Supreme Court Ruling on Contraceptive Coverage Mandate
On June 30th, 2014, the Supreme Court ruled that “closely held” corporations did not have to provide contraception coverage to employees if they claim a religious exemption. Here are some important practical points to consider:
Q: What constitutes a "closely held" corporation?
A: Typically this refers to a family-owned business. The technical IRS definition is a company that has "more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year," and is not a "personal service corporation."
Q: Can any closely held corporation take advantage of the Court's decision?
A: The decision appears to only apply to closely held corporations where the owners maintain that providing contraceptive drugs and devices as a covered benefit of their group health plan violates their religious beliefs.
Q: If a closely held company decides not to cover contraception, are there coverage alternatives for its employees?
A: PPACA provides an accommodation for employees of religious non-profits to still receive coverage for contraception through the same insurance provider as their group health plan, at no cost or extra premium, although it won't come directly through the employer plan. The Supreme Court suggested that Health and Human Services apply the same system to employees of for-profit companies.
Q: Does this ruling apply only to emergency contraception, or contraception of any kind?
A: Although the plaintiffs in the case were only requesting they not have to cover emergency contraception, the ruling applies broadly to the contraception coverage requirement included in PPACA.
For additional information and updates, please contact your EBI Account Manager or Executive.
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