None
NOTES: *Requires the insurer to offer a rider to policyholders so that women will have contraceptive coverage. SOURCE: Kaiser Family Foundation analysis of state laws and regulations.

Conclusion

The Trump Administration’s new regulations substantially expand the exemption to nonprofit and for-profit employers, as well as to private colleges or universities with religious or moral objections to contraceptive coverage. It is unknown how many of these employers and colleges will maintain coverage through the accommodation as before and how many will now opt for the exemption leaving their students, employees and dependents without no-cost coverage for the full range of contraceptive methods. As a result of the new regulation, choices about coverage and cost-sharing will be made by employers and private colleges and universities that issue student plans. For many women, their employers will determine whether they have no-cost coverage to the full range of FDA approved methods. Their choice of contraceptive methods may again be limited by cost, placing some of the most effective yet costly methods out of financial reach.

*Kaiser is a non-profit organization focusing on national health issues, as well as the U.S. role in global health policy. Unlike grant-making foundations, Kaiser develops and runs its own policy analysis, journalism and communications programs, sometimes in partnership with major news organizations. It is not associated with Kaiser Permanente.

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