Compliance News | January 27, 2025

Proposed Over-the-Counter Contraceptive Rule Withdrawn

In the final days of the Biden administration, the Departments of Labor, Health and Human Services and the Treasury (collectively, the Departments) withdrew a proposed rule that would have expanded access to coverage of ACA-recommended preventive services without cost sharing.

Proposed Over-the-Counter Contraceptive Rule Withdrawn

The withdrawn proposed rule

As discussed in our October 30, 2024 insight, the proposed rule would have required non-grandfathered health plans to cover over-the-counter (OTC) contraceptives for individuals without a prescription without cost sharing, as well as increased coverage of certain additional contraceptive drugs. The proposed rule also revisited increasing ease of accessibility through the expansion of the already-required exceptions process and included disclosure requirements related to the availability of OTC contraceptives.

These provisions would not have applied to plans exempted from contraception coverage based on a religious objection.

While the rules would have allowed for reasonable medical management of OTC contraceptives, how such techniques would have been feasible in practice remained unclear.

Reasons for the withdrawal

The Departments indicated that their decision to withdraw the proposal was based, in part, on the many comments they received that raised important cost and operational considerations. The administration also cited other priorities requiring attention, including:

  • Independent Dispute Resolution (IDR) operations and air ambulance requirements under the No Surprises Act
  • Cost-sharing regulations that could impact prescription drug copayment accumulator programs
  • Requirements related to Advanced Explanation of Benefits
  • Provider nondiscrimination requirements

Implications for group health plan sponsors

The withdrawal of the proposed rule alleviated the significant concerns of plan sponsors related to the operational modifications and potential costs that may have been associated with compliance.

The application of existing ACA requirements regarding recommended preventive services, including those regarding coverage of contraceptives, remain in effect.

Plan sponsors should continue to watch for guidance in this area. However, it seems unlikely that this proposed rule will be redeveloped in the new administration.

Have questions about the ACA’s preventive services coverage requirements?

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.