[Federal Register Volume 83, Number 221 (Thursday, November 15, 2018)]
[Rules and Regulations]
[Pages 57536-57590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24512]



[[Page 57535]]

Vol. 83

Thursday,

No. 221

November 15, 2018

Part II





Department of the Treasury





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Internal Revenue Service





Department of Labor





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Employee Benefits Security Administration





Department of Health and Human Services





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26 CFR Part 54

29 CFR Part 2590

45 CFR Part 147





Religious Exemptions and Accommodations for Coverage of Certain 
Preventive Services Under the Affordable Care Act; Final Rule

  Federal Register / Vol. 83 , No. 221 / Thursday, November 15, 2018 / 
Rules and Regulations  

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD-9840]
RIN 1545-BN92

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB83

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 147

[CMS-9940-F2]
RIN 0938-AT54


Religious Exemptions and Accommodations for Coverage of Certain 
Preventive Services Under the Affordable Care Act

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; and Centers for 
Medicare & Medicaid Services, Department of Health and Human Services.

ACTION: Final rules.

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SUMMARY: These rules finalize, with changes based on public comments, 
interim final rules concerning religious exemptions and accommodations 
regarding coverage of certain preventive services issued in the Federal 
Register on October 13, 2017. These rules expand exemptions to protect 
religious beliefs for certain entities and individuals whose health 
plans are subject to a mandate of contraceptive coverage through 
guidance issued pursuant to the Patient Protection and Affordable Care 
Act. These rules do not alter the discretion of the Health Resources 
and Services Administration, a component of the U.S. Department of 
Health and Human Services, to maintain the guidelines requiring 
contraceptive coverage where no regulatorily recognized objection 
exists. These rules also leave in place an ``accommodation'' process as 
an optional process for certain exempt entities that wish to use it 
voluntarily. These rules do not alter multiple other federal programs 
that provide free or subsidized contraceptives for women at risk of 
unintended pregnancy.

DATES: Effective date: These regulations are effective on January 14, 
2019.

FOR FURTHER INFORMATION CONTACT: Jeff Wu, at (301) 492-4305 or 
[email protected] for the Centers for Medicare & Medicaid 
Services (CMS), Department of Health and Human Services (HHS); Amber 
Rivers or Matthew Litton, Employee Benefits Security Administration 
(EBSA), Department of Labor, at (202) 693-8335; William Fischer, 
Internal Revenue Service, Department of the Treasury, at (202) 317-
5500.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor concerning employment-based 
health coverage laws may call the EBSA Toll-Free Hotline, 1-866-444-
EBSA (3272) or visit the Department of Labor's website (www.dol.gov/ebsa). Information from HHS on private health insurance coverage can be 
found on CMS's website (www.cms.gov/cciio), and information on health 
care reform can be found at www.HealthCare.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary and Background
    A. Executive Summary
    1. Purpose
    2. Summary of the Major Provisions
    a. Expanded Religious Exemptions to the Contraceptive Coverage 
Requirement
    b. Optional Accommodation
    3. Summary of Costs, Savings and Benefits of the Major 
Provisions
    B. Background
II. Overview, Analysis, and Response to Public Comments
    A. The Departments' Authority To Mandate Coverage and Provide 
Religious Exemptions
    B. Availability and Scope of Religious Exemptions
    C. The First Amendment and the Religious Freedom Restoration Act
    1. Discretion To Provide Religious Exemptions
    2. Requiring Entities To Choose Between Compliance With the 
Contraceptive Mandate or the Accommodation Violated RFRA in Many 
Instances
    a. Substantial Burden
    b. Compelling Interest
    D. Burdens on Third Parties
    E. Interim Final Rulemaking
    F. Health Effects of Contraception and Pregnancy
    G. Health and Equality Effects of Contraceptive Coverage 
Mandates
III. Description of the Text of the Regulations and Response to 
Additional Public Comments
    A. Restatement of Statutory Requirements of PHS Act Section 
2713(a) and (a)(4) (26 CFR 54.9815-2713(a)(1) and (a)(1)(iv), 29 CFR 
2590.715-2713(a)(1) and (a)(1)(iv), and 45 CFR 147.130(a)(1) and 
(a)(1)(iv))
    B. Prefatory Language of Religious Exemptions (45 CFR 
147.132(a)(1))
    C. Scope of Religious Exemptions and Requirements for Exempt 
Entities (45 CFR 147.132)
    D. Plan Sponsors in General (45 CFR 147.132(a)(1)(i) prefatory 
text)
    E. Houses of Worship and Integrated Auxiliaries (45 CFR 
147.132(a)(1)(i)(A))
    F. Nonprofit Organizations (45 CFR 147.132(a)(1)(i)(B))
    G. Closely Held For-Profit Entities (45 CFR 147.132(a)(1)(i)(C))
    H. For-Profit Entities That Are Not Closely Held (45 CFR 
147.132(a)(1)(i)(D))
    I. Other Non-Governmental Employers (45 CFR 147.132(a)(1)(i)(E))
    J. Plans Established or Maintained by Objecting Nonprofit 
Entities (45 CFR 147.132(a)(1)(ii))
    K. Institutions of Higher Education (45 CFR 147.132(a)(1)(iii))
    L. Health Insurance Issuers (45 CFR 147.132(a)(1)(iv))
    M. Description of the Religious Objection (45 CFR 147.132(a)(2))
    N. Individuals (45 CFR 147.132(b))
    O. Accommodation (45 CFR 147.131, 26 CFR 54.9815-2713A, 29 CFR 
2590.715-2713A)
    P. Definition of Contraceptives for the Purpose of These Final 
Rules
    Q. Severability
    R. Other Public Comments
    1. Items Approved as Contraceptives But Used To Treat Existing 
Conditions
    2. Comments Concerning Regulatory Impact
    3. Interaction With State Laws
IV. Economic Impact and Paperwork Burden
    A. Executive Orders 12866 and 13563--Department of HHS and 
Department of Labor
    1. Need for Regulatory Action
    2. Anticipated Effects
    a. Removal of Burdens on Religious Exercise
    b. Notices When Revoking Accommodated Status
    c. Impacts on Third Party Administrators and Issuers
    d. Impacts on Persons Covered by Newly Exempt Plans
    i. Unknown Factors Concerning Impact on Persons in Newly Exempt 
Plans
    ii. Public Comments Concerning Estimates in Religious IFC
    iii. Possible Sources of Information for Estimating Impact
    iv. Estimates Based on Litigating Entities That May Use Expanded 
Exemptions
    v. Estimates of Accommodated Entities That May Use Expanded 
Exemptions
    vi. Combined Estimates of Litigating and Accommodated Entities
    vii. Alternate Estimates Based on Consideration of Pre-ACA Plans
    viii. Final Estimates of Persons Affected by Expanded Exemptions
    B. Special Analyses--Department of the Treasury
    C. Regulatory Flexibility Act
    D. Paperwork Reduction Act--Department of Health and Human 
Services
    1. Wage Data
    2. ICRs Regarding Self-Certification or Notices to HHS (Sec.  
147.131(c)(3))

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    3. ICRs Regarding Notice of Availability of Separate Payments 
for Contraceptive Services (Sec.  147.131(e))
    4. ICRs Regarding Notice of Revocation of Accommodation (Sec.  
147.131(c)(4))
    5. Submission of PRA-Related Comments
    E. Paperwork Reduction Act--Department of Labor
    F. Regulatory Reform Executive Orders 13765, 13771 and 13777
    G. Unfunded Mandates Reform Act
    H. Federalism
V. Statutory Authority

I. Executive Summary and Background

A. Executive Summary

1. Purpose
    The primary purpose of this rule is to finalize, with changes in 
response to public comments, the interim final regulations with 
requests for comments (IFCs) published in the Federal Register on 
October 13, 2017 (82 FR 47792), ``Religious Exemptions and 
Accommodations for Coverage of Certain Preventive Services Under the 
Affordable Care Act'' (the Religious IFC). The rules are necessary to 
expand the protections for the sincerely held religious objections of 
certain entities and individuals. The rules, thus, minimize the burdens 
imposed on their exercise of religious beliefs, with regard to the 
discretionary requirement that health plans cover certain contraceptive 
services with no cost-sharing, a requirement that was created by HHS 
through guidance promulgated by the Health Resources and Services 
Administration (HRSA) (hereinafter ``Guidelines''), pursuant to 
authority granted by the ACA in section 2713(a)(4) of the Public Health 
Service Act. In addition, the rules maintain a previously created 
accommodation process that permits entities with certain religious 
objections voluntarily to continue to object while the persons covered 
in their plans receive contraceptive coverage or payments arranged by 
their health insurance issuers or third party administrators. The rules 
do not remove the contraceptive coverage requirement generally from 
HRSA's Guidelines. The changes being finalized to these rules will 
ensure that proper respect is afforded to sincerely held religious 
objections in rules governing this area of health insurance and 
coverage, with minimal impact on HRSA's decision to otherwise require 
contraceptive coverage.
2. Summary of the Major Provisions
a. Expanded Religious Exemptions to the Contraceptive Coverage 
Requirement
    These rules finalize exemptions provided in the Religious IFC for 
the group health plans and health insurance coverage of various 
entities and individuals with sincerely held religious beliefs opposed 
to coverage of some or all contraceptive or sterilization methods 
encompassed by HRSA's Guidelines. The rules finalize exemptions to the 
same types of organizatons and individuals for which exemptions were 
provided in the Religious IFC: Non-governmental plan sponsors including 
a church, an integrated auxiliary of a church, a convention or 
association of churches, or a religious order; a nonprofit 
organization; for-profit entities; an institution of higher education 
in arranging student health insurance coverage; and, in certain 
circumstances, issuers and individuals. The rules also finalize the 
regulatory restatement in the Religious IFC of language from section 
2713(a) and (a)(4) of the Public Health Service Act.
    In response to public comments, various changes are made to clarify 
the intended scope of the language in the Religious IFC. The prefatory 
language to the exemptions is clarified to ensure exemptions apply to a 
group health plan established or maintained by an objecting 
organization, or health insurance coverage offered or arranged by an 
objecting organization, to the extent of the objections. The 
Departments add language to clarify that, where an exemption 
encompasses a plan or coverage established or maintained by a church, 
an integrated auxiliary of a church, a convention or association of 
churches, a religious order, a nonprofit organization, or other non-
governmental organization or association, the exemption applies to each 
employer, organization, or plan sponsor that adopts the plan. Language 
is also added to clarify that the exemptions apply to non-governmental 
entities, including as the exemptions apply to institutions of higher 
education. The Departments revise the exemption applicable to health 
insurance issuers to make clear that the group health plan established 
or maintained by the plan sponsor with which the health insurance 
issuer contracts remains subject to any requirement to provide coverage 
for contraceptive services under Guidelines issued under Sec.  
147.130(a)(1)(iv) unless it is also exempt from that requirement. The 
Departments also restructure the provision describing the religious 
objection for entities. That provision specifies that the entity 
objects, based on its sincerely held religious beliefs, to its 
establishing, maintaining, providing, offering, or arranging for 
either: coverage or payments for some or all contraceptive services; 
or, a plan, issuer, or third party administrator that provides or 
arranges such coverage or payments.
    The Departments also clarify language in the exemption applicable 
to plans of objecting individuals. The final rule specifies that the 
individual exemption ensures that the HRSA Guidelines do not prevent a 
willing health insurance issuer offering group or individual health 
insurance coverage, and as applicable, a willing plan sponsor of a 
group health plan, from offering a separate policy, certificate or 
contract of insurance or a separate group health plan or benefit 
package option, to any group health plan sponsor (with respect to an 
individual) or individual, as applicable, who objects to coverage or 
payments for some or all contraceptive services based on sincerely held 
religious beliefs. The exemption adds that, if an individual objects to 
some but not all contraceptive services, but the issuer, and as 
applicable, plan sponsor, are willing to provide the plan sponsor or 
individual, as applicable, with a separate policy, certificate or 
contract of insurance or a separate group health plan or benefit 
package option that omits all contraceptives, and the individual 
agrees, then the exemption applies as if the individual objects to all 
contraceptive services.
b. Optional Accommodation
    These rules also finalize provisions from the Religious IFC that 
maintain the accommodation process as an optional process for entities 
that qualify for the exemption. Under that process, entities can choose 
to use the accommodation process so that contraceptive coverage to 
which they object is omitted from their plan, but their issuer or third 
party administrator, as applicable, will arrange for the persons 
covered by their plan to receive contraceptive coverage or payments.
    In response to public comments, these final rules make technical 
changes to the accommodation regulations maintained in parallel by HHS, 
the Department of Labor, and the Department of the Treasury. The 
Departments modify the regulations governing when an entity, that was 
using or will use the accommodation, can revoke the accommodation and 
operate under the exemption. The modifications set forth a transitional

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rule as to when entities currently using the accommodation may revoke 
it and use the exemption by giving 60-days notice pursuant to Public 
Health Service Act section 2715(d)(4) and 45 CFR[thinsp]147.200(b), 26 
CFR 54.9815-2715(b), and 29 CFR 2590.715-2715(b). The modifications 
also express a general rule that, in plan years that begin after the 
date on which these final rules go into effect, if contraceptive 
coverage is being offered by an issuer or third party administrator 
through the accommodation process, an organization eligible for the 
accommodation may revoke its use of the accommodation process effective 
no sooner than the first day of the first plan year that begins on or 
after 30 days after the date of the revocation.
    The Departments also modify the Religious IFC by adding a provision 
that existed in rules prior to the Religious IFC, namely, that if an 
issuer relies reasonably and in good faith on a representation by the 
eligible organization as to its eligibility for the accommodation, and 
the representation is later determined to be incorrect, the issuer is 
considered to comply with any applicable contraceptive coverage 
requirement from HRSA's Guidelines if the issuer complies with the 
obligations under this section applicable to such issuer. Likewise, the 
rule adds pre-existing ``reliance'' language deeming an issuer serving 
an accommodated organization compliant with the contraceptive coverage 
requirement if the issuer relies reasonably and in good faith on a 
representation by an organization as to its eligibility for the 
accommodation and the issuer otherwise complies with the accommodation 
regulation, and likewise deeming a group health plan compliant with the 
contraceptive coverage requirement if it complies with the 
accommodation regulation.
3. Summary of Costs, Savings and Benefits of the Major Provisions

------------------------------------------------------------------------
          Provision           Savings and benefits          Costs
------------------------------------------------------------------------
Restatement of statutory      The purpose of this   We estimate no costs
 language from section         provision is to       from finalizing
 2713(a) and (a)(4) of the     ensure that the       this part of the
 Public Health Service Act.    regulatory language   rule.
                               that restates
                               section 2713(a) and
                               (a)(4) of the
                               Public Health
                               Service Act mirrors
                               the language of the
                               statute. We
                               estimate no
                               economic savings or
                               benefit from
                               finalizing this
                               part of the rule,
                               but consider it a
                               deregulatory action
                               to minimize the
                               regulatory impact
                               beyond the scope
                               set forth in the
                               statute.
Expanded religious            Expanding religious   We estimate there
 exemptions.                   exemptions to the     will be transfer
                               contraceptive         costs where women
                               coverage              previously
                               requirement will      receiving
                               relieve burdens       contraceptive
                               that some entities    coverage from
                               and individuals       employers will no
                               experience from       longer receive that
                               being forced to       coverage where the
                               choose between, on    employers use the
                               the one hand,         expanded
                               complying with        exemptions. Even
                               their religious       after the public
                               beliefs and facing    comment period, we
                               penalties from        have very limited
                               failing to comply     data on what the
                               with the              scale of those
                               contraceptive         transfer costs will
                               coverage              be. We estimate
                               requirement, and on   that in no event
                               the other hand,       will they be more
                               providing (or, for    than $68.9 million.
                               individuals,         We estimate that,
                               obtaining)            where entities
                               contraceptive         using the
                               coverage or using     accommodation
                               the accommodation     revoke it to use
                               in violation of       the exemption, the
                               their sincerely       cost to industry of
                               held religious        sending notices of
                               beliefs.              revocation to their
                                                     policy holders will
                                                     be $112,163.
Optional accommodation        Maintaining the       We estimate that, by
 regulations.                  accommodation as an   expanding the types
                               optional process      of organizations
                               will ensure that      that may use the
                               contraceptive         accommodation, some
                               coverage is made      entities not
                               available to many     currently using it
                               women covered by      will opt into it.
                               plans of employers    When doing so they
                               that object to        will incur costs of
                               contraceptive         $677 to send a self-
                               coverage but not to   certification or
                               their issuers or      notice to their
                               third party           issuer or third
                               administrators        party
                               arranging for such    administrator, or
                               coverage to be        to HHS, to commence
                               provided to their     operation of the
                               plan participants.    accommodation.
                                                    We estimate that
                                                     entities that newly
                                                     make use of the
                                                     accommodation as
                                                     the result of these
                                                     rules, or their
                                                     issuers or third
                                                     party
                                                     administrators,
                                                     will incur costs of
                                                     $311,304 in
                                                     providing their
                                                     policy holders with
                                                     notices indicating
                                                     that contraceptive
                                                     coverage or
                                                     payments are
                                                     available to them
                                                     under the
                                                     accommodation
                                                     process.
------------------------------------------------------------------------

B. Background

    Over many decades, Congress has protected conscientious objections, 
including those based on religious beliefs, in the context of health 
care and human services including health coverage, even as it has 
sought to promote and expand access to health services.\1\ In 2010, 
Congress enacted the

[[Page 57539]]

Patient Protection and Affordable Care Act (PPACA) (Pub. L. 111-148) 
(March 23, 2010). Congress enacted the Health Care and Education 
Reconciliation Act of 2010 (HCERA) (Pub. L. 111-152) on March 30, 2010, 
which, among other things, amended the PPACA. As amended by HCERA, the 
PPACA is known as the Affordable Care Act (ACA).
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    \1\ See, for example, 42 U.S.C. 300a-7 (protecting individuals 
and health care entities from being required to provide or assist 
sterilizations, abortions, or other lawful health services if it 
would violate their ``religious beliefs or moral convictions''); 42 
U.S.C. 238n (protecting individuals and entities that object to 
abortion); Consolidated Appropriations Act of 2018, Div. H, Sec. 
507(d) (Departments of Labor, HHS, and Education, and Related 
Agencies Appropriations Act), Public Law 115-141, 132 Stat. 348, 764 
(Mar. 23, 2018) (protecting any ``health care professional, a 
hospital, a provider-sponsored organization, a health maintenance 
organization, a health insurance plan, or any other kind of health 
care facility, organization, or plan'' in objecting to abortion for 
any reason); id. at Div. E, Sec. 726(c) (Financial Services and 
General Government Appropriations Act) (protecting individuals who 
object to prescribing or providing contraceptives contrary to their 
``religious beliefs or moral convictions''); id. at Div. E, Sec. 808 
(regarding any requirement for ``the provision of contraceptive 
coverage by health insurance plans'' in the District of Columbia, 
``it is the intent of Congress that any legislation enacted on such 
issue should include a `conscience clause' which provides exceptions 
for religious beliefs and moral convictions.''); id. at Div. I, 
(Department of State, Foreign Operations, and Related Programs 
Appropriations Act) (protecting applicants for family planning funds 
based on their ``religious or conscientious commitment to offer only 
natural family planning''); 42 U.S.C. 290bb-36 (prohibiting the 
statutory section from being construed to require suicide-related 
treatment services for youth where the parents or legal guardians 
object based on ``religious beliefs or moral objections''); 42 
U.S.C. 290kk-1 (protecting the religious character of organizations 
participating in certain programs and the religious freedom of 
beneficiaries of the programs); 42 U.S.C. 300x-65 (protecting the 
religious character of organizations and the religious freedom of 
individuals involved in the use of government funds to provide 
substance abuse services); 42 U.S.C. 604a (protecting the religious 
character of organizations and the religious freedom of 
beneficiaries involved in the use of government assistance to needy 
families); 42 U.S.C. 1395w-22(j)(3)(B) (protecting against forced 
counseling or referrals in Medicare+Choice (now Medicare Advantage) 
managed care plans with respect to objections based on ``moral or 
religious grounds''); 42 U.S.C. 1396a(w)(3) (ensuring particular 
Federal law does not infringe on ``conscience'' as protected in 
state law concerning advance directives); 42 U.S.C. 1396u-2(b)(3) 
(protecting against forced counseling or referrals in Medicaid 
managed care plans with respect to objections based on ``moral or 
religious grounds''); 42 U.S.C. 5106i (prohibiting certain Federal 
statutes from being construed to require that a parent or legal 
guardian provide a child any medical service or treatment against 
the religious beliefs of the parent or legal guardian); 42 U.S.C. 
2996f(b) (protecting objection to abortion funding in legal services 
assistance grants based on ``religious beliefs or moral 
convictions''); 42 U.S.C. 14406 (protecting organizations and health 
providers from being required to inform or counsel persons 
pertaining to assisted suicide); 42 U.S.C. 18023 (blocking any 
requirement that issuers or exchanges must cover abortion); 42 
U.S.C. 18113 (protecting health plans or health providers from being 
required to provide an item or service that helps cause assisted 
suicide); see also 8 U.S.C. 1182(g) (protecting vaccination 
objections by ``aliens'' due to ``religious beliefs or moral 
convictions''); 18 U.S.C. 3597 (protecting objectors to 
participation in Federal executions based on ``moral or religious 
convictions''); 20 U.S.C. 1688 (prohibiting sex discrimination law 
to be used to require assistance in abortion for any reason); 22 
U.S.C. 7631(d) (protecting entities from being required to use HIV/
AIDS funds contrary to their ``religious or moral objection'').
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    The ACA reorganizes, amends, and adds to the provisions of part A 
of title XXVII of the Public Health Service Act (PHS Act) relating to 
group health plans and health insurance issuers in the group and 
individual markets. The ACA adds section 715(a)(1) to the Employee 
Retirement Income Security Act of 1974 (ERISA) and section 9815(a)(1) 
to the Internal Revenue Code (Code), in order to incorporate the 
provisions of part A of title XXVII of the PHS Act into ERISA and the 
Code, and to make them applicable to group health plans and health 
insurance issuers providing health insurance coverage in connection 
with group health plans. The sections of the PHS Act incorporated into 
ERISA and the Code are sections 2701 through 2728.
    In section 2713(a)(4) of the PHS Act (hereinafter ``section 
2713(a)(4)''), Congress provided administrative discretion to require 
that certain group health plans and health insurance issuers cover 
certain women's preventive services, in addition to other preventive 
services required to be covered in section 2713. Congress granted that 
discretion to the Health Resources and Services Administration (HRSA), 
a component of the U.S. Department of Health and Human Services (HHS). 
Specifically, section 2713(a)(4) allows HRSA discretion to specify 
coverage requirements, ``with respect to women, such additional 
preventive care and screenings . . . as provided for in comprehensive 
guidelines supported by'' HRSA's Guidelines.
    Since 2011, HRSA has exercised that discretion to require coverage 
for, among other things, certain contraceptive services.\2\ In the same 
time period, the Departments of Health and Human Services (HHS), Labor, 
and the Treasury (collectively, ``the Departments'') \3\ have 
promulgated regulations to guide HRSA in exercising its discretion to 
allow exemptions to those requirements, including issuing and 
finalizing three interim final regulations prior to 2017.\4\ In those 
regulations, the Departments defined the scope of permissible 
exemptions and accommodations for certain religious objectors where the 
Guidelines require coverage of contraceptive services, changed the 
scope of those exemptions and accommodations, and solicited public 
comments on a number of occasions. Many individuals and entities 
brought legal challenges to the contraceptive coverage requirement and 
regulations (hereinafter, the ``contraceptive Mandate,'' or the 
``Mandate'') as being inconsistent with various legal protections, 
including the Religious Freedom Restoration Act, 42 U.S.C. 2000bb-1 
(``RFRA''). Several of those cases went to the Supreme Court. See, for 
example, Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014); 
Zubik v. Burwell, 136 S. Ct. 1557 (2016).
---------------------------------------------------------------------------

    \2\ The references in this document to ``contraception,'' 
``contraceptive,'' ``contraceptive coverage,'' or ``contraceptive 
services'' generally include all contraceptives, sterilization, and 
related patient education and counseling, required by the Women's 
Preventive Guidelines, unless otherwise indicated. The Guidelines 
issued in 2011 referred to ``Contraceptive Methods and Counseling'' 
as ``[a]ll Food and Drug Administration approved contraceptive 
methods, sterilization procedures, and patient education and 
counseling for all women with reproductive capacity.'' https://www.hrsa.gov/womens-guidelines/index.html. The Guidelines as amended 
in December 2016 refer, under the header ``Contraception,'' to: 
``the full range of female-controlled U.S. Food and Drug 
Administration-approved contraceptive methods, effective family 
planning practices, and sterilization procedures,'' ``contraceptive 
counseling, initiation of contraceptive use, and follow-up care (for 
example, management, and evaluation as well as changes to and 
removal or discontinuation of the contraceptive method),'' and 
``instruction in fertility awareness-based methods, including the 
lactation amenorrhea method.'' https://www.hrsa.gov/womens-guidelines-2016/index.html.
    \3\ Note, however, that in sections under headings listing only 
two of the three Departments, the term ``Departments'' generally 
refers only to the two Departments listed in the heading.
    \4\ Interim final regulations on July 19, 2010, at 75 FR 41726 
(July 2010 interim final regulations); interim final regulations 
amending the July 2010 interim final regulations on August 3, 2011, 
at 76 FR 46621; final regulations on February 15, 2012, at 77 FR 
8725 (2012 final regulations); an advance notice of proposed 
rulemaking (ANPRM) on March 21, 2012, at 77 FR 16501; proposed 
regulations on February 6, 2013, at 78 FR 8456; final regulations on 
July 2, 2013, at 78 FR 39870 (July 2013 final regulations); interim 
final regulations on August 27, 2014, at 79 FR 51092 (August 2014 
interim final regulations); proposed regulations on August 27, 2014, 
at 79 FR 51118 (August 2014 proposed regulations); final regulations 
on July 14, 2015, at 80 FR 41318 (July 2015 final regulations); and 
a request for information on July 26, 2016, at 81 FR 47741 (RFI), 
which was addressed in an FAQ document issued on January 9, 2017, 
available at: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-36.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ACA-FAQs-Part36_1-9-17-Final.pdf.
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    The Departments most recently solicited public comments on these 
issues again in two interim final regulations with requests for 
comments (IFCs) published in the Federal Register on October 13, 2017: 
the regulations (82 FR 47792) that are being finalized with changes 
here, and regulations (82 FR 47838) concerning moral objections (the 
Moral IFC), which are being finalized with changes in companion final 
rules published elsewhere in today's Federal Register.
    In the preamble to the Religious IFC, the Departments explained 
several reasons why it was appropriate to reevaluate the religious 
exemptions and accommodations for the contraceptive Mandate and to take 
into account the religious beliefs of certain employers concerning that 
Mandate. The Departments also sought public comment on those 
modifications. The Departments considered, among other things, 
Congress's history of providing protections for religious beliefs 
regarding certain health services (including contraception, 
sterilization, and items or services believed to involve abortion); the 
text, context, and intent of section 2713(a)(4) and the ACA; protection 
of the free exercise of religion in the First Amendment and, by 
Congress, in RFRA; Executive Order 13798, ``Promoting Free Speech and 
Religious Liberty'' (May 4, 2017); previously submitted public 
comments;

[[Page 57540]]

and the extensive litigation over the contraceptive Mandate.
    After consideration of the comments and feedback received from 
stakeholders, the Departments are finalizing the Religious IFC, with 
changes based on comments as indicated herein.\5\
---------------------------------------------------------------------------

    \5\ The Department of the Treasury and the Internal Revenue 
Service (IRS) published proposed and temporary regulations as part 
of the joint rulemaking of the Religious IFC. The Departments of 
Labor and HHS published their respective rules as interim final 
rules with request for comments and are finalizing their interim 
final rules. The Department of the Treasury and IRS are finalizing 
their proposed regulations.
---------------------------------------------------------------------------

II. Overview, Analysis, and Response to Public Comments

    We provided a 60-day public comment period for the Religious IFC, 
which closed on December 5, 2017. The Departments received over 56,000 
public comment submissions, which are posted at www.regulations.gov.\6\ 
Below, the Departments provide an overview of the general comments on 
the final regulations, and address the issues raised by commenters.
---------------------------------------------------------------------------

    \6\ See Regulations.gov at https://www.regulations.gov/searchResults?rpp=25&so=DESC&sb=postedDate&po=0&cmd=12%7C05%7C17-12%7C05%7C17&dktid=CMS-2014-0115 and https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=7525&dct=PS&D=IRS-2017-0016. Some of those submissions included form letters or 
attachments that, while not separately tabulated at regulations.gov, 
together included comments from, or were signed by, hundreds of 
thousands of separate persons. The Departments reviewed all of the 
public comments and attachments.
---------------------------------------------------------------------------

    These rules expand exemptions to protect religious beliefs for 
certain entities and individuals with religious objections to 
contraception whose health plans are subject to a mandate of 
contraceptive coverage through guidance issued pursuant to the ACA. 
These rules do not alter the discretion of HRSA, a component of HHS, to 
maintain the Guidelines requiring contraceptive coverage where no 
regulatorily recognized objection exists. These rules finalize the 
accommodation process, which was previously established in response to 
objections of religious organizations that were not protected by the 
original exemption, as an optional process for any exempt entities. 
These rules do not alter multiple other federal programs that provide 
free or subsidized contraceptives or related education and counseling 
for women at risk of unintended pregnancy.\7\
---------------------------------------------------------------------------

    \7\ See, for example, Family Planning grants in 42 U.S.C. 300 et 
seq.; the Teenage Pregnancy Prevention Program, Public Law 112-74 
(125 Stat 786, 1080); the Healthy Start Program, 42 U.S.C. 254c-8; 
the Maternal, Infant, and Early Childhood Home Visiting Program, 42 
U.S.C. 711; Maternal and Child Health Block Grants, 42 U.S.C. 703; 
42 U.S.C. 247b-12; Title XIX of the Social Security Act, 42 U.S.C. 
1396, et seq.; the Indian Health Service, 25 U.S.C. 13, 42 U.S.C. 
2001(a), and 25 U.S.C. 1601, et seq.; Health center grants, 42 
U.S.C. 254b(e), (g), (h), and (i); the NIH Clinical Center, 42 
U.S.C. 248; and the Personal Responsibility Education Program, 42 
U.S.C. 713.
---------------------------------------------------------------------------

A. The Departments' Authority To Mandate Coverage and Provide Religious 
Exemptions

    The Departments received conflicting comments on their legal 
authority to provide the expanded exemptions and accommodation for 
religious beliefs. Some commenters agreed that the Departments are 
legally authorized to provide the expanded exemptions and 
accommodation, noting that there was no requirement of contraceptive 
coverage in the ACA and no prohibition on providing religious 
exemptions in Guidelines issued under section 2713(a)(4). Other 
commenters, however, asserted that the Departments have no legal 
authority to provide any exemptions to the contraceptive Mandate, 
contending, based on statements in the ACA's legislative history, that 
the ACA requires contraceptive coverage. Still other commenters 
contended that the Departments are legally authorized to provide the 
exemptions that existed prior to the Religious IFC, but not to expand 
them.
    Some commenters who argued that section 2713(a)(4) does not allow 
for exemptions said that the previous exemptions for houses of worship 
and integrated auxiliaries, and the previous accommodation process, 
were set forth in the ACA itself, and therefore were acceptable while 
the expanded exemptions in the Religious IFC were not. This is 
incorrect. The ACA does not prescribe (or prohibit) the previous 
exemptions for house of worship and the accommodation processes that 
the Departments issued through regulations.\8\ The Departments, 
therefore, find it appropriate to use the regulatory process to issue 
these expanded exemptions and accommodation, to better address concerns 
about religious exercise.
---------------------------------------------------------------------------

    \8\ The ACA also does not require that contraceptives be covered 
under the preventive services provisions.
---------------------------------------------------------------------------

    The Departments conclude that legal authority exists to provide the 
expanded exemptions and accommodation for religious beliefs set forth 
in these final rules. These rules concern section 2713 of the PHS Act, 
as also incorporated into ERISA and the Code. Congress has granted the 
Departments legal authority, collectively, to administer these 
statutes.\9\
---------------------------------------------------------------------------

    \9\ 26 U.S.C. 9833; 29 U.S.C. 1191c; 42 U.S.C. 300gg-92.
---------------------------------------------------------------------------

    Where it applies, section 2713(a)(4) requires coverage without cost 
sharing for ``such additional'' women's preventive care and screenings 
``as provided for'' and ``supported by'' Guidelines developed by HHS 
through HRSA. When Congress enacted this provision, those Guidelines 
did not exist. And nothing in the statute mandated that the Guidelines 
had to include contraception, let alone for all types of employers with 
covered plans. Instead, section 2713(a)(4) provided a positive grant of 
authority for HSRA to develop those Guidelines, thus delegating 
authority to HHS, as the administering agency of HRSA, and to all three 
agencies, as the administering agencies of the statutes by which the 
Guidelines are enforced, to shape that development. See 26 U.S.C. 9834; 
29 U.S.C. 1191(c), 42 U.S.C. 300gg-92. That is especially true for HHS, 
as HRSA is a component of HHS that was unilaterally created by the 
agency and thus is subject to the agency's general supervision, see 47 
FR 38,409 (August 31, 1982). Thus, nothing prevented HRSA from creating 
an exemption from otherwise-applicable Guidelines or prevented HHS and 
the other agencies from directing that HRSA create such an exemption.
    Congress did not specify the extent to which HRSA must ``provide 
for'' and ``support'' the application of Guidelines that it chooses to 
adopt. HRSA's authority to support ``comprehensive guidelines'' 
involves determining both the types of coverage and scope of that 
coverage. Section 2714(a)(4) requires coverage for preventive services 
only ``as provided for in comprehensive guidelines supported by 
[HRSA].'' That is, services are required to be included in coverage 
only to the extent that the Guidelines supported by HRSA provide for 
them. Through use of the word ``as'' in the phrase ``as provided for,'' 
it requires that HRSA support how those services apply--that is, the 
manner in which the support will happen, such as in the phrase ``as you 
like it.'' \10\ When Congress means to require certain activities to 
occur in a certain manner, instead of simply authorizing the agency to 
decide the manner in which they will occur, Congress knows how to do 
so. See, e.g., 42 U.S.C. 1395x (``The Secretary shall establish 
procedures to make beneficiaries and providers aware

[[Page 57541]]

of the requirement that a beneficiary complete a health risk assessment 
prior to or at the same time as receiving personalized prevention plan 
services.'') (emphasis added). Thus, the inclusion of ``as'' in section 
300gg-13(a)(3), and its absence in similar neighboring provisions, 
shows that HRSA has been granted discretion in supporting how the 
preventive coverage mandate applies--it does not refer to the timing of 
the promulgation of the Guidelines.
---------------------------------------------------------------------------

    \10\ See As (usage 2), Oxford English Dictionary Online (Feb. 
2018) (``[u]sed to indicate by comparison the way something happens 
or is done'').
---------------------------------------------------------------------------

    Nor is it simply a textual aberration that the word ``as'' is 
missing from the other three provisions in PHS Act section 2713(a). 
Rather, this difference mirrors other distinctions within that section 
that demonstrate that Congress intended HRSA to have the discretion the 
Agencies invoke. For example, sections (a)(1) and (a)(3) require 
``evidence-based'' or ``evidence-informed'' coverage, while section 
(a)(4) does not. This difference suggests that the Agencies have the 
leeway to incorporate policy-based concerns into their decision-making. 
This reading of section 2713(a)(4) also prevents the statute from being 
interpreted in a cramped way that allows no flexibility or tailoring, 
and that would force the Departments to choose between ignoring 
religious objections in violation of RFRA or else eliminating the 
contraceptive coverage requirement from the Guidelines altogether. The 
Departments instead interpret section 2713(a)(4) as authorizing HRSA's 
Guidelines to set forth both the kinds of items and services that will 
be covered, and the scope of entities to which the contraceptive 
coverage requirement in those Guidelines will apply.
    The religious objections at issue here, and in regulations 
providing exemptions from the inception of the Mandate in 2011, are 
considerations that, consistent with the statutory provision, 
permissibly inform what HHS, through HRSA, decides to provide for and 
support in the Guidelines. Since the first rulemaking on this subject 
in 2011, the Departments have consistently interpreted the broad 
discretion granted to HRSA in section 2713(a)(4) as including the power 
to reconcile the ACA's preventive-services requirement with sincerely 
held views of conscience on the sensitive subject of contraceptive 
coverage--namely, by exempting churches and their integrated 
auxiliaries from the contraceptive Mandate. (See 76 FR at 46623.) As 
the Departments explained at that time, the HRSA Guidelines ``exist 
solely to bind non-grandfathered group health plans and health 
insurance issuers with respect to the extent of their coverage of 
certain preventive services for women,'' and ``it is appropriate that 
HRSA . . . takes into account the effect on the religious beliefs of 
[employers] if coverage of contraceptive services were required in 
[their] group health plans.'' Id. Consistent with that longstanding 
view, Congress's grant of discretion in section 2713(a)(4), and the 
lack of a specific statutory mandate that contraceptives must be 
covered or that they be covered without any exemptions or exceptions, 
supports the conclusion that the Departments are legally authorized to 
exempt certain entities or plans from a contraceptive Mandate if HRSA 
decides to otherwise include contraceptives in its Guidelines.
    The conclusions on which these final rules are based are consistent 
with the Departments' interpretation of section 2713 of the PHS Act 
since 2010, when the ACA was enacted, and since the Departments started 
to issue interim final regulations implementing that section. The 
Departments have consistently interpreted section 2713(a)(4)'s grant of 
authority to include broad discretion regarding the extent to which 
HRSA will provide for, and support, the coverage of additional women's 
preventive care and screenings, including the decision to exempt 
certain entities and plans, and not to provide for or support the 
application of the Guidelines with respect to those entities or plans. 
The Departments defined the scope of the exemption to the contraceptive 
Mandate when HRSA issued its Guidelines for contraceptive coverage in 
2011, and then amended and expanded the exemption and added an 
accommodation process in multiple rulemakings thereafter. The 
accommodation process requires the provision of coverage or payments 
for contraceptives to participants in an eligible organization's health 
plan by the organization's insurer or third party administrator. 
However, the accommodation process itself, in some cases, failed to 
require contraceptive coverage for many women, because--as the 
Departments acknowledged at the time--the enforcement mechanism for 
that process, section 3(16) of ERISA, does not provide a means to 
impose an obligation to provide contraceptive coverage on the third 
party administrators of self-insured church plans. See 80 FR 41323. 
Non-exempt employers participate in many church plans. Therefore, in 
both the previous exemption, and in the previous accommodation's 
application to self-insured church plans, the Departments have been 
choosing not to require contraceptive coverage for certain kinds of 
employers since the Guidelines were adopted. During prior rulemakings, 
the Departments also disagreed with commenters who contended the 
Departments had no authority to create exemptions under section 2713 of 
the PHS Act, or as incorporated into ERISA and the Code, and who 
contended instead that we must enforce the Guidelines on the broadest 
spectrum of group health plans as possible. See, e.g., 2012 final 
regulations at 77 FR 8726.
    The Departments' interpretation of section 2713(a)(4) is confirmed 
by the ACA's statutory structure. Congress did not intend to require 
coverage of preventive services for every type of plan that is subject 
to the ACA. See, e.g., 76 FR 46623. On the contrary, Congress carved 
out an exemption from PHS Act section 2713 (and from several other 
provisions) for grandfathered plans. In contrast, grandfathered plans 
do have to comply with many of the other provisions in Title I of the 
ACA--provisions referred to by the previous Administration as providing 
``particularly significant protections.'' (75 FR 34540). Those 
provisions include (from the PHS Act) section 2704, which prohibits 
preexisting condition exclusions or other discrimination based on 
health status in group health coverage; section 2708, which prohibits 
excessive waiting periods (as of January 1, 2014); section 2711, which 
relates to lifetime and annual dollar limits; section 2712, which 
generally prohibits rescission of health coverage; section 2714, which 
extends dependent child coverage until the child turns 26; and section 
2718, which imposes a minimum medical loss ratio on health insurance 
issuers in the individual and group health insurance markets, and 
requires them to provide rebates to policyholders if that medical loss 
ratio is not met. (75 FR 34538, 34540, 34542). Consequently, of the 150 
million nonelderly people in America with employer-sponsored health 
coverage, approximately 25.5 million are estimated to be enrolled in 
grandfathered plans not subject to section 2713.\11\ Some commenters 
assert the exemptions for grandfathered plans are temporary, or were 
intended to be temporary, but as the Supreme Court observed, ``there is 
no legal requirement that grandfathered plans ever be phased out.'' 
Hobby Lobby, 134 S. Ct. at 2764 n.10.
---------------------------------------------------------------------------

    \11\ Kaiser Family Foundation & Health Research & Educational 
Trust, ``Employer Health Benefits, 2017 Annual Survey,'' Henry J 
Kaiser Family Foundation (Sept. 2017), http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2017.
---------------------------------------------------------------------------

    Some commenters argue that Executive Order 13535's reference to

[[Page 57542]]

implementing the ACA consistent with certain conscience laws does not 
justify creating exemptions to contraceptive coverage in the 
Guidelines, because those laws do not specifically require exemptions 
to the Mandate in the Guidelines. The Departments, however, believe 
these final regulations are consistent with Executive Order 13535. 
Issued upon the signing of the ACA, Executive Order 13535 specified 
that ``longstanding Federal laws to protect conscience . . . remain 
intact,'' including laws that protect holders of religious beliefs from 
certain requirements in health care contexts. While the Executive Order 
13535 does not require the expanded exemptions in these rules, the 
expanded exemptions are, as explained below, consistent with 
longstanding federal laws that protect religious beliefs, and are 
consistent with the Executive Order's intent that the ACA would be 
implemented in accordance with the conscience protections set forth in 
those laws.
    The extent to which RFRA provides authority for these final rules 
is discussed below in section II.C., The First Amendment and the 
Religious Freedom Restoration Act.

