On May 23, 2017, the Department of Health and Human Services sent to the Office of Management and Budget for review a draft of an interim final rule on “Coverage of Certain Preventive Services Under the Affordable Care Act.” This rule is intended to broaden current accommodations offered to entities that object to the requirement under the Affordable Care Act preventive services rule that insurers and group health plans provide employees access to contraceptives without cost sharing.

The OMB’s Office of Information and Regulatory Affairs (OIRA) is charged with reviewing draft federal rules to ensure that the rules comply with various federal requirements. For example, OIRA checks that that the agency considered regulatory alternatives and analyzed the costs and benefits of the rule. As of July 7, 2017, the draft was still being held at OIRA.

Under the federal Administrative Procedures Act, a proposed rule must normally be exposed for public comment and an agency must consider the public comments it receives before it promulgates a final rule. An interim final rule may be promulgated without prior comments only “when an agency, for good cause, finds that notice and public comment thereon are impracticable, unnecessary, or contrary to the public interest.”

An apparently genuine copy of the draft interim final contraceptive rule was leaked on May 30, 2017. The preamble of the leaked rule states, “The Departments have determined that good cause exists to publish these interim final rules because it would be impracticable and contrary to the public interest to delay putting these provisions in place until a full public notice and comment process is completed.” It is puzzling that, given the urgency of the rule, it is still being held a month and a half later. This is particularly puzzling as the Departments concluded in the preamble that the interim final rule is not economically significant and is not subject to a number of the statutes and executive orders under which OMB review is required.

There is no requirement that I am aware of that OIRA must expedite review for interim final rules. And a month and a half delay in the promulgation of an interim final rule is not unprecedented. It is, however, a little unusual. Since January 2012, OIRA has reviewed 16 interim final rules for HHS. Two took longer than two months to review, but the remaining 14 were processed in an average of about 11.4 days, many of them much more quickly. It makes sense that rules that are so urgently necessary that they cannot wait for public comment would be processed quickly by OIRA.

If It Is Urgent, Why Has The Contraceptive Rule Been So Delayed?

One explanation of the delay is that the contraceptive rule is simply more complicated than most that are approved as interim final rules, which might counsel for notice and comment rulemaking. But another is that the administration prefers not to let the contraceptive issue get entangled in ongoing attempts by Congress to amend the ACA. The American Health Care Act passed by the House and the Better Care Reconciliation Act being considered by the Senate have proven to be intensely controversial; a majority of respondents to a recent poll disapproved of the Republican Senate bill, and only about one sixth of those polled approved of it. There is broad support nationally for contraceptive coverage, including for requirements that religious organizations cover birth control for their employees.

The release of the interim final rule is likely to result in immediate challenges in the courts, which the administration might want to avoid at a time when sensitive health reform negotiations are taking place among congressional Republicans, many of whom are facing resistance to ACA repeal from their constituents. In particular, lawsuits are likely to raise the question of whether the administration has any authority to waive regulatory requirements because of moral as opposed to religious objections, as the draft rule does. The Religious Freedom Restoration Act explicitly authorizes accommodation of religious beliefs in federal regulations, but there is no similar law authorizing regulatory accommodations for moral convictions.

Challengers will also cite Supreme Court decisions involving the contraceptive coverage requirement. The most recent such decision instructed the parties “to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans ‘receive full and equal health coverage, including contraceptive coverage.’” The leaked rule would fail to guarantee such coverage to women employees.

Does Ongoing Litigation Support Issuing The Contraceptive Rule In Interim Final Form?

The preamble to the leaked interim final rule offers as a reason for the need for urgent action the pending of dozens of lawsuits challenging the contraceptive rule and the remand of several of these by the Supreme Court to the federal appellate courts for resolution. The Supreme Court’s Zubik order, however, prohibited the government from imposing taxes or penalties on the religious organizations involved in the lawsuits for violating the current rule’s notice requirement while the litigation remains pending. The cases must be resolved at some point, but resolution can no doubt wait until Congress resolves its current debate over ACA repeal.

In the meantime, the administration has been asking the courts to delay pending contraceptive cases until August. For the time being, the leaked regulation clearly signals to the litigants that the administration will soon come to their rescue, a signal that was earlier sent by President Trump’s May 4, 2017 executive order requiring the Departments of Labor, HHS, and Treasury to amend the current regulations to further accommodate religious objections to the contraceptive requirement. Whatever the reason why the draft regulation was leaked, it might turn out to be a blessing in disguise for the administration.

Not all litigants are patiently waiting, however. On July 1, 2017, the appellees in Wieland v. HHS, a case in which the lower court had ruled in favor of plaintiffs who challenged the rule prohibiting insurers from selling to them insurance that did not cover contraceptives, asked the 8th Circuit to require the government to explain why it did not simply dismiss the appeal in their case, as the government was about to create a new accommodation to the contraceptive rule in any event. (It should be noted that the Wieland’s problem—that they cannot legally purchase a health insurance policy that does not cover contraceptives—is not addressed at all by the current accommodation). A status call is also coming up in the Little Sisters case in the Tenth Circuit on July 14. We will soon see if the administration will further delay issuance of the contraceptive coverage rule or whether it will take a final and definitive stand on what is bound to be a very controversial issue.

Latest Insurer-Participation Map

On July 5, 2017, CMS released its third county-level map of insurer participation in the marketplaces for 2018. The first map was released on June 9 and the second on June 27.

The number of counties without an insurer participating in the exchange is down from 49 to 40 since the last map and the number of individuals in bare counties is down from 36,000 to 27,000. Since the last map came out, Centene has announced that it will cover previously bare counties in Missouri, but a number of rural counties in Nevada have lost 2018 insurer coverage. Some counties in Ohio and Indiana remain uncovered. The number of counties with only one insurer has stayed about steady at 1,300 counties with 2.4 million enrollees.

CMS notes that the map is based on insurer announcements as of July 3, 2017, and warns, “Participation is expected to fluctuate and does not represent actual Exchange application submissions.” Insurers have until August 16 to change their qualified health plan applications and until September 27, 2017 to sign their final exchange contracts, so coverage is very likely to change before 2018 open enrollment begins on November 1, 2017.