Update: On January 22, 2024, the Departments issued FAQs Part 64, expanding on previous guidance related to preventative services provisions for contraceptive coverage mandated by the ACA. FAQs Part 64 introduces an optional “therapeutic equivalence approach” that group health plans and insurers can choose to implement to support reasonable medical management techniques. This means that group health plans can continue to provide contraceptive coverage per the prior guidance, or choose to implement a “therapeutic equivalence approach,” under which the Departments will consider medical management techniques to be reasonable if plans:
- “Cover all FDA-approved contraceptive drugs and drug-led devices in that category (or group of substantially similar products) without cost sharing, other than those for which there is at least one therapeutic equivalent drug or drug-led device that the plan or issuer covers without cost sharing”; and
- “Provides an exceptions process that allows an individual to access without cost sharing the specific contraceptive drug or drug-led device (that is a therapeutic equivalent to the product that is covered without cost sharing) that is determined to be medically necessary with respect to the individual, as determined by the individual’s attending provider.”
Further, a contraceptive drug (or device) is considered therapeutically equivalent if the drug or device is identified as a therapeutic equivalent (i.e., designated with the letter “A”) in the FCA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book).
The Departments also explain their awareness of potential noncompliance with reasonable medical management techniques and reiterate their commitment to ensuring consumer access to all contraceptive benefits as entitled to per federal law, described further below. For an example of a reasonable medical management technique under this new “therapeutic equivalence approach,” as well as examples of potentially unreasonable medical management techniques, see the Department’s FAQs 64.
Original Article:
In response to continued complaints of non-compliance, the Department of Labor, Department of Health and Human Services, and the Department of Treasury (collectively, the Departments) recently issued a letter encouraging group health plans to provide coverage for contraception at no cost, as required by the Affordable Care Act (ACA), and they released related FAQs.
Background
Per Section 2713 of the Public Health Service Act (PHSA), non-grandfathered group health plans (except for certain employers with a religious or moral exemption) and insurers are required to cover contraceptives (aligned with guidelines issued by the Health Resources and Services Administration (HRSA)) without cost sharing. Further, the ACA requires that all Food and Drug Administration (FDA) approved contraceptives that are determined to be medically appropriate by an individual’s medical provider be covered without cost sharing.
This means that plans are required to cover at no cost:
- At least one form of contraception in each HSRA contraceptive category; and
- Contraceptive services or FDA approved, cleared, or granted contraceptive products advised by a health care provider as medically appropriate for an individual.
In addition, plans may use reasonable medical management techniques per category. Importantly, such techniques will not be considered reasonable unless the group health plan or carrier “(1) has an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual or their provider (or other individual acting as the individual’s authorized representative); and (2) covers without cost sharing a contraceptive service or FDA-approved, cleared, or -granted contraceptive product determined to be medically necessary with respect to an individual as determined by the individual’s attending provider (including if there is only one service or product that is medically appropriate for the individual, as determined by their attending provider).”
The Departments’ Recent Guidance
These coverage requirements are not new; however, the Departments are concerned about the continued complaints of noncompliance and clarify that enforcement and corrective action may be taken as a result, as explained further in their letter and FAQs (and prior guidance as mentioned in our blog, New Guidance and Reminders on Certain Services Covered Without Cost Sharing).
As described further in their letter, highlights of action items to ensure compliance include:
- Developing an exceptions process for contraceptive products that is not unduly burdensome (or review existing exceptions process for the same);
- Creating and implementing standardized forms for the exceptions process;
- Communicating information related to the exceptions process to individuals through plan documentation and online resources;
- Removing any unreasonable medical management techniques; and
- Deferring to provider’s recommendations regarding medical necessity determination.
For more information on contraceptive coverage requirements, see the Departments most recent FAQs on the topic.
Employer Action
Employers should be aware of these coverage requirements and discuss with their carriers (if fully insured) or their third-party administrators (if self-insured/level funded) to ensure their plans are compliant with the contraception coverage requirements (if not exempt) to avoid future enforcement actions that could impose penalty.
Additional Resources
- FAQs Part 64
- Departments’ Letter
- FAQs Part 54
- Sequoia Foreword: New Guidance and Reminders on Certain Services Covered Without Cost Sharing
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