B. Availability and Scope of Religious Exemptions

    Some commenters supported the expanded exemptions and accommodation 
in the Religious IFC, and the entities and individuals to which they 
applied. They asserted the expanded exemptions and accommodation are 
appropriate exercises of discretion and are consistent with religious 
exemptions Congress has provided in many similar contexts. Some further 
commented that the expanded exemptions are necessary under the First 
Amendment or RFRA. Similarly, commenters stated that the accommodation 
was an inadequate means to resolve religious objections, and that the 
expanded exemptions are needed. They objected to the accommodation 
process because it was another method to require compliance with the 
Mandate. They contended its self-certification or notice involved 
triggering the very contraceptive coverage that organizations objected 
to, and that such coverage flowed in connection with the objecting 
organizations' health plans. The commenters contended that the 
seamlessness cited by the Departments between contraceptive coverage 
and an accommodated plan gives rise to the religious objections that 
organizations would not have with an expanded exemption.
    Several other commenters asserted that the exemptions in the 
Religious IFC are too narrow and called for there to be no mandate of 
contraceptive coverage. Some of them contended that HRSA should not 
include contraceptives in their women's preventive services Guidelines 
because fertility and pregnancy are generally healthy conditions, not 
diseases that are appropriately the target of preventive health 
services. They also contended that contraceptives can pose medical 
risks for women and that studies do not show that contraceptive 
programs reduce abortion rates or rates of unintended pregnancies. Some 
commenters contended that, to the extent the Guidelines require 
coverage of certain drugs and devices that may prevent implantation of 
an embryo after fertilization, they require coverage of items that are 
abortifacients and, therefore, violate federal conscience protections 
such as the Weldon Amendment, see section 507(d) of Public Law 115-141.
    Other commenters contended that the expanded exemptions are too 
broad. In general, these commenters supported the inclusion of 
contraceptives in the Guidelines, contending they are a necessary 
preventive service for women. Some said that the Departments should not 
exempt various kinds of entities such as businesses, health insurance 
issuers, or other plan sponsors that are not nonprofit entities. Other 
commenters contended the exemptions and accommodation should not be 
expanded, but should remain the same as they were in the July 2015 
final regulations (80 FR 41318). Some commenters said the Departments 
should not expand the exemptions, but simply expand or adjust the 
accommodation process to resolve religious objections to the Mandate 
and accommodation. Some commenters contended that even the previous 
regulations allowing an exemption and accommodation were too broad, and 
said that no exemptions to the Mandate should exist, in order that 
contraceptive coverage would be provided to as many women as possible.
    After consideration of the comments, the Departments are finalizing 
the provisions of the Religious IFC without contracting the scope of 
the exemptions and accommodation set forth in the Religious IFC. Since 
HRSA issued its Guidelines in 2011, the Departments have recognized 
that religious exemptions from the contraceptive Mandate are 
appropriate. The details of the scope of such exemptions are discussed 
in further detail below. In general, the Departments conclude it is 
appropriate to maintain the exemptions created by the Religious IFC to 
avoid instances where the Mandate is applied in a way that violates the 
religious beliefs of certain plan sponsors, issuers, or individuals. 
The Departments do not believe the previous exemptions are adequate, 
because some religious objections by plan sponsors and individuals were 
favored with exemptions, some were not subjected to contraceptive 
coverage if they fell under the indirect exemption for certain self-
insured church plans, and others had to choose between the Mandate and 
the accommodation even though they objected to both. The Departments 
wish to avoid inconsistency in respecting religious objections in 
connection with the provision of contraceptive coverage. The lack of a 
congressional mandate that contraceptives be covered, much less that 
they be covered without religious exemptions, has also informed the 
Departments' decision to expand the exemptions. And Congress's decision 
not to apply PHS Act section 2713 to grandfathered plans has likewise 
informed the Departments' decision whether exemptions to the 
contraceptive Mandate are appropriate.
    Congress has also established a background rule against 
substantially burdening sincere religious beliefs except where 
consistent with the stringent requirements of the Religious Freedom 
Restoration Act. And Congress has consistently provided additional, 
specific exemptions for religious beliefs in statutes addressing 
federal requirements in the context of health care and specifically 
concerning issues such as abortion, sterilization, and contraception. 
Therefore, the Departments consider it appropriate, to the extent we 
impose a contraceptive coverage Mandate by the exercise of agency 
discretion, that we also include exemptions for the protection of 
religious beliefs in certain cases. The expanded exemptions finalized 
in these rules are generally consistent with the scope of exemptions 
that Congress has established in similar contexts. They are also 
consistent with the intent of Executive Order 13535 (March 24, 2010), 
which was issued upon the signing of the ACA and declared that, 
``[u]nder the Act, longstanding federal laws to protect conscience 
(such as the Church Amendment, 42 U.S.C. 300a-7, and the Weldon 
Amendment, section 508(d)(1) of Public Law 111-8) remain intact'' and 
that ``[n]umerous executive agencies have a role in ensuring that these 
restrictions are enforced, including the HHS.''
    Some commenters argued that Congress's failure to explicitly 
include

[[Page 57543]]

religious exemptions in PHS Act section 2713 itself is indicative of an 
intent that such exemptions not be included, but the Departments 
disagree. As noted above, Congress also failed to require contraceptive 
coverage in PHS Act section 2713. And the commenters' argument would 
negate not just these expanded exemptions, but the previous exemptions 
for houses of worship and integrated auxiliaries, and the indirect 
exemption for self-insured church plans that use the accommodation. 
Where Congress left so many matters concerning section 2713(a)(4) to 
agency discretion, the Departments consider it appropriate to implement 
these expanded exemptions in light of Congress's long history of 
respecting religious beliefs in the context of certain federal health 
care requirements.
    If there is to be a federal contraceptive mandate that fails to 
include some--or, in the views of some commenters, any--religious 
exemptions, the Departments do not believe it is appropriate for us to 
impose such a regime through discretionary administrative measures. 
Instead, such a serious imposition on religious liberty should be 
created, if at all, by Congress, in response to citizens exercising 
their rights of political participation. Congress did not prohibit 
religious exemptions under this Mandate. It did not even require 
contraceptive coverage under the ACA. It left the ACA subject to RFRA, 
and it specified that additional women's preventive services will only 
be required coverage as provided for in Guidelines supported by HRSA. 
Moreover, Congress legislated in the context of the political consensus 
on conscientious exemptions for health care that has long been in 
place. Since Roe v. Wade in 1973, Congress and the states have 
consistently offered religious exemptions for health care providers and 
others concerning issues such as sterilization and abortion, which 
implicate deep disagreements on scientific, ethical, and religious (and 
moral) concerns. Indeed over the last 44 years, Congress has repeatedly 
expanded religious exemptions in similar cases, including to 
contraceptive coverage. Congress did not purport to deviate from that 
approach in the ACA. Thus, we conclude it is appropriate to specify in 
these final rules, that, if the Guidelines continue to maintain a 
contraceptive coverage requirement, the expanded exemptions will apply 
to those Guidelines and their enforcement.
    Some commenters contended that, even though Executive Order 13535 
refers to the Church Amendments, the intention of those statutes is 
narrow, should not be construed to extend to entities, and should not 
be construed to prohibit procedures. But those comments mistake the 
Departments' position. The Departments are not construing the Church 
Amendments to require these exemptions, nor do the exemptions prohibit 
any procedures. Instead, through longstanding federal conscience 
statutes, Congress has established consistent principles concerning 
respect for religious beliefs in the context of certain Federal health 
care requirements. Under those principles, and absent any contrary 
requirement of law, the Departments are offering exemptions for 
sincerely held religious beliefs to the extent the Guidelines otherwise 
include contraceptive coverage.\12\ These exemptions do not prohibit 
any services, nor do they authorize employers to prohibit employees 
from obtaining any services. The Religious IFC and these final rules 
simply refrain from imposing the federal Mandate that employers and 
health insurance issuers cover contraceptives in their health plans 
where compliance with the Mandate would violate their sincerely held 
religious beliefs. And though not necessary to the Departments' 
decision here, the Departments note that the Church Amendments 
explicitly protect entities and that several subsequent federal 
conscience statutes have protected against federal mandates in health 
coverage.
---------------------------------------------------------------------------

    \12\ The Departments note that the Church Amendments are the 
subject of another, ongoing rulemaking process. See Protecting 
Statutory Conscience Rights in Health Care; Delegations of 
Authority, 83 FR 3880 (NPRM Jan. 26, 2018). Since the Departments 
are not construing the Amendments to require the religious 
exemptions, we defer issues regarding the scope, interpretation, and 
protections of the Amendments to HHS in that rulemaking.
---------------------------------------------------------------------------

    The Departments note that their decision is also consistent with 
state practice. A significant majority of states either impose no 
contraceptive coverage requirement or offer broader exemptions than the 
exemption contained in the July 2015 final regulations.\13\ Although 
the practice of states is not a limit on the discretion delegated to 
HRSA by the ACA, nor is it a statement about what the federal 
government may do consistent with RFRA or other limitations or 
protections embodied in federal law, such state practices can inform 
the Departments' view that it is appropriate to protect religious 
liberty as an exercise of agency discretion.
---------------------------------------------------------------------------

    \13\ See Guttmacher Institute, ``Insurance Coverage of 
Contraceptives'', The Guttmacher Institute (June 11, 2018), https://www.guttmacher.org/state-policy/explore/insurance-coverage-contraceptives.
---------------------------------------------------------------------------

    The Departments decline to adopt the suggestion of some commenters 
to use these final rules to revoke the contraceptive Mandate 
altogether, such as by declaring that HHS through HRSA shall not 
include contraceptives in the list of women's preventive services in 
Guidelines issued under section 2713(a)(4). Although previous 
regulations were used to authorize religious exemptions and 
accommodations to the imposition of the Guidelines' coverage of 
contraception, the issuance of the Guidelines themselves in 2011 
describing what items constitute recommended women's preventive 
services, and the update to those recommendations in December 2016, did 
not occur through the regulations that preceded the 2017 Religious IFC 
and these final rules. The Guidelines' specification of which women's 
preventive services were recommended were issued, not by regulation, 
but directly by HRSA, after consultation with external organizations 
that operated under cooperative agreements with HRSA to consider the 
issue, solicit public comment, and provide recommendations. The 
Departments decline to accept the invitation of some commenters to use 
these rules to specify whether HRSA includes contraceptives in the 
Guidelines at all. Instead the Departments conclude it is appropriate 
for these rules to continue to focus on restating the statutory 
language of PHS Act section 2713 in regulatory form, and delineating 
what exemptions and accommodations apply if HRSA lists contraceptives 
in its Guidelines. Some commenters said that if contraceptives are not 
removed from the Guidelines entirely, some entities or individuals with 
religious objections might not qualify for the exemptions or 
accommodation. As discussed below, however, the exemptions in the 
Religious IFC and these final rules cover a broad range of entities and 
individuals. The Departments are not aware of specific groups or 
individuals whose religious beliefs would still be substantially 
burdened by the Mandate after the issuance of these final rules.
    Some commenters asserted that HRSA should remove contraceptives 
from the Guidelines because the Guidelines have not been subject to the 
notice and comment process under the Administrative Procedure Act. Some 
commenters also contended that the Guidelines should be amended to omit 
items that may prevent (or possibly dislodge) the implantation of a 
human embryo after fertilization, in order to ensure consistency with 
conscience provisions that prohibit requiring plans to pay for or cover 
abortions.

[[Page 57544]]

    Whether and to what extent the Guidelines continue to list 
contraceptives, or items considered to prevent implantation of an 
embryo, for entities not subject to exemptions and an accommodation, 
and what process is used to include those items in the Guidelines, is 
outside the scope of these final rules. These rules focus on what 
religious exemptions and accommodations shall apply if Guidelines 
issued under section 2713(a)(4) include contraceptives or items 
considered to be abortifacients.
    Members of the public that support or oppose the inclusion of some 
or all contraceptives in the Guidelines, or wish to comment concerning 
the content of, and the process for developing and updating, the 
Guidelines, are welcome to communicate their views to HRSA, at 
[email protected].
    The Departments conclude that it would be inadequate to merely 
attempt to amend or expand the accommodation process instead of 
expanding the exemption. In the past, the Departments had stated in our 
regulations and court briefs that the previous accommodation process 
required contraceptive coverage or payments in a way that is 
``seamless'' with the coverage provided by the objecting employer. As a 
result, in significant respects, that previous accommodation process 
did not actually accommodate the objections of many entities, as many 
entities with religious objections have argued. The Departments have 
attempted to identify an accommodation process that would eliminate the 
religious objections of all plaintiffs, including seeking public 
comment through a Request For Information, 81 FR 47741 (July 26, 2016), 
but we stated in January 2017 that we were unable to develop such an 
approach at that time.\14\ The Departments continue to believe that, 
because of the nature of the accommodation process, merely amending 
that accommodation process without expanding the exemptions would not 
adequately address religious objections to compliance with the Mandate. 
Instead, we conclude that the most appropriate approach to resolve 
these concerns is to expand the exemptions as set forth in the 
Religious IFC and these final rules, while maintaining the 
accommodation as an option for providing contraceptive coverage, 
without forcing entities to choose between compliance with either the 
Mandate or the accommodation and their religious beliefs.
---------------------------------------------------------------------------

    \14\ See Departments of Labor, Health and Human Services, and 
the Treasury, ``FAQs About Affordable Care Act Implementation Part 
36,'' (Jan. 9, 2017), https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-36.pdf and 
https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ACA-FAQs-Part36_1-9-17-Final.pdf (``the comments reviewed by the 
Departments in response to the RFI indicate that no feasible 
approach has been identified at this time that would resolve the 
concerns of religious objectors, while still ensuring that the 
affected women receive full and equal health coverage, including 
contraceptive coverage'').
---------------------------------------------------------------------------

    Comments considering the appropriateness of exempting certain 
specific kinds of entities or individuals are discussed in more detail 
below.

C. The First Amendment and the Religious Freedom Restoration Act

    Some commenters said that the Supreme Court ruled that the 
exemptions to the contraceptive Mandate, which the Departments 
previously provided to houses of worship and integrated auxiliaries, 
were required by the First Amendment. From this, commenters concluded 
that the exemptions for houses of worship and integrated auxiliaries 
are legally authorized, but exemptions beyond those are not. But in 
Hobby Lobby and Zubik, the Supreme Court did not decide whether the 
exemptions previously provided to houses of worship and integrated 
auxiliaries were required by the First Amendment, and the Court did not 
say the Departments must apply the contraceptive Mandate to other 
organizations unless RFRA prohibits the Departments from doing so. 
Moreover, the previous church exemption, which applied automatically to 
all churches whether or not they had even asserted a religious 
objection to contraception, 45 CFR 147.141(a), is not tailored to any 
plausible free-exercise concerns. The Departments decline to adopt the 
view that RFRA does not apply to other religious organizations, and 
there is no logical explanation for how RFRA could require the church 
exemption but not this expanded religious exemption, given that the 
accommodation is no less an available alternative for the former than 
the latter.
    Commenters disagreed about the scope of RFRA's protection in this 
context. Some commenters said that the expanded exemptions and 
accommodation are consistent with RFRA. Some also said that they are 
required by RFRA, as the Mandate imposes substantial burdens on 
religious exercise and fails to satisfy the compelling-interest and 
least-restrictive- means tests imposed by RFRA. Other commenters, 
however, contended that the expanded exemptions and accommodation are 
neither required by, nor consistent with, RFRA. In this vein, some 
argued that the Departments have a compelling interest to deny 
religious exemptions, that there is no less restrictive means to 
achieve its goals, or that the Mandate or its accommodation process do 
not impose a substantial burden on religious exercise.
    For the reasons discussed below, the Departments believe that 
agencies charged with administering a statute that imposes a 
substantial burden on the exercise of religion under RFRA have 
discretion in determining whether the appropriate response is to 
provide an exemption from the burdensome requirement, or to merely 
attempt to create an accommodation that would mitigate the burden. 
Here, after further consideration of these issues and review of the 
public comments, the Departments have determined that a broader 
exemption, rather than a mere accommodation, is the appropriate 
response.
    In addition, with respect to religious employers, the Departments 
conclude that, without finalizing the expanded exemptions, and 
therefore requiring certain religiously objecting entities to choose 
between the Mandate, the accommodation, or penalties for 
noncompliance--or requiring objecting individuals to choose between 
purchasing insurance with coverage to which they object or going 
without insurance--the Departments would violate their rights under 
RFRA.
1. Discretion To Provide Religious Exemptions
    In the Religious IFC, we explained that even if RFRA does not 
compel the Departments to provide the religious exemptions set forth in 
the IFC, the Departments believe the exemptions are the most 
appropriate administrative response to the religious objections that 
have been raised.
    The Departments received conflicting comments on this issue. Some 
commenters agreed that the Departments have administrative discretion 
to address the religious objections even if the Mandate and 
accommodation did not violate RFRA. Other commenters expressed the view 
that RFRA does not provide such discretion, but only allows exemptions 
when RFRA requires exemptions. They contended that RFRA does not 
require exemptions for entities covered by the expanded exemptions of 
the Religious IFC, but that subjecting those entities to the 
accommodation satisfies RFRA, and therefore RFRA provides the 
Departments with no additional authority to exempt those entities. 
Those commenters further contended that because, in their view, section 
2713(a)(4) does not authorize the

[[Page 57545]]

expanded exemptions, no statutory authority exists for the Departments 
to finalize the expanded exemptions.
    As discussed above, the Departments disagree with the suggestions 
of commenters that section 2713(a)(4) does not authorize the 
Departments to adopt the expanded exemptions. Nevertheless, the 
Departments note that the expanded exemptions for religious objectors 
also rest on an additional, independent ground: The Departments have 
determined that, in light of RFRA, an expanded exemption rather than 
the existing accommodation is the most appropriate administrative 
response to the substantial burden identified by the Supreme Court in 
Hobby Lobby. Indeed, with respect to at least some objecting entities, 
an expanded exemption, as opposed to the existing accommodation, is 
required by RFRA. The Departments disagree with commenters who contend 
RFRA does not give the Departments discretion to offer these expanded 
exemptions.
    The Departments' determination about their authority under RFRA 
rests in part on the Departments' reassessment of the interests served 
by the application of the Mandate in this specific context. Although 
the Departments previously took the position that the application of 
the Mandate to objecting employers was narrowly tailored to serve a 
compelling governmental interest, as discussed below the Departments 
have now concluded, after reassessing the relevant interests and for 
the reasons stated below, that it does not. Particularly under those 
circumstances, the Departments believe that agencies charged with 
administering a statute that imposes a substantial burden on the 
exercise of religion under RFRA have discretion in determining whether 
the appropriate response is to provide an exemption from the burdensome 
requirement or instead to attempt to create an accommodation that would 
mitigate the burden. And here, the Departments have determined that a 
broader exemption rather than the existing accommodation is the 
appropriate response. That determination is informed by the 
Departments' reassessment of the relevant interests, as well as by 
their desire to bring to a close the more than five years of litigation 
over RFRA challenges to the Mandate.
    Although RFRA prohibits the government from substantially burdening 
a person's religious exercise where doing so is not the least 
restrictive means of furthering a compelling interest--as is the case 
with the contraceptive Mandate, pursuant to Hobby Lobby--neither RFRA 
nor the ACA prescribes the remedy by which the government must 
eliminate that burden, where any means of doing so will require 
departing from the ACA to some extent (on the view of some commenters, 
with which the Departments disagree, that section 2713(a)(4) does not 
itself authorize the Departments to recognize exceptions). The prior 
administration chose to do so through the complex accommodation it 
created, but nothing in RFRA or the ACA compelled that novel choice or 
prohibits the current administration from employing the more 
straightforward choice of an exemption--much like the existing and 
unchallenged exemption for churches. After all, on the theory that 
section 2713(a)(4) allows for no exemptions, the accommodation also 
departed from section 2713(a)(4) in the sense that employers were not 
themselves offering contraceptive coverage, and the ACA did not require 
the Departments to choose that departure rather than the expanded 
exemptions as the exclusive method to satisfy their obligations under 
RFRA to eliminate the substantial burden imposed by the Mandate. The 
agencies' choice to adopt an exemption in addition to the accommodation 
is particularly reasonable given the existing legal uncertainty as to 
whether the accommodation itself violates RFRA. See 82 FR at 47798; see 
also Ricci v. DeStefano, 557 U.S. 586, 585 (2009) (holding that an 
employer need only have a strong basis to believe that an employment 
practice violates Title VII's disparate impact ban in order to take 
certain types of remedial action that would otherwise violate Title 
VII's disparate-treatment ban). Indeed, if the Departments had simply 
adopted an expanded exemption from the outset--as they did for 
churches--no one could reasonably have argued that doing so was 
improper because they should have invented the accommodation instead. 
Neither RFRA nor the ACA compels a different result now based merely on 
path dependence.
    Although the foregoing analysis is independently sufficient, 
additional support for this view is provided by the Departments' 
conclusion, as explained more fully below, that an expanded exemption 
is required by RFRA for at least some objectors. In the Religious IFC, 
the Departments reaffirmed their conclusion that there is not a way to 
satisfy all religious objections by amending the accommodation, (82 FR 
at 47800), a conclusion that was confirmed by some commenters (and the 
continued litigation over the accommodation).\15\ Some commenters 
agreed the religious objections could not be satisfied by amending the 
accommodation without expanding the exemptions, because if the 
accommodation requires an objecting entity's issuer or third party 
administrator to provide or arrange contraceptive coverage for persons 
covered by the plan because they are covered by the plan, this 
implicates the objection of entities to the coverage being provided 
through their own plan, issuer, or third party administrator. Other 
commenters contended the accommodation could be modified to satisfy 
RFRA concerns without extending exemptions to objecting entities, but 
they did not propose a method of modifying the accommodation that 
would, in the view of the Departments, actually address the religious 
objections to the accommodation.
---------------------------------------------------------------------------

    \15\ See RFI, 81 FR 47741 (July 26, 2016); Departments of Labor, 
Health and Human Services, and the Treasury, ``FAQs, About 
Affordable Care Act Implementation Part 36,'' (Jan. 9, 2017), 
https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-36.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ACA-FAQs-Part36_1-9-17-Final.pdf (``the comments reviewed by the Departments 
in response to the RFI indicate that no feasible approach has been 
identified at this time that would resolve the concerns of religious 
objectors, while still ensuring that the affected women receive full 
and equal health coverage, including contraceptive coverage'').
---------------------------------------------------------------------------

    In the Departments' view, after considering all the comments and 
the preceding years of contention over this issue, it is appropriate to 
finalize the expanded exemptions rather than merely attempt to change 
the accommodation to satisfy religious objections. This is because if 
the accommodation still delivers contraceptive coverage through use of 
the objecting employer's plan, issuer, or third party administrator, it 
does not address the religious objections. If the accommodation could 
deliver contraceptive coverage independent and separate from the 
objecting employer's plan, issuer, and third party administrator, it 
could possibly address the religious objections, but there are two 
problems with such an approach. First, it would effectively be an 
exemption, not the accommodation as it has existed, so it would not be 
a reason not to offer the expanded exemptions finalized in these rules. 
Second, although (as explained above) the Departments have authority to 
provide exemptions to the Mandate, the Departments are not aware of the 
authority, or of a practical mechanism, for using section 2713(a)(4) to 
require contraceptive coverage be provided

[[Page 57546]]

specifically to persons covered by an objecting employer, other than by 
using the employer's plan, issuer, or third party administrator, which 
would likely violate some entities' religious objections. The 
Departments are aware of ways in which certain persons covered by an 
objecting employer might obtain contraceptive coverage through other 
governmental programs or requirements, instead of through objecting 
employers' plans, issuers, or third party administrators, and we 
mention those elsewhere in this rule. But those approaches do not 
involve the accommodation, they involve the expanded exemptions, plus 
the access to contraceptives through separate means.
2. Requiring Entities To Choose Between Compliance With the 
Contraceptive Mandate or the Accommodation Violated RFRA in Many 
Instances
    Before the Religious IFC, the Departments had previously contended 
that the Mandate did not impose a substantial burden on entities and 
individuals under RFRA; that it was supported by a compelling 
government interest; and that it was, in combination with the 
accommodation, the least restrictive means of advancing that interest. 
With respect to the coverage Mandate itself, apart from the 
accommodation, and as applied to entities with sincerely held religious 
objections, that argument was rejected in Hobby Lobby, which held that 
the Mandate imposes a substantial burden and was not the least 
restrictive means of achieving any compelling governmental interest. 
See 134 S. Ct. at 2775-79. In the Religious IFC, the Departments 
revisited its earlier conclusions and reached a different view, 
concluding that requiring compliance through the Mandate or 
accommodation constituted a substantial burden on the religious 
exercise of many entities or individuals with religious objections, did 
not serve a compelling interest, and was not the least restrictive 
means of serving a compelling interest, so that requiring such 
compliance led to the violation of RFRA in many instances. (82 FR at 
47806).
    In general, commenters disagreed about this issue. Some commenters 
agreed with the Departments, and with some courts, that requiring 
entities to choose between the contraceptive Mandate and its 
accommodation violated their rights under RFRA, because it imposed a 
substantial burden on their religious exercise, did not advance a 
compelling government interest, and was not the least restrictive means 
of achieving such an interest. Other commenters contended that 
requiring compliance either with the Mandate or the accommodation did 
not violate RFRA, agreeing with some courts that have concluded the 
accommodation does not substantially burden the religious exercise of 
organizations since, in their view, it does not require organizations 
to facilitate contraceptive coverage except by submitting a self-
certification form or notice, and requiring compliance was the least 
restrictive means of advancing the compelling interest of providing 
contraceptive access to women covered by objecting entities' plans.
    The Departments have examined further, including in light of public 
comments, the issue of whether requiring compliance with the 
combination of the contraceptive Mandate and the accommodation process 
imposes a substantial burden on entities that object to both, and is 
the least restrictive means of advancing a compelling government 
interest. The Departments now reaffirm the conclusion set forth in the 
Religious IFC, that requiring certain religiously objecting entities or 
individuals to choose between the Mandate, the accommodation, or 
incurring penalties for noncompliance imposes a substantial burden on 
religious exercise under RFRA.
a. Substantial Burden
    The Departments concur with the description of substantial burdens 
expressed recently by the Department of Justice:

    A governmental action substantially burdens an exercise of 
religion under RFRA if it bans an aspect of an adherent's religious 
observance or practice, compels an act inconsistent with that 
observance or practice, or substantially pressures the adherent to 
modify such observance or practice.
    Because the government cannot second-guess the reasonableness of 
a religious belief or the adherent's assessment of the connection 
between the government mandate and the underlying religious belief, 
the substantial burden test focuses on the extent of governmental 
compulsion involved. In general, a government action that bans an 
aspect of an adherent's religious observance or practice, compels an 
act inconsistent with that observance or practice, or substantially 
pressures the adherent to modify such observance or practice, will 
qualify as a substantial burden on the exercise of religion.\16\
---------------------------------------------------------------------------

    \16\ See Federal Law Protections for Religious Liberty, 82 FR 
49668, 49669 (Oct. 26, 2017).

    The Mandate and accommodation under the previous regulation forced 
certain non-exempt religious entities to choose between complying with 
the Mandate, complying with the accommodation, or facing significant 
penalties. Various entities sincerely contended, in litigation or in 
public comments, that complying with either the Mandate or the 
accommodation was inconsistent with their religious observance or 
practice. The Departments have concluded that withholding an exemption 
from those entities has imposed a substantial burden on their exercise 
of religion, either by compelling an act inconsistent with that 
observance or practice, or by substantially pressuring the adherents to 
modify such observance or practice. To this extent, the Departments 
believe that the Court's analysis in Hobby Lobby extends, for the 
purposes of analyzing substantial burden, to the burdens that an entity 
faces when it opposes, on the basis of its religious beliefs, complying 
with the Mandate or participating in the accommodation process, and is 
subject to penalties or disadvantages that would have applied in this 
context if it chose neither. See also Sharpe Holdings, 801 F.3d at 942. 
Likewise, reconsideration of these issues has also led the Departments 
to conclude that the Mandate imposes a substantial burden on the 
religious beliefs of an individual employee who opposes coverage of 
some (or all) contraceptives in his or her plan on the basis of his or 
her religious beliefs, and would be able to obtain a plan that omits 
contraception from a willing employer or issuer (as applicable), but 
cannot obtain one solely because the Mandate requires that employer or 
issuer to provide a plan that covers all FDA-approved contraceptives. 
The Departments disagree with commenters that contend the accommodation 
did not impose a substantial burden on religiously objecting entities, 
and agree with other commenters and some courts and judges that 
concluded the accommodation can be seen as imposing a substantial 
burden on religious exercise in many instances.
b. Compelling Interest
    Although the Departments previously took the position that the 
application of the Mandate to certain objecting employers was necessary 
to serve a compelling governmental interest, the Departments have 
concluded, after reassessing the relevant interests and, in light of 
the public comments received, that it does not. This is based on 
several independent reasons.
    First, as discussed above, the structure of section 2713(a)(4) and 
the ACA evince a desire by Congress to

[[Page 57547]]

grant a great amount of discretion on the issue of whether, and to what 
extent, to require contraceptive coverage in health plans pursuant to 
section 2713(a)(4). This informs the Departments' assessment of whether 
the interest in mandating the coverage constitutes a compelling 
interest, as doing so imposes a substantial burden on religious 
exercise. As the Department of Justice has explained, ``[t]he strict 
scrutiny standard applicable to RFRA is exceptionally demanding,'' and 
``[o]nly those interests of the highest order can outweigh legitimate 
claims to the free exercise of religion, and such interests must be 
evaluated not in broad generalities but as applied to the particular 
adherent.'' \17\
---------------------------------------------------------------------------

    \17\ Id. at 49670.
---------------------------------------------------------------------------

    Second, since the day the contraceptive Mandate came into effect in 
2011, the Mandate has not applied in many circumstances. To begin, the 
ACA does not apply the Mandate, or any part of the preventive services 
coverage requirements, to grandfathered plans. To continue, the 
Departments under the last Administration provided exemptions to the 
Mandate and expanded those exemptions through multiple rulemaking 
processes. Those rulemaking processes included an accommodation that 
effectively left employees of many non-exempt religious nonprofit 
entities without contraceptive coverage, in particular with respect to 
self-insured church plans exempt from ERISA. Under the previous 
accommodation, once a self-insured church plan filed a self-
certification or notice, the accommodation relieved it of any further 
obligation with respect to contraceptive services coverage. Having done 
so, the accommodation process would generally have transferred the 
obligation to provide or arrange for contraceptive coverage to a self-
insured plan's third party administrator (TPA). But the Departments 
recognized that they lack authority to compel church plan TPAs to 
provide contraceptive coverage or levy fines against those TPAs for 
failing to provide it. This is because church plans are exempt from 
ERISA pursuant to section 4(b)(2) of ERISA. Section 2761(a) of the PHS 
Act provides that States may enforce the provisions of title XXVII of 
the PHS Act as they pertain to health insurance issuers, but does not 
apply to church plans that do not provide coverage through a policy 
issued by a health insurance issuer. The combined result of PHS Act 
section 2713's authority to remove contraceptive coverage obligations 
from self-insured church plans, and HHS's and DOL's lack of authority 
under the PHS Act or ERISA to require TPAs of those plans to provide 
such coverage, led to significant disparity in the requirement to 
provide contraceptive coverage among nonprofit organizations with 
religious objections to the coverage.
    Third party administrators for some, but not all, religious 
nonprofit organizations were subject to enforcement for failure to 
provide contraceptive coverage under the accommodation, depending on 
whether they administer a self-insured church plan. Notably, many of 
those nonprofit organizations were not houses of worship or integrated 
auxiliaries. Under section 3(33)(C) of ERISA, organizations whose 
employees participate in self-insured church plans need not be churches 
so long as they are controlled by or ``share[ ] common religious bonds 
and convictions with'' a church or convention or association of 
churches. The effect is that many similar religious organizations were 
being treated differently with respect to their employees receiving 
contraceptive coverage based solely on whether organization employees 
participate in a church plan.
    This arrangement encompassed potentially hundreds of religious non-
profit organizations that were not covered by the exemption for houses 
of worship and integrated auxiliaries. For example, the Departments 
were sued by two large self-insured church plans--Guidestone and 
Christian Brothers.\18\ Guidestone is a plan organized by the Southern 
Baptist convention that covers 38,000 employers, some of which are 
exempt as churches or integrated auxiliaries, and some of which are 
not. Christian Brothers is a plan that covers Catholic churches and 
integrated auxiliaries and has said in litigation that it covers about 
500 additional entities that are not exempt as churches. In several 
other lawsuits challenging the Mandate, the previous Administration 
took the position that some plans established and maintained by houses 
of worship but that included entities that were not integrated 
auxiliaries, were church plans under section 3(33) of ERISA and, thus, 
the Government ``has no authority to require the plaintiffs' TPAs to 
provide contraceptive coverage at this time.'' Roman Catholic 
Archdiocese of N.Y. v. Sebelius, 987 F. Supp. 2d 232, 242 (E.D.N.Y. 
2013).
---------------------------------------------------------------------------

    \18\ The Departments take no view on the status of particular 
plans under the Employee Retirement Income Security Act of 1974 
(ERISA), but simply make this observation for the purpose of seeking 
to estimate the impact of these final rules.
---------------------------------------------------------------------------

    Third, the Departments now believe the administrative record on 
which the Mandate rested was--and remains--insufficient to meet the 
high threshold to establish a compelling governmental interest in 
ensuring that women covered by plans of objecting organizations receive 
cost-free contraceptive coverage through those plans. The Mandate is 
not narrowly tailored to advance the government's interests and appears 
both overinclusive and underinclusive. It includes some entities where 
a contraceptive coverage requirement seems unlikely to be effective, 
such as religious organizations of certain faiths, which, according to 
commenters, primarily hire persons who agree with their religious views 
or make their dedication to their religious views known to potential 
employees who are expected to respect those views. The Mandate also 
does not apply to a significant number of entities encompassing many 
employees and for-profit businesses, such as grandfathered plans. And 
it does not appear to target the population defined, at the time the 
Guidelines were developed, as being the most at-risk of unintended 
pregnancy, that is, ``women who are aged 18 to 24 years and unmarried, 
who have a low income, who are not high school graduates, and who are 
members of a racial or ethnic minority.'' \19\ Rather than focusing on 
this group, the Mandate is a broad-sweeping requirement across 
employer-provided coverage and the individual and group health 
insurance markets.
---------------------------------------------------------------------------

    \19\ Institute of Medicine, ``Clinical Preventive Services for 
Women: Closing the Gaps'' at 102 (2011).
---------------------------------------------------------------------------

    The Department received conflicting comments on this issue. Some 
commenters agreed that the government does not have a compelling 
interest in applying the Mandate to objecting religious employers. They 
noted that the expanded exemptions will impact only a small fraction of 
women otherwise affected by the Mandate and argued that refusing to 
provide those exemptions would fail to satisfy the compelling interest 
test. Other commenters, however, argued that the government has a 
broader interest in the Mandate because all women should be considered 
at-risk of unintended pregnancy. But the Institute of Medicine (IOM), 
in discussing whether contraceptive coverage is needed, provided a very 
specific definition of the population of women most at-risk of 
unintended pregnancy.\20\ The Departments believe it is appropriate to 
consider the government's interest in

[[Page 57548]]

the contraceptive coverage requirement using the definition that formed 
the basis of that requirement and the justifications the Departments 
have offered for it since 2011. The Mandate, by its own terms, applies 
not just to women most at-risk of unintended pregnancy as identified by 
the IOM, but applies to any non-grandfathered ``group health plan and a 
health insurance issuer offering group or individual health insurance 
coverage.'' PHS Act section 2713(a). Similarly, the exemptions and 
accommodation in previous rules, and the expanded exemptions in these 
rules, do not apply only to coverage for women most at-risk of 
unintended pregnancy, but to plans where a qualifying objection exists 
based on sincerely held religious beliefs without regard to the types 
of women covered in those plans. Seen in this light, the Departments 
believe there is a serious question whether the administrative record 
supports the conclusion that the Mandate, as applied to religious 
objectors encompassed by the expanded exemptions, is narrowly tailored 
to achieve the interests previously identified by the government. 
Whether and to what extent it is certain that an interest in health is 
advanced by refraining from providing expanded religious exemptions is 
discussed in more detail below in section II.F., Health Effects of 
Contraception and Pregnancy.
---------------------------------------------------------------------------

    \20\ Id.
---------------------------------------------------------------------------

    Fourth, the availability of contraceptive coverage from other 
possible sources--including some objecting entities that are willing to 
provide some (but not all) contraceptives, or from other governmental 
programs for low-income women--detracts from the government's interest 
to refuse to expand exemptions to the Mandate. The Guttmacher Institute 
recently published a study that concluded, ``[b]etween 2008 and 2014, 
there were no significant changes in the overall proportion of women 
who used a contraceptive method both among all women and among women at 
risk of unintended pregnancy,'' and ``there was no significant increase 
in the use of methods that would have been covered under the ACA (most 
or moderately effective methods) during the most recent time period 
(2012-2014) excepting small increases in implant use.'' \21\ In 
discussing why they did not see such an effect from the Mandate, the 
authors suggested that ``[p]rior to the implementation of the ACA, many 
women were able to access contraceptive methods at low or no cost 
through publicly funded family planning centers and Medicaid; existence 
of these safety net programs may have dampened any impact that the ACA 
could have had on contraceptive use. In addition, cost is not the only 
barrier to accessing a full range of method options,'' and ``[t]he fact 
that income is not associated with use of most other methods [besides 
male sterilization and withdrawal] obtained through health care 
settings may reflect broader access to affordable and/or free 
contraception made possible through programs such as Title X.''
---------------------------------------------------------------------------

    \21\ M.L. Kavanaugh et al., Contraceptive method use in the 
United States: trends and characteristics between 2008, 2012 and 
2014, 97 Contraception 14, 14-21 (2018), available at http://www.contraceptionjournal.org/article/S0010-7824(17)30478-X/pdf.
---------------------------------------------------------------------------

    Fifth, the Departments previously created the accommodation, in 
part, as a way to provide for payments of contraceptives and 
sterilization in a way that is ``seamless'' with the coverage that 
eligible employers provide to their plan participants and their 
beneficiaries. (80 FR 41318). As noted above, some commenters contended 
that seamlessness between contraceptive coverage and employer sponsored 
insurance is important and is a compelling governmental interest, while 
other commenters disagreed. Neither Congress, nor the Departments in 
other contexts, have concluded that seamlessness, as such, is a 
compelling interest in the federal government's delivery of 
contraceptive coverage. For example, the preventive services Mandate 
itself does not require contraceptive coverage and does not apply to 
grandfathered plans, thereby failing to guarantee seamless 
contraceptive coverage. The exemption for houses of worship and 
integrated auxiliaries, and the application of the accommodation to 
certain self-insured church plans, also represents a failure to achieve 
seamless contraceptive coverage. HHS's Title X program provides 
contraceptive coverage in a way that is not necessarily seamless with 
beneficiaries' employer sponsored insurance plans. After reviewing the 
public comments and reconsidering this issue, the Departments no longer 
believe that if a woman working for an objecting religious employer 
receives contraceptive access in ways that are not seamless to her 
employer sponsored insurance, a compelling government interest has 
nevertheless been undermined. Therefore the Departments conclude that 
guaranteeing seamlessness between contraceptive access and employer 
sponsored insurance does not constitute a compelling interest that 
overrides employers' religious objections to the contraceptive Mandate.
    Some commenters contended that obtaining contraceptive coverage 
from other sources could be more difficult or more expensive for women 
than obtaining it from their group health plan or health insurance 
plan. The Departments do not believe that such differences rise to the 
level of a compelling interest or make it inappropriate for us to issue 
the expanded exemptions set forth in these final rules. Instead, after 
considering this issue, the Departments conclude that the religious 
liberty interests that would be infringed if we do not offer the 
expanded exemptions are not overridden by the impact on those who will 
no longer obtain contraceptives through their employer sponsored 
coverage as a result. This is discussed in more detail in following 
section, II.D., Burdens on Third Parties.

