A recent survey of insurance companies indicated that the mandate will not actually cut costs.
In reality, the Becket Fund said, religious group will still end up paying for the coverage because the insurance company will “pass along the extra costs in increased premiums.”
Problems for self-insured religious groups
For religious groups that self-insure – meaning that the religious group acts as its own insurance company – the government has recommended that a “third party administrator” would administer the separate contraception coverage.
The administration has offered four suggestions for funding in these cases, which are currently open for comments from the public.
In response, however, the Becket Fund’s analysis addressed each of these recommendations and rebuffed all four as inadequate.
The administration’s first suggestion was that third party administrators could fund the coverage using revenue from drug rebates, service fees or disease management program fees.
But the Becket Fund said that it may be illegal for the third party administrator to use such funds to pay for contraceptive coverage if that money actually belongs to the client.
It compared the situation to investing, explaining, “It is illegal for an investment house to keep dividends and not repay them to shareholders.”
The central question that would need to be answered under this proposal is whether the drug rebate money would properly belong to the third party administrator or to all the organizations that had originally supplied the money, it explained.
If the pool of money that generated the drug rebate was owned by the contributors rather than the third party administrator, the administrator would be required to pro-rate the discounts back to those who pooled the money, it said.
Under the proposal, the administrator “would potentially be taking money away from a religious employer because the religious group would not be getting the rebate anymore,” since it would be going towards contraceptive coverage, it explained.
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The second suggestion offered by the federal government would involve the U.S. Office of Personnel Management, which is responsible for contracting with certain insurers to offer multi-state plans.
In developing such plans, the administration has suggested, the office could require these insurers to offer the contraceptive coverage for self-insured entities.
The Becket Fund said that this suggestion bolsters the argument made in its lawsuit that the government does have a means of accomplishing its goal without requiring religious groups to pay for it.
Even so, it said, this route would not entirely address the objections of religious organizations because it would still require them to provide their employees’ information to the third party administrator.
A third possibility put forth by the administration makes use of a reinsurance program through which insurance companies decrease their risk.
As part of the process of creating new exchanges with individual plans, a program will be used to offset the cost of reinsurance.