On January 22, 2024, the Department of Labor, the Department of the Treasury, and the Department of Health and Human Services (collectively, “the Departments”) issued FAQs on Part 64 of the Affordable Care Act (ACA), addressing compliance with the ACA Contraceptive Mandate. This guidance is in response to reports of group health plans and insurers employing unreasonable medical management techniques, so employers should ensure their plans are reasonable in light of the guidance below.
ACA Contraceptive Mandate Review
The ACA requires non-grandfathered group health plans to cover, without cost sharing, any contraceptive services and FDA-approved, -cleared, or -granted products that are deemed to be medically necessary for the covered individual.
Previous guidance issued by the Departments clarified to insurers and plans that they are required to cover, without cost sharing, (1) at least one form of contraceptive in each of the Health Resources and Services Administration (HRSA) Women’s Preventive Service Guidelines categories; and (2) contraceptive services and products determined to be medically necessary for the individual, even if not specifically identified in the HRSA Guidelines.
Issues
To comply with the ACA contraceptive mandate and HRSA Guidelines, the Departments have allowed plans to use medical management techniques to determine what contraceptive products or services to cover if multiple similar, medically appropriate, products or services are available. However, the Departments are reporting widespread barriers to contraceptive coverage created by medical management techniques the Departments deem unreasonable. The Departments have identified the following as examples of potentially unreasonable medical management techniques:
- Step therapy protocols (i.e., the “fail first” technique)
- Age-related restrictions
- Unduly burdensome administrative requirements as part of an exceptions process
- Cost sharing requirements for services that are integral to the contraceptive service (i.e., cost sharing for anesthesia during a sterilization surgery)
Therapeutic Equivalence Approach
To address the reports of unreasonable medical management techniques, the Departments issued this guidance to outline the therapeutic equivalence approach to compliance with the ACA contraceptive mandate, with specific focus on contraceptive drugs and drug-led devices.
Under the therapeutic equivalence approach, the Departments will generally view medical management techniques as reasonable so long as (1) the plan or insurer covers, without cost sharing, all FDA-approved drugs or drug led devices within an HSRA Guidelines category unless there is at least one therapeutic equivalent drug within the same category; and (2) there is a reasonable exceptions process to cover, without cost sharing, the therapeutic equivalent drugs that are not offered under the plan if the individual’s attending physician determines the drug or device to be medically necessary. To determine if a therapeutic equivalent drug exists, the Departments refer to the FDA “Orange Book.”
Action Items for Insurers and Group Health Plans
- Review your plan’s covered contraceptive services and
- Determine if the forms of contraception offered have a therapeutic equivalent, as outlined in the “Orange ” Note: if a form of contraception is not listed in the Orange Book, there is no therapeutic equivalent and the product or service with no therapeutic equivalent must be covered without cost sharing.
- Ensure that your plan is offering, without cost sharing, at least one form of contraception in each of the categories identified in the HRSA
- Develop a non-burdensome exceptions process for an individual to obtain coverage, without cost sharing, for a contraceptive service or FDA-approved, -cleared, or -granted contraceptive product that is medically necessary but not otherwise covered under your
- Connect with your benefits consultant to ensure that changes made to covered services and products and to the exceptions process are compliant with the ACA contraceptive mandate.
This information is general in nature and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.