D. Burdens on Third Parties

    The Departments received a number of comments on the question of 
burdens that these rules might impose on third parties. Some commenters 
asserted that the expanded exemptions and accommodation do not impose 
an impermissible or unjustified burden on third parties, including on 
women who might not otherwise receive contraceptive coverage with no 
cost-sharing. These included commenters agreeing with the Departments' 
explanations in the Religious IFC, stating that unintended pregnancies 
were decreasing before the Mandate was implemented, and asserting that 
any benefit that third parties might receive in getting contraceptive 
coverage does not justify forcing religious persons to provide such 
products in violation of their beliefs. Other commenters disagreed, 
asserting that the expanded exemptions unacceptably burden women who 
might lose contraceptive coverage as a result. They contended the 
exemptions may remove contraceptive coverage, causing women to have 
higher contraceptive costs, fewer contraceptive options, less ability 
to use contraceptives more consistently, more unintended 
pregnancies,\22\ births spaced more closely, and workplace, economic, 
or societal inequality. Still other commenters took the view that other 
laws or protections, such as those found in the First or Fifth 
Amendments, prohibit the expanded exemptions, which those commenters 
view as

[[Page 57549]]

prioritizing religious liberty of exempted entities over the religious 
liberty, conscience, or choices of women who would not receive 
contraceptive coverage where an exemption is used.
---------------------------------------------------------------------------

    \22\ Some commenters attempted to quantify the costs of 
unintended pregnancy, but failed to persuasively estimate the 
population of women that this exemption may affect.
---------------------------------------------------------------------------

    The Departments note that the exemptions in the Religious IFC and 
these final rules, like the exemptions created by the previous 
Administration, do not impermissibly burden third parties. Initially, 
the Departments observe that these final rules do not create a 
governmental burden; rather, they relieve a governmental burden. The 
ACA did not impose a contraceptive coverage requirement. HHS exercised 
discretion granted to HRSA by the Congress to include contraceptives in 
the Guidelines issued under section 2713(a)(4). That decision is what 
created and imposed a governmental burden. These rules simply relieve 
part of that governmental burden. If some third parties do not receive 
contraceptive coverage from private parties who the government chose 
not to coerce, that result exists in the absence of governmental 
action--it is not a result the government has imposed. Calling that 
result a governmental burden rests on an incorrect presumption: that 
the government has an obligation to force private parties to benefit 
those third parties and that the third parties have a right to those 
benefits. But Congress did not create a right to receive contraceptive 
coverage from other private citizens through PHS Act section 2713, 
other portions of the ACA, or any other statutes it has enacted. 
Although some commenters also contended such a right might exist under 
treaties the Senate has ratified or the Constitution, the Departments 
are not aware of any source demonstrating that the Constitution or a 
treaty ratified by the Senate creates a right to receive contraceptive 
coverage from other private citizens.
    The fact that the government at one time exercised its 
administrative discretion to require private parties to provide 
coverage to benefit other private parties, does not prevent the 
government from relieving some or all of the burden of its Mandate. 
Otherwise, any governmental coverage requirement would be a one-way 
ratchet. In the Religious IFC and these rules, the government has 
simply restored a zone of freedom where it once existed. There is no 
statutory or constitutional obstacle to the government doing so, and 
the doctrine of third-party burdens should not be interpreted to impose 
such an obstacle. Such an interpretation would be especially 
problematic given the millions of women, in a variety of contexts, whom 
the Mandate does not ultimately benefit, notwithstanding any expanded 
exemptions--including through grandfathering of plans, the previous 
religious exemptions, and the failure of the accommodation to require 
delivery of contraceptive coverage in various self-insured church plan 
contexts.
    In addition, the Government is under no constitutional obligation 
to fund contraception. Cf. Harris v. McRae, 448 U.S. 297 (1980) 
(holding that, although the Supreme Court has recognized a 
constitutional right to abortion, there is no constitutional obligation 
for government to pay for abortions). Even more so may the Government 
refrain from requiring private citizens, in violation of their 
religious beliefs, to cover contraception for other citizens. Cf. Rust 
v. Sullivan, 500 U.S. 173, 192-93 (1991) (``A refusal to fund protected 
activity, without more, cannot be equated with the imposition of a 
`penalty' on that activity.''). The constitutional rights of liberty 
and privacy do not require the government to force private parties to 
provide contraception to other citizens and do not prohibit the 
government from protecting religious objections to such governmental 
mandates, especially where, as here, the mandate is not an explicit 
statutory requirement.\23\ The Departments do not believe that the 
Constitution prohibits offering the expanded exemptions in these final 
rules.
---------------------------------------------------------------------------

    \23\ See, for example, Planned Parenthood Ariz., Inc. v. Am. 
Ass'n of Pro-Life Obstetricians & Gynecologists, 257 P.3d 181, 196 
(Ariz. Ct. App. 2011) (``[A] woman's right to an abortion or to 
contraception does not compel a private person or entity to 
facilitate either.'').
---------------------------------------------------------------------------

    As the Department of Justice has observed, the fact that exemptions 
may relieve a religious adherent from conferring a benefit on a third 
party ``does not categorically render an exemption unavailable,'' and 
RFRA still applies.\24\ The Departments conclusion on this matter is 
consistent with the Supreme Court's observation that RFRA may require 
exemptions even from laws requiring claimants ``to confer benefits on 
third parties.'' See Hobby Lobby, 134 S. Ct. at 2781 n.37. Here, no law 
contains such a requirement, but the Mandate is derived from an 
administrative exercise of discretion that Congress charged HRSA and 
the Departments with exercising. Burdens that may affect third parties 
as a result of revisiting the exercise of agency discretion may be 
relevant to the RFRA analysis, but they cannot be dispositive. 
``Otherwise, for example, the Government could decide that all 
supermarkets must sell alcohol for the convenience of customers (and 
thereby exclude Muslims with religious objections from owning 
supermarkets), or it could decide that all restaurants must remain open 
on Saturdays to give employees an opportunity to earn tips (and thereby 
exclude Jews with religious objections from owning restaurants).'' Id.
---------------------------------------------------------------------------

    \24\ See Federal Law Protections for Religious Liberty, 82 FR at 
49670.
---------------------------------------------------------------------------

    When government relieves burdens on religious exercise, it does not 
violate the Establishment Clause; rather, ``it follows the best of our 
traditions.'' Zorach v. Clauson, 343 U.S. 306, 314 (1952). The Supreme 
Court's cases ``leave no doubt that in commanding neutrality the 
Religion Clauses do not require the government to be oblivious to 
impositions that legitimate exercises of state power may place on 
religious belief and practice.'' Board of Educ. of Kiryas Joel Village 
Sch. Dist. v. Grumet, 512 U.S. 687, 705 (1994). Rather, the Supreme 
Court ``has long recognized that the government may (and sometimes 
must) accommodate religious practices and that it may do so without 
violating the Establishment Clause.'' Corporation of the Presiding 
Bishop of the Church of Jesus Christ of Latter-Day Saints v. Amos, 483 
U.S. 327, 334 (1987) (quoting Hobbie v. Unemployment Appeals Comm'n of 
Fla., 480 U.S. 136, 144-45 (1987)). ``[T]here is room for play in the 
joints between the Free Exercise and Establishment Clauses, allowing 
the government to accommodate religion beyond free exercise 
requirements, without offense to the Establishment Clause.'' Cutter v. 
Wilkinson, 544 U.S. 709, 713 (2005) (internal quotation omitted). Thus, 
the Supreme Court has upheld a broad range of accommodations against 
Establishment Clause challenges, including the exemption of religious 
organizations from Title VII's prohibition against discrimination in 
employment on the basis of religion, see Amos, 483 U.S. at 335-39; a 
state property tax exemption for religious organizations, see Walz v. 
Tax Comm'n of City of New York, 397 U.S. 664, 672-80 (1970); and a 
state program releasing public school children during the school day to 
receive religious instruction at religious centers, see Zorach, 343 
U.S. at 315.
    Before 2012 (when HRSA's Guidelines went into effect), there was no 
federal women's preventive services coverage mandate imposed nationally 
on health insurance and group health plans. The ACA did not require 
contraceptives to be included in HRSA's Guidelines, and it did not 
require any preventive services required under PHS

[[Page 57550]]

Act section 2713 to be covered by grandfathered plans. Many States do 
not impose contraceptive coverage mandates, or they offer religious 
exemptions to the requirements of such coverage mandates--exemptions 
that have not been invalidated by federal or State courts. The 
Departments, in previous regulations, exempted houses of worship and 
integrated auxiliaries from the Mandate. The Departments then issued a 
temporary enforcement safe harbor allowing religious nonprofit groups 
to not provide contraceptive coverage under the Mandate for almost two 
additional years. The Departments further expanded the houses of 
worship and integrated auxiliaries exemption through definitional 
changes. And the Departments created an accommodation process under 
which many women in self-insured church plans may not ultimately 
receive contraceptive coverage. In addition, many organizations have 
not been subject to the Mandate in practice because of injunctions they 
received through litigation, protecting them from federal imposition of 
the Mandate, including under several recently entered permanent 
injunctions that will apply regardless of the issuance of these final 
rules.
    Commenters offered various assessments of the impact these rules 
might have on state or local governments. Some commenters said that the 
expanded exemptions will not burden state or local governments, or that 
such burdens should not prevent the Departments from offering those 
exemptions. Others said that if the Departments provide expanded 
exemptions, states or local jurisdictions may face higher costs in 
providing birth control to women through government programs. The 
Departments consider it appropriate to offer expanded exemptions, 
notwithstanding the objection of some state or local governments. The 
ACA did not require a contraceptive Mandate, and its discretionary 
creation by means of HRSA's Guidelines does not translate to a benefit 
that the federal government owes to states or local governments. We are 
not aware of instances where the various situations recited in the 
previous paragraph, in which the federal government has not imposed 
contraceptive coverage (other than through the Religious and Moral 
IFCs), have been determined to cause a cognizable injury to state or 
local governments. Some states that were opposed to the IFCs submitted 
comments objecting to the potential impacts on their programs resulting 
from the expanded exemptions, but they did not adequately demonstrate 
that such impacts would occur, and they did not explain whether, or to 
what extent, they were impacted by the other kinds of instances 
mentioned above in which no federal mandate of contraceptive coverage 
has applied to certain plans. The Departments find no legal prohibition 
on finalizing these rules based on the speculative suggestion of an 
impact on state or local governments, and we disagree with the 
suggestion that once we have exercised our discretion to deny 
exemptions--no matter how recently or incompletely--we cannot change 
course if some state and local governments believe they are receiving 
indirect benefits from the previous decision.
    In addition, these expanded exemptions apply only to a small 
fraction of entities to which the Mandate would otherwise apply--those 
with qualifying religious objections. Public comments did not provide 
reliable data on how many entities would use these expanded religious 
exemptions, in which states women in such plans would reside, how many 
of those women would qualify for or use state and local government 
subsidies of contraceptives as a result, or in which states such women, 
if they are low income, would go without contraceptives and potentially 
experience unintended pregnancies that state Medicaid programs would 
have to cover. As mentioned above, at least one study, published by the 
Guttmacher Institute, concluded the Mandate has caused no clear 
increase in contraceptive use; one explanation proposed by the authors 
of the study is that women eligible for family planning from safety net 
programs were already receiving free or subsidized contraceptive access 
through them, notwithstanding the Mandate's effects on the overall 
market. Some commenters who opposed the expanded exemptions admitted 
that this information is unclear at this stage; other commenters that 
estimated considerably more individuals and entities would seek an 
exemption also admitted the difficulty of quantifying estimates.
    In the discussion below concerning estimated economic impacts of 
these rules, the Departments explain there is not reliable data 
available to accurately estimate the number of women who may lose 
contraceptive coverage under these rules, and the Departments set forth 
various reasons why it is difficult to know how many entities will use 
these exemptions or how many women will be impacted by those decisions. 
Solely for the purposes of determining whether the rules have a 
significant economic impact under Executive Order 12,866, and in order 
to estimate the broadest possible impact so as to determine the 
applicability of the procedures set forth in that Executive Order, the 
Departments propose that the rules will affect no more than 126,400 
women of childbearing age who use contraceptives covered by the 
Guidelines, and conclude the economic impact falls well below $100 
million. As explained below, that estimate assumes that a certain 
percentage of employers which did not cover contraceptives before the 
ACA will use these exemptions based on sincerely held religious 
beliefs. The Departments do not actually know that such entities will 
do so, however, or that they operate based on sincerely held religious 
beliefs against contraceptive coverage. The Departments also explain 
that other exemptions unaffected by these rules may encompass many or 
most women potentially affected by the expanded exemptions. In other 
words, the houses of worship and integrated auxiliaries exemption, the 
accommodation's failure to require contraceptive coverage in certain 
self-insured church plans, the non-applicability of PHS Act section 
2713 to grandfathered plans, and the permanent injunctive relief many 
religious litigants have received against section 2713(a)(4), may 
encompass a large percentage of women potentially affected by religious 
objections, and therefore many women in those plans may not be impacted 
by these rules at all. In addition, even if 126,400 women might be 
affected by these rules, that number constitutes less than 0.1% of all 
women in the United States.\25\ This suggests that if these rules have 
any impact on state or local governments, it will be statistically de 
minimus. The Departments conclude that there is insufficient evidence 
of a potential negative impact of these rules on state and local 
governments to override the appropriateness of deciding to finalize 
these rules.
---------------------------------------------------------------------------

    \25\ U.S. Census Bureau, ``Quick Facts: Population Estimates, 
July 1, 2017'' (estimating 325,719,178 persons in the U.S., 50.8% of 
which are female), available at https://www.census.gov/quickfacts/fact/table/US/PST045217.
---------------------------------------------------------------------------

    Some commenters contended that the expanded exemptions would 
constitute unlawful sex discrimination, such as under section 1557 of 
the Affordable Care Act, Title VII of the Civil Rights Act of 1964, 
Title IX of the Education Amendments of 1972, or the Fifth Amendment. 
Some commenters suggested the expanded exemptions

[[Page 57551]]

would discriminate on bases such as race, disability, or LGBT status, 
or that they would disproportionately burden certain persons in such 
categories.
    But these final rules do not discriminate or draw any distinctions 
on the basis of sex, pregnancy, race, disability, socio-economic class, 
LGBT status, or otherwise, nor do they discriminate on any unlawful 
grounds. The expanded exemptions in these rules do not authorize 
entities to comply with the Mandate for one person, but not for another 
person, based on that person's status as a member of a protected class. 
Instead they allow entities that have sincerely held religious 
objections to providing some or all contraceptives included in the 
Mandate to not be forced to provide coverage of those items to anyone.
    These commenters' contentions about discrimination are unpersuasive 
for still additional reasons. First, Title VII is applicable to 
discrimination committed by employers, and these rules have been issued 
in the government's capacity as a regulator of group health plans and 
group and individual health insurance, not an employer. See also In Re 
Union Pac. R.R. Emp't Practices Litig., 479 F.3d 936, 940-42 & n.1 (8th 
Cir. 2007) (holding that Title VII ``does not require coverage of 
contraception because contraception is not a gender-specific term like 
potential pregnancy, but rather applies to both men and women''). 
Second, these rules create no disparate impact. The women's preventive 
services mandate under section 2713(a)(4), and the contraceptive 
Mandate promulgated under such preventive services mandate, already 
inures to the specific benefit of women--men are denied any benefit 
from that section. Both before and after these final rules, section 
2713(a)(4) and the Guidelines issued under that section treat women's 
preventive services in general, and female contraceptives specifically, 
more favorably than they treat male preventive services or male 
contraceptives.
    It is simply not the case that the government's implementation of 
section 2713(a)(4) is discriminatory against women because exemptions 
are expanded to encompass religious objections. The previous 
regulations, as discussed elsewhere herein, do not require 
contraceptive coverage in a host of plans, including grandfathered 
plans, plans of houses of worship, and--through inability to enforce 
the accommodation on certain third party administrators--plans of many 
religious non-profits in self-insured church plans. Below, the 
Departments estimate that few women of childbearing age in the country 
will be affected by these expanded exemptions.\26\ In this context, the 
Departments do not believe that an adjustment to discretionary 
Guidelines for women's preventive services concerning contraceptives 
constitutes unlawful sex discrimination. Otherwise, anytime the 
government exercises its discretion to provide a benefit that is 
specific to women (or specific to men), it would constitute sex 
discrimination for the government to reconsider that benefit. Under 
that theory, Hobby Lobby itself, and RFRA (on which Hobby Lobby's 
holding was based), which provided a religious exemption to this 
Mandate for many businesses, would be deemed discriminatory against 
women because the underlying women's preventive services requirement is 
a benefit for women, not for men. Such conclusions are not consistent 
with legal doctrines concerning sex discrimination.
---------------------------------------------------------------------------

    \26\ Below, the Departments estimate that no more than 126,400 
women of childbearing age will be affected by the expanded 
exemptions. As noted above, this is less than 0.1% of the over 165 
million women in the United States. The Departments previously 
estimated that, at most 120,000 women of childbearing age would be 
affected by the expanded exemptions. See Religious IFC, 82 FR 
47,823-84.
---------------------------------------------------------------------------

    It is not clear that these expanded exemptions will significantly 
burden women most at risk of unintended pregnancies. Some commenters 
observed that contraceptives are often readily accessible at relatively 
low cost. Other commenters disagreed. Some objected to the suggestion 
in the Religious IFC that many forms of contraceptives are available 
for around $50 per month and other forms, though they bear a higher 
one-time cost, cost a similar amount over the duration of use. But some 
of those commenters cited sources maintaining that birth control pills 
can cost up to $600 per year (that is, $50 per month), and said that 
IUDs, which can last three to six years or more,\27\ can cost $1,100 
(that is, less than $50 per month over the duration of use). Some 
commenters said that, for lower income women, contraceptives can be 
available at free or low cost through government programs (federal 
programs offering such services include, for example, Medicaid, Title 
X, community health center grants, and Temporary Assistance for Needy 
Families (TANF)). Other commenters contended that many women in 
employer-sponsored coverage might not qualify for those programs, 
although that sometimes occurs because their incomes are above certain 
thresholds or because the programs were not intended to absorb 
privately insured individuals. Some commenters observed that 
contraceptives may be available through other sources, such as a plan 
of another family member and that the expanded exemptions will not 
likely encompass a very large segment of the population otherwise 
benefitting from the Mandate. Other commenters disagreed, pointing out 
that some government programs that provide family planning have income 
and eligibility thresholds, so that women earning certain amounts above 
those levels would need to pay full cost for contraceptives if they 
were no longer covered in their health plans.
---------------------------------------------------------------------------

    \27\ See, for example, Planned Parenthood, ``IUD,'' https://www.plannedparenthood.org/learn/birth-control/iud.
---------------------------------------------------------------------------

    The Departments do not believe that these general considerations 
make it inappropriate to issue the expanded exemptions set forth in 
these rules. In addition, the Departments note that the HHS Office of 
Population Affairs, within the Office of the Assistant Secretary for 
Health, has recently issued a proposed regulation to amend the 
regulations governing its Title X family planning program. The proposed 
regulation would amend the definition of ``low income family''--
individuals eligible for free or low cost contraceptive services--to 
include women who are unable to obtain certain family planning services 
under their employer-sponsored health coverage due to their employers' 
religious beliefs or moral convictions (see 83 FR 25502). If that 
regulation is finalized as proposed, it could further reduce any 
potential effect of these final rules on women's access to 
contraceptives. That proposal also demonstrates that the government has 
other means available to it for increasing women's access to 
contraception. Some of those means are less restrictive of religious 
exercise than imposition of the contraceptive Mandate on employers with 
sincerely held religious objections to providing such coverage.
    Some commenters stated that the expanded exemptions would violate 
section 1554 of the ACA. That section says the Secretary of HHS ``shall 
not promulgate any regulation'' that ``creates any unreasonable 
barriers to the ability of individuals to obtain appropriate medical 
care,'' ``impedes timely access to health care services,'' ``interferes 
with communications regarding a full range of treatment options between 
the patient and the provider,'' ``restricts the ability of health care 
providers to provide full disclosure of all relevant information to 
patients making health care decisions,'' ``violates the principles of 
informed consent and the ethical standards of health care 
professionals,'' or ``limits the

[[Page 57552]]

availability of health care treatment for the full duration of a 
patient's medical needs.'' 42 U.S.C. 18114. Such commenters urged, for 
example, that the Religious IFC created unreasonable barriers to the 
ability of individuals to obtain appropriate medical care, particularly 
in areas they said may have a disproportionately high number of 
entities likely to take advantage of the exemption.
    The Departments disagree with these comments about section 1554. 
The Departments issued previous exemptions and accommodations that 
allowed various plans to not provide contraceptive coverage on the 
basis of religious objections. The Departments, which administer both 
ACA section 1554 and PHS Act section 2713, did not conclude that the 
exemptions or accommodations in those regulations violated section 
1554. Moreover, the decision not to impose a governmental mandate is 
not the ``creation'' of a ``barrier,'' especially when that mandate 
requires private citizens to provide services to other private 
citizens. Nor, in any event, are the exemptions from the Mandate 
unreasonable. Section 1554 of the ACA does not require the Departments 
to require coverage of, or to keep in place a requirement to cover, 
certain services, including contraceptives, that was issued pursuant to 
HHS's exercise of discretion under section 2713(a)(4). Nor does section 
1554 prohibit the Departments from providing exemptions for burdens on 
religious exercise, or, as is the case here, from refraining to impose 
the Mandate in cases where religious exercise would be burdened by it. 
In light of RFRA and the First Amendment, providing religious 
exemptions is a reasonable administrative response in the context of 
this federally mandated burden, especially since the burden itself is a 
subregulatory creation that does not apply in various contexts. 
Religious exemptions from federal mandates in sensitive health contexts 
have existed in federal laws for decades, and President Obama 
referenced them when he issued Executive Order 13535 (March 24, 2010), 
declaring that, under the ACA, ``longstanding Federal laws to protect 
conscience (such as the Church Amendment, 42 U.S.C. 300a-7, and the 
Weldon Amendment, section 508(d)(1) of Pub. L. 111-8) remain intact,'' 
and that ``[n]umerous executive agencies have a role in ensuring that 
these restrictions are enforced, including the HHS.'' While the text of 
Executive Order 13535 does not require the expanded exemptions issued 
in these rules, the expanded exemptions are, as explained below, 
consistent with longstanding federal laws to protect religious beliefs.
    In short, the Departments do not believe sections 1554 or 1557 of 
the ACA, other nondiscrimination statutes, or any constitutional 
doctrines, create an affirmative obligation to create, maintain, or 
impose a Mandate that forces covered entities to provide coverage of 
preventive contraceptive services in health plans. The ACA's grant of 
authority to HRSA to provide for, and support, the Guidelines is not 
transformed by any of the laws cited by commenters into a requirement 
that, once those Guidelines exist, they can never be reconsidered or 
amended because doing so would only affect women's coverage or would 
allegedly impact particular populations disparately.
    Members of the public have widely divergent views on whether 
expanding the exemptions is good public policy. Some commenters said 
the exemptions would burden workers, families, and the economic and 
social stability of the country, and interfere with the physician-
patient relationship. Other commenters disagreed, favoring the public 
policy behind expanding the exemptions and arguing that the exemptions 
would not interfere with the physician-patient relationship. For all 
the reasons explained at length in this preamble, the Departments have 
determined that these rules are good policy. Because of the importance 
of the religious liberty values being accommodated, the limited impact 
of these rules, and uncertainty about the impact of the Mandate overall 
according to some studies, the Departments do not believe these rules 
will have any of the drastic negative consequences on third parties or 
society that some opponents of these rules have suggested.

E. Interim Final Rulemaking

    The Departments received several comments about their decision to 
issue the Religious IFC as interim final rules with requests for 
comments, instead of as a notice of proposed rulemaking. Several 
commenters asserted that the Departments had the authority to issue the 
Religious IFC in that way, agreeing that the Departments had explicit 
statutory authority to do so, good cause under the Administrative 
Procedure Act (APA), or both. Other commenters held the opposite view, 
contending that there was neither statutory authority to issue the 
rules on an interim final basis, nor good cause under the APA to make 
the rules immediately effective.
    The Departments continue to believe legal authority existed to 
issue the Religious IFC as interim final rules. Section 9833 of the 
Code, section 734 of ERISA, and section 2792 of the PHS Act authorize 
the Secretaries of the Treasury, Labor, and HHS (collectively, the 
Secretaries) to promulgate any interim final rules that they determine 
are appropriate to carry out the provisions of chapter 100 of the Code, 
part 7 of subtitle B of title I of ERISA, and part A of title XXVII of 
the PHS Act, which include sections 2701 through 2728 of the PHS Act 
and the incorporation of those sections into section 715 of ERISA and 
section 9815 of the Code. The Religious and Moral IFCs fall under those 
statutory authorizations for the use of interim final rulemaking. Prior 
to the Religious IFC, the Departments issued three interim final rules 
implementing this section of the PHS Act because of the needs of 
covered entities for immediate guidance and the weighty matters 
implicated by the HRSA Guidelines, including issuance of new or revised 
exemptions or accommodations. (75 FR 41726; 76 FR 46621; 79 FR 51092). 
The Departments also had good cause to issue the Religious IFC as 
interim final rules, for the reasons discussed therein.
    In any event, the objections of some commenters to the issuance of 
the Religious IFC as interim final rules with request for comments does 
not prevent the issuance of these final rules. These final rules are 
being issued after receiving and thoroughly considering public comments 
as requested in the Religious IFC. These final rules therefore comply 
with the APA's notice and comment requirements.

F. Health Effects of Contraception and Pregnancy

    The Departments received numerous comments on the health effects of 
contraception and pregnancy. As noted above, some commenters supported 
the expanded exemptions, and others urged that contraceptives be 
removed from the Guidelines entirely, based on the view that pregnancy 
and the unborn children resulting from conception are not diseases or 
unhealthy conditions that are properly the subject of preventive care 
coverage. Such commenters further contended that hormonal 
contraceptives may present health risks to women. For example, they 
contended that studies show certain contraceptives cause or are 
associated with an increased risk of depression,\28\ venous 
thromboembolic

[[Page 57553]]

disease,\29\ fatal pulmonary embolism,\30\ thrombotic stroke and 
myocardial infarction (particularly among women who smoke, are 
hypertensive, or are older),\31\ hypertension,\32\ HIV-1 acquisition 
and transmission,\33\ and breast, cervical, and liver cancers.\34\ Some 
commenters also observed that fertility awareness based methods of 
birth spacing are free of similar health risks since they do not 
involve ingestion of chemicals. Some commenters contended that 
contraceptive access does not reduce unintended pregnancies or 
abortions.
---------------------------------------------------------------------------

    \28\ Commenters cited Charlotte Wessel Skovlund et al., 
``Association of Hormonal Contraception with Depression,'' 73 JAMA 
Psychiatry 1154, 1154 (published online Sept. 28, 2016) (``Use of 
hormonal contraception, especially among adolescents, was associated 
with subsequent use of antidepressants and a first diagnosis of 
depression, suggesting depression as a potential adverse effect of 
hormonal contraceptive use.'').
    \29\ Commenters cited the Practice Committee of the American 
Society for Reproductive Medicine, ``Hormonal Contraception: Recent 
Advances and Controversies,'' 82 Fertility and Sterility S20, S26 
(2004); V.A. Van Hylckama et al., ``The Venous Thrombotic Risk of 
Oral Contraceptives, Effects of Estrogen Dose and Progestogen Type: 
Results of the MEGA Case-Control Study,'' 339 Brit. Med. J. 339b2921 
(2009); Y. Vinogradova et al., ``Use of Combined Oral Contraceptives 
and Risk of Venous Thromboembolism: Nested Case-Control Studies 
Using the QResearch and CPRD Databases,'' 350 Brit. Med. J. 350h2135 
(2015) (``Current exposure to any combined oral contraceptive was 
associated with an increased risk of venous thromboembolism . . . 
compared with no exposure in the previous year.''); [Oslash]. 
Lidegaard et al., ``Hormonal contraception and risk of venous 
thromboembolism: national follow-up study,'' 339 Brit. Med. J. b2890 
(2009): M. de Bastos et al., ``Combined oral contraceptives: venous 
thrombosis,'' Cochrane Database Syst. Rev. (no. 3, 2014). CD010813. 
doi: 10.1002/14651858.CD010813.pub2, available at https://www.ncbi.nlm.nih.gov/pubmed?term=24590565; L.J Havrilesky et al., 
``Oral Contraceptive User for the Primary Prevention of Ovarian 
Cancer,'' Agency for Healthcare Research and Quality, Report No. 13-
E002-EF (June 2013), available at https://archive.ahrq.gov/research/findings/evidence-based-reports/ocusetp.html; and Robert A. Hatcher 
et al., Contraceptive Technology 405-07 (Ardent Media 18th rev. ed. 
2004).
    \30\ Commenters cited N.R. Poulter, ``Risk of Fatal Pulmonary 
Embolism with Oral Contraceptives,'' 355 Lancet 2088 (2000).
    \31\ Commenters cited [Oslash]. Lidegaard et al., ``Thrombotic 
Stroke and Myocardial Infarction with Hormonal Contraception,'' 366 
N. Eng. J. Med. 2257, 2257 (2012) (risks ``increased by a factor of 
0.9 to 1.7 with oral contraceptives that included ethinyl estradiol 
at a dose of 20 [mu]g and by a factor of 1.3 to 2.3 with those that 
included ethinyl estradiol at a dose of 30 to 40 [mu]g''); Practice 
Committee of the American Society for Reproductive Medicine, 
``Hormonal Contraception''; M. Vessey et al., ``Mortality in 
Relation to Oral Contraceptive Use and Cigarette Smoking,'' 362 
Lancet 185, 185-91 (2003); WHO Collaborative Study of Cardiovascular 
Disease and Steroid Hormone Contraception, ``Acute Myocardial 
Infarction and Combined Oral Contraceptives: Results of an 
International Multicentre Case-Control Study,'' 349 Lancet 1202, 
1202-09(1997); K.M. Curtis et al., Combined Oral Contraceptive Use 
Among Women With Hypertension: A Systematic Review, 73 Contraception 
73179, 179-88 (2006); L.A. Gillum et al., ``Ischemic stroke risk 
with oral contraceptives: A meta analysis,'' 284 JAMA 72, 72-78 
(2000), available at https://www.ncbi.nlm.nih.gov/pubmed/10872016; 
and Robert A. Hatcher et al., Contraceptive Technology 404-05, 445 
(Ardent Media 18th rev. ed. 2004).
    \32\ Commenters cited Robert A. Hatcher et al., Contraceptive 
Technology 407, 445 (Ardent Media 18th rev. ed. 2004).
    \33\ Commenters cited Renee Heffron et al., ``Use of Hormonal 
Contraceptives and Risk of HIV-1 Transmission: A Prospective Cohort 
Study,'' 12 Lancet Infectious Diseases 19, 24 (2012) (``Use of 
hormonal contraceptives was associated with a two-times increase in 
the risk of HIV-1 acquisition by women and HIV-1 transmission from 
women to men.''); and ``Hormonal Contraception Doubles HIV Risk, 
Study Suggests,'' Science Daily (Oct. 4, 2011), https://www.sciencedaily.com/releases/2011/10/111003195253.htm.
    \34\ Commenters cited ``Oral Contraceptives and Cancer Risk'' 
(Mar. 21, 2012, National Cancer Institute (reviewed Feb. 22, 2018), 
https://www.cancer.gov/about-cancer/causes-prevention/risk/hormones/oral-contraceptives-fact-sheet; L.J Havrilesky et al., ``Oral 
Contraceptive User for the Primary Prevention of Ovarian Cancer,'' 
Agency for Healthcare Research and Quality, Report No. 13-E002-EF 
(June 2013), available at https://archive.ahrq.gov/research/findings/evidence-based-reports/ocusetp.html; S.N. Bhupathiraju et 
al., ``Exogenous hormone use: Oral contraceptives, postmenopausal 
hormone therapy, and health outcomes in the Nurses' Health Study,'' 
106 Am. J. Pub. Health 1631, 1631-37 (2016); The World Health 
Organization Department of Reproductive Health and Research, ``The 
Carcinogenicity of Combined Hormonal Contraceptives and Combined 
Menopausal Treatment'', World Health Organization (Sept. 2005), 
http://www.who.int/reproductivehealth/topics/ageing/cocs_hrt_statement.pdf; and the American Cancer Society, ``Known and 
Probably Human Carcinogens,'' American Cancer Society (rev. Nov. 3, 
2016), https://www.cancer.org/cancer/cancer-causes/general-info/known-and-probable-human-carcinogens.html.
---------------------------------------------------------------------------

    Other commenters disagreed, citing a variety of studies they 
contend show health benefits caused by, or associated with, 
contraceptive use or the prevention of unintended pregnancy. Commenters 
cited, for example, the 2011 IOM Report's discussions of the negative 
effects associated with unintended pregnancies, as well as other 
studies. Such commenters contended that, by reducing unintended 
pregnancy, contraceptives reduce the risk of unaddressed health 
complications, low birth weight, preterm birth, infant mortality, and 
maternal mortality.\35\ Commenters also said studies show 
contraceptives are associated with a reduced risk of conditions such as 
ovarian cancer, colorectal cancer, and endometrial cancer,\36\ and that 
contraceptives treat such conditions as endometriosis, polycystic 
ovarian syndrome, migraines, pre-menstrual pain, menstrual regulation, 
and pelvic inflammatory disease.\37\ Some commenters said that 
pregnancy presents various health risks, such as blood clots, bleeding, 
anemia, high blood pressure, gestational diabetes, and death. Some 
commenters also contended that increased access to contraception 
reduces abortions.
---------------------------------------------------------------------------

    \35\ Citing, e.g., Conde-Agudelo A, Rosas-Bermudez A, Kafury-
Goeta AC. Birth spacing and risk of adverse perinatal outcomes: a 
meta-analysis. JAMA 2006;295:1809-23, and John Hopkins Bloomberg 
Public Health School of Health, Contraception Use Averts 272,000 
Maternal Deaths Worldwide, https://www.jhsph.edu/news/news-releases/2012/ahmed-contraception.html.
    \36\ Citing, e.g., Schindler, A.E. (2013). Non-contraceptive 
benefits of oral hormonal contraceptives. International Journal of 
Endocrinology and Metabolism, 11 (1), 41-47.
    \37\ Citing, e.g., id., and American College of Obstetricians 
and Gynecologists, Committee on Health Care for Underserved Women. 
(2015, January). Committee Opinion Number 615: Access to 
Contraception. As discussed below, to the extent that contraceptives 
are prescribed to treat existing health conditions, and not for 
preventive purposes, the Mandate would not be applicable.
---------------------------------------------------------------------------

    Some commenters said that, in the Religious IFC, the Departments 
made incorrect statements concerning scientific studies. For example, 
some commenters argued there is no proven increased risk of breast 
cancer or other risks among contraceptive users. They criticized the 
Religious IFC for citing studies, including one previewed in the 2011 
IOM Report itself (Agency for Healthcare Research and Quality Report 
No.: 13-E002-EF (June 2013) (cited above)), discussing an association 
between contraceptive use and increased risks of breast and cervical 
cancer, and concluding there are no net cancer-reducing benefits of 
contraceptive use. As described in the Religious IFC, 82 FR at 47804, 
the 2013 Agency for Healthcare Research and Quality study, and others, 
reach conclusions with which these commenters appear to disagree. The 
Departments consider it appropriate to take into account both of those 
studies, as well as the studies cited by commenters who disagree with 
those conclusions.
    Some commenters further criticized the Departments for saying two 
studies cited by the 2011 IOM Report, which asserted an associative 
relationship between contraceptive use and decreases in unintended 
pregnancy, did not on their face establish a causal relationship 
between a broad coverage mandate and decreases in unintended pregnancy. 
In this respect, as noted in the Religious IFC,\38\ the purpose for the 
Departments' reference to such studies was to highlight the difference 
between a causal relationship and an associative one, as well as the 
difference between saying contraceptive use has a certain effect and 
saying a contraceptive coverage mandate (or, more specifically, the 
part of that mandate affected by certain exemptions) will necessarily 
have (or negate, respectively) such an effect.
---------------------------------------------------------------------------

    \38\ 82 FR at 47803-04.
---------------------------------------------------------------------------

    Commenters disagreed about the effects of some FDA-approved 
contraceptives on embryos. Some

[[Page 57554]]

commenters agreed with the quotation, in the Religious IFC, of FDA 
materials \39\ that indicate that some items it has approved as 
contraceptives may prevent the implantation of an embryo after 
fertilization. Some of those commenters cited additional scientific 
sources to argue that certain approved contraceptives may prevent 
implantation, and that, in some cases, some contraceptive items may 
even dislodge an embryo shortly after implantation. Other commenters 
disagreed with the sources cited in the Religious IFC and cited 
additional studies on that issue. Some commenters further criticized 
the Departments for asserting in the Religious IFC that some persons 
believe those possible effects are ``abortifacient.''
---------------------------------------------------------------------------

    \39\ FDA's guide ``Birth Control: Medicines To Help You,'' 
specifies that various approved contraceptives, including 
Levonorgestrel, Ulipristal Acetate, and IUDs, work mainly by 
preventing fertilization and ``may also work . . . by preventing 
attachment (implantation) to the womb (uterus)'' of a human embryo 
after fertilization. Available at https://www.fda.gov/forconsumers/byaudience/forwomen/freepublications/ucm313215.htm.
---------------------------------------------------------------------------

    The objection on this issue appears to be partially one of 
semantics. People disagree about whether to define ``conception'' or 
``pregnancy'' to occur at fertilization, when the sperm and ovum unite, 
or days later at implantation, when that embryo has undergone further 
cellular development, travelled down the fallopian tube, and implanted 
in the uterine wall. This question is independent of the question of 
what mechanisms of action FDA-approved or cleared contraceptives may 
have. It is also a separate question from whether members of the public 
assert, or believe, that it is appropriate to consider the items 
``abortifacient''--that is, a kind of abortion, or a medical product 
that causes an abortion--because they believe abortion means to cause 
the demise of a post-fertilization embryo inside the mother's body. 
Commenters referenced scientific studies and sources on both sides of 
the issue of whether certain contraceptives prevent implantation. 
Commenters and litigants have positively stated that some of them view 
certain contraceptives as abortifacients, for this reason. See also 
Hobby Lobby, 134 U.S. at 2765 (``The Hahns have accordingly excluded 
from the group-health-insurance plan they offer to their employees 
certain contraceptive methods that they consider to be 
abortifacients.'').
    The Departments do not take a position on the scientific, 
religious, or moral debates on this issue by recognizing that some 
people have sincere religious objections to providing contraception 
coverage on this basis. The Supreme Court has already recognized that 
such a view can form the basis of a sincerely held religious belief 
under RFRA.\40\ Even though there is a plausible scientific argument 
against the view that certain contraceptives have mechanisms of action 
that may prevent implantation, there is also a plausible scientific 
argument in favor of it--as demonstrated, for example, by FDA's 
statement that some contraceptives may prevent implantation and by some 
scientific studies cited by commenters. The Departments believe in this 
context we have a sufficient rationale to offer expanded religious 
exemptions with respect to this Mandate.
---------------------------------------------------------------------------

    \40\ ``Although many of the required, FDA-approved methods of 
contraception work by preventing the fertilization of an egg, four 
of those methods (those specifically at issue in these cases) may 
have the effect of preventing an already fertilized egg from 
developing any further by inhibiting its attachment to the uterus. 
See Brief for HHS in No. 13-354, pp. 9-10, n. 4; FDA, Birth Control: 
Medicines to Help You.'' Hobby Lobby, 134 S. Ct. at 2762-63. ``The 
Hahns have accordingly excluded from the group-health-insurance plan 
they offer to their employees certain contraceptive methods that 
they consider to be abortifacients. . . . Like the Hahns, the Greens 
believe that life begins at conception and that it would violate 
their religion to facilitate access to contraceptive drugs or 
devices that operate after that point.'' Id. at 2765-66.
---------------------------------------------------------------------------

    The Departments also received comments about their discussion of 
the uncertain effects of the expanded exemptions on teen sexual 
activity. In this respect, the Departments stated, ``With respect to 
teens, the Santelli and Melnikas study cited by IOM 2011 observes that, 
between 1960 and 1990, as contraceptive use increased, teen sexual 
activity outside of marriage likewise increased (although the study 
does not assert a causal relationship). Another study, which proposed 
an economic model for the decision to engage in sexual activity, stated 
that `[p]rograms that increase access to contraception are found to 
decrease teen pregnancies in the short run but increase teen 
pregnancies in the long run.' '' \41\ Some commenters agreed with this 
discussion, while other commenters disagreed. Commenters who supported 
the expanded exemptions cited these and similar sources suggesting that 
denying expanded exemptions to the Mandate is not a narrowly tailored 
way to advance the Government's interests in reducing teen pregnancy, 
and suggesting there are means of doing so that are less restrictive of 
religious exercise.\42\ Some commenters opposing the expanded 
exemptions stated that school-based health centers provide access to 
contraceptives, thus increasing use of contraceptives by sexually 
active students. They also cited studies concluding that certain 
decreases in teen pregnancy are attributable to increased contraceptive 
use.\43\
---------------------------------------------------------------------------

    \41\ Citing J.S. Santelli & A.J. Melnikas, ``Teen fertility in 
transition: recent and historic trends in the United States,'' 31 
Ann. Rev. Pub. Health 371, 375-76 (2010), and Peter Arcidiacono et 
al., Habit Persistence and Teen Sex: Could Increased Access to 
Contraception Have Unintended Consequences for Teen Pregnancies? 
(2005), available at http://public.econ.duke.edu/~psarcidi/
addicted13.pdf. See also K. Buckles & D. Hungerman, ``The Incidental 
Fertility Effects of School Condom Distribution Programs,'' Nat'l 
Bureau of Econ. Research Working Paper No. 22322 (June 2016), 
available at http://www.nber.org/papers/w22322 (``access to condoms 
in schools increases teen fertility by about 10 percent'' and 
increased sexually transmitted infections).
    \42\ See Helen Alvar[eacute], ``No Compelling Interest: The 
`Birth Control' Mandate and Religious Freedom,'' 58 Vill. L. Rev. 
379, 400-02 (2013) (discussing the Santelli & Melnikas study and the 
Arcidiacono study cited above, and other research that considers the 
extent to which reduction in teen pregnancy is attributable to 
sexual risk avoidance rather than to contraception access).
    \43\ See, for example, Lindberg L., Santelli J., ``Understanding 
the Decline in Adolescent Fertility in the United States, 2007-
2012,'' 59 J. Adolescent Health 577-83 (Nov. 2016), https://doi.org/10.1016/j.jadohealth.2016.06.024; see also Comment of The Colorado 
Health Foundation, submission ID CMS-2014-0115-19635, 
www.regulations.gov (discussing teen pregnancy data from Colorado).
---------------------------------------------------------------------------

    Many commenters opposing the Religious IFC misunderstood the 
Departments' discussion of this issue. Teens are a significant part, 
though not the entirety, of women the IOM identified as being most at 
risk of unintended pregnancy. The Departments do not take a position on 
the empirical question of whether contraception has caused certain 
reductions in teen pregnancy. Rather, we note that studies suggesting 
various causes of teen pregnancy and unintended pregnancy in general 
support the Departments' conclusion that it is difficult to establish 
causation between granting religious exemptions to the contraceptive 
Mandate and either an increase in teen pregnancies in particular, or 
unintended pregnancies in general. For example, a 2015 study 
investigating the decline in teen pregnancy since 1991 attributed it to 
multiple factors (including but not limited to reduced sexual activity, 
falling welfare benefit levels, and expansion of family planning 
services in Medicaid, with the latter accounting for less than 13 
percent of the decline), and concluded ``that none of the relatively 
easy, policy-based explanations for the recent decline in teen 
childbearing in the United States hold up very well to careful 
empirical scrutiny.'' \44\ One

[[Page 57555]]

study found that during the teen pregnancy decline between 2007-2012, 
teen sexual activity was also decreasing.\45\ One study concluded that 
falling unemployment rates in the 1990s accounted for 85% of the 
decrease in rates of first births among 18-19 year-old African 
Americans.\46\ Another study found that the representation of African-
American teachers was associated with a significant reduction in the 
African-American teen pregnancy rate.\47\ One study concluded that an 
``increase in the price of the Pill on college campuses . . . did not 
increase the rates of unintended pregnancy.'' \48\ Similarly, one study 
from England found that, where funding for teen pregnancy prevention 
was reduced, there was no evidence that the reduction led to an 
increase in teen pregnancies.\49\ Some commenters also cited studies, 
which are not limited to the issue of teen pregnancy, that have found 
many women who have abortions report that they were using 
contraceptives when they became pregnant.\50\
---------------------------------------------------------------------------

    \44\ Kearney MS and Levine PB, ``Investigating recent trends in 
the U.S. birth rate,'' 41 J. Health Econ. 15-29 (2015), available at 
https://www.sciencedirect.com/science/article/abs/pii/S0167629615000041.
    \45\ See, for example, K. Ethier et al., ``Sexual Intercourse 
Among High School Students--29 States and United States Overall, 
2005-2015,'' 66 CDC Morb. Mortal. Wkly Report 1393, 1393-97 (Jan. 5, 
2018), available at http://dx.doi.org/10.15585/mmwr.mm665152a1 
(``Nationwide, the proportion of high school students who had ever 
had sexual intercourse decreased significantly overall. . . .'').
    \46\ Colen CG, Geronimus AT, and Phipps MG, ``Getting a piece of 
the pie? The economic boom of the 1990s and declining teen birth 
rates in the United States,'' 63 Social Science & Med. 1531-45 
(Sept. 2006), available at https://www.sciencedirect.com/science/article/pii/S027795360600205X.
    \47\ Atkins DN and Wilkins VM, ``Going Beyond Reading, Writing, 
and Arithmetic: The Effects of Teacher Representation on Teen 
Pregnancy Rates,'' 23 J. Pub. Admin. Research & Theory 771-90 (Oct. 
1, 2013), available at https://academic.oup.com/jpart/article-abstract/23/4/771/963674.
    \48\ E. Collins & B. Herchbein, ``The Impact of Subsidized Birth 
Control for College Women: Evidence from the Deficit Reduction 
Act,'' U. Mich. Pop. Studies Ctr. Report 11-737 (May 2011), 
available at https://www.psc.isr.umich.edu/pubs/pdf/rr11-737.pdf 
(``[I]ncrease in the price of the Pill on college campuses . . . did 
not increase the rates of unintended pregnancy or sexually 
transmitted infections for most women'').
    \49\ See D. Paton & L. Wright, ``The effect of spending cuts on 
teen pregnancy,'' 54 J. Health Econ. 135, 135-46 (2017), available 
at https://www.sciencedirect.com/science/article/abs/pii/S0167629617304551 (``Contrary to predictions made at the time of the 
cuts, panel data estimates provide no evidence that areas which 
reduced expenditure the most have experienced relative increases in 
teenage pregnancy rates. Rather, expenditure cuts are associated 
with small reductions in teen pregnancy rates'').
    \50\ Commenters cited, for example, Guttmacher Institute, ``Fact 
Sheet: Induced Abortion in the United States'' (Jan. 2018) (``Fifty-
one percent of abortion patients in 2014 were using a contraceptive 
method in the month they became pregnant''), available at https://www.guttmacher.org/sites/default/files/factsheet/fb_induced_abortion.pdf.
---------------------------------------------------------------------------

    As the Departments stated in the Religious IFC, we do not take a 
position on the variety of empirical questions discussed above. 
Likewise, these rules do not address the substantive question of 
whether HRSA should include contraceptives in the women's preventive 
services Guidelines issued under section 2713(a)(4). Rather, 
reexamination of the record and review of the public comments has 
reinforced the Departments' conclusion that significantly more 
uncertainty and ambiguity exists on these issues than the Departments 
previously acknowledged when we declined to extend the exemption to 
certain objecting organizations and individuals. The uncertainty 
surrounding these weighty and important issues makes it appropriate to 
maintain the expanded exemptions and accommodation if and for as long 
as HRSA continues to include contraceptives in the Guidelines. The 
federal government has a long history, particularly in certain 
sensitive and multi-faceted health issues, of providing religious 
exemptions from governmental mandates. These final rules are consistent 
with that history and with the discretion Congress vested in the 
Departments for implementing the ACA.

