On January 22, 2024, the Departments of Labor, Health and Human Services, and the Treasury jointly issued a comprehensive set of FAQs concerning the contraceptive coverage mandate specified in the Affordable Care Act (ACA).
This release aims to clarify the mandate’s scope, tackle compliance issues head-on, and introduce an innovative approach for managing the coverage of FDA-approved contraceptive drugs and devices.
This update is pivotal for shedding light on crucial facets of healthcare coverage, which is why we at Launchways took notice.
Understanding the Contraceptive Coverage Mandate
The ACA ensures that most health plans cover specific preventive care services without charging extra. One of these services is contraception. This is outlined in the Health Resources and Services Administration (HRSA) supported guidelines. However, there are exceptions to this rule. For example, employers with religious or moral objections can opt out of providing this coverage due to their beliefs and values.
According to the Departments of Labor, Health and Human Services, and the Treasury (Departments), this mandate requires health plans to cover (without cost-sharing) no less than one type of contraception for each listed in HRSA’s guidelines. Those include:
- Intrauterine devices with progestin
- Injectable contraceptives
- Oral contraceptives-combined pill
- Emergency contraception-levonorgestrel
Also covered are any FDA-approved, -cleared, or -granted products and contraceptive services that a person’s doctor determines as being medically appropriate. These can include newer products, even if outside the HRSA’s guidelines.
When HRSA’s guidelines do not specify how often, how, where, or with what method to provide a particular birth control method (or for similar services not covered in HRSA’s rules), health plans and insurance companies can use fair medical management strategies.
When that occurs, the issuer or plan must make it easy for employees to request exceptions. If an employee’s doctor states a specific birth control method is medically necessary, that process should be transparent, not too difficult, and without additional costs.
Unreasonable Medical Management Strategies
In an effort to control healthcare costs, it’s no surprise that some health plans and insurance companies are imposing “widespread barriers” that make it difficult for people to get birth control. These include unfair medical management strategies.
Examples of these problematic practices include the following:
- Requiring people to try out several different types of products or services to satisfy step-therapy protocols before they agree to cover the one their doctor recommends.
- Applying age limits for a contraceptive product or service that your doctor states is necessary.
- Imposing overly complex administrative requirements to get an exception process.
- Demanding cost sharing for secondary but necessary services vital to the primary service. An example of this is a medically required pregnancy test before specific contraceptive options.
Your New Optional Approach
To tackle compliance issues, the FAQs introduce a fresh alternative for health plans and issuers to adhere to the ACA’s contraceptive coverage mandate. This alternative, known as the therapeutic equivalence approach, offers a new method for ensuring compliance with the law.
With this approach, when health plans or insurance companies use certain methods for managing FDA-approved contraception within a specific category, they’re seen as fair if they do the following:
- It includes all FDA-approved birth control pills and devices in that group (or similar ones) without making employees pay anything extra, except for those with at least one similar option covered without cost-sharing by the plan or insurance company.
- It offers a process for employees to get an exception to cost-sharing for the specific birth control pill or device needed. This is especially important for medical necessities.
If one birth control pill or device is seen as therapeutically equivalent to another, it means they do the same job in the body. This can be verified by checking the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book).
With the government’s attention on birth control coverage, it’s a good idea for employers to check if their health plans comply with the ACA. This applies to health plans and insurance companies that aren’t ‘grandfathered’ in. Plans that are grandfathered or self-funded have more flexibility in how they’re set up, but companies should think about how limiting certain services might affect people.
Employers should watch for troublesome medical management strategies designed to limit access, like complex step-therapy rules, age limits, or complicated paperwork.
Since many use step-therapy rules to save money, leaders must consider how they will handle the new guidance. A new therapeutic equivalent approach was introduced. Employers and decision-makers in charge of health plans might want to know a bit more about it if plan members ask. Check out the FAQS ABOUT AFFORDABLE CARE ACT IMPLEMENTATION PART 64 (dol.gov).