On Monday, August 1, 2011, the Obama administration announced new guidelines that require health care plans to cover certain women’s preventive services, including birth control and voluntary sterilization. The action taken by the United States Department of Health and Human Services (the “HHS”) adopts recommendations made by the Institute of Medicine, which recently issued a report dealing with a review of women’s health needs. In that report, the Institute of Medicine concluded that contraceptive coverage was justified because nearly half of all pregnancies in the United States are unintended and a significant percentage of these pregnancies lead to abortions. Thus, it asserted that greater use of contraception would reduce the rates of unintended pregnancy and abortion. The new requirements apply to health coverage in years starting on or after August 1, 2012, and thus will take effect on January 1, 2013 for calendar year plans. Grandfathered plans are not subject to the preventive care standards and thus do not have to comply with these new standards.

The Patient Protection and Affordable Care Act (“PPACA”) requires health care plans to cover certain preventive services on a first dollar basis without any cost-sharing requirements (e.g., co-payment, co-insurance and/or deductible requirements). In 2010, HHS (working in conjunction with other involved agencies) issued interim final regulations providing guidance on the services subject to this requirement. Four categories of preventive health care coverage were made subject to these requirements, including (i) evidence-based services that have in effect a rating of “A” or “B” in the current recommendations of the United States Preventive Services Task Force (examples include high blood pressure, diabetes and cholesterol screenings); (ii) routine immunizations for children, adolescents and adults that currently are recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention; (iii) evidence-based preventive care and screenings for infants, children and adolescents provided for under guidelines supported by the Health Resources and Services Administration (“HRSA”); and (iv) evidence-based preventive care and screenings for women provided for under guidelines supported by the HRSA.

The HRSA women’s health guidelines, which were not issued when the interim final regulations were published, were issued on August 1, 2011. These new guidelines, which are not limited to contraceptives, are intended to address health care needs unique to women. The guidelines include the following services and screenings: (i) annual well-women visits to seek age and developmentally appropriate preventive services, including preconception and pre-natal care and other preventives services; (ii) all FDA-approved contraceptive methods, sterilization procedures and patient education and counseling;(iii) screening for gestational diabetes with pregnant women; (iv) human papillomavirus testing, beginning at age 30 (not more frequently than every 3 years); (v) annual counseling for sexually transmitted infections; (vi) annual counseling and screening for human immunodeficiency virus; (vii) breastfeeding support, supplies and counseling; and (viii) annual screening and counseling for domestic violence.

A proposed amendment to the interim final regulation on first dollar coverage of preventive care permits exemptions to be granted to qualifying religious institutions that provide health care coverage to their employees so that these institutions would not be required to cover contraception services as part of that coverage.

While hardly a surprise, this new standard for preventive care is not without detractors. The United States Conference of Catholic Bishops and some conservative groups, including the Family Research Council, oppose a requirement for coverage of contraceptives. The extension of preventive care coverage to contraceptives may add to the political rancor that has surrounded passage of PPACA. On the other hand, supporters, such as Planned Parenthood, claim this extension will help millions of American women who struggle to afford birth control.

The ultimate impact of this change on the cost of health care delivery is unclear. Some claim that covering contraception will lead to cost savings for the government based on studies that have shown that a large percentage of publicly funded births are from unintended pregnancies. Other contend that this extension will result in increased costs for coverage. Employers maintaining non-grandfathered health plans will need to make certain that their plans provide the mandated preventive care coverage, as they may be subject to steep penalties of $100 per day per person to whom a failure to comply relates.