G. Health and Equality Effects of Contraceptive Coverage Mandates

    The Departments also received comments about the health and 
equality effects of the Mandate more broadly. Some commenters contended 
that the contraceptive Mandate promotes the health and equality of 
women, especially low income women and promotes female participation 
and equality in the workforce. Other commenters contended that there 
was insufficient evidence that the expanded exemptions would harm those 
interests. Some of those commenters further questioned whether there 
was evidence that broad health coverage mandates of contraception lead 
to increased contraceptive use, reductions in unintended pregnancies, 
or reductions in negative effects said to be associated with unintended 
pregnancies. In particular, some commenters discussed the study quoted 
above, published and revised by the Guttmacher Institute in October 
2017, concluding that through 2014 there were no significant changes in 
the overall proportion of women who used a contraceptive method both 
among all women and among women at risk of unintended pregnancy, that 
there was no significant shift from less effective to more effective 
methods, and that it was ``unclear'' whether this Mandate impacted 
contraceptive use because there was no significant increase in the use 
of contraceptive methods the Mandate covered.\51\ These commenters also 
noted that, in the 29 States where contraceptive coverage mandates have 
been imposed statewide,\52\ those mandates have not necessarily lowered 
rates of unintended pregnancy (or abortion) overall.\53\ Other 
commenters, however, disputed the significance of these state 
statistics, noting that of the 29 states with contraceptive coverage 
mandates, only four states have laws that match the federal 
requirements in scope. Some also observed that, even in states with 
state contraceptive coverage mandates, self-insured group health plans 
might escape those requirements, and some states do not mandate the 
contraceptives to be covered at no out-of-pocket cost to the 
beneficiary.
---------------------------------------------------------------------------

    \51\ Kavanaugh, 97 Contraception at 14-21.
    \52\ See Guttmacher Institute, ``Insurance Coverage of 
Contraceptives'' (June 11, 2018); Kaiser Family Foundation, ``State 
Requirements for Insurance Coverage of Contraceptives,'' Henry J 
Kaiser Family Foundation (Jan. 1, 2018), https://www.kff.org/other/state-indicator/state-requirements-for-insurance-coverage-of-contraceptives/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.
    \53\ See Michael J. New, ``Analyzing the Impact of State Level 
Contraception Mandates on Public Health Outcomes,'' 13 Ave Maria L. 
Rev. 345 (2015), available at http://avemarialaw-law-review.avemarialaw.edu/Content/articles/vXIII.i2.new.final.0809.pdf.
---------------------------------------------------------------------------

    The Departments have considered these experiences as relevant to 
the effect the expanded exemptions in these rules might have on the 
Mandate more broadly. The state mandates apply to a very large number 
of plans and plan participants, notwithstanding ERISA preemption, and 
public commenters did not point to studies showing those state mandates 
reduced unintended pregnancies. The federal contraceptive Mandate, 
likewise, applies to a broad, but not entirely comprehensive, number of 
employers. For example, to the extent that houses of worship and 
integrated auxiliaries may have self-insured to avoid state health 
insurance contraceptive coverage mandates or for other reasons, those 
groups are, and have been, exempt from the federal Mandate prior to the 
Religious IFC. The exemptions as set forth in the Religious IFC and in 
these final rules leave the contraceptive Mandate in place for nearly 
all entities and plans to which the Mandate has applied. The 
Departments are not aware of data showing that these expanded 
exemptions would negate any reduction in unintended pregnancies that 
might

[[Page 57556]]

result from a broad contraceptive coverage mandate.
    Some commenters expressed concern that providing exemptions to the 
Mandate that private parties provide contraception may lead to 
exemptions regarding other medications or services, like vaccines. The 
exemptions provided in these rules, however, do not apply beyond the 
contraceptive coverage requirement implemented through section 
2713(a)(4). Specifically, PHS Act section 2713(a)(2) requires coverage 
of ``immunizations,'' and these exemptions do not encompass that 
requirement. The fact that the Departments have exempted houses of 
worship and integrated auxiliaries from the contraceptive Mandate since 
2011 did not lead to those entities receiving exemptions under section 
2713(a)(2) concerning vaccines. In addition, hundreds of entities have 
sued the Departments over the implementation of section 2713(a)(4), 
leading to two decisions of the U.S. Supreme Court, but no similar wave 
of lawsuits has challenged section 2713(a)(2). The expanded exemptions 
in these final rules are consistent with a long history of statutes 
protecting religious beliefs from certain health care mandates 
concerning issues such as sterilization, abortion and birth control.
    Some commenters took issue with the conclusion set forth in the 
Religious IFC, which is similar to that asserted in the 2017 Guttmacher 
study, that ``[t]he role that the contraceptive coverage guarantee 
played in impacting use of contraception at the national level remains 
unclear, as there was no significant increase in the use of methods 
that would have been covered under the ACA.'' They observed that more 
women have coverage of contraceptives and contraception counseling 
under the Mandate and that more contraceptives are provided without co-
pays than before. Still other commenters argued that the Mandate, or 
other expansions of contraceptive coverage, have led women to increase 
their use of contraception in general, or to change from less 
effective, less expensive contraceptive methods to more effective, more 
expensive contraceptive methods. Some commenters lamented that 
exemptions would include exemption from the requirement to cover 
contraception counseling. Some commenters pointed to studies cited in 
the 2011 IOM Report recommending contraception be included in the 
Guidelines and argued that certain women will go without certain health 
care, or contraception specifically, because of cost. They contended 
that a smaller percentage of women delay or forego health care overall 
under the ACA \54\ and that, according to studies, coverage of 
contraceptives without cost-sharing has increased use of contraceptives 
in certain circumstances. Some commenters also argued that studies show 
that decreases in unintended pregnancies are due to broader access of 
contraceptives. Finally, some commenters argued that birth control 
access generally has led to social and economic equality for women.
---------------------------------------------------------------------------

    \54\ Citing, for example, Adelle Simmons et al., ``The 
Affordable Care Act: Promoting Better Health for Women,'' Table 1, 
Assistant Secretary for Planning and Evaluation (June 14, 2016), 
https://aspe.hhs.gov/system/files/pdf/205066/ACAWomenHealthIssueBrief.pdf.
---------------------------------------------------------------------------

    The Departments have reviewed the comments, including studies 
submitted by commenters either supporting or opposing these expanded 
exemptions. Based on our review, it is not clear that merely expanding 
exemptions as done in these rules will have a significant effect on 
contraceptive use and health, or workplace equality, for the vast 
majority of women benefitting from the Mandate. There is conflicting 
evidence regarding whether the Mandate alone, as distinct from birth 
control access more generally, has caused increased contraceptive use, 
reduced unintended pregnancies, or eliminated workplace disparities, 
where all other women's preventive services were covered without cost 
sharing. Without taking a definitive position on those evidentiary 
issues, however, we conclude that the Religious IFC and these final 
rules--which merely withdraw the Mandate's requirement from what 
appears to be a small group of newly exempt entities and plans--are not 
likely to have negative effects on the health or equality of women 
nationwide. We also conclude that the expanded exemptions are an 
appropriate policy choice left to the agencies under the relevant 
statutes, and, thus, are an appropriate exercise of the Departments' 
discretion.
    Moreover, we conclude that the best way to balance the various 
policy interests at stake in the Religious IFC and these final rules is 
to provide the expanded exemptions set forth herein, even if certain 
effects may occur among the populations actually affected by the 
employment of these exemptions. These rules will provide tangible 
protections for religious liberty, and impose fewer governmental 
burdens on various entities and individuals, some of whom have 
contended for several years that denying them an exemption from the 
contraceptive Mandate imposes a substantial burden on their religious 
exercise. The Departments view the provision of those protections to 
preserve religious exercise in this health care context as an 
appropriate policy option, notwithstanding the widely divergent effects 
that public commenters have predicted based on different studies they 
cited. Providing the protections for religious exercise set forth in 
the Religious IFC and these final rules is not inconsistent with the 
ACA, and brings this Mandate into better alignment with various other 
federal conscience protections in health care, some of which have been 
in place for decades.

III. Description of the Text of the Regulations and Response to 
Additional Public Comments

    Here, the Departments describe the regulatory text set forth prior 
to the Religious IFC, the regulations from that IFC, public comments in 
response to the specific regulatory text set forth in the IFC, the 
Departments' response to those comments, and, in consideration of those 
comments, the regulatory text as finalized in this final rule. As noted 
above, various members of the public provided comments that were 
supportive, or critical, of the Religious IFC overall, or of 
significant policies pertaining to those regulations. To the extent 
those comments apply to the following regulatory text, the Departments 
have responded to them above. This section of the preamble responds to 
comments that pertain more specifically to particular regulatory text.

A. Restatement of Statutory Requirements of PHS Act Section 2713(a) and 
(a)(4) (26 CFR 54.9815-2713(a)(1) and (a)(1)(iv), 29 CFR 2590.715-
2713(a)(1) and (a)(1)(iv), and 45 CFR 147.130(a)(1) and (a)(1)(iv))

    The previous regulations restated the statutory requirements of 
section 2713(a) of the PHS Act, at 26 CFR 54.9815-2713(a)(1) and 
(a)(1)(iv), 29 CFR 2590.715-2713(a)(1) and (a)(1)(iv), and 45 CFR 
147.130(a)(1) and (a)(1)(iv). The Religious IFC modified these 
restatements to more closely align them with the text of PHS Act 
section 2713(a) and (a)(4).
    Previous versions of these rules had varied from the statutory 
language. PHS Act section 2713(a) and (a)(4) require group health plans 
and health insurance issuers offering coverage to provide coverage 
without cost sharing for ``such additional preventive care and 
screenings not described in paragraph (1) as provided for in 
comprehensive guidelines'' supported by HRSA. In comparison, the 
previous version of regulatory restatements of this language (as drawn 
from 45 CFR 147.130(a)(1)

[[Page 57557]]

and (a)(1)(iv)) stated the coverage must include ``evidence-informed 
preventive care and screenings provided for in binding comprehensive 
health plan coverage guidelines supported by'' HRSA. The Religious IFC 
amended this language to state, parallel to the language in section 
2713(a)(4), that the coverage must include ``such additional preventive 
care and screenings not described in paragraph (a)(1)(i) of this 
section as provided for in comprehensive guidelines supported by'' 
HRSA.
    These rules adopt as final, without change, the provisions in the 
Religious IFC amending 26 CFR 54.9815-2713(a)(1) and (a)(1)(iv), 29 CFR 
2590.715-2713(a)(1) and (a)(1)(iv), and 45 CFR 147.130(a)(1) and 
(a)(1)(iv). In this way, the regulatory text better conforms to the 
statutory language. In paragraph (a)(1) of the final regulations, 
instead of saying ``must provide coverage for all of the following 
items and services, and may not impose any cost-sharing requirements . 
. . with respect to those items and services:'', the regulation now 
tracks the statutory language by saying ``must provide coverage for and 
must not impose any cost-sharing requirements . . . for--''. By 
eliminating the language ``coverage for all of the following items and 
services,'' and ``with respect to those items and services,'' the 
Departments do not intend that coverage for specified items and 
services will not be required, but we simply intend to simplify the 
text of the regulation to track the statute and avoid duplicative 
language.
    By specifying that paragraph (a)(1)(iv) concerning the women's 
preventive services Guidelines encompasses ``such additional preventive 
care and screenings not described in paragraph (a)(1)(i) of this 
section as provided for in comprehensive guidelines supported by the 
Health Resources and Services Administration for purposes of section 
2713(a)(4) of the Public Health Service Act, subject to Sec. Sec.  
147.131 and 147.132,'' the regulatory text also better tracks the 
statutory language that the Guidelines are for ``such additional'' 
preventive services as HRSA may ``provide[ ] for'' and ``support[ ].'' 
This text also eliminates language, not found in the statute, that the 
Guidelines are ``evidence-informed'' and ``binding.'' Congress did not 
include the word ``binding'' in PHS Act section 2713, and did include 
the words ``evidence-based'' or ``evidence-informed'' in section 
2713(a)(1) and (a)(3), but omitted such terms from section 2713(a)(4). 
In this way, the regulatory text better comports with the scope of the 
statutory text. This text of paragraph (a)(1)(iv) also acknowledges 
that the Departments have decided Guidelines issued under section 
2713(a)(4) will not be provided for or supported to the extent they 
exceed the exemptions and accommodation set forth in 45 CFR 147.131 and 
147.132. Previous versions of the regulation placed that limit in 45 
CFR 147.130(a)(1), but did not reiterate it in Sec.  147.130(a)(1)(iv). 
To clearly set forth the applicability of the exemptions and 
accommodation, the Departments adopt as final the Religious IFC 
language, which included the language ``subject to Sec. Sec.  147.131 
and 147.132'' in both Sec.  147.130(a)(1) and Sec.  147.130(a)(1)(iv). 
Because these final rules adopt as final the Religious IFC language 
which includes the exemptions and accommodation in both Sec. Sec.  
147.131 and 147.132, and not just in Sec.  147.131 as under the 
previous rules, the Departments correspondingly included references to 
both sections in this part.
    Some commenters supported restoring the statutory language from PHS 
Act section 2713(a) and (a)(4) in the regulatory restatements of that 
language. Other commenters opposed doing so, asserting that Guidelines 
issued pursuant to section 2713(a)(4) must be ``evidence-informed'' and 
``binding.'' The Departments disagree with the position that, even 
though Congress omitted those terms from section 2713(a)(4), their 
regulatory restatement of the statutory requirement should include 
those terms. Instead, the Departments conclude that it is more 
appropriate for the regulatory restatements of section 2713(a)(4) to 
track the statutory language in this regard, namely, ``as provided for 
in comprehensive guidelines supported by [HRSA] for purposes of'' that 
paragraph.

B. Prefatory Language of Religious Exemptions (45 CFR 147.132(a)(1))

    These final rules adopt as final, with changes based on comments as 
set forth below, the regulatory provision in the Religious IFC that 
moved the religious exemption from 45 CFR 147.131(a) to 45 CFR 147.132.
    In the previous regulations, the exemption stated, at Sec.  
147.131(a), that HRSA's Guidelines ``may establish an exemption'' for 
the health plan or coverage of a ``religious employer,'' defined as 
``an organization that is organized and operates as a nonprofit entity 
and is referred to in section 6033(a)(3)(A)(i) or (iii) of the Internal 
Revenue Code.'' The Religious IFC moved the exemption to a new Sec.  
147.132, in which paragraph (a) discussed objecting entities, paragraph 
(b) discussed objecting individuals, paragraph (c) set forth a 
definition, and paragraph (d) discussed severability. The prefatory 
language to Sec.  147.132(a)(1) stated that HRSA's Guidelines ``must 
not provide for or support the requirement of coverage or payments for 
contraceptive services'' for the health plan or coverage of an 
``objecting organization,'' and thus that HRSA ``will exempt'' such an 
organization from the contraceptive coverage requirments of the 
Guidelines. The remainder of paragraph (a)(1), which is discussed in 
greater detail below, describes what entities are included as objecting 
organizations.
    This language not only specifies that certain entities are 
``exempt,'' but also explains that the Guidelines shall not support or 
provide for an imposition of the contraceptive coverage requirement to 
such exempt entities. This is an acknowledgement that section 
2713(a)(4) requires women's preventive services coverage only ``as 
provided for in comprehensive guidelines supported by the Health 
Resources and Services Administration.'' To the extent the HRSA 
Guidelines do not provide for, or support, the application of such 
coverage to certain entities or plans, the Affordable Care Act does not 
require the coverage. Those entities or plans are ``exempt'' by not 
being subject to the requirements in the first instance. Therefore, in 
describing the entities or plans as ``exempt,'' and in referring to the 
``exemption'' encompassing those entities or plans, the Departments 
also affirm the non-applicability of the Guidelines to them.
    The Departments wish to make clear that the expanded exemption set 
forth in Sec.  147.132(a) applies to several distinct entities involved 
in the provision of coverage to the objecting employer's employees. 
This explanation is consistent with how prior regulations have worked 
by means of similar language. When sections Sec.  147.132(a)(1) and 
(a)(1)(i) specify that ``[a] group health plan,'' ``health insurance 
coverage provided in connection with a group health plan,'' and 
``health insurance coverage offered or arranged by an objecting 
organization'' are exempt ``to the extent'' of the objections ``as 
specified in paragraph (a)(2),'' that language exempts the group health 
plans of the sponsors that object, and their health insurance issuers 
in providing the coverage in those plans (whether or not the issuers 
have their own objections). Consequently, with respect to Guidelines 
issued under Sec.  147.130(a)(1)(iv) (and as referenced by the parallel 
provisions in 26 CFR 54.9815-2713(a)(1)(iv) and 29 CFR 2590.715-
2713(a)(1)(iv)), the plan

[[Page 57558]]

sponsor, issuer, and plan covered in the exemption of Sec.  
147.132(a)(1) and (a)(1)(i) would face no penalty as a result of 
omitting certain contraceptive coverage from the benefits of the plan 
participants and beneficiaries. However, while the objection of a plan 
sponsor (or entity that arranges coverage under the plan, as 
applicable) removes penalties from that plan's issuer, it only does so 
for that plan--it does not affect the issuer's coverage for other group 
health plans where the plan sponsor has no qualifying objection. More 
information on the effects of the objection of a health insurance 
issuer in Sec.  147.132(a)(1)(iii) is included below.
    The exemptions in Sec.  147.132(a)(1) apply ``to the extent'' of 
the objecting entities' sincerely held religious convictions. Thus, 
entities that hold a requisite objection to covering some, but not all, 
contraceptive items would be exempt with respect to the items to which 
they object, but not with respect to the items to which they do not 
object. Some commenters said it was unclear whether the plans of 
entities or individuals that religiously object to some but not all 
contraceptives would be exempt from being required to cover just the 
contraceptive methods as to which there is an objection, or whether the 
objection to some contraceptives leads to an exemption from that plan 
being required to cover all contraceptives. The Departments intend that 
a requisite religious objection against some but not all contraceptives 
would lead to an exemption only to the extent of that objection: That 
is, the exemption would encompass only the items to which the relevant 
entity or individual objects, and would not encompass contraceptive 
methods to which the objection does not apply. To make this clearer, in 
these final rules, the Departments finalize the prefatory language of 
Sec.  147.132(a) with the following change, so that the final rules 
state that an exemption shall be included, and the Guidelines must not 
provide for contraceptive coverage, ``to the extent of the objections 
specified below.''
    The Departments have made corresponding changes to language 
throughout the regulatory text, to describe the exemptions as applying 
``to the extent'' of the objection(s).

C. Scope of Religious Exemptions and Requirements for Exempt Entities 
(45 CFR 147.132)

    In 45 CFR 147.132(a)(1)(i) through (iii) and (b), the Religious IFC 
expands the exemption to plans of additional entities and individuals 
not encompassed by the exemption set forth in the regulations prior to 
the Religious IFC. Specific entities to which the expanded exemptions 
apply are discussed below.
    The exemptions contained in previous regulations, at Sec.  
147.131(a), did not require exempt entities to submit any particular 
self-certification or notice, either to the government or to their 
issuer or third party administrator, in order to obtain or qualify for 
the exemption. Similarly, under the expanded exemptions in Sec.  
147.132, the Religious IFC did not require exempt entities to comply 
with a self-certification process. We finalize that approach in this 
respect without change. Although exempt entities do not need to file 
notices or certifications of their exemption, and these final rules do 
not impose any new notice requirements on them, existing ERISA rules 
governing group health plans require that, with respect to plans 
subject to ERISA, a plan document must include a comprehensive summary 
of the benefits covered by the plan and a statement of the conditions 
for eligibility to receive benefits. Under ERISA, the plan document 
identifies what benefits are provided to participants and beneficiaries 
under the plan; if an objecting employer would like to exclude all or a 
subset of contraceptive services, it must ensure that the exclusion is 
clear in the plan document. Moreover, if there is a reduction in a 
covered service or benefit, the plan has to disclose that change to 
plan participants.\55\ Thus, where an exemption applies and all (or a 
subset of) contraceptive services are omitted from a plan's coverage, 
otherwise applicable ERISA disclosure documents must reflect the 
omission of coverage in ERISA plans. These existing disclosure 
requirements serve to help provide notice to participants and 
beneficiaries of what ERISA plans do and do not cover.
---------------------------------------------------------------------------

    \55\ See, for example, 29 U.S.C. 1022, 1024(b), 29 CFR 2520.102-
2, 102-3, & 104b-3(d), and 29 CFR 2590.715-2715. See also 45 CFR 
147.200 (requiring disclosure of the ``exceptions, reductions, and 
limitations of the coverage,'' including group health plans and 
group and individual issuers).
---------------------------------------------------------------------------

    Some commenters supported the expanded exemption's approach which 
maintained the policy of the previous exemption in not requiring exempt 
entities to comply with a self-certification process. They suggested 
that self-certification forms for an exemption are not necessary, could 
add burdens to exempt entities beyond those imposed by the previous 
exemption, and could give rise to religious objections to the self-
certification process itself. Commenters also stated that requiring an 
exemption form for exempt entities could cause additional operational 
burdens for plans that have existing processes in place to handle 
exemptions. Other commenters, however, favored including a self-
certification process for exempt entities. They suggested that entities 
might abuse the availability of an exemption or use exempt status 
insincerely if no self-certification process exists, and that the 
Mandate might be difficult to enforce without a self-certification 
process. Some commenters asked that the government publish a list of 
entities that claim the exemption.
    The Departments believe it is appropriate to not require exempt 
entities to submit a self-certification or notice. The previous 
exemption did not require a self-certification or notice, and the 
Departments did not collect a list of all entities that used the 
exemption. The Departments believe the approach under the previous 
exemption is appropriate for the expanded exemption. Adding a self-
certification or notice to the exemption process would impose an 
additional paperwork burden on exempt entities that the previous 
regulations did not impose, and would also involve additional public 
costs if those certifications or notices were to be reviewed or kept on 
file by the government.
    The Departments are not aware of instances where the lack of a 
self-certification under the previous exemption led to abuses or to an 
inability to engage in enforcement. The Mandate is enforceable through 
various mechanisms in the PHS Act, the Code, and ERISA. Entities that 
insincerely or otherwise improperly operate as if they are exempt would 
do so at the risk of enforcement under such mechanisms. The Departments 
are not aware of sufficient reasons to believe those measures and 
mechanisms would fail to deter entities from improperly operating as if 
they are exempt. Moreover, as noted above, ERISA and other plan 
disclosure requirements governing group health plans require provision 
of a comprehensive summary of the benefits covered by the plan and 
disclosure of any reductions in covered services or benefits, so 
beneficiaries in plans that reduce or eliminate contraceptive benefits 
as a result of the exemption will know whether their health plan claims 
an exemption and will be able to raise appropriate challenges to such 
claims. As a consequence, the Departments believe it is an appropriate 
balance of various concerns expressed by commenters for these rules to 
continue to not require notices or self-certifications for using the 
exemption.

[[Page 57559]]

    Some commenters asked the Departments to add language indicating 
that an exemption cannot be invoked in the middle of a plan year, nor 
should it be used to the extent inconsistent with laws that apply to, 
or state approval of, fully insured plans. None of the previous 
iterations of the exemption regulations included such provisions, and 
the Departments do not consider them necessary in these rules. The 
expanded exemptions in these rules only purport to exempt plans and 
entities from the application of the federal contraceptive coverage 
requirement of the Guidelines issued under section 2713(a)(4). They do 
not purport to exempt entities or plans from state laws concerning 
contraceptive coverage, or laws governing whether an entity can make a 
change (of whatever kind) during a plan year. The rules governing the 
accommodation likewise do not purport to obviate the need to follow 
otherwise applicable rules about making changes during a plan year. 
(Below, these rules discuss in more detail the accommodation and when 
an entity seeking to revoke it would be able to do so or to notify plan 
participants of the revocation.)
    Commenters also asked that clauses be added to the regulatory text 
holding issuers harmless where exemptions are invoked by plan sponsors. 
As discussed above, the exemption rules already specify that, where an 
exemption applies to a group health plan, it encompasses both the group 
health plan and health insurance coverage provided in connection with 
the group health plan, and therefore encompasses any impact on the 
issuer of the contraceptive coverage requirement with respect to that 
plan. In addition, as discussed below, the Departments are including, 
in these final rules, language from the previous regulations protecting 
issuers that act in reliance on certain representations made in the 
accommodation process. To the extent that commenters seek language 
offering additional protections for other incidents that might occur in 
connection with the invocation of an exemption, the previous exemption 
regulations did not include such provisions, and the Departments do not 
consider them necessary in these final rules. As noted above, the 
expanded exemptions in these final rules simply remove or narrow the 
contraceptive Mandate contained in and derived from the Guidelines for 
certain plans. The previous regulations included a reliance clause in 
the accommodation provisions, but did not specify further details 
regarding the relationship between exempt entities and their issuers or 
third party administrators.
    Regarding the Religious IFC's expansion of the exemption to other 
kinds of entities and individuals in general, commenters disagreed 
about the likely effects of the exemptions on the health coverage 
market. Some commenters said that expanding the exemptions would not 
cause complications in the market, while others said that it could, due 
to such causes as a lack of uniformity among plans or permitting 
multiple risk pools. The Departments note that the extent to which 
plans cover contraception under the prior regulations is already far 
from uniform. Congress did not require all entities to comply with 
section 2713 of the PHS Act (under which the Mandate was promulgated)--
most notably by exempting grandfathered plans. Moreover, under the 
previous regulations, issuers were already able to offer plans that 
omit contraceptives--or offer only some contraceptives--to houses of 
worship and integrated auxiliaries; some commenters and litigants said 
that issuers were doing so. These cases where plans did not need to 
comply with the Mandate, and the Departments' previous accommodation 
process allowing coverage not to be provided in certain self-insured 
church plans, together show that the importance of a uniform health 
coverage system is not significantly harmed by allowing plans to omit 
contraception in some contexts.\56\
---------------------------------------------------------------------------

    \56\ See also Real Alternatives v. Sec'y, Dep't of Health & 
Human Servs., 867 F.3d 338, 389 (3d Cir. 2017) (Jordan, J., 
concurring in part and dissenting in part) (``Because insurance 
companies would offer such plans as a result of market forces, doing 
so would not undermine the government's interest in a sustainable 
and functioning market. . . . Because the government has failed to 
demonstrate why allowing such a system (not unlike the one that 
allowed wider choice before the ACA) would be unworkable, it has not 
satisfied strict scrutiny.'' (citation and internal quotation marks 
omitted)).
---------------------------------------------------------------------------

    Concerning the prospect raised by commenters of different risk 
pools between men and women, PHS Act section 2713(a) itself provides 
for some preventive services coverage that applies to both men and 
women, and some that would apply only to women. With respect to the 
latter, it does not specify what, if anything, HRSA's Guidelines for 
women's preventives services would cover, or if contraceptive coverage 
would be required. These rules do not require issuers to offer products 
that satisfy religiously objecting entities or individuals; they simply 
make it legal to do so. The Mandate has been imposed only relatively 
recently, and the contours of its application to religious entities has 
been in continual flux, due to various rulemakings and court orders. 
Overall, concerns raised by some public commenters have not led the 
Departments to consider it likely that offering these expanded 
exemptions will cause any injury to the uniformity or operability of 
the health coverage market.

D. Plan Sponsors in General (45 CFR 147.132(a)(1)(i) Prefatory Text)

    With respect to employers and others that sponsor group health 
plans, in Sec.  147.132(a)(1)(i), the Religious IFC provided exemptions 
for non-governmental plan sponsors that object to coverage of all, or a 
subset of, contraceptives or sterilization and related patient 
education and counseling based on sincerely held religious beliefs. The 
Departments finalize the prefatory text of Sec.  147.132(a)(1)(i) 
without change.
    The expanded exemptions covered any kind of non-governmental 
employer plan sponsor with the requisite objections, stating the 
exemption encompassed ``[a] group health plan and health insurance 
coverage provided in connection with a group health plan to the extent 
the non-governmental plan sponsor objects as specified in paragraph 
(a)(2) of this section.'' For the sake of clarity, the expanded 
exemptions also stated that ``[s]uch non-governmental plan sponsors 
include, but are not limited to, the following entities,'' followed by 
an illustrative, non-exhaustive list of non-governmental organizations 
whose objections qualify the plans they sponsor for an exemption. Each 
type of such entities, and comments specifically concerning them, are 
discussed below.
    The plans of governmental employers are not covered by the plan 
sponsor exemption in Sec.  147.132(a)(1)(i). Some commenters suggested 
that the expanded religious exemptions should include government 
entities. Others disagreed. The Departments are not aware of reasons 
why it would be appropriate or necessary to offer a religious exemption 
to governmental employer plan sponsors with respect to the 
contraceptive Mandate. We are unaware of government entities that would 
attempt to assert a religious exemption to the Mandate, and it is not 
clear to us that a governmental entity could do so. Accordingly, we 
conclude that it is appropriate for us to not further expand the 
religious exemption to include governmental entities in the religious 
plan-sponsor exemption.
    Nevertheless, as discussed below, governmental employers are 
permitted to respect an individual's objection under Sec.  147.132(b) 
and, thus, to provide

[[Page 57560]]

health coverage without the objected-to contraceptive coverage to such 
individual. Where that exemption is operative, the Guidelines may not 
be construed to prevent a willing governmental plan sponsor of a group 
health plan from offering a separate benefit package option, or a 
separate policy, certificate or contract of insurance, to any 
individual who objects to coverage or payments for some or all 
contraceptive services based on sincerely held religious beliefs.
    By the general extension of the exemption to the plans of plan 
sponsors in Sec.  147.132(a)(1)(i), these final rules also exempt group 
health plans sponsored by an entity other than an employer (for 
example, a union, or a sponsor of a multiemployer plan) that objects 
based on sincerely held religious beliefs to coverage of contraceptives 
or sterilization. Some commenters objected to extending the exemption 
to such entities, arguing that they could not have the same kind of 
religious objection that a single employer might have. Other commenters 
supported the protection of any plan sponsor with the requisite 
religious objection. The Departments conclude that it is appropriate, 
where the plan sponsor of a union, multiemployer, or similar plan 
adopts a religious objection using the same procedures that such a plan 
sponsor might use to make other decisions, that the expanded exemptions 
should respect that decision by providing an exemption from the 
Mandate.

E. Houses of Worship and Integrated Auxiliaries (45 CFR 
147.132(a)(1)(i)(A))

    As noted above, the exemption in the previous regulations, found at 
Sec.  147.131(a), included only ``an organization that is organized and 
operates as a nonprofit entity and is referred to in section 
6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as 
amended.'' Section 6033(a)(3)(A)(i) or (iii) of the Code encompasses 
``churches, their integrated auxiliaries, and conventions or 
associations of churches,'' and ``the exclusively religious activities 
of any religious order.''
    The Religious IFC expanded the exemption to include, in Sec.  
147.132(a)(1)(i)(A), plans sponsored by ``[a] church, an integrated 
auxiliary of a church, a convention or association of churches, or a 
religious order.'' Most commenters did not oppose the exemptions 
continuing to include these entities, although some contended that the 
Departments have no authority to exempt any entity or plan from the 
Mandate, an objection to which the Departments respond above. Notably, 
this exemption exempts ``a religious order,'' and not merely ``the 
exclusively religious activities of any religious order.'' In addition, 
section 6033(a)(3)(A)(i) specifies that it covers churches, not merely 
``the exclusively religious activities'' of a church. Some religious 
people might express their beliefs through a church, others might do so 
through a religious order, and still others might do so through 
religious bodies that take a different form, structure, or nomenclature 
based on a different cultural or historical tradition. Cf. Hosanna-
Tabor Evangelical Lutheran Church and School v. E.E.O.C., 565 U.S. 171, 
198 (2012) (Alito and Kagan, JJ., concurring) (``The term `minister' is 
commonly used by many Protestant denominations to refer to members of 
their clergy, but the term is rarely if ever used in this way by 
Catholics, Jews, Muslims, Hindus, or Buddhists.''). For the purposes of 
respecting the exercise of religious beliefs, which the expanded 
exemptions in these rules concern, the Departments find it appropriate 
that this part of the exemption encompasses religious orders and 
churches similarly, without limiting the scope of the protection to the 
exclusively religious activities of either kind of entity. Based on all 
these considerations, the Departments finalize Sec.  
147.132(a)(1)(i)(A) without change.
    Moreover, the Departments also finalize the regulatory text to 
exempt plans ``established or maintained by'' a house of worship or 
integrated auxiliary on a plan, not employer, basis. Under previous 
regulations, the Departments stated that ``the availability of the 
exemption or accommodation [was to] be determined on an employer by 
employer basis, which the Departments . . . believe[d] best balance[d] 
the interests of religious employers and eligible organizations and 
those of employees and their dependents.'' (78 FR 39886 (emphasis 
added)). Therefore, under the prior exemption, if an employer 
participated in a house of worship's plan--perhaps because it was 
affiliated with a house of worship--but was not an integrated auxiliary 
or a house of worship itself, that employer was not covered by the 
exemption, even though it was, in the ordinary meaning of the text of 
the prior regulation, participating in a ``plan established or 
maintained by a [house of worship].'' Upon further consideration, in 
the Religious IFC, the Departments changed their view on this issue and 
expanded the exemption for houses of worship and integrated 
auxiliaries. Under these rules, the Departments intend that, when this 
regulation text exempts a plan ``established or maintained by'' a house 
of worship or integrated auxiliary, such exemption will no longer ``be 
determined on an employer by employer basis,'' but will be determined 
on a plan basis--that is, by whether the plan is a ``plan established 
or maintained by'' a house of worship or integrated auxiliary. This 
interpretation better conforms to the text of the regulation setting 
forth the exemption--in both the prior regulation and in the text set 
forth in these final rules. It also offers appropriate respect to 
houses of worship and their integrated auxiliaries not only in their 
internal employment practices, but in their choice of organizational 
form and/or in their activity of establishing or maintaining health 
plans for employees of associated employers that do not meet the 
requirement of being integrated auxiliaries. Under this interpretation, 
houses of worship would not be faced with the potential of having to 
include, in the plans that they have established and maintained, 
coverage for services to which they have a religious objection for 
employees of an affiliated employer participating in the plans.
    The Departments do not believe there is a sufficient factual basis 
to exclude from this part of the exemption entities that are so closely 
associated with a house of worship or integrated auxiliary that they 
are permitted to participate in its health plan but are not themselves 
integrated auxiliaries. Additionally, this interpretation is not 
inconsistent with the operation of the accommodation under the prior 
regulation where with respect to self-insured church plans, hundreds of 
nonprofit religious entities participating in those plans were provided 
a mechanism by which their plan participants would not receive 
contraceptive coverage through the plan or third party 
administrator.\57\
---------------------------------------------------------------------------

    \57\ See supra at II.A.3.
---------------------------------------------------------------------------

    Therefore, the Departments believe it is most appropriate to use a 
plan basis, not an employer by employer basis, to determine the scope 
of an exemption for a group health plan established or maintained by a 
house of worship or integrated auxiliary.

F. Nonprofit Organizations (45 CFR 147.132(a)(1)(i)(B))

    The exemption under previous regulations did not encompass 
nonprofit religious organizations beyond one that is organized and 
operates as a nonprofit entity and is referred to in section 
6033(a)(3)(A)(i) or (iii) of the Code. The Religious IFC expanded the 
exemption to include plans sponsored by any other

[[Page 57561]]

``nonprofit organization,'' Sec.  147.132(a)(1)(i)(B), if it has the 
requisite religious objection under Sec.  147.132(a)(2) (see Sec.  
147.132(a)(1)(i) introductory text). The Religious IFC also specified 
in Sec.  147.132(a)(1)(i)(A), as under the prior exemption, that the 
exemption covers ``a group health plan established or maintained by . . 
. [a] church, the integrated auxiliary of a church, a convention or 
association of churches, or a religious order.'' (Hereinafter ``houses 
of worship and integrated auxiliaries.'') These rules finalize, without 
change, the text of Sec.  147.132(a)(1)(i)(A) and (B).
    The Departments received comments in support of, and in opposition 
to, this expansion. Some commenters supported the expansion of the 
exemptions beyond houses of worship and integrated auxiliaries to other 
nonprofit organizations with religious objections (referred to herein 
as ``religious nonprofit'' organizations, groups or employers). They 
said that religious belief and exercise in American law has not been 
limited to worship, that religious people engage in service and social 
engagement as part of their religious exercise, and, therefore, that 
the Departments should respect the religiosity of nonprofit groups even 
when they are not houses of worship and integrated auxiliaries. Some 
public commenters and litigants have indicated that various religious 
nonprofit groups possess deep religious commitments even if they are 
not houses of worship or their integrated auxiliaries. Other commenters 
did not support the expansion of exemptions to nonprofit organizations. 
Some of them described churches as having a special status that should 
not be extended to religious nonprofit groups. Some others contended 
that women at nonprofit religious organizations may support or wish to 
use contraceptives and that if the exemptions are expanded, it would 
deprive all or most of the employees of various religious nonprofit 
organizations of contraceptive coverage.
    After evaluating the comments, the Departments continue to believe 
that an expanded exemption is the appropriate administrative response 
to the substantial burdens on sincere religious beliefs imposed by the 
contraceptive Mandate, as well as to the litigation objecting to the 
same. We agree with the comments that religious exercise in this 
country has long been understood to encompass actions outside of houses 
of worship and their integrated auxiliaries. The Departments' previous 
assertion that the exemptions were intended to respect a certain sphere 
of church autonomy (80 FR 41325) is not, in itself, grounds to refuse 
to extend the exemptions to other nonprofit entities with religious 
objections. Respect for churches does not preclude respect for other 
religious entities. Among religious nonprofit organizations, the 
Departments no longer adhere to our previous assertion that ``[h]ouses 
of worship and their integrated auxiliaries that object to 
contraceptive coverage on religious grounds are more likely than other 
employers to employ people of the same faith who share the same 
objection.'' (78 FR 39874.) It is not clear to the Departments that the 
percentage of women who work at churches that oppose contraception, but 
who support contraception, is lower than the percentage of woman who 
work at nonprofit religious organizations that oppose contraception on 
religious grounds, but who support contraception. In addition, public 
comments and litigation reflect that many nonprofit religious 
organizations publicly describe their religiosity. Government records 
and those groups' websites also often reflect those groups' religious 
character. If a person who desires contraceptive coverage works at a 
nonprofit religious organization, the Departments believe it is 
sufficiently likely that the person would know, or would know to ask, 
whether the organization offers such coverage. The Departments are not 
aware of federal laws that would require a nonprofit religious 
organization that opposes contraceptive coverage to hire a person who 
the organization knows disagrees with the organization's view on 
contraceptive coverage. Instead, nonprofit organizations generally have 
access to a First Amendment right of expressive association and 
religious free exercise to choose to hire persons (or, in the case of 
students, to admit them) based on whether they share, or at least will 
be respectful of, their beliefs.\58\
---------------------------------------------------------------------------

    \58\ Notably, ``the First Amendment simply does not require that 
every member of a group agree on every issue in order for the 
group's policy to be `expressive association.' '' Boy Scouts of 
America v. Dale, 530 U.S. 640, 655 (2000).
---------------------------------------------------------------------------

    In addition, it is not at all clear to the Departments that 
expanding the exemptions would, as some commenters asserted, remove 
contraceptive coverage from employees of many large religious nonprofit 
organizations. Many large religious nonprofit employers, including but 
not limited to some Catholic hospitals, notified the Department under 
the last Administration that they had opted into the accommodation and 
expressed no objections to doing so. We also received public comments 
from organizations of similar nonprofit employers indicating that the 
accommodation satisfied their religious objections. These final rules 
leave the accommodation in place as an optional process. Thus, it is 
not clear to the Departments that all or most of such large nonprofit 
employers will choose to use the expanded exemption instead of the 
accommodation. If they continue to use the accommodation, their 
insurers or third party administrators would continue to be required to 
provide contraceptive coverage to the plan sponsors' employees through 
such accommodation.
    Given the sincerely held religious beliefs of many nonprofit 
religious organizations, some commenters also contended that continuing 
to impose the contraceptive Mandate on certain nonprofit religious 
objectors might also undermine the Government's broader interests in 
ensuring health coverage by causing some entities to stop providing 
health coverage entirely.\59\ Although the Departments do not know the 
extent to which that effect would result from not extending exemptions, 
we wish to avoid that potential obstacle to the general expansion of 
health coverage.
---------------------------------------------------------------------------

    \59\ See, e.g., Manya Brachear Pashman, ``Wheaton College ends 
coverage amid fight against birth control mandate,'' Chicago 
Tribune, July 29, 2015; Laura Bassett, ``Franciscan University Drops 
Entire Student Health Insurance Plan Over Birth Control Mandate,'' 
HuffPost, May 15, 2012.
---------------------------------------------------------------------------

G. Closely Held For-Profit Entities (45 CFR 147.132(a)(1)(i)(C))

    The previous regulations did not exempt plans sponsored by closely 
held for-profit entities; however, the Religious IFC included in its 
list of exempt plan sponsors, at Sec.  147.132(a)(1)(i)(C), ``[a] 
closely held for-profit entity.'' These rules finalize Sec.  
147.132(a)(1)(i)(C) without change.
    Some commenters supported including these entities in the 
exemption, saying owners of such entities exercise their religious 
beliefs through their businesses and should not be burdened by a 
federal governmental contraceptive Mandate. Other commenters opposed 
extending the exemption to closely held for-profit entities, saying the 
entities cannot exercise religion or should not have their religious 
opposition to contraceptive coverage protected by the exemption. Some 
said the entities should not be able to impose their beliefs about 
contraceptive coverage on their employees, and that doing so 
constitutes discrimination.
    As set forth in the Religious IFC, the Departments believe it is 
appropriate to expand the exemptions to include closely held for-profit 
employers in

[[Page 57562]]

order to protect the religious exercise of those entities and their 
owners. The ACA did not apply the preventive services mandate to the 
many grandfathered health plans among closely held as well as publicly 
traded for-profit entities, encompassing tens of millions of women. As 
explained below, we are not aware of evidence showing that the expanded 
exemptions finalized here will impact such a large number of women. 
And, in the Departments' view, the decision by Congress to not apply 
the preventive services mandate to grandfathered plans did not 
constitute improper discrimination or an imposition of beliefs. We also 
do not believe RFRA or the large number of other statutory exemptions 
Congress has provided for religious beliefs (including those exercised 
for profit) in certain health contexts such as sterilization, 
contraception, or abortion have been improper.
    Including closely held for-profit entities in the exemption is also 
consistent with the Supreme Court's ruling in Hobby Lobby, which 
declared that a corporate entity is capable of possessing and pursuing 
non-pecuniary goals (in Hobby Lobby, the pursuit of religious beliefs), 
regardless of whether the entity operates as a nonprofit organization, 
and rejected the previous Administration's argument to the contrary. 
134 S. Ct. at 2768-75. Some reports and industry experts have indicated 
that few for-profit entities beyond those that had originally 
challenged the Mandate have sought relief from it after Hobby 
Lobby.\60\
---------------------------------------------------------------------------

    \60\ See Jennifer Haberkorn, ``Two years later, few Hobby Lobby 
copycats emerge,'' Politico (Oct. 11, 2016), http://www.politico.com/story/2016/10/obamacare-birth-control-mandate-employers-229627.
---------------------------------------------------------------------------

H. For-Profit Entities That Are Not Closely Held (45 CFR 
147.132(a)(1)(i)(D))

    The previous regulations did not exempt for-profit entities that 
are not closely held. However, the Religious IFC included in its list 
of exempt plan sponsors, at Sec.  147.132(a)(1)(i)(D), ``[a] for-profit 
entity that is not closely held.'' These rules finalize Sec.  
147.132(a)(1)(i)(D) without change.
    Under Sec.  147.132(a)(1)(i)(D), the rules extend the exemption to 
the plans of for-profit entities that are not closely held. Some 
commenters supported including such entities, including publicly traded 
businesses, in the scope of the exemption. Some of them said that 
publicly traded entities have historically taken various positions on 
important public concerns beyond merely (and exclusively) seeking the 
company's own profits, and that nothing in principle would preclude 
them from using the same mechanisms of corporate decision-making to 
exercise religious views against contraceptive coverage. They also said 
that other protections for religious beliefs in federal health care 
conscience statutes do not preclude the application of such protections 
to certain entities on the basis that they are not closely held, and 
federal law defines ``persons,'' protected under RFRA, to include 
corporations at 1 U.S.C. 1. Other commenters opposed including publicly 
traded companies in the expanded exemptions. Some of these commenters 
stated that such companies could not exercise religious beliefs, and 
opposed the effects on women if they could. These commenters also 
objected that including such employers, along with closely held 
businesses, would extend the exemptions to all or virtually all 
employers.
    The Departments conclude it is appropriate to include entities that 
are not closely held within the expanded exemptions for entities with 
religious objection. RFRA prohibits the federal government from 
``substantially burden[ing] a person's exercise of religion . . . .'' 
unless it demonstrates that the application of the burden to the 
person'' is the least restrictive means to achieve a compelling 
governmental interest. 42 U.S.C. 2000bb-1(a) & (b). As commenters 
noted, the definition of ``person'' applicable in RFRA is found at 1 
U.S.C. 1, which defines ``person'' as including ``corporations, 
companies, associations, firms, partnerships, societies, and joint 
stock companies, as well as individuals.'' Accordingly, the 
Departments' decision to extend the religious exemption to publicly 
traded for profit corporations is supported by the text of RFRA. The 
mechanisms for determining whether a company has adopted and holds 
certain principles or views, such as sincerely held religious beliefs, 
is a matter of well-established State law with respect to corporate 
decision-making,\61\ and the Departments expect that application of 
such laws would cabin the scope of this exemption.
---------------------------------------------------------------------------

