GBS Health & Benefits Compliance
Affordable Care Act:
Proposed Rules Enhancing Coverage of Preventive Services
Including Over-the-Counter Contraception
On October 21, 2024, the Departments of Health and Human Services, Labor, and the Treasury (the Departments) released new proposed rules titled “Enhancing Coverage of Preventive Services Under the Affordable Care Act.” These rules aim to improve access to preventive services without cost-sharing, especially focusing on making contraceptive services, including over-the-counter (OTC) contraceptives, more accessible.
Background
The Affordable Care Act (ACA) added a rule under the Public Health Service Act (PHS Act) that requires group health plans and insurers to cover certain preventive services without cost-sharing, such as copayments, coinsurance, or deductibles. These services include:
- Items and services recommended by the U.S. Preventive Services Task Force.
- Immunizations recommended by the CDC’s Advisory Committee on Immunization Practices.
- Preventive care and screenings for infants, children, and adolescents recommended by the Health Resources and Services Administration (HRSA).
- Preventive care and screenings for women based on guidelines supported by HRSA.
Current rules let plans and insurers use reasonable medical management to decide how often, by what method, or in what setting to provide these services if the guidelines don’t specify those details. They must also cover, without cost-sharing, any items or services that are essential to delivering a recommended preventive service.
Since the ACA became law in 2010, the Departments have received complaints and questions about issues related to preventive services coverage. Also, under current rules, OTC preventive services only have to be covered without cost-sharing if prescribed by a provider. In October 2023, the Departments asked for public input on whether OTC preventive products, like contraception, should be covered without cost-sharing or a prescription.
Based on the feedback, ongoing complaints, and new developments—like the FDA approving an OTC oral contraceptive in July 2023—the Departments are now proposing to update regulations addressing how plans cover preventive services and how they communicate this to participants.
Summary of Proposed Rules
Exceptions Process for Preventive Services
The proposed rules would clarify how plans can use medical management for preventive services. They would require an easy-to-access, transparent process for people to get coverage without cost-sharing for services that are medically necessary for them, even if not typically covered under their plan. This ensures individuals can access preventive services they need without facing unreasonable barriers.
Contraceptive Coverage and Disclosure
The new rules would also require plans and insurers to cover recommended OTC contraceptives without needing a prescription and without cost-sharing. Currently, OTC contraceptives like contraceptive sponges or emergency contraception are only covered if prescribed by a provider, but the new rules would eliminate this requirement. This would remove obstacles that make it harder for women to access contraception.
The Departments propose starting with contraception before considering similar requirements for other preventive services. This approach allows them to gather feedback on the benefits and challenges before expanding the rules.
Additionally, the new rules would ensure that plans cover certain contraceptive drugs and combination products without cost-sharing unless a therapeutic equivalent is available. The Departments also plan to include definitions for “therapeutic equivalent” and “drug-led combination product” based on FDA terms.
Lastly, plans would need to update their transparency tools to inform participants that OTC contraceptives are covered without a prescription and cost-sharing, along with contact details for more information.
The Departments are asking for comments on whether these proposals should apply to other preventive services as well and expect to release more proposed rules on preventive services coverage in the future. Note that these rules would not change existing protections for employers, plans, or issuers who have religious or moral objections to contraceptive coverage.
Key Points
The proposed changes would be applicable for plan years beginning on or after Jan. 1, 2026, if they are finalized. The proposed rule would require health plans and issuers to do the following:
- Cover recommended OTC contraceptive items without requiring a prescription and without imposing cost sharing;
- Cover every FDA-approved contraceptive drug or drug-led combination product without cost sharing, unless the plan also covers a therapeutic equivalent of the drug or drug-led combination product without cost sharing; and
- Disclose to plan participants that OTC contraception is covered without a prescription and without cost sharing. This disclosure would be required as part of any Transparency in Coverage self-service tool search for covered contraceptives and would need to include a phone number and internet link to where a participant could learn more about the coverage.
October 2024
This document is not intended to be exhaustive, nor should any information be construed as tax or legal advice. Readers should contact a tax professional or attorney if legal advice is needed. Although we have made every effort to provide complete, up-to-date, and accurate information in this document, such information is meant to be used for reference only. If there is any inconsistency between the information contained in this document and any applicable law, then such law will control.