    \61\ Although the Departments do not prescribe any form or 
notification, they would expect that such principles or views would 
have been adopted and documented in accordance with the laws of the 
jurisdiction under which the organization is incorporated or 
organized.
---------------------------------------------------------------------------

    As to the impact of so extending the religious exemption, the 
Departments are not aware of any publicly traded entities that have 
publicly objected to providing contraceptive coverage on the basis of 
religious belief. As noted above, before the ACA, a substantial 
majority of employers covered contraceptives. Some commenters opposed 
to including publicly traded entities in these exemptions noted that 
there did not appear to be any known religiously motivated objections 
to the Mandate from publicly traded for-profit corporations. These 
comments support our estimates that including publicly traded entities 
in the exemptions will have little, if any effect, on contraceptive 
coverage for women. We likewise agree with the Supreme Court's 
statement in Hobby Lobby that it is unlikely that many publicly traded 
companies will adopt religious objections to offering women 
contraceptive coverage. See 134 S. Ct. at 2774. Some commenters 
contended that, because many closely held for-profit businesses 
expressed religious objections to the Mandate, or took advantage of the 
accommodation, it is likely that many publicly traded businesses will 
do so. The Departments agree it is possible that publicly traded 
businesses may use the expanded exemption. But while scores of closely 
held for-profit businesses filed suit against the Mandate, no publicly 
traded entities did so, even though they were not authorized to seek 
the accommodation. Based on these data points, we believe the impact of 
the extension of the exemption to publicly traded for-profit 
organizations will not be significant. Below, based on limited data, 
but on years of receiving public comments and defending litigation 
brought by organizations challenging the Mandate on the basis of their 
religious objections, our best estimate of the anticipated effects of 
these rules is that no publicly traded employers will invoke the 
religious exemption.
    In the Departments' view, such estimate does not lead to the 
conclusion that the religious exemption should not be extended to 
publicly traded corporations. The Departments are generally aware that, 
in a country as large as the U.S., comprised of a supermajority of 
religious persons,\62\ some publicly traded entities might claim a 
religious character for their company, or the majority of shares (or 
voting shares) of some publicly traded companies might be controlled by 
a small group of religiously devout persons so as to set forth such a 
religious character.\63\ Thus we consider

[[Page 57563]]

it possible that a publicly traded company might have religious 
objections to contraceptive coverage. Moreover, as noted, there are 
many closely held for-profit corporations that do have religious 
objections to covering some or all contraceptives. The Departments do 
not want to preclude such a closely held corporation from having to 
decide between relinquishing the exemption or financing future growth 
by sales of stock, which would be the effect of denying it the 
exemption if it changes its status and became a publicly traded entity. 
The Departments also find it relevant that other federal conscience 
statutes, such as those applying to hospitals or insurance companies, 
do not exclude publicly traded businesses from protection.\64\ As a 
result, the Departments continue to consider it appropriate not to 
exclude such entities from these expanded exemptions.
---------------------------------------------------------------------------

    \62\ For example, in 2017, 74 percent of Americans said that 
religion is fairly important or very important in their lives, and 
87 percent of Americans said they believe in God. Gallup, 
``Religion,'' available at https://news.gallup.com/poll/1690/religion.aspx.
    \63\ See, for example, Kapitall, ``4 Publicly Traded Religious 
Companies if You're Looking to Invest in Faith'' (Feb. 7, 2014), 
http://www.nasdaq.com/article/4-publicly-traded-religious-companies-if-youre-looking-to-invest-in-faith-cm324665.
    \64\ See, for example, 42 U.S.C. 300a-7, 42 U.S.C. 238n, 
Consolidated Appropriations Act of 2018, Div. H, Sec. 507(d), Public 
Law 115-141, and id. at Div. E, Sec. 808.
---------------------------------------------------------------------------

I. Other Non-Governmental Employers (45 CFR 147.132(a)(1)(i)(E))

    As noted above, the exemption in the previous regulations, found at 
Sec.  147.131(a), included only churches, their integrated auxiliaries, 
conventions or associations of churches, and the exclusively religious 
activities of any religious order. The Religious IFC included, in its 
list of exempt plan sponsors at Sec.  147.132(a)(1)(i)(E), ``[a]ny 
other non-governmental employer.'' These rules finalize Sec.  
147.132(a)(1)(i)(E) without change.
    Some commenters objected to extending the exemption to other 
nongovernmental employers, asserting that it is not clear such 
employers should be protected, nor that they can assert religious 
objections. The Departments, however, agree with other commenters that 
supported that provision of the Religious IFC. The Departments believe 
it is appropriate that any nongovernmental employer asserting the 
requisite religious objections should be protected from the Mandate in 
the same way as other plan sponsors. Such other employers could 
include, for example, association health plans.\65\ The reasons 
discussed above for providing the exemption to various specific kinds 
of employers, and for their ability to assert sincerely held religious 
beliefs using ordinary mechanisms of corporate decision-making, 
generally apply to other nongovernmental employers as well, if they 
have sincerely held religious beliefs opposed to contraceptive coverage 
and otherwise meet the requirements of these rules. We agree with 
commenters who contend there is not a sufficient basis to exclude other 
nongovernmental employers from the exemption.
---------------------------------------------------------------------------

    \65\ See 29 CFR 2510.3-5.
---------------------------------------------------------------------------

J. Plans Established or Maintained by Objecting Nonprofit Entities (45 
CFR 147.132(a)(1)(ii))

    Based on the expressed intent in the Religious IFC, as discussed 
above, to expand the exemption to encompass plans established or 
maintained by nonprofit organizations with religious objections, and on 
public comments received concerning those exemptions, these rules 
finalize new language in Sec.  147.132(a)(1)(ii) to better clarify the 
scope and application of the exemptions.
    The preamble to the Religious IFC contained several discussions 
about the Departments' intent to exempt plans established or maintained 
by certain religious organizations that have the requisite objection to 
contraceptive coverage, including instances in which the plans 
encompass multiple employers. For example, as noted above, the 
Departments intended that the exemption for houses of worship and 
integrated auxiliaries be interpreted to apply on a plan basis, instead 
of on an employer-by-employer basis. In addition, the Departments 
discussed at length the fact that, under the prior regulations, where 
an entity was enrolled in a self-insured church plan exempt from ERISA 
under ERISA section 3(33) and the accommodation in the previous 
regulations was used, that accommodation process provided no mechanism 
to impose, or enforce, the accommodation requirement of contraceptive 
coverage against a third party administrator of such a plan. As a 
result, the prior accommodation served, in effect, as an exemption from 
requirements of contraceptive coverage for all organizations and 
employers covered under a self-insured church plan.
    In response to these discussions in the Religious IFC, some 
commenters, including some church plans, supported the apparent intent 
to exempt such plans on a plan basis, but suggested that additional 
clarification is needed in the text of the rule to effect this intent. 
They observed that some plans are established or maintained by 
religious nonprofit entities that might not be houses of worship or 
integrated auxiliaries, and that some employers that adopt or 
participate in such plans may not be the ``plan sponsors.'' They 
recommended, therefore, that the final rules specify that the exemption 
applies on a plan basis when plans are established or maintained by 
houses of worship, integrated auxiliaries, or religious nonprofits, so 
as to shield employers that adopt such plans from penalties for 
noncompliance with the Mandate.
    The text of the prefatory language of Sec.  147.132(a)(1), as set 
forth in the Religious IFC, declared that the Guidelines would not 
apply ``with respect to a group health plan established or maintained 
by an objecting organization, or health insurance coverage offered or 
arranged by an objecting organization.'' We intended this language to 
exempt a plan and/or coverage where the entity that established or 
maintained a plan was an objecting organization, and not just to look 
at the views or status of individual employers (or other entities) 
participating in such plan. The Departments agree with commenters who 
stated that additional clarity is needed and appropriate in these final 
rules, in order to ensure that such plans are exempt on a plan basis, 
and that employers joining or adopting those plans are exempt by virtue 
of the plan itself being exempt. Doing so will make the application of 
the expanded exemption clearer, and protect employers (and other 
entities) participating in such plans from penalties for noncompliance 
with the Mandate. Clearer language will better realize the intent to 
exempt plans and coverage ``established or maintained by an objecting 
organization,'' and make the operation of that exemption simpler by 
specifying that the exemption applies based on the objection of the 
entity that established or maintains the plan. Such language would also 
resolve the anomaly that, under the previous rules, only self-insured 
church plans (not insured church plans) under ERISA section 3(33) were, 
in effect, exempt--but only indirectly through the Departments' 
inability to impose, or enforce, the accommodation process against the 
third party administrators of such plans, instead of being specifically 
exempt in the rules.
    We believe entities participating in plans established or 
maintained by an objecting organization usually share the views of 
those organizations. Multiple lawsuits were filed against the 
Departments by churches that established or maintained plans, or the 
church plans themselves, and they generally declared that the entities 
or individuals participating in their plans

[[Page 57564]]

are usually required to share their religious affiliation or beliefs. 
In addition, because, as we have stated before, ``providing payments 
for contraceptive services is cost neutral for issuers'' (78 FR 39877), 
we do not believe this clarification would produce any financial 
incentive for entities that do not have religious objections to 
contraceptive coverage to enter into plans established or maintained by 
an organization that does have such objections.
    Therefore, the Departments finalize the text of Sec.  147.132(a)(1) 
of the Religious IFC with the following change: adding a provision that 
makes explicit this understanding, in a new paragraph at Sec.  
147.132(a)(1)(ii). This language now specifies that the exemptions 
encompassed by Sec.  147.132(a)(1) include: ``[a] group health plan, 
and health insurance coverage provided in connection with a group 
health plan, where the plan or coverage is established or maintained by 
a church, an integrated auxiliary of a church, a convention or 
association of churches, a religious order, a nonprofit organization, 
or other organization or association, to the extent the plan sponsor 
responsible for establishing and/or maintaining the plan objects as 
specified in paragraph (a)(2) of this section. The exemption in this 
paragraph applies to each employer, organization, or plan sponsor that 
adopts the plan[.]''

K. Institutions of Higher Education (45 CFR 147.132(a)(1)(iii))

    The previous regulations did not exempt student health plans 
arranged by institutions of higher education, although it did, for 
purposes of the accommodation, treat plans arranged by institutions of 
higher education similar to the way in which the regulations treated 
plans of nonprofit religious employers. See 80 FR at 41347. The 
Religious IFC included in its list of exemptions, at Sec.  
147.132(a)(1)(ii), ``[a]n institution of higher education as defined in 
20 U.S.C. 1002 in its arrangement of student health insurance coverage, 
to the extent that institution objects as specified in paragraph (a)(2) 
of this section. In the case of student health insurance coverage, this 
section is applicable in a manner comparable to its applicability to 
group health insurance coverage provided in connection with a group 
health plan established or maintained by a plan sponsor that is an 
employer, and references to `plan participants and beneficiaries' will 
be interpreted as references to student enrollees and their covered 
dependents.'' These rules finalize this language with a change to 
clarify their application, as discussed below, and by redesignating the 
paragraph as Sec.  147.132(a)(1)(iii).
    These rules treat the plans of institutions of higher education 
that arrange student health insurance coverage similarly to the way in 
which the rules treat the plans of employers. These rules do so by 
making such student health plans eligible for the expanded exemptions, 
and by permitting them the option of electing to utilize the 
accommodation process. Thus, these rules specify, in Sec.  
147.132(a)(1)(iii), that the exemption is extended, in the case of 
institutions of higher education (as defined in 20 U.S.C. 1002) with 
objections to the Mandate based on sincerely held religious beliefs, to 
their arrangement of student health insurance coverage in a manner 
comparable to the applicability of the exemption for group health 
insurance coverage provided in connection with a group health plan 
established or maintained by a plan sponsor that is an employer.
    Some commenters supported including, in the expanded exemptions, 
institutions of higher education that provide health coverage for 
students through student health plans but have religious objections to 
providing certain contraceptive coverage. They said that religious 
exemptions allow freedom for certain religious institutions of higher 
education to exist, and this in turn gives students the choice of 
institutions that hold different views on important issues such as 
contraceptives and abortifacients. Other commenters opposed including 
the exemption, asserting that expanding the exemptions would negatively 
impact female students because institutions of higher education might 
not cover contraceptives in student health plans, women enrolled in 
those plans would not receive access to birth control, and an increased 
number of unintended pregnancies would result among those women.
    In the Departments' view, the reasons for extending the exemptions 
to institutions of higher education are similar to the reasons, 
discussed above, for extending the exemption to other nonprofit 
organizations. Only a minority of students in higher education receive 
health insurance coverage from plans arranged by their colleges or 
universities.\66\ It is necessarily true that an even smaller number 
receive such coverage from religious schools, and from religious or 
other private schools that object to arranging contraceptive coverage. 
Religious institutions of higher education are private entities with 
religious missions. Various commenters asserted the importance, to many 
of those institutions, of being able to adhere to their religious 
tenets. Indeed, many students who attend such institutions do so 
because of the institutions' religious tenets. No student is required 
to attend such an institution. At a minimum, students who attend 
private colleges and universities have the ability to ask those 
institutions in advance what religious tenets they follow, including 
whether the institutions will provide contraceptives in insurance plans 
they arrange. Some students wish to receive contraceptive coverage from 
a health plan arranged by an institution of higher education. But other 
students wish to attend an institution of higher education that adheres 
to its religious mission about contraceptives in health insurance. And 
still other students favor contraception, but are willing to attend a 
religious university without forcing it to violate its beliefs about 
contraceptive coverage. Exempting religious institutions that object to 
contraceptive coverage still allows contraceptive coverage to be 
provided by institutions of higher education more broadly. The 
exemption simply makes it legal under federal law for institutions to 
adhere to religious beliefs that oppose contraception, without facing 
penalties for non-compliance that could threaten their existence. This 
removes a possible barrier to diversity in the nation's higher 
education system, and makes it more possible for students to attend 
institutions of higher education that hold those views.
---------------------------------------------------------------------------

    \66\ The American College Health Association estimates that, in 
2014, student health insurance plans at colleges and universities 
covered ``more than two million college students nationwide.'' ``Do 
You Know Why Student Health Insurance Matters?'' available at 
https://www.acha.org/documents/Networks/Coalitions/Why_SHIPs_Matter.pdf. We assume for the purposes of this estimate 
that those plans covered 2,100,000 million students. Data from the 
Department of Education shows that in 2014, there were 20,207,000 
students enrolled in degree-granting postsecondary institutions. 
National Center for Education Statistics, Table 105.20, ``Enrollment 
in elementary, secondary, and degree-granting postsecondary 
institutions, by level and control of institution, enrollment level, 
and attendance status and sex of student: Selected years, fall 1990 
through fall 2026,'' available at https://nces.ed.gov/programs/digest/d16/tables/dt16_105.20.asp?current=yes.
---------------------------------------------------------------------------

    In addition, under the previous exemption and accommodation, it was 
possible for self-insured church plans exempt from ERISA that have 
religious objection to certain contraceptives to avoid any requirement 
that either they or their third party administrators provide 
contraceptive coverage. As seen

[[Page 57565]]

in some public comments and litigation statements, some such self-
insured church plans provide health coverage for students at 
institutions of higher education covered by those church plans. In 
order to avoid the situation where some student health plans sponsored 
by institutions with religious objections are effectively exempt from 
the contraceptive Mandate, and other student health plans sponsored by 
other institutions with similar religious objections are required to 
comply with the Mandate, the Departments consider it appropriate to 
extend the exemption, so that religious colleges and universities with 
objections to the Mandate would not be treated differently in this 
regard.
    The Departments also note that the ACA does not require 
institutions of higher education to provide student health insurance 
coverage. As a result, some institutions of higher education that 
object to the Mandate appear to have chosen to stop arranging student 
health insurance plans, rather than comply with the Mandate or be 
subject to the accommodation.\67\ Extending the exemption in these 
rules removes an obstacle to such entities deciding to offer student 
health insurance plans, thereby giving students another health 
insurance option.
---------------------------------------------------------------------------

    \67\ See, e.g., Manya Brachear Pashman, ``Wheaton College ends 
coverage amid fight against birth control mandate,'' Chicago 
Tribune, July 29, 2015; Laura Bassett, ``Franciscan University Drops 
Entire Student Health Insurance Plan Over Birth Control Mandate,'' 
HuffPost, May 15, 2012.
---------------------------------------------------------------------------

    As noted above, it is not clear that studies discussing various 
effects of birth control access clearly and specifically demonstrate a 
negative impact to students in higher education because of the expanded 
exemption in these final rules. The Departments consider these expanded 
exemptions to be an appropriate and permissible policy choice in light 
of various interests at stake and the lack of a statutory requirement 
for the Departments to impose the Mandate on entities and plans that 
qualify for these expanded exemptions.
    Finally, the Religious IFC specified that the plan sponsor 
exemption applied to ``non-governmental'' plan sponsors (Sec.  
147.132(a)(1)(i)), including ``[a]ny other non-governmental employer'' 
(Sec.  147.132(a)(1)(i)(E)). Then, in Sec.  147.132(a)(1)(ii), the rule 
specified that the institution of higher education exemption applicable 
to the arrangement of student health insurance coverage applied ``in a 
manner comparable to its applicability to group health insurance 
coverage provided in connection with a group health plan established or 
maintained by a plan sponsor that is an employer.'' Consequently, the 
Religious IFC's expanded exemptions only applied to non-governmental 
institutions of higher education, including for student health 
insurance coverage, not to governmental institutions of higher 
education. Nevertheless, the term ``non-governmental,'' while appearing 
twice in Sec.  147.132(a)(1)(i) concerning plan sponsors, was not 
repeated in in Sec.  147.132(a)(1)(ii). To more clearly specify that 
this limitation was intended to apply to Sec.  147.132(a)(1)(ii), we 
finalize this paragraph with a change by adding the phrase ``which is 
non-governmental'' after the phrase ``An institution of higher 
education as defined in 20 U.S.C. 1002''.

L. Health Insurance Issuers (45 CFR 147.132(a)(1)(iv))

    The previous regulations did not exempt health insurance issuers. 
However, the Religious IFC included in its list of exemptions at Sec.  
147.132(a)(1)(iii), ``[a] health insurance issuer offering group or 
individual insurance coverage to the extent the issuer objects as 
specified in paragraph (a)(2) of this section. Where a health insurance 
issuer providing group health insurance coverage is exempt under this 
paragraph (a)(1)(iii), the plan remains subject to any requirement to 
provide coverage for contraceptive services under Guidelines issued 
under Sec.  [thinsp]147.130(a)(1)(iv) unless it is also exempt from 
that requirement[.]'' These rules finalize this exemption with 
technical changes to clarify the language based on public comments, and 
redesignate the paragraph as Sec.  147.132(a)(1)(iv).
    The Religious IFC extends the exemption to health insurance issuers 
offering group or individual health insurance coverage that sincerely 
hold their own religious objections to providing coverage for 
contraceptive services. Under this exemption, the only plan sponsors--
or in the case of individual insurance coverage, individuals--who are 
eligible to purchase or enroll in health insurance coverage offered by 
an exempt issuer that does not cover some or all contraceptive 
services, are plan sponsors or individuals who themselves object and 
whose plans are otherwise exempt based on their objection. An exempt 
issuer can then offer an exempt health insurance product to an entity 
or individual that is exempt based on either the moral exemptions for 
entities and individuals, or the religious exemptions for entities and 
individuals. Thus, the issuer exemption specifies that, where a health 
insurance issuer providing group health insurance coverage is exempt 
under paragraph (a)(1)(iii) of this section, the plan remains subject 
to any requirement to provide coverage for contraceptive services under 
Guidelines issued under Sec.  147.130(a)(1)(iv), unless it is also 
exempt from that requirement.
    Under these rules, issuers that hold their own objections, based on 
sincerely held religious beliefs, could issue policies that omit 
contraception to plan sponsors or individuals that are otherwise exempt 
based on their religious beliefs, or on their moral convictions under 
the companion final rules published elsewhere in today's Federal 
Register. Likewise, issuers with sincerely held moral convictions, that 
are exempt under those companion final rules, could issue policies that 
omit contraception to plan sponsors or individuals that are otherwise 
exempt based on either their religious beliefs or their moral 
convictions.
    In the separate companion IFC to the Religious IFC--the Moral IFC--
the Departments provided a similar exemption for issuers in the context 
of moral objections, but we used slightly different operative language. 
There, in the second sentence, instead of saying ``the plan remains 
subject to any requirement to provide coverage for contraceptive 
services,'' the exemption stated, ``the group health plan established 
or maintained by the plan sponsor with which the health insurance 
issuer contracts remains subject to any requirement to provide coverage 
for contraceptive services.'' Some commenters took note of this 
difference, and asked the Departments to clarify which language 
applies, and whether the Departments intended any difference in the 
operation of the two paragraphs. The Departments did not intend the 
language to operate differently. The language in the Moral IFC 
accurately, and more clearly, expresses the intent set forth in the 
Religious IFC about how the issuer exemption applies. Consequently, 
these rules finalize the issuer exemption paragraph from the Religious 
IFC with minor technical changes so that the final language will mirror 
language from the Moral IFC, stating that the exemption encompasses: 
``[a] health insurance issuer offering group or individual insurance 
coverage to the extent the issuer objects as specified in paragraph 
(a)(2) of this section. Where a health insurance issuer providing group 
health insurance coverage is exempt under paragraph (a)(1)(iv) of this 
section, the group health plan established or maintained by the plan 
sponsor with

[[Page 57566]]

which the health insurance issuer contracts remains subject to any 
requirement to provide coverage for contraceptive services under 
Guidelines issued under Sec.  147.130(a)(1)(iv) unless it is also 
exempt from that requirement[.]''
    Some commenters supported including this exemption for issuers in 
these rules, both to protect the religious exercise of issuers, and so 
that in the future religious issuers that may wish to specifically 
serve religious plan sponsors would be free to organize. Other 
commenters objected to including an exemption for issuers. Some 
objected that issuers cannot exercise religious beliefs, while others 
objected that exempting issuers would threaten contraceptive coverage 
for women. Some commenters said that it was arbitrary and capricious 
for the Departments to provide an exemption for issuers if we do not 
know that issuers with qualifying religious objections exist.
    The Departments consider it appropriate to provide this exemption 
for issuers. Because the issuer exemption only applies where an 
independently exempt policyholder (entity or individual) is involved, 
the issuer exemption will not serve to remove contraceptive coverage 
obligations from any plan or plan sponsor that is not also exempt, nor 
will it prevent other issuers from being required to provide 
contraceptive coverage in individual or group insurance coverage. The 
issuer exemption therefore serves several interests, even though the 
Departments are not currently aware of existing issuers that would use 
it. As noted by some commenters, allowing issuers to be exempt, at 
least with respect to plan sponsors and plans that independently 
qualify for an exemption, will remove a possible obstacle to religious 
issuers being organized in the future to serve entities and individuals 
that want plans that respect their religious beliefs or moral 
convictions. Furthermore, permitting issuers to object to offering 
contraceptive coverage based on sincerely held religious beliefs will 
allow issuers to continue to offer coverage to plan sponsors and 
individuals, without subjecting them to liability under section 
2713(a)(4), or related provisions, for their failure to provide 
contraceptive coverage. In this way, the issuer exemption serves to 
protect objecting issuers from being required to issue policies that 
cover contraception in violation of the issuers' sincerely held 
religious beliefs, and from being required to issue policies that omit 
contraceptive coverage to non-exempt entities or individuals, thus 
subjecting the issuers to potential liability if those plans are not 
exempt from the Guidelines.
    The Departments reject the proposition that issuers cannot exercise 
religious beliefs. First, since RFRA protects the religious exercise of 
corporations as persons, the religious exercise of health insurance 
issuers--which are generally organized as corporations--is protected by 
RFRA. In addition, many federal health care conscience laws and 
regulations specifically protect issuers or plans. For example, 42 
U.S.C. 1395w-22(j)(3)(B) and 1396u-2(b)(3) protect plans or managed 
care organizations in Medicaid or Medicare Advantage. The Weldon 
Amendment specifically protects, among other entities, provider-
sponsored organizations, health maintenance organizations (HMOs), 
health insurance plans, and ``any other kind of health care 
facilit[ies], organization[s], or plan[s]'' as a ``health care entity'' 
from being required to pay for, or provide coverage of, abortions. See 
for example, Consolidated Appropriations Act of 2018, Public Law 115-
141, Div. H, Sec. 507(d), 132 Stat. 348, 764 (Mar. 23, 2018).\68\ 
Congress also declared this year that ``it is the intent of Congress'' 
to include a ``conscience clause'' which provides exceptions for 
religious beliefs if the District of Columbia requires ``the provision 
of contraceptive coverage by health insurance plans.'' See id. at Div. 
E, Sec. 808, 132 Stat. at 603. In light of the clearly expressed intent 
of Congress to protect religious liberty, particularly in certain 
health care contexts, along with the specific efforts to protect 
issuers, the Departments have concluded that an exemption for issuers 
is appropriate.
---------------------------------------------------------------------------

    \68\ ACA section 1553 protects an identically defined group of 
``health care entities,'' including provider-sponsored 
organizations, HMOs, health insurance plans, and ``any other kind of 
. . . plan,'' from being subject to discrimination on the basis that 
it does not provide any health care item or service furnishing for 
the purpose of assisted suicide, euthanasia, mercy killing, and the 
like. ACA section 1553, 42 U.S.C. 18113.
---------------------------------------------------------------------------

    The issuer exemption does not specifically include third party 
administrators, although the optional accommodation process provided 
under these final rules specifies that third party administrators 
cannot be required to contract with an entity that invokes that 
process. Some religious third party administrators have brought suit in 
conjunction with suits brought by organizations enrolled in ERISA-
exempt church plans. Such plans are now exempt under these final rules, 
and their third party administrators, as claims processors, are under 
no obligation under section 2713(a)(4) to provide benefits for 
contraceptive services, as that section applies only to plans and 
issuers. In the case of ERISA-covered plans, plan administrators are 
obligated under ERISA to follow the plan terms, but it is the 
Departments' understanding that third party administrators are not 
typically designated as plan administrators, and, therefore, would not 
normally act as plan administrators, under section 3(16) of ERISA. 
Therefore, to the Departments' knowledge, it is only under the existing 
accommodation process that third party administrators are required to 
undertake any obligations to provide or arrange for contraceptive 
coverage to which they might object. These rules make the accommodation 
process optional for employers and other plan sponsors, and specify 
that third party administrators that have their own objection to 
complying with the accommodation process may decline to enter into, or 
decline to continue, contracts as third party administrators of such 
plans.

M. Description of the Religious Objection (45 CFR 147.132(a)(2))

    The previous regulations did not specify what, if any, religious 
objection applied to its exemption; however, the Religious IFC set 
forth the scope of the religious objection of objecting entities in 
Sec.  147.132(a)(2), as follows: ``The exemption of this paragraph (a) 
will apply to the extent that an entity described in paragraph (a)(1) 
of this section objects to its establishing, maintaining, providing, 
offering, or arranging (as applicable) coverage, payments, or a plan 
that provides coverage or payments for some or all contraceptive 
services, based on its sincerely held religious beliefs.'' These rules 
finalize this description with technical changes to clarify the scope 
of the objection as intended in the Religious IFC, and based on public 
comments.
    Throughout the exemptions for objecting entities, the rules specify 
that they apply where the entities object as specified in Sec.  
147.132(a)(2) of the Religious IFC. That paragraph describes the 
religious objection by specifying that exemptions for objecting 
entities will apply to the extent that an entity described in paragraph 
(a)(1) objects to its establishing, maintaining, providing, offering, 
or arranging (as applicable) coverage, payments, or a plan that 
provides coverage or payments for some or all contraceptive services, 
based on its sincerely held religious beliefs.

[[Page 57567]]

    In the separate companion IFC to the Religious IFC--the Moral IFC--
the Departments, at Sec.  147.133(a)(2), provided a similar description 
of the scope of the objection based on moral convictions rather than 
religious beliefs, but we used slightly different operative language. 
There, instead of saying the entity ``objects to its establishing, 
maintaining, providing, offering, or arranging (as applicable) 
coverage, payments, or a plan that provides coverage or payments for 
some or all contraceptive services,'' the paragraph stated the entity 
``objects to its establishing, maintaining, providing, offering, or 
arranging (as applicable) coverage or payments for some or all 
contraceptive services, or for a plan, issuer, or third party 
administrator that provides or arranges such coverage or payments.'' 
Some commenters took note of this difference, and asked the Departments 
to clarify which language applies, and whether the Departments intended 
any difference in the operation of the two paragraphs. The Departments 
did not intend the language to operate differently. The language in the 
Moral IFC accurately, and more clearly, expresses the intent set forth 
in the Religious IFC about how the issuer exemption applies. The 
Religious IFC explained that the intent of the expanded exemptions was 
to encompass entities that objected to providing or arranging for 
contraceptive coverage in their plans, and to encompass entities that 
objected to the previous accommodation process, by which their issuers 
or third party administrators were required to provide contraceptive 
coverage or payments in connection with their plans. In other words, an 
entity would be exempt from the Mandate if it objected to complying 
with the Mandate, or if it objected to complying with the 
accommodation. The language in the Religious IFC encompassed both 
circumstances by encompassing an objection to providing ``coverage [or] 
payments'' for contraceptive services, and by encompassing an objection 
to ``a plan that provides'' coverage or payments for contraceptive 
services. But the language describing the objection set forth in the 
Moral IFC does so more clearly, and restructuring the sentence could 
make it clearer still. Questions by commenters about the scope of the 
description suggests that we should restructure the description, in a 
non-substantive way, to provide more clarity. The Departments do this 
by breaking some of the text out into subparagraphs, and rearranging 
clauses so that it is clearer which words they modify. The new 
structure specifies that it includes an objection to establishing, 
maintaining, providing, offering, or arranging for (as applicable) 
coverage or payments for contraceptive services, and it includes an 
objection to establishing, maintaining, providing, offering, or 
arranging for (as applicable) a plan, issuer, or third party 
administrator that provides contraceptive coverage. This more clearly 
encompasses objections to complying with either the Mandate or the 
accommodation. Consequently, these rules finalize the paragraph 
describing the religious objection in the Religious IFC with minor 
technical changes so that the final language will essentially mirror 
language from the Moral IFC. The introductory phrase of the religious 
objection set forth in paragraph (a)(2) is finalized to state the 
exemption ``will apply to the extent that an entity described in 
paragraph (a)(1) of this section objects, based on its sincerely held 
religious beliefs, to its establishing, maintaining, providing, 
offering, or arranging for (as applicable)''. The remainder of the 
paragraph is broken into two sub-paragraphs, regarding either 
``coverage or payments for some or all contraceptive services,'' or ``a 
plan, issuer, or third party administrator that provides or arranges 
such coverage or payments.''
    Some commenters observed that by allowing exempt groups to object 
to ``some or all'' contraceptives, this might yield a cafeteria-style 
approach where different plan sponsors choose various combinations of 
contraceptives that they wish to cover. Some commenters further 
observed that this might create a burden on issuers or third party 
administrators. The Departments have concluded, however, that, just as 
the exemption under the previous regulations allowed entities to object 
to some or all contraceptives, it is appropriate to maintain that 
flexibility for entities covered by the expanded exemption. Notably, 
even where an entity or individual qualifies for an exemption under 
these rules, these rules do not require the issuer or third party 
administrator to contract with that entity or individual if the issuer 
or third party administrator does not wish to do so, including because 
the issuer or third party administrator does not wish to offer an 
unusual variation of a plan. These rules simply remove the federal 
Mandate that, in some cases, could have led to penalties for an 
employer, issuer, or third party administrator if they wished to 
sponsor, provide, or administer a plan that omits contraceptive 
coverage in the presence of a qualifying religious objection. 
Similarly, under the previous exemption, the plans of houses of worship 
and integrated auxiliaries were exempt from offering some or all 
contraceptives, but the previous regulations did not require issuers 
and third party administrators to contract with those exempt entities 
if they chose not to do so.

N. Individuals (45 CFR 147.132(b))

    The previous regulations did not provide an exemption for objecting 
individuals. However, the Religious IFC expanded the exemptions to 
encompass objecting individuals (referred to here as the ``individual 
exemption''), at Sec.  147.132(b). These rules finalize the individual 
exemption from the Religious IFC with changes, which reflect both non-
substantial technical revisions, and changes based on public comments 
to more clearly express the intent of the Religious IFC.
    In the separate companion IFC to the Religious IFC--the Moral IFC--
the Departments, at Sec.  147.133(b), provided a similar individual 
exemption, but we used slightly different operative language. Where the 
Religious IFC described what may be offered to objecting individuals as 
``a separate benefit package option, or a separate policy, certificate 
or contract of insurance,'' the Moral IFC said a willing issuer and 
plan sponsor may offer ``a separate policy, certificate or contract of 
insurance or a separate group health plan or benefit package option, to 
any individual who objects'' under the individual exemption. Some 
commenters observed this difference and asked whether the language was 
intended to encompass the same options. The Departments intended these 
descriptions to include the same scope of options. Some commenters 
suggested that the individual exemption should not allow the offering 
of ``a separate group health plan,'' as set forth in the version found 
in Sec.  147.133(b), because doing so could cause various 
administrative burdens. The Departments disagree, since group health 
plan sponsors and group and individual health insurance issuers would 
be free to decline to provide that option, including because of 
administrative burdens. In addition, the Departments wish to clarify 
that, where an employee claims the exemption, a willing issuer and a 
willing employer may, where otherwise permitted, offer the employee 
participation in a group health insurance policy or benefit option that 
complies with the employee's objection. Consequently, these rules 
finalize the individual

[[Page 57568]]

exemption by making a technical change to the language to adopt the 
formulation, ``a separate policy, certificate or contract of insurance 
or a separate group health plan or benefit package option, to any group 
health plan sponsor (with respect to an individual) or individual, as 
applicable, who objects'' under the individual exemption.
    Some commenters supported the individual exemption as providing 
appropriate protections for the religious beliefs of individuals who 
obtain their insurance coverage in such places as the individual market 
or exchanges, or who obtain coverage from a group health plan sponsor 
that does not object to contraceptive coverage but is willing (and, as 
applicable, the issuer is also willing) to provide coverage that is 
consistent with an individual's religious objections. Some commenters 
also observed that, by specifying that the individual exemption only 
operates where the plan sponsor and issuer, as applicable, are willing 
to provide coverage that is consistent with the objection, the 
exemption would not impose burdens on the insurance market because the 
possibility of such burdens would be factored into the willingness of 
an employer or issuer to offer such coverage. Other commenters 
disagreed and contended that allowing the individual exemption would 
cause burden and confusion in the insurance market. Some commenters 
also suggested that the individual exemption should not allow the 
offering of a separate group health plan because doing so could cause 
various administrative burdens.
    The Departments agree with the commenters who suggested the 
individual exemption will not burden the insurance market, and, 
therefore, conclude that it is appropriate to provide the individual 
exemption where a plan sponsor and, as applicable, issuer are willing 
to cooperate in doing so. As discussed in the Religious IFC, the 
individual exemption only operates in the case where the group health 
plan sponsor or group or individual market health insurance issuer is 
willing to provide the separate option; in the case of coverage 
provided by a group health plan sponsor, where the plan sponsor is 
willing; or in the case where both a plan sponsor and issuer are 
involved, both are willing. The Departments conclude that it is 
appropriate to provide the individual exemption so that the Mandate 
will not serve as an obstacle among these various options. Practical 
difficulties that may be implicated by one option or another will 
likely be factored into whether plan sponsors and issuers are willing 
to offer particular options in individual cases.
    In addition, Congress has provided several protections for 
individuals who object to prescribing or providing contraceptives 
contrary to their religious beliefs. See for example, Consolidated 
Appropriations Act of 2018, Div. E, Sec. 726(c) (Financial Services and 
General Government Appropriations Act), Public Law 115-141, 132 Stat. 
348, 593-94 (Mar. 23, 2018). While some commenters proposed to construe 
this provision narrowly, Congress likewise provided that, if the 
District of Columbia requires ``the provision of contraceptive coverage 
by health insurance plans,'' ``it is the intent of Congress that any 
legislation enacted on such issue should include a `conscience clause' 
which provides exceptions for religious beliefs and moral 
convictions''. Id. at Div. E, Sec. 808, 132 Stat. at 603. A religious 
exemption for individuals would not be effective if the government 
simultaneously made it illegal for issuers and group health plans to 
provide individuals with policies that comply with the individual's 
religious beliefs.
    The individual exemption extends to the coverage unit in which the 
plan participant, or subscriber in the individual market, is enrolled 
(for instance, to family coverage covering the participant and his or 
her beneficiaries enrolled under the plan), but does not relieve the 
plan's or issuer's obligation to comply with the Mandate with respect 
to the group health plan generally, or, as applicable, to any other 
individual policies the issuer offers.
    This individual exemption allows plan sponsors and issuers that do 
not specifically object to contraceptive coverage to offer religiously 
acceptable coverage to their participants or subscribers who do object, 
while offering coverage that includes contraception to participants or 
subscribers who do not object. This individual exemption can apply with 
respect to individuals in plans sponsored by private employers or 
governmental employers.
    By its terms, the individual exemption would also apply with 
respect to individuals in plans arranged by institutions of higher 
education, if the issuers offering those plans were willing to provide 
plans complying with the individuals' objections. Because federal law 
does not require institutions of higher education to arrange such 
plans, the institutions would not be required by these rules to arrange 
a plan compliant with an individual's objection if the institution did 
not wish to do so.
    As an example, in one lawsuit brought against the Departments, the 
State of Missouri enacted a law under which the State is not permitted 
to discriminate against insurance issuers that offer group health 
insurance policies without coverage for contraception based on 
employees' religious beliefs, or against the individual employees who 
accept such offers. See Wieland, 196 F. Supp. 3d at 1015-16 (quoting 
Mo. Rev. Stat. 191.724). Under the individual exemption of these final 
rules, employers sponsoring governmental plans would be free to honor 
the objections of individual employees by offering them plans that omit 
contraceptive coverage, even if those governmental entities do not 
object to offering contraceptive coverage in general.
    This individual exemption cannot be used to force a plan (or its 
sponsor) or an issuer to provide coverage omitting contraception, or, 
with respect to health insurance coverage, to prevent the application 
of State law that requires coverage of such contraceptives or 
sterilization. Nor can the individual exemption be construed to require 
the guaranteed availability of coverage omitting contraception to a 
plan sponsor or individual who does not have a sincerely held religious 
objection. This individual exemption is limited to the requirement to 
provide contraceptive coverage under section 2713(a)(4), and does not 
affect any other federal or State law governing the plan or coverage. 
Thus, if there are other applicable laws or plan terms governing the 
benefits, these final rules do not affect such other laws or terms.
    Some individuals commented that they welcomed the individual 
exemption so that their religious beliefs were not forced to be in 
tension with their desire for health coverage. The Departments believe 
the individual exemption may help to meet the ACA's goal of increasing 
health coverage because it will reduce the incidence of certain 
individuals choosing to forego health coverage because the only 
coverage available would violate their sincerely held religious 
beliefs.\69\ At the same time, this individual exemption ``does not 
undermine the governmental interests furthered by the contraceptive

[[Page 57569]]

coverage requirement,'' \70\ because, when the exemption is applicable, 
the individual does not want the coverage, and therefore would not use 
the objectionable items even if they were covered.
---------------------------------------------------------------------------

    \69\ See also, for example, Wieland, 196 F. Supp. 3d at 1017, 
and March for Life, 128 F. Supp. 3d at 130, where the courts noted 
that the individual employee plaintiffs indicated that they viewed 
the Mandate as pressuring them to ``forgo health insurance 
altogether.''
    \70\ 78 FR 39874.
---------------------------------------------------------------------------

    Some commenters welcomed the ability of individuals covered by the 
individual exemption to be able to assert an objection to either some 
or all contraceptives. Other commenters expressed concern that there 
might be multiple variations in the kinds of contraceptive coverage to 
which individuals object, and this might make it difficult for willing 
plan sponsors and issuers to provide coverage that complies with the 
religious beliefs of an exempt individual. As discussed above, where 
the individual exemption applies, it only affects the coverage of an 
individual. If an individual only objects to some contraceptives, and 
the individual's issuer and, as applicable, plan sponsor are willing to 
provide the individual a package of benefits omitting such coverage, 
but for practical reasons they can only do so by providing the 
individual with coverage that omits all--not just some--contraceptives, 
the Departments believe that it favors individual freedom and market 
choice, and does not harm others, to allow the issuer and plan sponsor 
to provide, in that case, a plan omitting all contraceptives if the 
individual is willing to enroll in that plan. The language of the 
individual exemption set forth in the Religious IFC implied this 
conclusion, by specifying that the Guidelines requirement of 
contraceptive coverage did not apply where the individual objected to 
some or all contraceptives. Notably, this was different than the 
language applicable to the exemptions under Sec.  147.132(a), which 
specifies that the exemptions apply ``to the extent'' of the religious 
objections, so that, as discussed above, the exemptions include only 
those contraceptive methods to which the objection applied. In response 
to comments suggesting the language of the individual exemption was not 
sufficiently clear on this distinction, however, the Departments in 
these rules finalize the individual exemption at Sec.  147.133(b) with 
the following change, by adding the following sentence at the end of 
the paragraph: ``Under this exemption, if an individual objects to some 
but not all contraceptive services, but the issuer, and as applicable, 
plan sponsor, are willing to provide the individual with a separate 
policy, certificate or contract of insurance or a separate group health 
plan or benefit package option that omits all contraceptives, and the 
individual agrees, then the exemption applies as if the individual 
objects to all contraceptive services.''
    Some commenters asked for plain language guidance and examples 
about how the individual exemption might apply in the context of 
employer-sponsored insurance. Here is one such example. An employee is 
enrolled in group health coverage through her employer. The plan is 
fully insured. If the employee has sincerely held religious beliefs 
objecting to her plan including coverage for contraceptives, she could 
raise this with her employer. If the employer is willing to offer her a 
plan that omits contraceptives, the employer could discuss this with 
the insurance agent or issuer. If the issuer is also willing to offer 
the employer, with respect to this employee, a group health insurance 
policy that omits contraceptive coverage, the individual exemption 
would make it legal for the group health insurance issuer to omit 
contraceptives for her and her beneficiaries under a policy, for her 
employer to sponsor that plan for her, and for the issuer to issue such 
a plan to the employer, to cover that employee. This would not affect 
other employees' plans--those plans would still be subject to the 
Mandate and would continue to cover contraceptives. But if either the 
employer, or the issuer, is not willing (for whatever reason) to offer 
a plan or a policy for that employee that omits contraceptive coverage, 
these rules do not require them to. The employee would have the choice 
of staying enrolled in a plan with its coverage of contraceptives, not 
enrolling in that plan, seeking coverage elsewhere, or seeking 
employment elsewhere.
    For all these reasons, these rules adopt the individual exemption 
language from the Religious IFC with clarifying changes to reflect the 
Departments' intent.

O. Accommodation (45 CFR 147.131, 26 CFR 54.9815-2713A, 29 CFR 
2590.715-2713A)

    The previous regulations set forth an accommodation process at 45 
CFR 147.131, 26 CFR 54.9815-2713A, and 29 CFR 2590.715-2713A, as an 
alternative method of compliance with the Mandate. Under the 
accommodation, if a religious nonprofit entity, or a religious closely 
held for-profit business, objected to coverage of some or all 
contraceptive services in its health plan, it could file a notice or 
fill out a form expressing this objection and describing its objection 
to its plan and issuer or third party administrator. Upon doing so, the 
plan would not cover some or all contraceptive services, and the issuer 
or third party administrator would be responsible for providing or 
arranging for persons covered by the plan to receive coverage or 
payments of those services (except in the case of self-insured church 
plans exempt from ERISA, in which case no such obligation was imposed 
on the third party administrator). The accommodation was set forth in 
regulations of each of the Departments. Based on each Department's 
regulatory authority, HHS regulations applied to insured group health 
plans, and DOL and Treasury regulations applied to both insured group 
health plans and self-insured group health plans.
    The Religious IFC maintained the accommodation process. 
Nevertheless, by virtue of expanding the exemptions to encompass all 
entities that were eligible for the accommodation process under the 
previous regulations, in addition to other newly exempt entities, the 
Religious IFC rendered the accommodation process optional. Entities 
could choose not just between the Mandate and the accommodation, but 
between the Mandate, the exemption, and the accommodation. These rules 
finalize the optional accommodation process and its location in the 
Code of Federal Regulations at 45 CFR 147.131, 26 CFR 54.9815-2713A, 
and 29 CFR 2590.715-2713A, but the Departments do so with several 
changes based on public comments.
    Many commenters supported keeping the accommodation as an optional 
process, including some commenters who otherwise supported creating the 
expanded exemptions. Some commenters opposed making the accommodation 
optional, but asked the Departments to return to the previous 
regulations in which entities that did not meet the narrower exemption 
could only choose between the accommodation process or direct 
compliance with the Mandate. Some commenters believed there should be 
no exemptions and no accommodation process.
    The Departments continue to consider it appropriate to make the 
accommodation process optional for entities that are otherwise also 
eligible for the expanded exemptions--that is, to keep it in place as 
an option that exempt entities can choose. The accommodation provides 
contraceptive access, which is a result many opponents of the expanded 
exemptions said they desire. The accommodation involves some regulation 
of issuers and third party administrators, but the previous

[[Page 57570]]

regulations had already put that regulatory structure in place. These 
rules for the most part merely keep it in place and maintain the way it 
operates. The Religious IFC adds some additional paperwork burdens as a 
result of the new interaction between the accommodation and the 
expanded exemptions; those are discussed below.
    Above, the Departments discussed public comments concerning whether 
we should have merely expanded the accommodation rather than expanding 
the exemptions. The Religious IFC and these final rules expand the 
kinds of entities that may use the optional accommodation, by expanding 
the exemptions and allowing any exempt entities to opt to make use of 
the accommodation. Consequently, under these rules, objecting employers 
may make use of the exemption or may choose to utilize the optional 
accommodation process. If an eligible organization uses the optional 
accommodation process through the EBSA Form 700 or other specified 
notice to HHS, it voluntarily shifts an obligation to provide separate 
but seamless contraceptive coverage to its issuer or third party 
administrator.
    Some commenters asked that these final rules create an alternative 
payment mechanism to cover contraceptive services for third party 
administrators obligated to provide or arrange such coverage under the 
accommodation. These rules do not concern the payment mechanism, which 
is set forth in separate rules at 45 CFR 156.50. The Departments do not 
view an alternative payment mechanism as necessary. As discussed below, 
although the Departments do not know how many entities will use the 
accommodation, it is reasonably likely that some entities previously 
using it will continue to do so, while others will choose the expanded 
exemption, leading to an overall reduction in the use of the 
accommodation. The Departments have reason to believe that these final 
rules will not lead to a significant expansion of entities using the 
accommodation, since nearly all of the entities of which the 
Departments are aware that may be interested in doing so were already 
able to do so prior to the Religious IFC. Moreover, it is still the 
case under these rules that if an entity serving as a third party 
administrator does not wish to satisfy the obligations it would need to 
satisfy under an accommodation, it could choose not to contract with an 
entity that opts into the accommodation. This conflict is even less 
likely now that entities eligible for the accommodation are also 
eligible for the exemption. For these reasons, the Departments do not 
find it necessary to add an additional payment mechanism for the 
accommodation process.
    If an eligible organization wishes to revoke its use of the 
accommodation, it can do so under these rules, and operate under its 
exempt status. As part of its revocation, the issuer or third party 
administrator of the eligible organization must provide participants 
and beneficiaries written notice of such revocation. Some commenters 
suggested HHS has not yet issued guidance on the revocation process, 
but CCIIO provided guidance concerning this process on November 30, 
2017.\71\ These rules supersede that guidance, and adopt or modify its 
specific guidelines as explained below. As a result, these rules delete 
references, set forth in the Religious IFC's accommodation regulations, 
to ``guidance issued by the Secretary of the Department of Health and 
Human Services.''
---------------------------------------------------------------------------

    \71\ See Randy Pate, ``Notice by Issuer or Third Party 
Administrator for Employer/Plan Sponsor of Revocation of the 
Accommodation for Certain Preventive Services,'' CMS (Nov. 30, 
2017), https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Notice-Issuer-Third-Party-Employer-Preventive.pdf.
---------------------------------------------------------------------------

    The guidance stated that an entity that was using the accommodation 
under the previous rules, or an entity that adopts the accommodation 
maintained by the IFCs, could revoke its use of the accommodation and 
use the exemption. This guideline applies under the final rules. This 
revocation process applies both prospectively to eligible organizations 
that decide at a later date to avail themselves of the optional 
accommodation and then decide to revoke that accommodation, as well as 
to organizations that invoked the accommodation prior to the effective 
date of the Religious IFC either by their submission of an EBSA Form 
700 or notification, or by some other means under which their third 
party administrator or issuer was notified by DOL or HHS that the 
accommodation applies.
    The guidance stated that, when the accommodation is revoked by an 
entity using the exemption, the issuer of the eligible organization 
must provide participants and beneficiaries written notice of such 
revocation. These rules adopt that guideline. Consistent with other 
applicable laws, the issuer or third party administrator of an eligible 
organization must promptly notify plan participants and beneficiaries 
of the change of status to the extent such participants and 
beneficiaries are currently being offered contraceptive coverage at the 
time the accommodated organization invokes its exemption. The guidance 
further stated that the notice may be provided by the organization 
itself, its group health plan, or its third party administrator, as 
applicable. The guidance stated that, under the regulation at 45 CFR 
147.200(b), ``[t]he notice of modification must be provided in a form 
that is consistent with the rules of paragraph (a)(4) of this 
section,'' and (a)(4) has detailed rules on when electronic notice is 
permitted. These guidelines still apply under the final rules. These 
rules adopt those guidelines.
    The guidance further specified that the revocation of the 
accommodation would be effective notice on the first day of the first 
plan year that begins on or after 30 days after the date of the 
revocation, or alternatively, whether or not the objecting entity's 
group health plan or issuer listed the contraceptive benefit in its 
Summary of Benefits of Coverage (SBC), the group health plan or issuer 
could revoke the accommodation by giving at least 60-days prior notice 
pursuant to section 2715(d)(4) of the PHS Act (incorporated into ERISA 
and the Code) \72\ and applicable regulations thereunder to revoke the 
accommodation. The guidance noted that, unlike the SBC notification 
process, which can effectuate a modification of benefits in the middle 
of a plan year, provided it is allowed by State law and the contract of 
the policy, the 30 day notification process under the guidance can only 
effectuate a benefit modification at the beginning of a plan year. This 
part of the guidance is adopted in part and changed in part by these 
final rules, as follows, based on public comments on the issue.
---------------------------------------------------------------------------

    \72\ See also 26 CFR 54.9815-2715(b); 29 CFR 2590.715-2715(b); 
45 CFR 147.200(b).
---------------------------------------------------------------------------

    Some commenters asked that revocations only be permitted to occur 
on the first day of the next plan year, or no sooner than January 2019, 
to avoid burdens on plans and because some states do not allow for mid-
year plan changes. The Departments believe that providing 60-days 
notice pursuant to section 2715(d)(4) of the PHS Act, where applicable, 
is a mechanism that already exists for making changes in health 
benefits covered by a group health plan during a plan year; that 
process already takes into consideration any applicable state laws. 
However, in response to public comments, these rules change the 
accommodation provisions from the Religious IFC to indicate that, as a 
transitional rule, providing 60-days notice for revoking an 
accommodation is only available, if applicable, to plans that are using 
the accommodation at the time of the

[[Page 57571]]

publication of these final rules. As a general rule, for plans that use 
the accommodation in future plan years, the Departments believe it is 
appropriate to allow revocation of an accommodation only on the first 
day of the next plan year. Based on the objections of various litigants 
and public commenters, we believe that some entities already using the 
accommodation may have been doing so only because previous regulations 
denied them an exemption. For them, access to the transitional 60-days 
notice procedure (if applicable) is appropriate in the period 
immediately following the finalization of these rules. In future plan 
years, however--plan years that begin after the effective date of these 
final rules--plans and entities that qualify as exempt under these 
rules will have been on notice that they qualify for an exemption or 
the accommodation. If they have opted to enter or remain in the 
accommodation in those future plan years, when they could have chosen 
the exemption, the Departments believe it is appropriate for them to 
wait until the first day of the following plan year to change to exempt 
status.\73\
---------------------------------------------------------------------------

    \73\ These final rules go into effect 60 days after they are 
published in the Federal Register. Some entities currently using the 
accommodation may have a plan year that begins less than 30 days 
after the effective date of these final rules. In such cases, they 
may be unable, after the effective date of these final rules, to 
provide a revocation notice 30 days prior to the start of their next 
plan year. However, these final rules will be published at least 60 
days prior to the start of that plan year. Therefore, entities 
exempt under these final rules that have been subject to the 
accommodation on the date these final rules are published, that wish 
to revoke the accommodation, and whose next plan years start after 
these final rules go into effect, but less than 30 days thereafter, 
may submit their 30 day revocation notices after these final rules 
are published, before these final rules are in effect, so that they 
will have submitted the revocation at least 30 days before their 
next plan year starts. In such cases, even though the revocation 
notice will be submitted before these final rules are in effect, the 
actual revocation will not occur until after these final rules are 
in effect, and plan participants will have been provided with 30 
days' notice of the revocation.
---------------------------------------------------------------------------

    This change is implemented in the following manner. In the 
Religious IFC, the accommodation provisions addressing revocation were 
found at 45 CFR 147.131(c)(4), 26 CFR 54.9815-2713AT(a)(5),\74\ and 29 
CFR 2590.715-2713A(a)(5).
---------------------------------------------------------------------------

    \74\ The Department of the Treasury's rule addressing the 
accommodation is being finalized at 26 CFR 54.9815-2713A, 
superseding its temporary regulation at 26 CFR 54.9815-2713AT.
---------------------------------------------------------------------------

    The provisions in the Religious IFC (with technical variations 
among the HHS, Labor, and Treasury rules) state that a written notice 
of revocation must be provided ``as specified in guidance issued by the 
Secretary of the Department of Health and Human Services.'' On November 
30, 2017, HHS issued the guidance regarding revocation. These final 
rules incorporate this guidance, with certain clarifications, and state 
that the revocation notice must be provided ``as specified herein.'' 
The final rule incorporates the two sets of directions for revoking the 
accommodation initially set forth in the interim guidance in the 
following manner. The first, designated as subparagprah (1) as a 
``[t]ransitional rule,'' explains that if contraceptive coverage is 
being offered through the accommodation process on the date on which 
these final rules go into effect, 60-days notice may be provided to 
revoke the accommodation process, or they revocation may occur ``on the 
first day of the first plan year that begins on or after 30 days after 
the date of the revocation'' consistent with PHS Act section 
2715(d)(4), 45 CFR[thinsp]147.200(b), 26 CFR 54.9815-2715(b), or 29 CFR 
2590.715-2715(b). The second direction, set forth in subparagraph (ii), 
explains the ``[g]eneral rule'' that, in plan years beginning after the 
date on which these final rules go into effect, revocation of the 
accommodation will be effective on ``the first day of the first plan 
year that begins on or after 30 days after the date of the 
revocation.''
    The Religious IFC states that if an accommodated entity objects to 
some, but not all, contraceptives, an issuer for an insured group 
health plan that covers contraceptives under the accommodation may, at 
the issuer's option, choose to provide coverage or payments for all 
contraceptive services, instead of just for the narrower set of 
contraceptive services to which the entities object. Some commenters 
supported this provision, saying that it allows flexibility for issuers 
that might otherwise face unintended burdens from providing coverage 
under the accommodation for entities that object to only some 
contraceptive items. The Departments have maintained this provision in 
these final rules. Note that this provision is consistent with the 
other assertions in the rules saying that an entity's objection applies 
``to the extent'' of the entity's religious beliefs, because in this 
instance, under the accommodation, the plan participant or beneficiary 
still receives coverage or payments for all contraceptives, and this 
provision simply allows issuers more flexibility in choosing how to 
help provide that coverage.
    Some commenters asked that the Departments retain the ``reliance'' 
provision, contained in the previous accommodation regulations, under 
which an issuer is deemed to have complied with the Mandate where the 
issuer relied reasonably and in good faith on a representation by an 
eligible organization as to its eligibility for the accommodation, even 
if that representation was later determined to be incorrect. The 
Departments omitted this provision from the Religious IFC, on the 
grounds that this provision was less necessary where any organization 
eligible for the optional accommodation is also exempt. Nevertheless, 
in order to respond to concerns in public comments, and to prevent any 
risk to issuers of a mistake or misrepresentation by an organization 
seeking the accommodation process, the Departments have finalized the 
Religious IFC with an additional change that restores this clause. The 
clause uses the same language that was in the regulations prior to the 
Religious IFC, and it is inserted at 45 CFR 147.131(f), 26 CFR 54.9815-
2713A(e), and 29 CFR 2590.715-2713A(e). As a result, these rules 
renumber the subsequent paragraphs in each of those sections.

P. Definition of Contraceptives for the Purpose of These Final Rules

    The previous regulations did not define contraceptive services. The 
Guidelines issued in 2011 included, under ``Contraceptive methods and 
counseling,'' ``[a]ll Food and Drug Administration approved 
contraceptive methods, sterilization procedures, and patient education 
and counseling for all women with reproductive capacity.'' The previous 
regulations concerning the exemption and the accommodation used the 
terms contraceptive services and contraceptive coverage as catch-all 
terms to encompass all of those Guidelines' requirements. The 2016 
update to the Guidelines are similarly worded. Under ``Contraception,'' 
they include the ``full range of contraceptive methods for women 
currently identified by the U.S. Food and Drug Administration,'' 
``instruction in fertility awareness-based methods,'' and 
``[c]ontraceptive care'' to ``include contraceptive counseling, 
initiation of contraceptive use, and follow-up care (for example, 
management, and evaluation as well as changes to and removal or 
discontinuation of the contraceptive method).'' \75\
---------------------------------------------------------------------------

    \75\ https://www.hrsa.gov/womens-guidelines-2016/index.html.
---------------------------------------------------------------------------

    To more explicitly state that the exemption encompasses any of the 
contraceptive or sterilization services, items, or information that 
have been required under the Guidelines, the Religious IFC included a 
definition at 45

[[Page 57572]]

CFR 147.131(f) and 147.132(c), 26 CFR 54.9815-2713AT(e), and 29 CFR 
2590.715-2713A(e). These rules finalize those definitions without 
change, but renumber them as 45 CFR 147.131(f) and 147.132(c), 26 CFR 
54.9815-2713A(e), and 29 CFR 2590.715-2713A(e), respectively.

Q. Severability

    The Departments finalize without change (except for certain 
paragraph redesignations), the severability clauses in the interim 
final rules, namely, at paragraph (g) of 26 CFR 54.9815-2713A, the 
redesignated paragraph (g) of 29 CFR 2590.715-2713A, and 45 CFR 
147.132(d).

R. Other Public Comments

1. Items Approved as Contraceptives But Used To Treat Existing 
Conditions
    Some commenters noted that some drugs included in the preventive 
services contraceptive Mandate can also be useful for treating certain 
existing health conditions, and that women use them for non-
contraceptive purposes. Certain commenters urged the Departments to 
clarify that the final rules do not permit employers to exclude from 
coverage medically necessary prescription drugs used for non-preventive 
services. Some commenters suggested that religious objections to the 
Mandate should not be permitted in cases where such methods are used to 
treat such conditions, even if those methods can also be used for 
contraceptive purposes.
    Section 2713(a)(4) only applies to ``preventive'' care and 
screenings. The statute does not allow the Guidelines to mandate 
coverage of services provided solely for a non-preventive use, such as 
the treatment of an existing condition. The Guidelines implementing 
this section of the statute are consistent with that narrow authority. 
They state repeatedly that they apply to ``preventive'' services or 
care.\76\ The requirement in the Guidelines concerning 
``contraception'' specifies several times that it encompasses 
``contraceptives,'' that is, medical products, methods, and services 
applied for ``contraceptive'' uses. The Guidelines do not require 
coverage of care and screenings that are non-preventive, and the 
contraception portion of those Guidelines do not require coverage of 
medical products, methods, care, and screenings that are non-
contraceptive in purpose or use. The Guidelines' inclusion of 
contraceptive services requires coverage of contraceptive methods as a 
type of preventive service only when a drug that FDA has approved for 
contraceptive use is prescribed in whole or in part for such purpose or 
intended use. Section 2713(a)(4) does not authorize the Departments to 
require coverage, without cost-sharing, of drugs prescribed exclusively 
for a non-contraceptive and non-preventive use to treat an existing 
condition.\77\ The extent to which contraceptives are covered to treat 
non-preventive conditions would be determined by application of the 
requirement section 1302(b)(1)(F) of the ACA to cover prescription 
drugs (where applicable), implementing regulations at 45 CFR 156.122, 
and 156.125, and plans' decisions about the basket of medicines to 
cover for these conditions.
---------------------------------------------------------------------------

    \76\ Id.
    \77\ The Departments previously cited the IOM's listing of 
existing conditions that contraceptive drugs can be used to treat 
(menstrual disorders, acne, and pelvic pain), and said of those uses 
that ``there are demonstrated preventive health benefits from 
contraceptives relating to conditions other than pregnancy.'' 77 FR 
8727 & n.7. This was not, however, an assertion that PHS Act 
2713(a)(4) or the Guidelines require coverage of ``contraceptive'' 
methods when prescribed for an exclusively non-contraceptive, non-
preventive use. Instead, it was an observation that such drugs--
generally referred to as ``contraceptives''--also have some 
alternate beneficial uses to treat existing conditions. For the 
purposes of these final rules, the Departments clarify here that the 
reference prior to the Religious IFC to the benefits of using 
contraceptive drugs exclusively for some non-contraceptive and non-
preventive uses to treat existing conditions did not mean that the 
Guidelines require coverage of such uses, and consequently is not a 
reason to refrain from offering the expanded exemptions provided 
here. Where a drug approved by the FDA for contraceptive use is 
prescribed for both a contraceptive use and a non-contraceptive use, 
the Guidelines (to the extent they apply) would require its coverage 
for contraceptive use. Where a drug approved by the FDA for 
contraceptive use is prescribed exclusively for a non-contraceptive 
and non-preventive use to treat an existing condition, it would be 
outside the scope of the Guidelines and the contraceptive Mandate.
---------------------------------------------------------------------------

    Some commenters observed that pharmacy claims do not include a 
medical diagnosis code, so plans may be unable to discern whether a 
drug approved by FDA for contraceptive uses is actually applied for a 
preventive or contraceptive use, or for another use. Section 
2713(a)(4), however, draws a distinction between preventive care and 
screenings and other kinds of care and screenings. That subsection does 
not authorize the Departments to impose a coverage mandate of services 
that are not at least partly applied for a preventive use, and the 
Guidelines themselves do not require coverage of contraceptive methods 
or care unless such methods or care is contraceptive in purpose. These 
rules do not prohibit issuers from covering drugs and devices that are 
approved for contraceptive uses even when those drugs and devices are 
prescribed for non-preventive, non-contraceptive purposes. As discussed 
above, these final rules also do not purport to delineate the items 
HRSA will include in the Guidelines, but only concern expanded 
exemptions and accommodations that apply to the extent the Guidelines 
require contraceptive coverage. Therefore, the Departments do not 
consider it appropriate to specify in these final rules that under 
section 2713(a)(4), exempt organizations must provide coverage for 
drugs prescribed exclusively for a non-contraceptive and non-preventive 
use to treat an existing condition.
2. Comments Concerning Regulatory Impact
    Some commenters agreed with the Departments' statement in the 
Religious IFC that the expanded exemptions are likely to affect only a 
small percentage of women otherwise receiving coverage under the 
Mandate. Other commenters disagreed, stating that the expanded 
exemptions could take contraceptive coverage away from many or most 
women. Still others opposed expanding the exemptions and contended that 
accurately determining the number of women affected by the expanded 
exemptions is not possible.
    After reviewing the public comments, the Departments agree with 
commenters who said that estimating the impact of these final rules is 
difficult based on the limited data available to us, and with 
commenters who agreed with the Religious IFC that the expanded 
exemptions are likely to affect only a small percentage of women. The 
Departments do not find the estimates of large impacts submitted by 
some commenters more reliable than the estimates set forth in the 
Religious and Moral IFCs. Even certain commenters that ``strongly 
oppos[ed]'' the Religious IFC commented that merely ``thousands'' would 
be impacted, a number consistent with the Departments' estimate of the 
number of women who may be affected by the rule. The Departments' 
estimates of the impact of these final rules are discussed in more 
detail in the following section. Therefore, the Departments conclude 
that the estimates of regulatory impact made in the Religious IFC are 
still the best estimates available. Our estimates are discussed in more 
detail in the following section.
3. Interaction With State Laws
    Some commenters asked the Departments to discuss the interaction 
between these final rules and state laws that either require 
contraceptive

[[Page 57573]]

coverage or provide religious exemptions from those and other 
requirements. Some commenters argued that providing expanded exemptions 
in these rules would negate state contraceptive requirements or 
narrower state religious exemptions. Some commenters asked that the 
Departments specify that these exemptions do not apply to plans 
governed by state laws that require contraceptive coverage. The 
Department agrees that these rules concern only the applicability of 
the Federal contraceptive Mandate imposed pursuant to section 
2713(a)(4). They do not regulate state contraceptive mandates or state 
religious exemptions. If a plan is exempt under the Religious IFC and 
these rules, that exemption does not necessarily exempt the plan or 
other insurance issuer from state laws that may apply to it. The 
previous regulations, which offered exemptions for houses of worship 
and integrated auxiliaries, did not include regulatory language 
negating the exemptions in states that require contraceptive coverage, 
although the Departments discussed the issue to some degree in various 
preambles of those previous regulations. The Departments do not 
consider it appropriate or necessary in the regulatory text of the 
religious exemptions to declare that the Federal contraceptive Mandate 
will still apply in states that have a state contraceptive mandate, 
since these rules do not purport to regulate the applicability of state 
contraceptive mandates.\78\
---------------------------------------------------------------------------

    \78\ Some commenters also asked that these final rules specify 
that exempt entities must comply with other applicable laws 
concerning such things as notice to plan participants or collective 
bargaining agreements. These final rules relieve the application of 
the Federal contraceptive Mandate under section 2713(a)(4) to 
qualified exempt entities; they do not affect the applicability of 
other laws. Elsewhere in this preamble, the Departments provide 
guidance applicable to notices of revocation and changes that an 
entity may seek to make during its plan year.
---------------------------------------------------------------------------

    Some commenters observed that, through ERISA, some entities may 
avoid state laws that require contraceptive coverage by self-insuring. 
This is a result of the application of the preemption and savings 
clauses contained in ERISA to state insurance regulation. See 29 U.S.C. 
1144(a) & (b)(1). These rules cannot change statutory ERISA provisions, 
and do not change the standards applicable to ERISA preemption. To the 
extent Congress has decided that ERISA preemption includes preemption 
of state laws requiring contraceptive coverage, that decision occurred 
before the ACA and was not negated by the ACA. Congress did not mandate 
in the ACA that any Guidelines issued under section 2713(a)(4) must 
include contraceptives, nor that the Guidelines must force entities 
with religious objections to cover contraceptives.

IV. Economic Impact and Paperwork Burden

    The Departments have examined the impacts of the Religious IFC and 
the final rules as required by Executive Order 12866 on Regulatory 
Planning and Review (September 30, 1993), Executive Order 13563 on 
Improving Regulation and Regulatory Review (January 18, 2011), the 
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96 354), 
section 1102(b) of the Social Security Act, section 202 of the Unfunded 
Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive 
Order 13132 on Federalism (August 4, 1999), the Congressional Review 
Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing Regulation 
and Controlling Regulatory Costs (January 30, 2017).

A. Executive Orders 12866 and 13563--Department of HHS and Department 
of Labor

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, and public 
health and safety effects; distributive impacts; and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility.
    Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a 
regulation: (1) Having an annual effect on the economy of $100 million 
or more in any one year, or adversely and materially affecting a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local, or tribal governments or 
communities (also referred to as ``economically significant''); (2) 
creating a serious inconsistency or otherwise interfering with an 
action taken or planned by another agency; (3) materially altering the 
budgetary impacts of entitlement grants, user fees, or loan programs or 
the rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.
    A regulatory impact analysis must be prepared for major rules with 
economically significant effects ($100 million or more in any one 
year), and an ``economically significant'' regulatory action is subject 
to review by the Office of Management and Budget (OMB). As discussed 
below regarding their anticipated effects, the Religious IFC and these 
rules are not likely to have economic impacts of $100 million or more 
in any one year, and therefore do not meet the definition of 
``economically significant'' under Executive Order 12866. However, OMB 
has determined that the actions are significant within the meaning of 
section 3(f)(4) of the Executive Order. Therefore, OMB has reviewed 
these final rules, and the Departments have provided the following 
assessment of their impact.
1. Need for Regulatory Action
    These final rules adopt as final and further change the amendments 
made by the Religious IFC, which amended the Departments' July 2015 
final regulations. The Religious IFC and these final rules expand the 
exemption from the requirement to provide coverage for contraceptives 
and sterilization, established under the HRSA Guidelines, promulgated 
under section 2713(a)(4) of the PHS Act, section 715(a)(1) of ERISA, 
and section 9815(a)(1) of the Code, to include certain entities and 
individuals with objections to compliance with the Mandate based on 
sincerely held religious beliefs, and they revise the accommodation 
process to make it optional for eligible organizations. The expanded 
exemption applies to certain individuals and entities that have 
religious objections to some (or all) of the contraceptive and/or 
sterilization services that would be covered under the Guidelines. Such 
action has been taken, among other reasons discussed above, to provide 
for participation in the health insurance market by certain entities or 
individuals, by freeing them from penalties they could incur if they 
follow their sincerely held religious beliefs against contraceptive 
coverage.
2. Anticipated Effects
a. Removal of Burdens on Religious Exercise
    Regarding entities and individuals that are extended an exemption 
by the Religious IFC and these final rules, without that exemption the 
Guidelines would require many of them to either pay for coverage of 
contraceptive services that they find religiously objectionable; submit 
self-certifications that would result in their issuer or third party 
administrator paying for such services for their employees, which

[[Page 57574]]

some entities also believe entangles them in the provision of such 
objectionable coverage; or pay tax penalties, or be subject to other 
adverse consequences, for non-compliance with these requirements. These 
final rules remove certain associated burdens imposed on these entities 
and individuals--that is, by recognizing their religious objections to, 
and exempting them on the basis of such objections from, the 
contraceptive and/or sterilization coverage requirement of the HRSA 
Guidelines and making the accommodation process optional for eligible 
organizations.
b. Notices When Revoking Accommodated Status
    To the extent that entities choose to revoke their accommodated 
status to make use of the expanded exemption, a notice will need to be 
sent to enrollees (either by the objecting entity or by the issuer or 
third party administrator) that their contraceptive coverage is 
changing, and guidance will reflect that such a notice requirement is 
imposed no more than is already required by preexisting rules that 
require notices to be sent to enrollees of changes to coverage during a 
plan year. If the entities wait until the start of their next plan year 
to change to exempt status, instead of doing so during the current plan 
year, those entities generally will also be able to avoid sending any 
supplementary notices in addition to what they would otherwise normally 
send prior to the start of a new plan year. Additionally, these final 
rules provide such entities with an offsetting regulatory benefit by 
the exemption itself and its relief of burdens on their religious 
beliefs. As discussed below, assuming that more than half of the 
entities that have been using the previous accommodation will seek 
immediate revocation of their accommodated status and notices will be 
sent to all their enrollees, the total estimated cost of sending those 
notices will be $302,036.
c. Impacts on Third Party Administrators and Issuers
    The Departments estimate that these final rules will not result in 
any additional burdens or costs on issuers or third party 
administrators. As discussed below, the Departments believe that 109 of 
the 209 entities making use of the accommodation process will instead 
make use of their new exempt status. In contrast, the Departments 
expect that a much smaller number (which we assume to be 9) will make 
use of the accommodation to which they were not previously provided 
access. Reduced burdens for issuers and third party administrators due 
to reductions in use of the accommodation will more than offset 
increased obligations for serving the fewer number of entities that 
will now opt into the accommodation. This will lead to a net decrease 
in burdens and costs on issuers and third party administrators, who 
will no longer have continuing obligations imposed on them by the 
accommodation. While these rules make it legal for issuers to offer 
insurance coverage that omits contraceptives to exempt entities and 
individuals, these final rules do not require issuers to do so.
    The Departments anticipate that the effect of these rules on 
adjustments made to the federally facilitated Exchange user fees under 
45 CFR 156.50 will be that fewer overall adjustments will be made using 
the accommodation process, because there will be more entities who 
previously were reluctant users of the accommodation that will choose 
to operate under the newly expanded exemption than there will be 
entities not previously eligible to use the accommodation that will opt 
into it. The Departments' estimates of each number of those entities is 
set forth in more detail below.
d. Impacts on Persons Covered by Newly Exempt Plans
    These final rules will result in some persons covered in plans of 
newly exempt entities not receiving coverage or payments for 
contraceptive services. As discussed in the Religious IFC, the 
Departments did not have sufficient data on a variety of relevant 
factors to precisely estimate how many women would be impacted by the 
expanded exemptions or any related costs they may incur for 
contraceptive coverage or the results associated with any unintended 
pregnancies.
i. Unknown Factors Concerning Impact on Persons in Newly Exempt Plans
    As referenced above and for reasons explained here, there are 
multiple levels of uncertainty involved in measuring the effect of the 
expanded exemption, including but not limited to--
     How many entities will make use of their newly exempt 
status.
     How many entities will opt into the accommodation 
maintained by these rules, under which their plan participants will 
continue receiving contraceptive coverage.
     Which contraceptive methods some newly exempt entities 
will continue to provide without cost-sharing despite the entity 
objecting to other methods (for example, as reflected in Hobby Lobby, 
several objecting entities have still provided coverage for 14 of the 
18 FDA-approved women's contraceptive or sterilization methods, 134 S. 
Ct. at 2766).
     How many women will be covered by plans of entities using 
their newly exempt status.
     Which of the women covered by those plans want and would 
have used contraceptive coverage or payments for contraceptive methods 
that are no longer covered by such plans.
     Whether, given the broad availability of contraceptives 
and their relatively low cost, such women will obtain and use 
contraception even if it is not covered.
     The degree to which such women are in the category of 
women identified by IOM as most at risk of unintended pregnancy.
     The degree to which unintended pregnancies may result 
among those women, which would be attributable as an effect of these 
rules only if the women did not otherwise use contraception or a 
particular contraceptive method due to their plan making use of its 
newly exempt status.
     The degree to which such unintended pregnancies may be 
associated with negative health effects, or whether such effects may be 
offset by other factors, such as the fact that those women will be 
otherwise enrolled in insurance coverage.
     The extent to which such women will qualify for 
alternative sources of contraceptive access, such as through a parent's 
or spouse's plan, or through one of the many governmental programs that 
subsidize contraceptive coverage to supplement their access.
ii. Public Comments Concerning Estimates in Religious IFC
    In the public comments, some commenters agreed with the 
Departments' estimate that, at most, the economic impact would lead to 
a potential transfer cost, from employers (or other plan sponsors) to 
affected women, of $63.8 million. Some commenters said the impact would 
be much smaller. Other commenters disagreed, suggesting that the 
expanded exemptions risked removing contraceptive coverage from more 
than 55 million women receiving the benefits of the preventive services 
Guidelines, or even risked removing contraceptive coverage from over 
100 million women. Some commenters cited studies indicating that, 
nationally, unintended pregnancies have large public costs, and the 
Mandate overall led to large out-of-pocket savings for women.
    These general comments do not, however, substantially assist us in

[[Page 57575]]

estimating how many women would be affected by these expanded 
exemptions specifically, or among them, how many unintended pregnancies 
would result, or how many of the affected women would nevertheless use 
contraceptives not covered under the health plans of their objecting 
employers and, thus, be subject to the transfer costs the Departments 
estimate, or instead, how many women might avoid unintended pregnancies 
by changing their activities in other ways besides using 
contraceptives. The Departments conclude, therefore, that our estimates 
of the anticipated effect in the Religious IFC are still the best 
estimates we have based on the limited data available to make those 
estimates. We do not believe that the higher estimates submitted by 
various public commenters sufficiently took into consideration, or 
analyzed, the various factors that suggest the small percentage of 
entities that will now use the expanded exemptions out of the large 
number of entities subject to the Mandate overall. Instead, the 
Departments agree with various public commenters providing comment and 
analysis that, for a variety of reasons, the best estimate of the 
impact of the expanded exemptions finalized in these rules is that most 
women receiving contraceptive coverage under the Mandate will not be 
affected. We agree with such commenters that the number of women 
covered by entities likely to make use of the expanded exemptions in 
these rules is likely to be very small in comparison to the overall 
number of women receiving contraceptive coverage as a result of the 
Mandate.
iii. Possible Sources of Information for Estimating Impact
    The Departments have access to the following general sources of 
information that are relevant to this issue, but these sources do not 
provide a full picture of the impact of these final rules. First, the 
regulations prior to the Religious IFC already exempted certain houses 
of worship and their integrated auxiliaries and, as explained 
elsewhere, effectively did not apply contraceptive coverage 
requirements to various entities in self-insured church plans. The 
effect of those previous exemptions or limitations are not included as 
effects of these rules, which leave those impacts in place. Second, in 
the Departments' previous regulations creating or expanding exemptions 
and the accommodation process we concluded that no significant burden 
or costs would result. 76 FR 46625; 78 FR 39889. Third, some entities, 
including some for-profit entities, object to only some but not all 
contraceptives, and in some cases will cover 14 of 18 FDA-approved 
women's contraceptive and sterilization methods.\79\ See Hobby Lobby, 
134 S. Ct. at 2766. The effects of the expanded exemptions will be 
mitigated to that extent. No publicly traded for-profit entities sued 
challenging the Mandate, and the public comments did not reveal any 
that specifically would seek to use the expanded exemptions. 
Consequently, the Departments agree with the estimate from the 
Religious IFC that publicly traded companies would not likely make use 
of these expanded exemptions.
---------------------------------------------------------------------------

    \79\ By reference to the FDA Birth Control Guide's list of 18 
birth control methods for women and 2 for men, https://www.fda.gov/downloads/forconsumers/byaudience/forwomen/freepublications/ucm517406.pdf, Hobby Lobby and entities with similar beliefs were 
not willing to cover: IUD copper; IUD with progestin; emergency 
contraceptive (Levonorgestrel); and emergency contraceptive 
(Ulipristal Acetate). See 134 S. Ct. at 2765-66. Hobby Lobby was 
willing to cover: sterilization surgery for women; sterilization 
implant for women; implantable rod; shot/injection; oral 
contraceptives (``the Pill''--combined pill); oral contraceptives 
(``the Pill''--extended/continuous use/combined pill); oral 
contraceptives (``the Mini Pill''--progestin only); patch; vaginal 
contraceptive ring; diaphragm with spermicide; sponge with 
spermicide; cervical cap with spermicide; female condom; spermicide 
alone. Id. Among women using these 18 female contraceptive methods, 
85 percent use the 14 methods that Hobby Lobby and entities with 
similar beliefs were willing to cover (22,446,000 out of 
26,436,000), and ``[t]he pill and female sterilization have been the 
two most commonly used methods since 1982.'' See Guttmacher 
Institute, ``Contraceptive Use in the United States'' (Sept. 2016), 
https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states.
---------------------------------------------------------------------------

    Fourth, HHS previously estimated that 209 entities would make use 
of the accommodation process. To arrive at this number, the Departments 
used, as a placeholder, the approximately 122 nonprofit entities that 
brought litigation challenging the accommodation process, and the 
approximately 87 closely held for-profit entities that filed suit 
challenging the Mandate in general. The Departments' records indicate, 
as noted in the Religious IFC, that approximately 63 entities 
affirmatively submitted notices to HHS to use the accommodation,\80\ 
and approximately 60 plans took advantage of the contraceptive user 
fees adjustments, in the 2015 plan year, to obtain reimbursement for 
contraceptive service payments made for coverage of such services for 
women covered by self-insured plans that were accommodated. Overall, 
while recognizing the limited data available, the Departments assumed 
that, under an expanded exemption and accommodation, approximately 109 
previously accommodated entities would use an expanded exemption, and 
about 100 would continue their accommodated status. We also estimated 
that another 9 entities would use the accommodation where the entities 
were not previously eligible to do so.
---------------------------------------------------------------------------

    \80\ This includes some fully insured and some self-insured 
plans, but it does not include entities that may have used the 
accommodation by submitting an EBSA form 700 self-certification 
directly to their issuer or third party administrator. In addition, 
the Departments have deemed some other entities as being subject to 
the accommodation through their litigation filings, but that might 
not have led to contraceptive coverage being provided to persons 
covered in some of those plans, either because they are exempt as 
houses of worship or integrated auxiliaries, they are in self-
insured church plans, or the Departments were not aware of their 
issuers or third party administrators so as to send them letters 
obligating them to provide such coverage.
---------------------------------------------------------------------------

    These sources of information were outlined in the Religious IFC. 
Some commenters agreed with the Departments' estimates based on those 
sources, and while others disagreed, the Departments conclude that 
commenters did not provide information that allows us to make better 
estimates.
iv. Estimates Based on Litigating Entities That May Use Expanded 
Exemptions
    Based on these and other factors, the Departments considered two 
approaches in the Religious IFC to estimate the number of women 
affected among entities using the expanded exemptions. First, following 
the use in previous regulations of litigating entities to estimate the 
effect of the exemption and accommodation, the Departments attempted to 
estimate the number of women covered by plans of litigating entities 
that could be affected by expanded exemptions. Based on papers filed in 
litigation, and public sources, the Departments estimated in the 
Religious IFC that approximately 8,700 women of childbearing age could 
have their contraception costs affected by plans of litigating entities 
using these expanded exemptions. The Departments believe that number is 
lower based upon the receipt, by many of those litigating entities, of 
permanent injunctions against the enforcement of section 2713(a)(4) to 
the extent it supports a contraceptive Mandate, which have been entered 
by federal district courts since the issuance of the Religious IFC.\81\ 
As a result, these final rules will not affect whether such entities 
will be subject to the contraceptive Mandate. Subtracting those 
entities from the total, the Departments estimate that the remaining 
litigating entities employ

[[Page 57576]]

approximately 49,000 persons, male and female. The average percent of 
workers at firms offering health benefits that are actually covered by 
those benefits is 60 percent.\82\ This amounts to approximately 29,000 
employees covered under those plans. EBSA estimates that for each 
employee policyholder, there is approximately one dependent.\83\ This 
amounts to approximately 58,000 covered persons. Census data indicate 
that women of childbearing age--that is, women aged 15 to 44--compose 
20.2 percent of the general population.\84\ Furthermore, approximately 
43.6 percent of women of childbearing age use women's contraceptive 
methods covered by the Guidelines.\85\ Therefore, the Departments 
estimate that approximately 5,200 women of childbearing age that use 
contraception covered by the Guidelines are covered by employer 
sponsored plans of entities that might be affected by these final 
rules. The Departments also estimate that, for the educational 
institutions that brought litigation challenges objecting to the 
Mandate as applied to student coverage that they arranged--where (1) 
the institutions were not exempt under the prior rule, (2) their 
student plans were not self-insured, and (3) they have not received 
permanent injunctions preventing the application of the previous 
regulations--such student plans likely covered approximately 2,600 
students. Thus, the Departments estimate the female members of those 
plans is 2,600 women.\86\ Assuming, as referenced above, that 43.6 
percent of such women use contraception covered by the Guidelines, the 
Departments estimate that 1,150 of those women would be affected by 
these final rules.
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    \81\ See, for example, Catholic Benefits Ass'n LCA v. Hargan, 
No. 5:14-cv-00240-R (W.D. Okla. order filed Mar. 7, 2018), and Dordt 
Coll. v. Burwell, No. 5:13-cv-04100 (N.D. Iowa order filed June 12, 
2018).
    \82\ See Kaiser Family Foundation and Health Research and 
Educational Trust, ``Employer Health Benefits: 2018 Annual Survey'' 
at 62, available at http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2018.
    \83\ Employee Benefits Security Administration, ``Health 
Insurance Coverage Bulletin'' Table 4, page 21. Using Data for the 
March 2016 Annual Social and Economic Supplement to the Current 
Population Survey. https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2016.pdf.
    \84\ United States Census Bureau, ``Age and Sex Composition: 
2010'' (May 2011), available at https://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf. The Guidelines' requirement of contraceptive 
coverage only applies ``for all women with reproductive capacity.'' 
https://www.hrsa.gov/womensguidelines/; also, see 80 FR 40318. In 
addition, studies commonly consider the 15-44 age range to assess 
contraceptive use by women of childbearing age. See, for example, 
Guttmacher Institute, ``Contraceptive Use in the United States'' 
(Sept. 2016), available at https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states.
    \85\ See https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states (reporting that of 61,491,766 women aged 15-44, 
26,809,5550 use women's contraceptive methods covered by the 
Guidelines).
    \86\ On average, the Departments expect that approximately half 
of those students (1,300) are female. For the purposes of this 
estimate, we also assume that female policyholders covered by plans 
arranged by institutions of higher education are women of 
childbearing age. The Departments expect that they would have less 
than the average number of dependents per policyholder than exists 
in standard plans, but for the purposes of providing an upper bound 
to this estimate, the Departments assume that they would have an 
average of one dependent per policyholder, thus bringing the number 
of policyholders and dependents back up to 2,6,00. Many of those 
dependents are likely not to be women of childbearing age, but in 
order to provide an upper bound to this estimate, the Departments 
assume they are. Therefore, for the purposes of this estimate, the 
Departments assume that the effect of these expanded exemptions on 
student plans of litigating entities includes 2,600 women.
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    Together, this leads the Departments to estimate that approximately 
6,400 women of childbearing age may have their contraception costs 
affected by plans of litigating entities using these expanded 
exemptions. As noted previously, the Departments do not have data 
indicating how many of those women agree with their employers' or 
educational institutions' opposition to contraception (so that fewer of 
them than the national average might actually use contraception). Nor 
do the Departments know how many would have alternative contraceptive 
access from a parent's or spouse's plan, or from federal, state, or 
local governmental programs, nor how many of those women would fall in 
the category of being most at risk of unintended pregnancy, nor how 
many of those entities would provide some contraception in their plans 
while only objecting to certain contraceptives.
v. Estimates of Accommodated Entities That May Use Expanded Exemptions
    In the Religious IFC, the Departments also examined data concerning 
user-fee reductions to estimate how many women might be affected by 
entities that are using the accommodation and would use the expanded 
exemptions under these final rules. Under the accommodation, HHS has 
received information from issuers that seek user fees adjustments under 
45 CFR 156.50(d)(3)(ii), for providing contraceptive payments for self-
insured plans that make use of the accommodation. HHS receives requests 
for fees adjustments both where Third Party Administrators (TPAs) for 
those self-insured accommodated plans are themselves issuers, and where 
the TPAs use separate issuers to provide the payments and those issuers 
seek fees adjustments. Where the issuers seeking adjustments are 
separate from the TPAs, the TPAs are asked to report the number of 
persons covered by those plans. Some users do not enter all the 
requested data, and not all the data for the 2017 plan year is 
complete. Nevertheless, HHS has reviewed the user fees adjustment data 
received for the 2017 plan year. HHS's best estimate from the data is 
that there were $38.4 million in contraception claims sought as the 
basis for user fees adjustments for plans, and that these claims were 
for plans covering approximately 1,823,000 plan participants and 
beneficiaries of all ages, male and female.
    This number fluctuates from year to year. It is larger than the 
estimate used in the Religious IFC because, on closer examination of 
the data, this number better accounts for plans where TPAs were also 
issuers seeking user fees adjustments, in addition to plans where the 
TPA is separate from the issuer seeking user fees adjustments. The 
number of employers using the accommodation where user fees adjustments 
were sought cannot be determined from HHS data, because not all users 
are required to submit that information, and HHS does not necessarily 
receive information about fully insured plans using the accommodation. 
Therefore, the Departments still consider our previous estimate of 209 
entities using the accommodation as the best estimate available.
    As noted in the Religious IFC, HHS's information indicates that 
religious nonprofit hospitals or health systems sponsored a significant 
minority of the accommodated self-insured plans that were using 
contraceptive user fees adjustments, yet those plans covered more than 
80 percent of the persons covered in all plans using contraceptive user 
fees adjustments. Some of those plans cover nearly tens of thousands of 
persons each and are proportionately much larger than the plans 
provided by other entities using the contraceptive user fees 
adjustments.
    The Departments continue to believe that a significant fraction of 
the persons covered by previously accommodated plans provided by 
religious nonprofit hospitals or health systems may not be affected by 
the expanded exemption. A broad range of religious hospitals or health 
systems have publicly indicated that they do not conscientiously oppose 
participating in the accommodation.\87\

[[Page 57577]]

Of course, some of these religious hospitals or health systems may opt 
for the expanded exemption under these final rules, but others might 
not. In addition, among plans of religious nonprofit hospitals or 
health systems, some have indicated that they might be eligible for 
status as a self-insured church plan.\88\ As discussed above, some 
litigants challenging the Mandate have appeared, after their complaints 
were filed, to make use of self-insured church plan status.\89\ (The 
Departments take no view on the status of these particular plans under 
the Employee Retirement Income Security Act of 1974 (ERISA), but simply 
make this observation for the purpose of seeking to estimate the impact 
of these final rules.) Nevertheless, considering all these factors, it 
generally seems likely that many of the remaining religious hospital or 
health systems plans previously using the accommodation will continue 
to opt into the voluntary accommodation under these final rules, under 
which their employees will still receive contraceptive coverage. To the 
extent that plans of religious hospitals or health systems are able to 
make use of self-insured church plan status, the previous accommodation 
rule would already have allowed them to relieve themselves and their 
third party administrators of obligations to provide contraceptive 
coverage or payments. Therefore, in such situations, the Religious IFC 
and these final rules would not have an anticipated effect on the 
contraceptive coverage of women in those plans.
---------------------------------------------------------------------------

    \87\ See, e.g., https://www.chausa.org/newsroom/women%27s-preventive-health-services-final-rule (``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. 
. . . 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 will work with our members to 
implement this accommodation.''). In comments submitted in previous 
rules concerning this Mandate, the Catholic Health Association has 
stated it ``is the national leadership organization for the Catholic 
health ministry, consisting of more than 2,000 Catholic health care 
sponsors, systems, hospitals, long-term care facilities, and related 
organizations. Our ministry is represented in all 50 states and the 
District of Columbia.'' Comments on CMS-9968-ANPRM (dated June 15, 
2012).
    \88\ See, for example, Brief of the Catholic Health Association 
of the United States as Amicus Curiae in Support of Petitioners, 
Advocate Health Care Network, Nos. 16-74, 16-86, 16-258, 2017 WL 
371934 at *1 (U.S. filed Jan. 24, 2017) (``CHA members have relied 
for decades that the `church plan' exemption contained in'' ERISA.).
    \89\ See https://www.franciscanhealth.org/sites/default/files/2015%20employee%20benefit%20booklet.pdf; see, for example, Roman 
Catholic Archdiocese of N.Y. v. Sebelius, 987 F. Supp. 2d 232, 242 
(E.D.N.Y. 2013).
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vi. Combined Estimates of Litigating and Accommodated Entities
    Considering all these data points and limitations, the Departments 
offer the following estimate of the number of women who will be 
impacted by the expanded exemption in these final rules. In addition to 
the estimate of 6,400 women of childbearing age that use contraception 
covered by the Guidelines, who will be affected by use of the expanded 
exemption among litigating entities, the Departments calculate the 
following number of women who we estimate to be affected by 
accommodated entities using the expanded exemption. As noted above, 
approximately 1,823,000 plan participants and beneficiaries were 
covered by self-insured plans that received contraceptive user fee 
adjustments in 2017. Although additional self-insured entities may have 
participated in the accommodation without making use of contraceptive 
user fees adjustments, the Departments do not know what number of 
entities did so. We consider it likely that self-insured entities with 
relatively larger numbers of covered persons had sufficient financial 
incentive to make use of the contraceptive user fees adjustments. 
Therefore, without better data available, the Departments assume that 
the number of persons covered by self-insured plans using contraceptive 
user fees adjustments approximates the number of persons covered by all 
self-insured plans using the accommodation.
    An additional but unknown number of persons were likely covered in 
fully insured plans using the accommodation. The Departments do not 
have data on how many fully insured plans have been using the 
accommodation, nor on how many persons were covered by those plans. DOL 
estimates that, among persons covered by employer-sponsored insurance 
in the private sector, 62.7 percent are covered by self-insured plans 
and 37.3 percent are covered by fully insured plans.\90\ Therefore, 
corresponding to the approximately 1,823,000 persons covered by self-
insured plans using user fee adjustments, we estimate an additional 
1,084,000 persons were covered by fully insured plans using the 
accommodation. This yields approximately 2,907,000 persons of all ages 
and sexes whom the Departments estimate were covered in plans using the 
accommodation under the previous regulations.
---------------------------------------------------------------------------

    \90\ ``Health Insurance Coverage Bulletin'' Table 3A, page 14. 
Using Data for the March 2016 Annual Social and Economic Supplement 
to the Current Population Survey. https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2016.pdf.
---------------------------------------------------------------------------

    Although recognizing the limited data available for our estimates, 
the Departments estimate that 100 of the 209 entities that were using 
the accommodation under the previous regulations will continue to opt 
into it under these final rules and that those entities will cover the 
substantial majority of persons previously covered in accommodated 
plans. The data concerning accommodated self-insured plans indicates 
that plans sponsored by religious hospitals and health systems and 
other entities likely to continue using the accommodation constitute 
over 60 percent of plans using the accommodation, and encompass more 
than 90 percent of the persons covered in accommodated plans.\91\ In 
other words, plans sponsored by such entities appear to be a majority 
of plans using the accommodation, and also have a proportionately 
larger number of covered persons than do plans sponsored by other 
accommodated entities, which have smaller numbers of covered persons. 
Moreover, as cited above, many religious hospitals and health systems 
have indicated that they do not object to the accommodation, and some 
of those entities might also qualify as self-insured church plans, so 
that these final rules would not impact the contraceptive coverage 
their employees receive.
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    \91\ The data also reflects a religious university using the 
accommodation that has publicly affirmed the accommodation is 
consistent with its religious views, and two houses of worship that 
are using the accommodation despite already qualifying for the 
previous exemption. We assume for the purposes of this estimate 
these three entities will also continue using the accommodation 
instead of the expanded exemption.
---------------------------------------------------------------------------

    The Departments do not have specific data on which plans of which 
sizes will actually continue to opt into the accommodation, nor how 
many will make use of self-insured church plan status. The Departments 
assume that the proportions of covered persons in self-insured plans 
using contraceptive user fees adjustments also apply in fully insured 
plans, for which the Departments lack representative data. Based on 
these assumptions and without better data available, the Departments 
assume that the 100 accommodated entities that will remain in the 
accommodation will account for 75 percent of all the persons previously 
covered in accommodated plans. In comparison, the Departments assume 
the 109 accommodated entities that will make use of the expanded 
exemption will encompass 25 percent of persons

[[Page 57578]]

previously covered in accommodated plans.
    Applying these percentages to the estimated 2,907,000 persons 
covered in previously accommodated plans, the Departments estimate that 
approximately 727,000 persons will be covered in the 109 plans that use 
the expanded exemption, and 2,180,000 persons will be covered in the 
estimated 100 plans that continue to use the accommodation. According 
to the Census data cited above, women of childbearing age comprise 20.2 
percent of the population, which means that approximately 147,000 women 
of childbearing age are covered in previously accommodated plans that 
the Departments estimate will use the expanded exemption. As noted 
above, approximately 43.6 percent of women of childbearing age use 
women's contraceptive methods covered by the Guidelines, so that the 
Departments expect approximately 64,000 women that use contraception 
covered by the Guidelines will be affected by accommodated entities 
using the expanded exemption.
    It is not clear the extent to which this number overlaps with the 
number estimated above of 6,400 women in plans of litigating entities 
that may be affected by these rules. In order to more broadly estimate 
the possible effects of these rules, the Departments assume there is no 
overlap between the two numbers, and therefore that these final rules 
would affect the contraceptive costs of approximately 70,500 women.
    Under the assumptions just discussed, the number of women whose 
contraceptive costs will be impacted by the expanded exemption in these 
final rules is approximately 0.1 percent of the 55.6 million women in 
private plans that HHS's Office of the Assistant Secretary for Planning 
and Evaluation (ASPE) estimated in 2015 received preventive services 
coverage under the Guidelines.
    In order to estimate the cost of contraception to women affected by 
the expanded exemption, the Departments are aware that, under the 
previous accommodation process, the total amount of contraceptive 
claims sought for self-insured plans for the 2017 benefit year was 
$38.5 million.\92\ These adjustments covered the cost of contraceptive 
coverage provided to women. As also discussed above, the Departments 
estimate that amount corresponded to plans covering 1,823,000 persons. 
Among those persons, as cited above, approximately 20.2 percent on 
average were women of childbearing age, and of those, approximately 
43.6 percent use women's contraceptive methods covered by the 
Guidelines. This amounts to approximately 161,000 women. Therefore, 
entities using contraceptive user fees adjustments received 
approximately $239 per year per woman of childbearing age that used 
contraception covered by the Guidelines and covered in their plans. But 
in the Religious IFC, we estimated that the average annual cost of 
contraception per woman per year is $584. As noted above, public 
commenters cited similar estimates of the annual cost of various 
contraceptive methods, if calculated for the life of the method's 
effectiveness. Therefore, to estimate the annual transfer effects of 
these final rules, the Departments will continue to use the estimate of 
$584 per woman per year. With an estimated impact of these final rules 
of 70,500 women per year, the financial transfer effects attributable 
to these final rules on those women would be approximately $41.2 
million.
---------------------------------------------------------------------------

    \92\ The amount of user fees adjustments provided was higher 
than this, since an additional administrative amount was added to 
the amount of contraceptive costs claimed.
---------------------------------------------------------------------------

    Some commenters suggested that the Departments' estimate of women 
affected among litigating entities was too low, but they did not 
support their proposed higher numbers with citations or specific data 
that could be verified as more reliable than the estimates in the 
Religious IFC. Their estimates appeared to be overinclusive, for 
example, by counting all litigating entities and not just those that 
may be affected by these rules because they are not in church plans, or 
by counting all plan participants and not just women of childbearing 
age that use contraception. Moreover, since the Religious IFC was 
issued, additional entities have received permanent injunctions against 
enforcement of any regulations implementing the contraceptive Mandate 
and so will not be affected by these final rules. Taking all of these 
factors into account, the Departments are not aware of a better method 
of estimating the number of women affected by these expanded 
exemptions.
vii. Alternate Estimates Based on Consideration of Pre-ACA Plans
    To account for uncertainty in the estimates above, the Departments 
conducted a second analysis using an alternative framework, in order to 
thoroughly consider the possible upper bound economic impact of these 
final rules.
    In 2015, ASPE estimated that 55.6 million women aged 15 to 64 were 
covered by private insurance had preventive services coverage under the 
Affordable Care Act.\93\ The Religious IFC used this estimate in this 
second analysis of the possible impact of the expanded exemptions in 
the interim final rules. ASPE has not issued an update to its report. 
Some commenters noted that a private organization published a fact 
sheet in 2017 claiming to make similar estimates based on more recent 
data, in which it estimated that 62.4 million aged 15 to 64 were 
covered by private insurance had preventive services coverage under the 
Affordable Care Act.\94\ The primary difference between these numbers 
appears to be a change in the number of persons covered by 
grandfathered plans.
---------------------------------------------------------------------------

    \93\ Available at https://aspe.hhs.gov/system/files/pdf/139221/The%20Affordable%20Care%20Act%20is%20Improving%20Access%20to%20Preventive%20Services%20for%20Millions%20of%20Americans.pdf.
    \94\ The commenters cited the National Women's Law Center's Fact 
Sheet from September 2017, available at https://nwlc-ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/2017/09/New-Preventive-Services-Estimates-3.pdf.
---------------------------------------------------------------------------

    The methodology of both reports do not fully correspond to the 
number the Departments seek to estimate here for the purposes of 
Executive Orders 12866 and 13563. These final rules will not affect all 
women aged 15 to 64 who are covered by private insurance and have 
coverage of preventive services under the Affordable Care Act. This is 
partly because the Departments do not have evidence to suggest that 
most employers will have sincerely held religious objections to 
contraceptive coverage and will use the expanded exemptions. In 
addition, both reports include women covered by plans that are not 
likely affected by the expanded exemptions for other reasons. For 
example, even though the estimates in those reports do not include 
enrollees in public plans such as Medicare or Medicaid, they do include 
enrollees in plans obtained on the health insurance marketplaces, 
purchased in the individual market, obtained by self-employed persons, 
or offered by government employers. Women who purchase plans in the 
marketplaces, the individual market, or as self-employed persons are 
not required to use the exemptions in these rules. Government employers 
are also not affected by the exemptions in these rules.
    In response to public comments citing the more recent report, the 
Departments offer the following estimates based on more recent data 
than used in the Religious IFC. Data from the U.S. Census Bureau 
indicates that 167.6 million individuals, male and female, under 65 
years of age, were covered by

[[Page 57579]]

employment-based insurance in 2017.\95\ Of those, 50.1 percent were 
female, that is, 84 million.\96\ The most recent Health Insurance 
Coverage Bulletin from EBSA states that, within employer-sponsored 
insurance, 76.5% are covered by private sector employers.\97\ As noted 
above, these expanded exemptions do not apply to public sector 
employers. Assuming the same percentage applies to the Census data for 
2017, 64.2 million women under 65 years of age were covered by private 
sector employment based insurance. EBSA's bulletin also states that, 
among those covered by private sector employer sponsored insurance, 5% 
receive health insurance coverage from a different primary source.\98\ 
We assume for the purposes of this estimate that an exemption claimed 
by an employer under these rules need not affect contraceptive coverage 
of a person who receives health insurance coverage from a different 
primary source. Again assuming this percentage applies to the 2017 
coverage year, we estimate that 61 million women under 65 years of age 
received primary health coverage from private sector, employment-based 
insurance. In conducting this analysis, the Departments also observed 
that for 3.8 percent of those covered by private sector employment 
sponsored insurance, the plan was purchased by a self-employed person, 
not by a third party employer. Self-employed persons who direct firms 
are not required to use the exemptions in these final rules, but if 
they do, they would not be losing contraceptive coverage that they want 
to have, since they would be using the exemption based on their 
sincerely held religious beliefs. If those persons have employees, the 
employees would be included in this estimate in the number of people 
who receive employer sponsored insurance from a third party. Assuming 
this percentage applies to the 2017 coverage year, we estimate that 
58.7 million women under 65 years of age received primary health 
coverage from private sector insurance from a third party employer plan 
sponsor.
---------------------------------------------------------------------------

    \95\ See U.S. Census Bureau Current Population Survey Table HI-
01, ``Health Insurance Coverage in 2017: All Races,'' available at 
https://www2.census.gov/programs-surveys/cps/tables/hi-01/2018/hi01_1.xls.
    \96\ Id.
    \97\ Table 1A, page 5 (stating that in coverage year 2015, 177.5 
million persons of all ages were covered by employer sponsored 
insurance, with 135.7 million of those being covered by private 
sector employers), available at https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2016.pdf.
    \98\ Id. at Table 1C, page 8 (168.7 million persons received 
health insurance coverage from employer sponsored insurance as their 
primary source, compared to 177.5 million persons covered by 
employer sponsored insurance overall).
---------------------------------------------------------------------------

    The Kaiser Family Foundation's Employer Health Benefits Annual 
Survey 2018 states that 16% of covered workers at all firms are 
enrolled in a plan grandfathered under the ACA (and thus not subject to 
the preventive services coverage requirements), but that only 14% of 
workers receiving coverage from state and local government employer 
plans are in grandfathered plans.\99\ Using the data cited above in 
EBSA's bulletin concerning the number of persons covered in public and 
private sector employer sponsored insurance, this suggests 16.6% of 
persons covered by private sector employer sponsored plans are in 
grandfathered plans, and 83.4% in non-grandfathered plans.\100\ 
Applying this percentage to the Census data, 49 million women under 65 
years of age received primary health insurance coverage from private 
sector, third party employment-based, non-grandfathered plans. Census 
data indicates that among women under age 65, 46.7% are of childbearing 
age (aged 15 to 44).\101\ Therefore, we estimate that 22.9 million 
women aged 15-44 received primary health insurance coverage from 
private sector, third party employment based, non-grandfathered 
insurance plans.
---------------------------------------------------------------------------

    \99\ ``Employer Health Benefits: 2018 Annual Survey'' at 211, 
available at http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2018.
    \100\ EBSA's bulletin shows 168.7 million persons with primary 
coverage from employer sponsored insurance, with 131.6 million in 
the private sector and 37.1 million in the public sector. 16% of 
168.7 million is 26.9 million. 14% of 37.1 million is 5.2 million. 
26.9 million - 5.2 million is 21.8 million, which is 16.6% of the 
131.6 million persons with primary coverage from private sector 
employer sponsored insurance.
    \101\ U.S. Census Bureau, Table S0101 ``Age and Sex'' (available 
at https://data.census.gov/cedsci/results/tables?q=S0101:%20AGE%20AND%20SEX&ps=table*currentPage@1).
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    Prior to the implementation of the Affordable Care Act, 
approximately 6 percent of employer survey respondents did not offer 
contraceptive coverage, with 31 percent of respondents not knowing 
whether they offered such coverage.\102\ The 6 percent may have 
included approximately 1.37 million of the women aged 15 to 44 
primarily covered by employer-sponsored insurance plans in the private 
sector. And as noted above, approximately 43.6 percent of women of 
childbearing age use women's contraceptive methods covered by the 
Guidelines. Therefore, the Departments estimate that 599,000 women of 
childbearing age that use contraceptives covered by the Guidelines were 
covered by plans that omitted contraceptive coverage prior to the 
Affordable Care Act.\103\
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    \102\ Kaiser Family Foundation & Health Research & Educational 
Trust, ``Employer Health Benefits, 2010 Annual Survey'' at 196, 
available at https://kaiserfamilyfoundation.files.wordpress.com/2013/04/8085.pdf.
    \103\ Some of the 31 percent of survey respondents that did not 
know about contraceptive coverage may not have offered such 
coverage. If it were possible to account for this non-coverage, the 
estimate of potentially affected covered women could increase. On 
the other hand, these employers' lack of knowledge about 
contraceptive coverage suggests that they lacked sincerely held 
religious beliefs specifically objecting to such coverage--beliefs 
without which they would not qualify for the expanded exemptions 
offered by these final rules. In that case, omission of such 
employers and covered women from this estimation approach would be 
appropriate. Correspondingly, the 6 percent of employers that had 
direct knowledge about the absence of coverage may be more likely to 
have omitted such coverage on the basis of religious beliefs than 
were the 31 percent of survey respondents who did not know whether 
the coverage was offered. Yet an entity's mere knowledge about its 
coverage status does not itself reflect its motive for omitting 
coverage. In responding to the survey, the entity may have simply 
examined its plan document to determine whether or not contraceptive 
coverage was offered. As will be relevant in a later portion of the 
analysis, we have no data indicating what portion of the entities 
that omitted contraceptive coverage pre-Affordable Care Act did so 
on the basis of sincerely held religious beliefs, as opposed to 
doing so for other reasons that would not qualify them for the 
expanded exemption offered in these final rules.
---------------------------------------------------------------------------

    It is unknown what motivated those employers to omit contraceptive 
coverage--whether they did so for religious or other reasons. Despite 
the lack of information about their motives, the Departments attempt to 
make a reasonable estimate of the upper bound of the number of those 
employers that omitted contraception before the Affordable Care Act and 
that would make use of these expanded exemptions based on sincerely 
held religious beliefs.
    To begin, the Departments estimate that publicly traded companies 
would not likely make use of these expanded exemptions. Even though the 
rule does not preclude publicly traded companies from dropping coverage 
based on a sincerely held religious belief, it is likely that attempts 
to object on religious grounds by publicly traded companies would be 
rare. The Departments take note of the Supreme Court's decision in 
Hobby Lobby, where the Court observed that ``HHS has not pointed to any 
example of a publicly traded corporation asserting RFRA rights, and 
numerous practical restraints would likely prevent that from occurring. 
For example, the idea that unrelated shareholders--including 
institutional investors with their own set of stakeholders--would agree 
to run a corporation under the same religious beliefs seems 
improbable.'' 134 S. Ct. at 2774. The Departments are aware of several 
federal health care conscience

[[Page 57580]]

laws \104\ that in some cases have existed for decades and that protect 
companies, including publicly traded companies, from discrimination if, 
for example, they decline to facilitate abortion, but the Departments 
are not aware of examples where publicly traded companies have made use 
of these exemptions. Thus, while the Departments consider it important 
to include publicly traded companies in the scope of these expanded 
exemptions for reasons similar to those reasons used by the Congress in 
RFRA and some health care conscience laws, in estimating the 
anticipated effects of the expanded exemptions, the Departments agree 
with the Supreme Court that it is improbable any will do so.
---------------------------------------------------------------------------

    \104\ For example, 42 U.S.C. 300a-7(b), 42 U.S.C. 238n, and 
Consolidated Appropriations Act of 2017, Div. H, Title V, Sec. 
507(d), Public Law 115-31.
---------------------------------------------------------------------------

    This assumption is significant because 31.3 percent of employees in 
the private sector work for publicly traded companies.\105\ That means 
that only approximately 411,000 women aged 15 to 44 that use 
contraceptives covered by the Guidelines were covered by plans of non-
publicly traded companies that did not provide contraceptive coverage 
pre-Affordable Care Act.
---------------------------------------------------------------------------

    \105\ John Asker, et al., ``Corporate Investment and Stock 
Market Listing: A Puzzle?'' 28 Review of Financial Studies Issue 2, 
at 342-390 (Oct. 7, 2014), available at https://doi.org/10.1093/rfs/hhu077. This is true even though there are only about 4,300 publicly 
traded companies in the U.S. See Rayhanul Ibrahim, ``The number of 
publicly-traded US companies is down 46% in the past two decades,'' 
Yahoo! Finance (Aug. 8, 2016), available at https://finance.yahoo.com/news/jp-startup-public-companies-fewer-000000709.html.
---------------------------------------------------------------------------

    Moreover, because these final rules build on previous regulations 
that already exempted houses of worship and integrated auxiliaries and, 
as explained above, effectively eliminated obligations to provide 
contraceptive coverage within objecting self-insured church plans, the 
Departments attempt to estimate the number of such employers whose 
employees would not be affected by these rules. In attempting to 
estimate the number of such employers, the Departments consider the 
following information. Many Catholic dioceses have litigated or filed 
public comments opposing the Mandate, representing to the Departments 
and to courts around the country that official Catholic Church teaching 
opposes contraception. There are 17,651 Catholic parishes in the United 
States,\106\ 197 Catholic dioceses,\107\ 5,224 Catholic elementary 
schools, and 1,205 Catholic secondary schools.\108\ Not all Catholic 
schools are integrated auxiliaries of Catholic churches, but there are 
other Catholic entities that are integrated auxiliaries that are not 
schools, so the Departments use the number of schools as an estimate of 
the number of integrated auxiliaries. Among self-insured church plans 
that oppose the Mandate, the Department has been sued by two--
Guidestone and Christian Brothers. Guidestone is a plan organized by 
the Southern Baptist convention covering 38,000 employers, some of 
which are exempt as churches or integrated auxiliaries, and some of 
which are not.\109\ Christian Brothers is a plan that covers Catholic 
organizations including Catholic churches and integrated auxiliaries, 
which are estimated above, but has also said in litigation that it 
covers about 500 additional entities that are not exempt as 
churches.\110\ In total, therefore, without having certain data on the 
number of entities exempt under the previous rules, the Departments 
estimate that approximately 62,000 employers among houses of worship, 
integrated auxiliaries, and church plans, were exempt or relieved of 
contraceptive coverage obligations under the previous regulations. The 
Departments do not know how many persons are covered in the plans of 
those employers. Guidestone reports that among its 38,000 employers, 
its plan covers approximately 220,000 persons, and its employers 
include ``churches, mission-sending agencies, hospitals, educational 
institutions and other related ministries.'' Using that ratio, the 
Departments estimate that the 62,000 church and church plan employers 
among Guidestone, Christian Brothers, and Catholic churches would 
include 359,000 persons. Among them, as referenced above, 72,500 women 
would be of childbearing age, and 32,100 may use contraceptives covered 
by the Guidelines.
---------------------------------------------------------------------------

    \106\ Roman Catholic Diocese of Reno, ``Diocese of Reno 
Directory: 2016-2017,'' available at http://www.renodiocese.org/documents/2016/9/2016%202017%20directory.pdf.
    \107\ Wikipedia, ``List of Catholic dioceses in the United 
States,'' available at https://en.wikipedia.org/wiki/List_of_Catholic_dioceses_in_the_United_States.
    \108\ National Catholic Educational Association, ``Catholic 
School Data,'' available at http://www.ncea.org/NCEA/Proclaim/Catholic_School_Data/Catholic_School_Data.aspx.
    \109\ Guidestone Financial Resources, ``Who We Serve,'' 
available at https://www.guidestone.org/AboutUs/WhoWeServe.
    \110\ The Departments take no view on the status of particular 
plans under the Employee Retirement Income Security Act of 1974 
(ERISA), but simply make this observation for the purpose of seeking 
to estimate the impact of these final rules.
---------------------------------------------------------------------------

    Taking all of these factors into account, the Departments estimate 
that the private, non-publicly traded employers that did not cover 
contraception pre-Affordable Care Act, and that were not exempt by the 
previous regulations nor were participants in self-insured church plans 
that oppose contraceptive coverage, covered approximately 379,000 women 
aged 15 to 44 that use contraceptives covered by the Guidelines. But to 
estimate the likely actual transfer impact of these final rules, the 
Departments must estimate not just the number of such women covered by 
those entities, but how many of those entities would actually qualify 
for, and use, the expanded exemptions.
    The Departments do not have data indicating how many of the 
entities that omitted coverage of contraception pre- Affordable Care 
Act did so on the basis of sincerely held religious beliefs that might 
qualify them for exempt status under these final rules, as opposed to 
having done so for other reasons. Besides the entities that filed 
lawsuits or submitted public comments concerning previous regulations 
on this matter, the Departments are not aware of entities that omitted 
contraception pre-Affordable Care Act and then opposed the 
contraceptive coverage requirement after it was imposed by the 
Guidelines. For the following reasons, however, the Departments believe 
that a reasonable estimate is that no more than approximately one third 
of the persons covered by relevant entities--that is, no more than 
approximately 126,400 affected women--would likely be subject to 
potential transfer impacts under the expanded religious exemptions 
offered in these final rules. Consequently, as explained below, the 
Departments believe that the potential impact of these final rules 
falls substantially below the $100 million threshold for an 
economically significant major rule.
    First, as mentioned, the Departments are not aware of information, 
or of data from public comments, that would lead us to estimate that 
all or most entities that omitted coverage of contraception pre-
Affordable Care Act did so on the basis of sincerely held conscientious 
objections in general or, specifically, religious beliefs, as opposed 
to having done so for other reasons. It would seem reasonable to assume 
that many of those entities did not do so based on sincerely held 
religious beliefs. According to a 2016 poll, only 4% of Americans 
believe that using contraceptives is morally wrong (including from a 
religious perspective).\111\ In addition,

[[Page 57581]]

various reasons exist for some employers not to return to a pre-ACA 
situation in which they did not provide contraceptive coverage, such as 
avoiding negative publicity, the difficulty of taking away a fringe 
benefit that employees have become accustomed to having, and avoiding 
the administrative cost of renegotiating insurance contracts. 
Additionally, as discussed above, many employers with objections to 
contraception, including several of the largest litigants, only object 
to some contraceptives and cover as many as 14 of 18 of the 
contraceptive methods included in the Guidelines. This will reduce, and 
potentially eliminate, the contraceptive cost transfer for women 
covered in their plans.\112\ Moreover, as suggested by the Guidestone 
data mentioned previously, employers with conscientious objections may 
tend to have relatively few employees and, among nonprofit entities 
that object to the Mandate, it is possible that a greater share of 
their employees oppose contraception than among the general population, 
which should lead to a reduction in the estimate of how many women in 
those plans actually use contraception.
---------------------------------------------------------------------------

    \111\ Pew Research Center, ``Where the Public Stands on 
Religious Liberty vs. Nondiscrimination'' at page 26 (Sept. 28, 
2016), available at http://assets.pewresearch.org/wp-content/uploads/sites/11/2016/09/Religious-Liberty-full-for-web.pdf.
    \112\ On the other hand, a key input in the approach that 
generated the one third threshold estimate was a survey indicating 
that six percent of employers did not provide contraceptive coverage 
pre-Affordable Care Act. Employers that covered some contraceptives 
pre-Affordable Care Act may have answered ``yes'' or ``don't know'' 
to the survey. In such cases, the potential transfer estimate has a 
tendency toward underestimation because the rule's effects on such 
women--causing their contraceptive coverage to be reduced from all 
18 methods to some smaller subset--have been omitted from the 
calculation.
---------------------------------------------------------------------------

    It may not be the case that all entities that objected on religious 
grounds to contraceptive coverage before the ACA brought suit against 
the Mandate. However, it is worth noting that, while less than 100 for-
profit entities challenged the Mandate in court (and an unknown number 
joined two newly formed associational organizations bringing suit on 
their behalf), there are more than 3 million for-profit private sector 
establishments in the United States that offer health insurance.\113\ 
Six percent of those would be 185,000, and one third of that number 
would be 62,000. The Departments consider it unlikely that tens or 
hundreds of thousands of for-profit private sector establishments 
omitted contraceptive coverage pre-ACA specifically because of 
sincerely held religious beliefs, when, after six years of litigation 
and multiple public comment periods, the Departments are aware of less 
than 100 such entities. The Departments do not know how many additional 
nonprofit entities would use the expanded exemptions, but as noted 
above, under the rules predating the Religious IFC, tens of thousands 
were already exempt as churches or integrated auxiliaries, or were 
covered by self-insured church plans that are not penalized if no 
contraceptive coverage is offered.
---------------------------------------------------------------------------

    \113\ Tables I.A.1 and I.A.2, Medical Expenditure Panel Survey, 
``Private-Sector Data by Firm Size, Industry Group, Ownership, Age 
of Firm, and Other Characteristics: 2017,'' HHS Agency for 
Healthcare Research and Quality (indicating total number of for-
profit incorporated, for-profit unincorporated, and non-profit 
establishments in the United States, and the percentage of each that 
offer health insurance), available at https://meps.ahrq.gov/data_stats/summ_tables/insr/national/series_1/2017/tia1.htm and 
https://meps.ahrq.gov/data_stats/summ_tables/insr/national/series_1/2017/tia2.htm. 2523.
---------------------------------------------------------------------------

    Finally, among entities that omitted contraceptive coverage based 
on sincerely held conscientious objections as opposed to other reasons, 
it is likely that some, albeit a minority, did so based on moral 
objections that are non-religious, and therefore would not be compassed 
by the expanded exemptions in these final rules.\114\ Among the general 
public, polls vary about religious beliefs, but one prominent poll 
shows that 13 percent of Americans say they do not believe in God or 
have no opinion on the question.\115\ Therefore, the Departments 
estimate that, of the entities that omitted contraception pre-
Affordable Care Act based on sincerely held conscientious objections as 
opposed to other reasons, a small fraction did so based on sincerely 
held non-religious moral convictions, and therefore would not be 
affected by the expanded exemption provided by these final rules for 
religious beliefs.
---------------------------------------------------------------------------

    \114\ Such objections may be encompassed by companion final 
rules published elsewhere in today's Federal Register. Those final 
rules, however, are narrower in scope than these final rules. For 
example, in providing expanded exemptions for plan sponsors, they do 
not encompass companies with certain publicly traded ownership 
interests.
    \115\ Gallup, ``Religion,'' available at https://news.gallup.com/poll/1690/religion.aspx.
---------------------------------------------------------------------------

    For the reasons stated above, the Departments believe it would be 
incorrect to assume that all or even most of the plans that did not 
cover contraceptives before the ACA did so on the basis of religious 
objections. Instead, without data available on the reasons those plans 
omitted contraceptive coverage before the ACA, we assume that no more 
than one third of those plans omitted contraceptive coverage based on 
sincerely held religious beliefs. Thus, of the estimated 379,000 women 
aged 15 to 44 that use contraceptives covered by the Guidelines, who 
received primary coverage from plans of private, non-publicly traded, 
third party employers that did not cover contraception pre-Affordable 
Care Act, and whose plans were neither exempt nor omitted from 
mandatory contraceptive coverage under the previous regulations, we 
estimate that no more than 126,400 women would be in plans that will 
use these expanded exemptions.
viii. Final Estimates of Persons Affected by Expanded Exemptions
    Based on the estimate of an average annual expenditure on 
contraceptive products and services of $584 per user, the effect of the 
expanded exemptions on 126,400 women would give rise to approximately 
$73.8 million in potential transfer impact. It is possible, however, 
that premiums would adjust to reflect changes in coverage, thus 
partially offsetting the transfer experienced by women who use the 
affected contraceptives. As referenced elsewhere in this analysis, such 
women may make up approximately 8.8 percent of the covered 
population,\116\ in which case the offset would also be approximately 
8.8 percent, yielding a potential transfer of $67.3 million.
---------------------------------------------------------------------------

    \116\ As cited above, women of childbearing age are 20.2 percent 
of woman aged 15-65, and 43.6 percent of women of childbearing age 
use contraceptives covered by the Guidelines.
---------------------------------------------------------------------------

    Thus, in their most expansive estimate, the Departments conclude 
that no more than approximately 126,400 women would likely be subject 
to potential transfer impacts under the expanded religious exemptions 
offered in these final rules. The Departments estimate this financial 
transfer to be approximately $67.3 million. This falls substantially 
below the $100 million threshold for an economically significant and 
major rule.
    As noted above, the Departments view this alternative estimate as 
being the highest possible bound of the transfer effects of these 
rules, but believe the number of establishments that will actually 
exempt their plans as the result of these rules will be far fewer than 
contemplated by this estimate. The Departments make these estimates 
only for the purposes of determining whether the rules are economically 
significant under Executive Orders 12866 and 13563.
    After reviewing public comments, both those supporting and those 
disagreeing with these estimates and similar estimates from the 
Religious IFC, and because the Departments do not have sufficient data 
to precisely

[[Page 57582]]

estimate the amount by which these factors render our estimate too 
high, or too low, the Departments simply conclude that the financial 
transfer falls substantially below the $100 million threshold for an 
economically significant rule based on the calculations set forth 
above.

B. Special Analyses--Department of the Treasury

    These regulations are not subject to review under section 6(b) of 
Executive Order 12866 pursuant to the Memorandum of Agreement (April 
11, 2018) between the Department of the Treasury and the Office of 
Management and Budget regarding review of tax regulations.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to federal rules that are subject to 
the notice and comment requirements of section 553(b) of the APA (5 
U.S.C. 551 et seq.) and that are likely to have a significant economic 
impact on a substantial number of small entities. The Religious IFC was 
an interim final rule with comment period, and in these final rules, 
the Departments adopt the Religious IFC as final with certain changes. 
These final rules are, thus, being issued after a notice and comment 
period.
    The Departments also carefully considered the likely impact of the 
rule on small entities in connection with their assessment under 
Executive Order 12866 and do not expect that these final rules will 
have a significant economic effect on a substantial number of small 
entities. These final rules will not result in any additional costs to 
affected entities, and, in many cases, may relieve burdens and costs 
from such entities. By exempting from the Mandate small businesses and 
nonprofit organizations with religious objections to some (or all) 
contraceptives and/or sterilization--businesses and organizations that 
would otherwise be faced with the dilemma of complying with the Mandate 
(and violating their religious beliefs) or following their beliefs (and 
incurring potentially significant financial penalties for 
noncompliance)--the Departments have reduced regulatory burden on such 
small entities. Pursuant to section 7805(f) of the Code, the notice of 
proposed rulemaking preceding these regulations was submitted to the 
Chief Counsel for Advocacy of the Small Business Administration for 
comment on their impact on small business.

D. Paperwork Reduction Act--Department of Health and Human Services

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), 
we are required to provide 30-day notice in the Federal Register and 
solicit public comment before a collection of information is submitted 
to the Office of Management and Budget (OMB) for review and approval. 
In order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 (PRA) requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
    Recommendations to minimize the information collection burden on 
the affected public, including automated collection techniques. In the 
October 13, 2017 (82 FR 47792) interim final rules, we solicited public 
comment on each of these issues for the following sections of the rule 
containing information collection requirements (ICRs). A description of 
the information collection provisions implicated in these final rules 
is given in the following section with an estimate of the annual 
burden. The burden related to these ICRs received emergency review and 
approval under OMB control number 0938-1344. They have been resubmitted 
to OMB in conjunction with these final rules and are pending re-
approval. The Departments sought public comments on PRA estimates set 
forth in the Religious IFC, and are not aware of significant comments 
submitted that suggest there is a better way to estimate these burdens.
1. Wage Data
    Average labor costs (including 100 percent fringe benefits and 
overhead) used to estimate the costs are calculated using data 
available derived from the Bureau of Labor Statistics.\117\
---------------------------------------------------------------------------

    \117\ May 2016 National Occupational Employment and Wage 
Estimates United States found at https://www.bls.gov/oes/current/oes_nat.htm.

                          Table 1--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                   Occupational     Mean hourly    benefits and      Adjusted
              BLS occupation title                     code         wage ($/hr)    overhead ($/   hourly wage ($/
                                                                                        hr)             hr)
----------------------------------------------------------------------------------------------------------------
Executive Secretaries and Executive                      43-6011          $27.84          $27.84          $55.68
 Administrative Assistants......................
Compensation and Benefits Manager...............         11-3111           61.01           61.01          122.02
Legal Counsel...................................         23-1011           67.25           67.25          134.50
Senior Executive................................         11-1011           93.44           93.44          186.88
General and Operations Managers.................         11-1021           58.70           58.70          117.40
----------------------------------------------------------------------------------------------------------------

2. ICRs Regarding Self-Certification or Notices to HHS (Sec.  
147.131(c)(3))
    Each organization seeking to be treated as an eligible organization 
that wishes to use the optional accommodation process offered under 
these final rules must either use the EBSA Form 700 method of self-
certification or provide notice to HHS of its religious objection to 
coverage of all or a subset of contraceptive services. Specifically, 
these final rules continue to allow eligible organizations to notify an 
issuer or third party administrator using EBSA Form 700, or to notify 
HHS, of their religious objection to coverage of all or a subset of 
contraceptive services, as set forth in the July 2015 final regulations 
(80 FR 41318).
    Notably, however, entities that are participating in the previous 
accommodation process, where a self-certification or notice has already 
been submitted, and where the entities choose to continue their 
accommodated status under these final rules, generally do not need to 
file a new self-certification or notice (unless they change their 
issuer or third party

[[Page 57583]]

administrator). As explained above, HHS assumes that, among the 209 
entities the Departments estimated are using the previous 
accommodation, 109 will use the expanded exemption and 100 will 
continue under the voluntary accommodation. Those 100 entities will not 
need to file additional self-certifications or notices. HHS also 
assumes that an additional 9 entities that were not using the previous 
accommodation will opt into it. Those entities will be subject to the 
self-certification or notice requirement.
    In order to estimate the cost for an entity that chooses to opt 
into the accommodation process, HHS assumes that clerical staff for 
each eligible organization will gather and enter the necessary 
information and send the self-certification to the issuer or third 
party administrator as appropriate, or send the notice to HHS.\118\ HHS 
assumes that a compensation and benefits manager and inside legal 
counsel will review the self-certification or notice to HHS and a 
senior executive would execute it. HHS estimates that an eligible 
organization would spend approximately 50 minutes (30 minutes of 
clerical labor at a cost of $55.68 per hour, 10 minutes for a 
compensation and benefits manager at a cost of $122.02 per hour, 5 
minutes for legal counsel at a cost of $134.50 per hour, and 5 minutes 
by a senior executive at a cost of $186.88 per hour) preparing and 
sending the self-certification or notice to HHS and filing it to meet 
the recordkeeping requirement. Therefore, the total annual burden for 
preparing and providing the information in the self-certification or 
notice to HHS will require approximately 50 minutes for each eligible 
organization with an equivalent cost of approximately $74.96 for a 
total hour burden of approximately 7.5 hours and an associated 
equivalent cost of approximately $675 for 9 entities. As DOL and HHS 
share jurisdiction, they are splitting the hour burden so that each 
will account for approximately 3.75 burden hours with an equivalent 
cost of approximately $337.
---------------------------------------------------------------------------

    \118\ For purposes of this analysis, the Department assumes that 
the same amount of time will be required to prepare the self-
certification and the notice to HHS.
---------------------------------------------------------------------------

    HHS estimates that each self-certification or notice to HHS will 
require $0.50 in postage and $0.05 in materials cost (paper and ink) 
and the total postage and materials cost for each self-certification or 
notice sent via mail will be $0.55. For purposes of this analysis, HHS 
assumes that 50 percent of self-certifications or notices to HHS will 
be mailed. The total cost for sending the self-certifications or 
notices to HHS by mail is approximately $2.75 for 5 entities. As DOL 
and HHS share jurisdiction they are splitting the cost burden so that 
each will account for $1.38 of the cost burden.
3. ICRs Regarding Notice of Availability of Separate Payments for 
Contraceptive Services (Sec.  147.131(e))
    As required by the July 2015 final regulations (80 FR 41318), a 
health insurance issuer or third party administrator providing or 
arranging separate payments for contraceptive services for participants 
and beneficiaries in insured or self-insured group health plans (or 
student enrollees and covered dependents in student health insurance 
coverage) of eligible organizations is required to provide a written 
notice to plan participants and beneficiaries (or student enrollees and 
covered dependents) informing them of the availability of such 
payments. The notice must be separate from, but contemporaneous with 
(to the extent possible), any application materials distributed in 
connection with enrollment (or re-enrollment) in group or student 
coverage of the eligible organization in any plan year to which the 
accommodation is to apply and will be provided annually. To satisfy the 
notice requirement, issuers and third party administrators may, but are 
not required to, use the model language previously provided by HHS or 
substantially similar language.
    As mentioned, HHS is anticipating that approximately 109 entities 
will use the optional accommodation (100 that used it previously, and 9 
that will newly opt into it). It is unknown how many issuers or third 
party administrators provide health insurance coverage or services in 
connection with health plans of eligible organizations, but HHS will 
assume at least 109. It is estimated that each issuer or third party 
administrator will need approximately 1 hour of clerical labor (at 
$55.68 per hour) and 15 minutes of management review (at $117.40 per 
hour) to prepare the notices. The total burden for each issuer or third 
party administrator to prepare notices will be 1.25 hours with an 
associated cost of approximately $85.03. The total burden for all 109 
issuers or third party administrators will be 136 hours, with an 
associated cost of approximately $9,268. As DOL and HHS share 
jurisdiction, they are splitting the burden each will account for 68 
burden hours with an associated cost of $4,634, with approximately 55 
respondents.
    The Departments estimate that approximately 2,180,000 plan 
participants and beneficiaries will be covered in the plans of the 100 
entities that previously used the accommodation and will continue doing 
so, and that an additional 9 entities will newly opt into the 
accommodation. We reach this estimate using calculations set forth 
above, in which we used 2017 data available to HHS for contraceptive 
user fees adjustments to estimate that approximately 2,907,000 plan 
participants and beneficiaries were covered by plans using the 
accommodation. We further estimated that the 100 entities that 
previously used the accommodation and will continue doing so will cover 
approximately 75 percent of the persons in all accommodated plans, 
based on HHS data concerning accommodated self-insured plans that 
indicates plans sponsored by religious hospitals and health systems 
encompass more than 80 percent of the persons covered in such plans. In 
other words, plans sponsored by such entities have a proportionately 
larger number of covered persons than do plans sponsored by other 
accommodated entities, which have smaller numbers of covered persons. 
As noted above, many religious hospitals and health systems have 
indicated that they do not object to the accommodation, and some of 
those entities might also qualify as self-insured church plans. The 
Departments do not have specific data on which plans of which employer 
sizes will actually continue to opt into the accommodation, nor how 
many will make use of self-insured church plan status. The Departments 
assume that the proportions of covered persons in self-insured plans 
using contraceptive user fees adjustments also apply in fully insured 
plans, for which we lack representative data.
    Based on these assumptions and without better data available, the 
Departments estimate that previously accommodated entities encompassed 
approximately 2,907,000 persons; the estimated 100 entities that 
previously used the accommodation and continue to use it will account 
for 75 percent of those persons (that is, approximately 2,180,000 
persons); and the estimated 109 entities that previously used the 
accommodation and will now use their exempt status will account for 25 
percent of those persons (that is, approximately 727,000 persons). It 
is not known how many persons will be covered in the plans of the 9 
entities we estimate will newly use the accommodation. Assuming that 
those 9 entities will have a similar number of covered persons per 
entity as the 100 entities encompassing 2,180,000

[[Page 57584]]

persons, the Departments estimate that all 109 accommodated entities 
will encompass approximately 2,376,000 covered persons.
    The Departments assume that sending one notice to each policyholder 
will satisfy the need to send the notices to all participants and 
dependents. Among persons covered by insurance plans sponsored by large 
employers in the private sector, approximately 50.1 percent are 
participants and 49.9 percent are dependents.\119\ For 109 entities, 
the total number of notices will be 1,190,613. For purposes of this 
analysis, the Departments also assume that 53.7 percent of notices will 
be sent electronically, and 46.3 percent will be mailed.\120\ 
Therefore, approximately 551,254 notices will be mailed. HHS estimates 
that each notice will require $0.50 in postage and $0.05 in materials 
cost (paper and ink) and the total postage and materials cost for each 
notice sent via mail will be $0.55. The total cost for sending 
approximately 551,254 notices by mail will be approximately $303,190. 
As DOL and HHS share jurisdiction, they are splitting the cost burden 
so each will account for $151,595 of the cost burden.
---------------------------------------------------------------------------

    \119\ ``Health Insurance Coverage Bulletin'' Table 4, page 21. 
Using Data for the March 2016 Annual Social and Economic Supplement 
to the Current Population Survey. https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2016.pdf.
    \120\ According to data from the National Telecommunications and 
Information Agency (NTIA), 36.0 percent of individuals age 25 and 
over have access to the internet at work. According to a Greenwald & 
Associates survey, 84 percent of plan participants find it 
acceptable to make electronic delivery the default option, which is 
used as the proxy for the number of participants who will not opt 
out that are automatically enrolled (for a total of 30.2 percent 
receiving electronic disclosure at work). Additionally, the NTIA 
reports that 38.5 percent of individuals age 25 and over have access 
to the internet outside of work. According to a Pew Research Center 
survey, 61 percent of internet users use online banking, which is 
used as the proxy for the number of internet users who will opt in 
for electronic disclosure (for a total of 23.5 percent receiving 
electronic disclosure outside of work). Combining the 30.2 percent 
who receive electronic disclosure at work with the 23.5 percent who 
receive electronic disclosure outside of work produces a total of 
53.7 percent who will receive electronic disclosure overall.
---------------------------------------------------------------------------

4. ICRs Regarding Notice of Revocation of Accommodation (Sec.  
147.131(c)(4))
    An eligible organization that now wishes to take advantage of the 
expanded exemption may revoke its use of the accommodation process; its 
issuer or third party administrator must provide written notice of such 
revocation to participants and beneficiaries as soon as practicable. As 
discussed above, HHS estimates that 109 entities that are using the 
accommodation process will revoke their use of the accommodation, and 
will therefore be required to send the notification; the issuer or 
third party administrator can send the notice on behalf of the entity. 
For the purpose of calculating the ICRs associated with revocations of 
the accommodation, and for various reasons discussed above, HHS assumes 
that litigating entities that were previously using the accommodation 
and that will revoke their use of the accommodation fall within the 
estimated 109 entities that will revoke the accommodation overall.
    As before, HHS assumes that, for each issuer or third party 
administrator, a manager and inside legal counsel and clerical staff 
will need approximately 2 hours to prepare and send the notification to 
participants and beneficiaries and maintain records (30 minutes for a 
manager at a cost of $117.40 per hour, 30 minutes for legal counsel at 
a cost of $134.50 per hour, 1 hour for clerical staff at a cost of 
$55.68 per hour). The burden per respondent will be 2 hours with an 
associated cost of approximately $182; for 109 entities, the total hour 
burden will be 218 hours with an associated cost of approximately 
$19,798. As DOL and HHS share jurisdiction, they are splitting the hour 
burden so each will account for 109 burden hours with an associated 
cost of approximately $9,899.
    As discussed above, HHS estimates that there are approximately 
727,000 covered persons in accommodated plans that will revoke their 
accommodated status and use the expanded exemption.\121\ As before, the 
Departments use the average of 50.1 percent of covered persons who are 
policyholders, and estimate that an average of 53.7 percent of notices 
will be sent electronically and 46.3 percent by mail. Therefore, 
approximately 364,102 notices will be distributed, of which 168,579 
notices will be mailed. HHS estimates that each mailed notice will 
require $0.50 in postage and $0.05 in materials cost (paper and ink) 
and the total postage and materials cost for each notice sent via mail 
will be $0.55. The total cost for sending approximately 168,579 notices 
by mail is approximately $93,545. As DOL and HHS share jurisdiction, 
they are splitting the hour burden so each will account for 182,051 
notices, with an associated cost of approximately $46,772.
---------------------------------------------------------------------------

    \121\ In estimating the number of women that might have their 
contraceptive coverage affected by the expanded exemption, the 
Departments indicated that we do not know the extent to which the 
number of women in accommodated plans affected by these final rules 
overlap with the number of women in plans offered by litigating 
entities that will be affected by these final rules, though we 
assume there is significant overlap. That uncertainty should not 
affect the calculation of the ICRs for revocation notices, however. 
If the two numbers overlap, the estimates of plans revoking the 
accommodation and policyholders covered in those plans would already 
include plans and policyholders of litigating entities. If the 
numbers do not overlap, those litigating entity plans would not 
presently be enrolled in the accommodation, and therefore would not 
need to send notices concerning revocation of accommodated status.

                                                   Table 1--Summary of Information Collection Burdens
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Total
                                            OMB Control   Number of                 Burden per     annual     Hourly labor     Total labor    Total cost
            Regulation section                  No.      respondents   Responses    respondent     burden        cost of         cost of         ($)
                                                                                     (hours)      (hours)     reporting ($)   reporting ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Self-Certification or Notices to HHS......    0938-1344          * 5            5         0.83         3.75          $89.95            $337         $339
Notice of Availability of Separate            0938-1344         * 55      595,307         1.25        68.13           68.02           4,634      156,229
 Payments for Contraceptive Services......
Notice of Revocation of Accommodation.....    0938-1344          *55      182,051         2.00          109           90.82           9,899       56,671
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................  ...........         *115      777,363  ...........       180.88  ..............          14,870      213,239
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The total number of respondents is 227 (= 9+109+109) for both HHS and DOL, but the summaries here and below exceed that total because of rounding up
  that occurs when sharing the burden between HHS and DOL.
Note: There are no capital/maintenance costs associated with the ICRs contained in this rule; therefore, we have removed the associated column from
  Table 1. Postage and material costs are included in Total Cost.


[[Page 57585]]

5. Submission of PRA-Related Comments
    We have submitted a copy of this rule to OMB for its review of the 
rule's information collection and recordkeeping requirements. These 
requirements are not effective until they have been approved by OMB.

E. Paperwork Reduction Act--Department of Labor

    Under the Paperwork Reduction Act, an agency may not conduct or 
sponsor, and an individual is not required to respond to, a collection 
of information unless it displays a valid OMB control number. In 
accordance with the requirements of the PRA, the ICR for the EBSA Form 
700 and alternative notice have previously been approved by OMB under 
control numbers 1210-0150 and 1210-0152. A copy of the ICR may be 
obtained by contacting the PRA addressee shown below or at http://www.RegInfo.gov. PRA ADDRESSEE: G. Christopher Cosby, Office of Policy 
and Research, U.S. Department of Labor, Employee Benefits Security 
Administration, 200 Constitution Avenue NW, Room N-5718, Washington, DC 
20210. Telephone: 202-693-8410; Fax: 202-219-4745. These are not toll-
free numbers.
    The Religious final rules amended the ICR by changing the 
accommodation process to an optional process for exempt organizations 
and requiring a notice of revocation to be sent by the issuer or third 
party administrator to participants and beneficiaries in plans whose 
employer revokes their accommodation; these final rules confirm as 
final the Religious IFC provisions on the accommodation process. DOL 
submitted the ICRs to OMB in order to obtain OMB approval under the PRA 
for the regulatory revision. In an effort to consolidate the number of 
information collection requests, DOL is combining the ICR related to 
the OMB control number 1210-0152 with the ICR related to the OMB 
control number 1210-0150 and discontinuing OMB control number 1210-
0152. Consistent with the analysis in the HHS PRA section above, the 
Departments expect that each of the estimated 9 eligible organizations 
newly opting into the accommodation will spend approximately 50 minutes 
in preparation time and incur $0.54 mailing cost to self-certify or 
notify HHS. Each of the 109 issuers or third party administrators for 
the 109 eligible organizations that make use of the accommodation 
overall will distribute Notices of Availability of Separate Payments 
for Contraceptive Services. These issuers and third party 
administrators will spend approximately 1.25 hours in preparation time 
and incur $0.54 cost per mailed notice. Notices of Availability of 
Separate Payments for Contraceptive Services will need to be sent to 
1,190,613 policyholders, and 53.7 percent of the notices will be sent 
electronically, while 46.3 percent will be mailed. Finally, 109 
entities using the previous accommodation process will revoke their use 
of the accommodation (in favor of the expanded exemption) and will 
therefore be required to cause the Notice of Revocation of 
Accommodation to be sent, with the issuer or third party administrator 
able to send the notice on behalf of the entity. These entities will 
spend approximately two hours in preparation time and incur $0.54 cost 
per mailed notice. Notice of Revocation of Accommodation will need to 
be sent to an average of 364,102 policyholders and 53.7 percent of the 
notices will be sent electronically. The DOL information collections in 
this rule are found in 29 CFR 2510.3-16 and 2590.715-2713A and are 
summarized as follows:
    Type of Review: Revised Collection.
    Agency: DOL-EBSA.
    Title: Coverage of Certain Preventive Services under the Affordable 
Care Act--Private Sector.
    OMB Numbers: 1210-0150.
    Affected Public: Private Sector--Not for profit and religious 
organizations; businesses or other for-profits.
    Total Respondents: 114 \122\ (combined with HHS total is 227).
---------------------------------------------------------------------------

    \122\ Denotes that there is an overlap between jurisdiction 
shared by HHS and DOL over these respondents and therefore they are 
included only once in the total.
---------------------------------------------------------------------------

    Total Responses: 777,362 (combined with HHS total is 1,554,724).
    Frequency of Response: On occasion.
    Estimated Total Annual Burden Hours: 181 (combined with HHS total 
is 362 hours).
    Estimated Total Annual Burden Cost: $197,955 (combined with HHS 
total is $395,911).
    Type of Review: Revised Collection.
    Agency: DOL-EBSA.

F. Regulatory Reform Executive Orders 13765, 13771 and 13777

    Executive Order 13765 (January 20, 2017) directs that, ``[t]o the 
maximum extent permitted by law, the Secretary of the Department of 
Health and Human Services and the heads of all other executive 
departments and agencies (agencies) with authorities and 
responsibilities under the Act shall exercise all authority and 
discretion available to them to waive, defer, grant exemptions from, or 
delay the implementation of any provision or requirement of the Act 
that would impose a fiscal burden on any state or a cost, fee, tax, 
penalty, or regulatory burden on individuals, families, healthcare 
providers, health insurers, patients, recipients of healthcare 
services, purchasers of health insurance, or makers of medical devices, 
products, or medications.'' In addition, agencies are directed to 
``take all actions consistent with law to minimize the unwarranted 
economic and regulatory burdens of the [Affordable Care Act], and 
prepare to afford the states more flexibility and control to create a 
freer and open healthcare market.'' These final rules exercise the 
discretion provided to the Departments under the Affordable Care Act, 
RFRA, and other laws to grant exemptions and thereby minimize 
regulatory burdens of the Affordable Care Act on the affected entities 
and recipients of health care services.
    Consistent with Executive Order 13771 (82 FR 9339, February 3, 
2017), the Departments have estimated the costs and cost savings 
attributable to these final rules. As discussed in more detail in the 
preceding analysis, these final rules lessen incremental reporting 
costs.\123\ However, in order to avoid double-counting with the 
Religious IFC, which has already been tallied as an Executive Order 
13771 deregulatory action, this finalization of the IFC's policy is not 
considered a deregulatory action under the Executive Order.
---------------------------------------------------------------------------

    \123\ Other noteworthy potential impacts encompass potential 
changes in medical expenditures, including potential decreased 
expenditures on contraceptive devices and drugs and potential 
increased expenditures on pregnancy-related medical services. OMB's 
guidance on E.O. 13771 implementation (Dominic J. Mancini, 
``Guidance Implementing Executive Order 13771, Titled ``Reducing 
Regulation and Controlling Regulatory Costs,'' Office of Mgmt. & 
Budget (Apr. 5, 2017), https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2017/M-17-21-OMB.pdf) states that 
impacts should be categorized as consistently as possible within 
Departments. The Food and Drug Administration, within HHS, and the 
Occupational Safety and Health Administration (OSHA) and Mine Safety 
and Health Administration (MSHA), within DOL, regularly estimate 
medical expenditure impacts in the analyses that accompany their 
regulations, with the results being categorized as benefits 
(positive benefits if expenditures are reduced, negative benefits if 
expenditures are raised). Following the FDA, OSHA and MSHA 
accounting convention leads to this final rule's medical expenditure 
impacts being categorized as (positive or negative) benefits, rather 
than as costs, thus placing them outside of consideration for E.O. 
13771 designation purposes.

---------------------------------------------------------------------------

[[Page 57586]]

G. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (section 202(a) of Pub. L. 
104-4), requires the Departments to prepare a written statement, which 
includes an assessment of anticipated costs and benefits, before 
issuing ``any rule that includes any federal mandate that may result in 
the expenditure by state, local, and tribal governments, in the 
aggregate, or by the private sector, of $100 million or more (adjusted 
annually for inflation) in any one year.'' In 2018, that threshold 
after adjustment for inflation is $150 million. For purposes of the 
Unfunded Mandates Reform Act, the Religious IFC and these final rules 
do not include any federal mandate that may result in expenditures by 
state, local, or tribal governments, nor do they include any federal 
mandates that may impose an annual burden of $150 million, adjusted for 
inflation, or more on the private sector.

H. Federalism

    Executive Order 13132 outlines fundamental principles of 
federalism, and requires the adherence to specific criteria by federal 
agencies in the process of their formulation and implementation of 
policies that have ``substantial direct effects'' on states, the 
relationship between the federal government and states, or the 
distribution of power and responsibilities among the various levels of 
government. Federal agencies promulgating regulations that have these 
federalism implications must consult with state and local officials, 
and describe the extent of their consultation and the nature of the 
concerns of state and local officials in the preamble to the 
regulation.
    These final rules do not have any federalism implications, since 
they only provide exemptions from the contraceptive and sterilization 
coverage requirement in HRSA Guidelines supplied under section 2713 of 
the PHS Act.

V. Statutory Authority

    The Department of the Treasury regulations are adopted pursuant to 
the authority contained in sections 7805 and 9833 of the Code, and 
Public Law 103-141, 107 Stat. 1488 (42 U.S.C. 2000bb-2000bb-4).
    The Department of Labor regulations are adopted pursuant to the 
authority contained in 29 U.S.C. 1002(16), 1027, 1059, 1135, 1161-1168, 
1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1185d, 1191, 1191a, 
1191b, and 1191c; sec. 101(g), Public Law 104-191, 110 Stat. 1936; sec. 
401(b), Public Law 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 
512(d), Public Law 110-343, 122 Stat. 3881; sec. 1001, 1201, and 
1562(e), Public Law 111-148, 124 Stat. 119, as amended by Public Law 
111-152, 124 Stat. 1029; Pub. L. 103-141, 107 Stat. 1488 (42 U.S.C. 
2000bb-2000bb-4); Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 
9, 2012).
    The Department of Health and Human Services regulations are adopted 
pursuant to the authority contained in sections 2701 through 2763, 
2791, and 2792 of the PHS Act (42 U.S.C. 300gg through 300gg-63, 300gg-
91, and 300gg-92), as amended; and Title I of the Affordable Care Act, 
sections 1301-1304, 1311-1312, 1321-1322, 1324, 1334, 1342-1343, 1401-
1402, 1412, Public Law 111-148, 124 Stat. 119 (42 U.S.C. 18021-18024, 
18031-18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, 26 
U.S.C. 36B, and 31 U.S.C. 9701); and Public Law 103-141, 107 Stat. 1488 
(42 U.S.C. 2000bb-2000bb-4).

List of Subjects

26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

29 CFR Part 2590

    Continuation coverage, Disclosure, Employee benefit plans, Group 
health plans, Health care, Health insurance, Medical child support, 
Reporting and recordkeeping requirements.

45 CFR Part 147

    Health care, Health insurance, Reporting and recordkeeping 
requirements, State regulation of health insurance.

Kirsten Wielobob,
Deputy Commissioner for Services and Enforcement.
    Approved: October 30, 2018.
David J. Kautter,
Assistant Secretary for Tax Policy.
    Signed this 29th day of October 2018.
Preston Rutledge,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
    Dated: October 17, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: October 18, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.

DEPARTMENT OF THE TREASURY

Internal Revenue Service

    Accordingly, 26 CFR part 54 is amended as follows:

PART 54--PENSION EXCISE TAXES

0
1. The authority citation for part 54 continues to read, in part, as 
follows:

    Authority:  26 U.S.C. 7805. * * *


0
2. Section 54.9815-2713 is amended by revising paragraphs (a)(1) 
introductory text and (a)(1)(iv) to read as follows:


Sec.  54.9815-2713   Coverage of preventive health services.

    (a) * * *
    (1) In general. Beginning at the time described in paragraph (b) of 
this section and subject to Sec.  54.9815-2713A, a group health plan, 
or a health insurance issuer offering group health insurance coverage, 
must provide coverage for and must not impose any cost-sharing 
requirements (such as a copayment, coinsurance, or a deductible) for--
* * * * *
    (iv) With respect to women, such additional preventive care and 
screenings not described in paragraph (a)(1)(i) of this section as 
provided for in comprehensive guidelines supported by the Health 
Resources and Services Administration for purposes of section 
2713(a)(4) of the Public Health Service Act, subject to 45 CFR 147.131 
and 147.132.
* * * * *

0
3. Section 54.9815-2713A is revised to read as follows:


Sec.  54.9815-2713A  Accommodations in connection with coverage of 
preventive health services.

    (a) Eligible organizations for optional accommodation. An eligible 
organization is an organization that meets the criteria of paragraphs 
(a)(1) through (4) of this section.
    (1) The organization is an objecting entity described in 45 CFR 
147.132(a)(1)(i) or (ii);
    (2) Notwithstanding its status under paragraph (a)(1) of this 
section and under 45 CFR 147.132(a), the organization voluntarily seeks 
to be considered an eligible organization to invoke the optional 
accommodation under paragraph (b) or (c) of this section as applicable; 
and
    (3) [Reserved]
    (4) The organization self-certifies in the form and manner 
specified by the

[[Page 57587]]

Secretary of Labor or provides notice to the Secretary of the 
Department of Health and Human Services as described in paragraph (b) 
or (c) of this section. To qualify as an eligible organization, the 
organization must make such self-certification or notice available for 
examination upon request by the first day of the first plan year to 
which the accommodation in paragraph (b) or (c) of this section 
applies. The self-certification or notice must be executed by a person 
authorized to make the certification or provide the notice on behalf of 
the organization, and must be maintained in a manner consistent with 
the record retention requirements under section 107 of ERISA.
    (5) An eligible organization may revoke its use of the 
accommodation process, and its issuer or third party administrator must 
provide participants and beneficiaries written notice of such 
revocation, as specified herein.
    (i) Transitional rule--If contraceptive coverage is being offered 
on the date on which these final rules go into effect, by an issuer or 
third party administrator through the accommodation process, an 
eligible organization may give 60-days notice pursuant to section 
2715(d)(4) of the PHS Act and Sec.  54.9815-2715(b), if applicable, to 
revoke its use of the accommodation process (to allow for the provision 
of notice to plan participants in cases where contraceptive benefits 
will no longer be provided). Alternatively, such eligible organization 
may revoke its use of the accommodation process effective on the first 
day of the first plan year that begins on or after 30 days after the 
date of the revocation.
    (ii) General rule--In plan years that begin after the date on which 
these final rules go into effect, if contraceptive coverage is being 
offered by an issuer or third party administrator through the 
accommodation process, an eligible organization's revocation of use of 
the accommodation process will be effective no sooner than the first 
day of the first plan year that begins on or after 30 days after the 
date of the revocation.
    (b) Optional accommodation--self-insured group health plans--(1) A 
group health plan established or maintained by an eligible organization 
that provides benefits on a self-insured basis may voluntarily elect an 
optional accommodation under which its third party administrator(s) 
will provide or arrange payments for all or a subset of contraceptive 
services for one or more plan years. To invoke the optional 
accommodation process:
    (i) The eligible organization or its plan must contract with one or 
more third party administrators.
    (ii) The eligible organization must provide either a copy of the 
self-certification to each third party administrator or a notice to the 
Secretary of the Department of Health and Human Services that it is an 
eligible organization and of its objection as described in 45 CFR 
147.132 to coverage of all or a subset of contraceptive services.
    (A) When a copy of the self-certification is provided directly to a 
third party administrator, such self-certification must include notice 
that obligations of the third party administrator are set forth in 29 
CFR 2510.3-16 and this section.
    (B) When a notice is provided to the Secretary of Health and Human 
Services, the notice must include the name of the eligible 
organization; a statement that it objects as described in 45 CFR 
147.132 to coverage of some or all contraceptive services (including an 
identification of the subset of contraceptive services to which 
coverage the eligible organization objects, if applicable), but that it 
would like to elect the optional accommodation process; the plan name 
and type (that is, whether it is a student health insurance plan within 
the meaning of 45 CFR 147.145(a) or a church plan within the meaning of 
section 3(33) of ERISA); and the name and contact information for any 
of the plan's third party administrators. If there is a change in any 
of the information required to be included in the notice, the eligible 
organization must provide updated information to the Secretary of the 
Department of Health and Human Services for the optional accommodation 
process to remain in effect. The Department of Labor (working with the 
Department of Health and Human Services) will send a separate 
notification to each of the plan's third party administrators informing 
the third party administrator that the Secretary of the Department of 
Health and Human Services has received a notice under paragraph 
(b)(1)(ii) of this section and describing the obligations of the third 
party administrator under 29 CFR 2510.3-16 and this section.
    (2) If a third party administrator receives a copy of the self-
certification from an eligible organization or a notification from the 
Department of Labor, as described in paragraph (b)(1)(ii) of this 
section, and is willing to enter into or remain in a contractual 
relationship with the eligible organization or its plan to provide 
administrative services for the plan, then the third party 
administrator will provide or arrange payments for contraceptive 
services, using one of the following methods--
    (i) Provide payments for the contraceptive services for plan 
participants and beneficiaries without imposing any cost-sharing 
requirements (such as a copayment, coinsurance, or a deductible), 
premium, fee, or other charge, or any portion thereof, directly or 
indirectly, on the eligible organization, the group health plan, or 
plan participants or beneficiaries; or
    (ii) Arrange for an issuer or other entity to provide payments for 
the contraceptive services for plan participants and beneficiaries 
without imposing any cost-sharing requirements (such as a copayment, 
coinsurance, or a deductible), premium, fee, or other charge, or any 
portion thereof, directly or indirectly, on the eligible organization, 
the group health plan, or plan participants or beneficiaries.
    (3) If a third party administrator provides or arranges payments 
for contraceptive services in accordance with either paragraph 
(b)(2)(i) or (ii) of this section, the costs of providing or arranging 
such payments may be reimbursed through an adjustment to the federally 
facilitated Exchange user fee for a participating issuer pursuant to 45 
CFR 156.50(d).
    (4) A third party administrator may not require any documentation 
other than a copy of the self-certification from the eligible 
organization or notification from the Department of Labor described in 
paragraph (b)(1)(ii) of this section.
    (5) Where an otherwise eligible organization does not contract with 
a third party administrator and files a self-certification or notice 
under paragraph (b)(1)(ii) of this section, the obligations under 
paragraph (b)(2) of this section do not apply, and the otherwise 
eligible organization is under no requirement to provide coverage or 
payments for contraceptive services to which it objects. The plan 
administrator for that otherwise eligible organization may, if it and 
the otherwise eligible organization choose, arrange for payments for 
contraceptive services from an issuer or other entity in accordance 
with paragraph (b)(2)(ii) of this section, and such issuer or other 
entity may receive reimbursements in accordance with paragraph (b)(3) 
of this section.
    (6) Where an otherwise eligible organization is an ERISA-exempt 
church plan within the meaning of section 3(33) of ERISA and it files a 
self-certification or notice under paragraph (b)(1)(ii) of this 
section, the obligations under paragraph (b)(2) of this section do not

[[Page 57588]]

apply, and the otherwise eligible organization is under no requirement 
to provide coverage or payments for contraceptive services to which it 
objects. The third party administrator for that otherwise eligible 
organization may, if it and the otherwise eligible organization choose, 
provide or arrange payments for contraceptive services in accordance 
with paragraphs (b)(2)(i) or (ii) of this section, and receive 
reimbursements in accordance with paragraph (b)(3) of this section.
    (c) Optional accommodation--insured group health plans--(1) General 
rule. A group health plan established or maintained by an eligible 
organization that provides benefits through one or more group health 
insurance issuers may voluntarily elect an optional accommodation under 
which its health insurance issuer(s) will provide payments for all or a 
subset of contraceptive services for one or more plan years. To invoke 
the optional accommodation process--
    (i) The eligible organization or its plan must contract with one or 
more health insurance issuers.
    (ii) The eligible organization must provide either a copy of the 
self-certification to each issuer providing coverage in connection with 
the plan or a notice to the Secretary of the Department of Health and 
Human Services that it is an eligible organization and of its objection 
as described in 45 CFR 147.132 to coverage for all or a subset of 
contraceptive services.
    (A) When a self-certification is provided directly to an issuer, 
the issuer has sole responsibility for providing such coverage in 
accordance with Sec.  54.9815-2713.
    (B) When a notice is provided to the Secretary of the Department 
Health and Human Services, the notice must include the name of the 
eligible organization; a statement that it objects as described in 45 
CFR 147.132 to coverage of some or all contraceptive services 
(including an identification of the subset of contraceptive services to 
which coverage the eligible organization objects, if applicable) but 
that it would like to elect the optional accommodation process; the 
plan name and type (that is, whether it is a student health insurance 
plan within the meaning of 45 CFR 147.145(a) or a church plan within 
the meaning of section 3(33) of ERISA); and the name and contact 
information for any of the plan's health insurance issuers. If there is 
a change in any of the information required to be included in the 
notice, the eligible organization must provide updated information to 
the Secretary of Department of Health and Human Services for the 
optional accommodation process to remain in effect. The Department of 
Health and Human Services will send a separate notification to each of 
the plan's health insurance issuers informing the issuer that the 
Secretary of the Department Health and Human Services has received a 
notice under paragraph (c)(2)(ii) of this section and describing the 
obligations of the issuer under this section.
    (2) If an issuer receives a copy of the self-certification from an 
eligible organization or the notification from the Department of Health 
and Human Services as described in paragraph (c)(2)(ii) of this section 
and does not have its own objection as described in 45 CFR 147.132 to 
providing the contraceptive services to which the eligible organization 
objects, then the issuer will provide payments for contraceptive 
services as follows--
    (i) The issuer must expressly exclude contraceptive coverage from 
the group health insurance coverage provided in connection with the 
group health plan and provide separate payments for any contraceptive 
services required to be covered under Sec.  54.9815-2713(a)(1)(iv) for 
plan participants and beneficiaries for so long as they remain enrolled 
in the plan.
    (ii) With respect to payments for contraceptive services, the 
issuer may not impose any cost-sharing requirements (such as a 
copayment, coinsurance, or a deductible), or impose any premium, fee, 
or other charge, or any portion thereof, directly or indirectly, on the 
eligible organization, the group health plan, or plan participants or 
beneficiaries. The issuer must segregate premium revenue collected from 
the eligible organization from the monies used to provide payments for 
contraceptive services. The issuer must provide payments for 
contraceptive services in a manner that is consistent with the 
requirements under sections 2706, 2709, 2711, 2713, 2719, and 2719A of 
the PHS Act, as incorporated into section 9815 of the PHS Act. If the 
group health plan of the eligible organization provides coverage for 
some but not all of any contraceptive services required to be covered 
under Sec.  54.9815-2713(a)(1)(iv), the issuer is required to provide 
payments only for those contraceptive services for which the group 
health plan does not provide coverage. However, the issuer may provide 
payments for all contraceptive services, at the issuer's option.
    (3) A health insurance issuer may not require any documentation 
other than a copy of the self-certification from the eligible 
organization or the notification from the Department of Health and 
Human Services described in paragraph (c)(1)(ii) of this section.
    (d) Notice of availability of separate payments for contraceptive 
services--self-insured and insured group health plans. For each plan 
year to which the optional accommodation in paragraph (b) or (c) of 
this section is to apply, a third party administrator required to 
provide or arrange payments for contraceptive services pursuant to 
paragraph (b) of this section, and an issuer required to provide 
payments for contraceptive services pursuant to paragraph (c) of this 
section, must provide to plan participants and beneficiaries written 
notice of the availability of separate payments for contraceptive 
services contemporaneous with (to the extent possible), but separate 
from, any application materials distributed in connection with 
enrollment (or re-enrollment) in group health coverage that is 
effective beginning on the first day of each applicable plan year. The 
notice must specify that the eligible organization does not administer 
or fund contraceptive benefits, but that the third party administrator 
or issuer, as applicable, provides or arranges separate payments for 
contraceptive services, and must provide contact information for 
questions and complaints. The following model language, or 
substantially similar language, may be used to satisfy the notice 
requirement of this paragraph (d): ``Your employer has certified that 
your group health plan qualifies for an accommodation with respect to 
the federal requirement to cover all Food and Drug Administration-
approved contraceptive services for women, as prescribed by a health 
care provider, without cost sharing. This means that your employer will 
not contract, arrange, pay, or refer for contraceptive coverage. 
Instead, [name of third party administrator/health insurance issuer] 
will provide or arrange separate payments for contraceptive services 
that you use, without cost sharing and at no other cost, for so long as 
you are enrolled in your group health plan. Your employer will not 
administer or fund these payments. If you have any questions about this 
notice, contact [contact information for third party administrator/
health insurance issuer].''
    (e) Reliance--insured group health plans--(1) If an issuer relies 
reasonably and in good faith on a representation by the eligible 
organization as to its eligibility for the accommodation in paragraph 
(c) of this section, and the representation is later determined to be

[[Page 57589]]

incorrect, the issuer is considered to comply with any applicable 
requirement under Sec.  54.9815-2713(a)(1)(iv) to provide contraceptive 
coverage if the issuer complies with the obligations under this section 
applicable to such issuer.
    (2) A group health plan is considered to comply with any applicable 
requirement under Sec.  54.9815-2713(a)(1)(iv) to provide contraceptive 
coverage if the plan complies with its obligations under paragraph (c) 
of this section, without regard to whether the issuer complies with the 
obligations under this section applicable to such issuer.
    (f) Definition. For the purposes of this section, reference to 
``contraceptive'' services, benefits, or coverage includes 
contraceptive or sterilization items, procedures, or services, or 
related patient education or counseling, to the extent specified for 
purposes of Sec.  54.9815-2713(a)(1)(iv).
    (g) Severability. Any provision of this section held to be invalid 
or unenforceable by its terms, or as applied to any person or 
circumstance, shall be construed so as to continue to give maximum 
effect to the provision permitted by law, unless such holding shall be 
one of utter invalidity or unenforceability, in which event the 
provision shall be severable from this section and shall not affect the 
remainder thereof or the application of the provision to persons not 
similarly situated or to dissimilar circumstances.


Sec.  54.9815-2713T   [Removed]

0
4. Section 54.9815-2713T is removed.


Sec.  54.9815-2713AT   [Removed]

0
5. Section 54.9815-2713AT is removed.

DEPARTMENT OF LABOR

Employee Benefits Security Administration

    For the reasons set forth in the preamble, the Department of Labor 
adopts as final the interim final rules amending 29 CFR part 2590 
published on October 13, 2017 (82 FR 47792) with the following changes:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
6. The authority citation for part 2590 continues to read, as follows:

    Authority:  29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c; 
sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 
105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 
110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-
148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029; 
Division M, Pub. L. 113-235, 128 Stat. 2130; Secretary of Labor's 
Order 1-2011, 77 FR 1088 (Jan. 9, 2012).


0
7. Section 2590.715-2713A is amended by:
0
a. Revising paragraph (a)(5);
0
b. Redesignating paragraphs (e) and (f) as paragraphs (f) and (g); and
0
c. Adding new paragraph (e).
    The revision and addition read as follows:


Sec.  2590.715-2713A  Accommodations in connection with coverage of 
preventive health services.

    (a) * * *
    (5) An eligible organization may revoke its use of the 
accommodation process, and its issuer or third party administrator must 
provide participants and beneficiaries written notice of such 
revocation, as specified herein.
    (i) Transitional rule--If contraceptive coverage is being offered 
on the date on which these final rules go into effect, by an issuer or 
third party administrator through the accommodation process, an 
eligible organization may give 60-days notice pursuant to PHS Act 
section 2715(d)(4) and Sec.  2590.715-2715(b), if applicable, to revoke 
its use of the accommodation process (to allow for the provision of 
notice to plan participants in cases where contraceptive benefits will 
no longer be provided). Alternatively, such eligible organization may 
revoke its use of the accommodation process effective on the first day 
of the first plan year that begins on or after 30 days after the date 
of the revocation.
    (ii) General rule--In plan years that begin after the date on which 
these final rules go into effect, if contraceptive coverage is being 
offered by an issuer or third party administrator through the 
accommodation process, an eligible organization's revocation of use of 
the accommodation process will be effective no sooner than the first 
day of the first plan year that begins on or after 30 days after the 
date of the revocation.
* * * * *
    (e) Reliance--insured group health plans--(1) If an issuer relies 
reasonably and in good faith on a representation by the eligible 
organization as to its eligibility for the accommodation in paragraph 
(c) of this section, and the representation is later determined to be 
incorrect, the issuer is considered to comply with any applicable 
requirement under Sec.  2590.715-2713(a)(1)(iv) to provide 
contraceptive coverage if the issuer complies with the obligations 
under this section applicable to such issuer.
    (2) A group health plan is considered to comply with any applicable 
requirement under Sec.  2590.715-2713(a)(1)(iv) to provide 
contraceptive coverage if the plan complies with its obligations under 
paragraph (c) of this section, without regard to whether the issuer 
complies with the obligations under this section applicable to such 
issuer.
* * * * *

DEPARTMENT OF HEALTH AND HUMAN SERVICES

    For the reasons set forth in the preamble, the Department of Health 
and Human Services adopts as final the interim final rules amending 45 
CFR part 147 published on October 13, 2017 (82 FR 47792) with the 
following changes:

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
8. The authority citation for part 147 is revised to read as follows:

    Authority:  42 U.S.C. 300gg through 300gg-63, 300gg-91, and 
300gg-92, as amended.


0
9. Section 147.131 is amended by:
0
a. Revising paragraph (c)(4);
0
b. Redesignating paragraphs (f) and (g) as (g) and (h); and
0
c. Adding new paragraph (f).
    The revision and addition read as follows:


Sec.  147.131   Accommodations in connection with coverage of certain 
preventive health services.

* * * * *
    (c) * * *
    (4) An eligible organization may revoke its use of the 
accommodation process, and its issuer must provide participants and 
beneficiaries written notice of such revocation, as specified herein.
    (i) Transitional rule--If contraceptive coverage is being offered 
on January 14, 2019, by an issuer through the accommodation process, an 
eligible organization may give 60-days notice pursuant to section 
2715(d)(4) of the PHS Act and Sec.  147.200(b), if applicable, to 
revoke its use of the accommodation process (to allow for the provision 
of notice to plan participants in cases where contraceptive benefits 
will no longer be provided). Alternatively, such eligible organization 
may revoke its use of the accommodation process effective on the first 
day of the first plan year that begins on or after 30 days after the 
date of the revocation.
    (ii) General rule--In plan years that begin after January 14, 2019, 
if

[[Page 57590]]

contraceptive coverage is being offered by an issuer through the 
accommodation process, an eligible organization's revocation of use of 
the accommodation process will be effective no sooner than the first 
day of the first plan year that begins on or after 30 days after the 
date of the revocation.
* * * * *
    (f) Reliance--(1) If an issuer relies reasonably and in good faith 
on a representation by the eligible organization as to its eligibility 
for the accommodation in paragraph (d) of this section, and the 
representation is later determined to be incorrect, the issuer is 
considered to comply with any applicable requirement under Sec.  
147.130(a)(1)(iv) to provide contraceptive coverage if the issuer 
complies with the obligations under this section applicable to such 
issuer.
    (2) A group health plan is considered to comply with any applicable 
requirement under Sec.  147.130(a)(1)(iv) to provide contraceptive 
coverage if the plan complies with its obligations under paragraph (d) 
of this section, without regard to whether the issuer complies with the 
obligations under this section applicable to such issuer.
* * * * *

0
10. Section 147.132 is amended by:
0
a. Revising paragraph (a)(1) introductory text;
0
b. Redesignating paragraphs (a)(1)(ii) and (iii) as paragraphs (iii) 
and (iv);
0
c. Adding new paragraph (a)(1)(ii);
0
d. Revising newly designated paragraph (a)(1)(iii);
0
e. Revising newly designated paragraph (a)(1)(iv); and
0
f. Revising paragraphs (a)(2) and (b).
    The revisions and addition read as follows:


Sec.  147.132  Religious exemptions in connection with coverage of 
certain preventive health services.

    (a) * * *
    (1) Guidelines issued under Sec.  147.130(a)(1)(iv) by the Health 
Resources and Services Administration must not provide for or support 
the requirement of coverage or payments for contraceptive services with 
respect to a group health plan established or maintained by an 
objecting organization, or health insurance coverage offered or 
arranged by an objecting organization, to the extent of the objections 
specified below. Thus the Health Resources and Service Administration 
will exempt from any guidelines' requirements that relate to the 
provision of contraceptive services:
* * * * *
    (ii) A group health plan, and health insurance coverage provided in 
connection with a group health plan, where the plan or coverage is 
established or maintained by a church, an integrated auxiliary of a 
church, a convention or association of churches, a religious order, a 
nonprofit organization, or other non-governmental organization or 
association, to the extent the plan sponsor responsible for 
establishing and/or maintaining the plan objects as specified in 
paragraph (a)(2) of this section. The exemption in this paragraph 
applies to each employer, organization, or plan sponsor that adopts the 
plan;
    (iii) An institution of higher education as defined in 20 U.S.C. 
1002, which is non-governmental, in its arrangement of student health 
insurance coverage, to the extent that institution objects as specified 
in paragraph (a)(2) of this section. In the case of student health 
insurance coverage, this section is applicable in a manner comparable 
to its applicability to group health insurance coverage provided in 
connection with a group health plan established or maintained by a plan 
sponsor that is an employer, and references to ``plan participants and 
beneficiaries'' will be interpreted as references to student enrollees 
and their covered dependents; and
    (iv) A health insurance issuer offering group or individual 
insurance coverage to the extent the issuer objects as specified in 
paragraph (a)(2) of this section. Where a health insurance issuer 
providing group health insurance coverage is exempt under this 
subparagraph (iv), the group health plan established or maintained by 
the plan sponsor with which the health insurance issuer contracts 
remains subject to any requirement to provide coverage for 
contraceptive services under Guidelines issued under Sec.  
147.130(a)(1)(iv) unless it is also exempt from that requirement.
    (2) The exemption of this paragraph (a) will apply to the extent 
that an entity described in paragraph (a)(1) of this section objects, 
based on its sincerely held religious beliefs, to its establishing, 
maintaining, providing, offering, or arranging for (as applicable):
    (i) Coverage or payments for some or all contraceptive services; or
    (ii) A plan, issuer, or third party administrator that provides or 
arranges such coverage or payments.
    (b) Objecting individuals. Guidelines issued under Sec.  
147.130(a)(1)(iv) by the Health Resources and Services Administration 
must not provide for or support the requirement of coverage or payments 
for contraceptive services with respect to individuals who object as 
specified in this paragraph (b), and nothing in Sec.  
147.130(a)(1)(iv), 26 CFR 54.9815-2713(a)(1)(iv), or 29 CFR 2590.715-
2713(a)(1)(iv) may be construed to prevent a willing health insurance 
issuer offering group or individual health insurance coverage, and as 
applicable, a willing plan sponsor of a group health plan, from 
offering a separate policy, certificate or contract of insurance or a 
separate group health plan or benefit package option, to any group 
health plan sponsor (with respect to an individual) or individual, as 
applicable, who objects to coverage or payments for some or all 
contraceptive services based on sincerely held religious beliefs. Under 
this exemption, if an individual objects to some but not all 
contraceptive services, but the issuer, and as applicable, plan 
sponsor, are willing to provide the plan sponsor or individual, as 
applicable, with a separate policy, certificate or contract of 
insurance or a separate group health plan or benefit package option 
that omits all contraceptives, and the individual agrees, then the 
exemption applies as if the individual objects to all contraceptive 
services.
* * * * *

[FR Doc. 2018-24512 Filed 11-7-18; 4:15 pm]
 BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P