Enhancing Coverage of Preventive Services Under the Affordable Care Act

SUPPLEMENTARY INFORMATION:

I. Background

A. Coverage of Preventive Services Under the Affordable Care Act and Implementing Regulations

The Patient Protection and Affordable Care Act (Pub. L. 111-148) was enacted on March 23, 2010. The Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) was enacted on March 30, 2010. These statutes are collectively known as the Affordable Care Act (ACA). The ACA reorganized, amended, and added to the provisions of part A of title XXVII of the Public Health Service Act (PHS Act) relating to group health plans and health insurance issuers in the group and individual markets. The ACA added section 715(a)(1) to the Employee Retirement Income Security Act of 1974 (ERISA) and section 9815(a)(1) to the Internal Revenue Code (Code) to incorporate the provisions of part A of title XXVII of the PHS Act into ERISA and the Code, and to make them applicable to group health plans and health insurance issuers providing health insurance coverage in connection with group health plans.

Section 2713 of the PHS Act, as added by section 1001 of the ACA and incorporated into ERISA and the Code, and its implementing regulations require that non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage (plans and issuers) provide coverage without imposing any cost-sharing requirements for the following items and services:

• Evidence-based items or services that have in effect a rating of “A” or “B” in the current recommendations of the United States Preventive Services Task Force (USPSTF) with respect to the individual involved, except for the recommendations of the USPSTF regarding breast cancer screening, mammography, and prevention issued in or around November 2009;

• Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC) with respect to the individual involved;

• With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and
• With respect to women, such additional preventive care and screenings not described in the USPSTF recommendations in PHS Act section 2713(a)(1), as provided for in comprehensive guidelines supported by HRSA.

On August 1, 2011, HRSA established the HRSA-supported Women's Preventive Services Guidelines (HRSA-supported Guidelines) based on recommendations from a Department of Health and Human Services' (HHS) commissioned study by the Institute of Medicine. Among other recommended items and services, the 2011 HRSA-supported Guidelines addressed contraceptive methods and counseling as a type of preventive service and included all Food and Drug Administration (FDA)-approved “contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.” The HRSA-supported Guidelines' recommendation on contraception has been updated several times, including in 2016, and most recently in 2021. The 2011 HRSA-supported Guidelines included for each type of preventive service a column labeled “Frequency,” which for contraceptive methods and counseling, stated, “as prescribed.” The “Frequency” column does not appear in the 2016, 2019, or 2021 updated HRSA-supported Guidelines for any preventive service, and the updated HRSA-supported Guidelines do not contain language that specifies frequency in accordance with a prescription for contraceptive methods (or contraceptives) by a health care provider Plans and issuers are required to provide coverage of women's preventive services, including contraceptive items and services, without cost sharing, consistent with the 2021 HRSA-supported Guidelines, for plan years and policy years beginning on or after December 30, 2022. The 2021 HRSA-supported Guidelines refer, under the header “Contraception,” to “the full range of contraceptives and contraceptive care to prevent unintended pregnancies and improve birth outcomes.” The term “contraceptive methods” was replaced in 2021 by “contraceptives.” With the removal of the phrase “female-controlled,” as HRSA explained, male condoms are included in the 2021 HRSA-supported Guidelines, which also include “screening, education, counseling, and provision of contraceptives (including in the immediate postpartum period)” including “follow-up care ( e.g., management, evaluation and changes, including the removal, continuation, and discontinuation of contraceptives).” The 2021 HRSA-supported Guidelines recommend “the full range of U.S. Food and Drug Administration (FDA)-approved, -granted, or -cleared contraceptives, effective family planning practices, and sterilization procedures be available as part of contraceptive care.”

The Departments of the Treasury, Labor, and HHS (the Departments) previously issued rulemaking to implement the preventive services requirements of section 2713 of the PHS Act, using their authority under section 9833 of the Code, section 734 of ERISA, and section 2792 of the PHS Act. On July 19, 2010, the Departments issued interim final rules (July 2010 interim final rules) at 26 CFR 54.9815-2713T, 29 CFR 2590.715-2713, and 45 CFR 147.130, which require that plans and issuers provide coverage of recommended preventive services generally for plan years or policy years that begin on or after September 23, 2010; or, if later, for plan years or policy years that begin on or after the date that is one year after the recommendation or guideline is issued. Among other provisions, the July 2010 interim final rules allow plans and issuers to rely on the relevant clinical evidence base to impose reasonable medical management techniques to determine the frequency, method, treatment, or setting for coverage of a recommended preventive health item or service, to the extent not specified in the applicable recommendation or guideline. Additionally, if a plan or issuer has a provider in its network that can provide a recommended preventive service, the July 2010 interim final rules specify that the plan or issuer is not required to provide coverage or waive cost sharing for the item or service when delivered by an out-of-network provider. However, if a plan or issuer does not have in its network a provider who can provide a recommended preventive service (or the plan or coverage does not have a network), the plan or issuer must cover the item or service when performed by an out-of-network provider, and may not impose any cost-sharing requirements with respect to the item or service. The Departments finalized these rules on July 14, 2015.

The Departments have also previously issued rules that provide exemptions from the contraceptive coverage requirement for entities and individuals with moral or religious objections to contraceptive coverage, and accommodations through which objecting entities are not required to contract, arrange, pay, or provide a referral for contraceptive coverage, while at the same time ensuring that participants, beneficiaries, and enrollees enrolled in coverage sponsored or arranged by an objecting entity could separately obtain contraceptive services at no additional cost. Most recently, on February 2, 2023, the Departments issued proposed rules (2023 proposed rules) to rescind the moral exemption to the contraceptive coverage requirement and to establish a new “individual contraceptive arrangement,” an independent pathway that individuals enrolled in plans or coverage sponsored, arranged, or provided by objecting entities could use to obtain contraceptive services at no cost directly from a provider or facility that furnishes contraceptive services.

B. Guidance Related to the Coverage of Recommended Preventive Services

Since publishing the July 2010 interim final rules, the Departments have issued extensive guidance related to the requirement to cover recommended preventive services, including contraceptive services, without cost sharing under section 2713 of the PHS Act and its implementing regulations. These guidance documents respond to questions from interested parties regarding the requirement to provide coverage for recommended preventive services without cost sharing. Cumulatively, this body of guidance interprets key elements of the preventive health services recommendations and guidelines and coverage requirements, including with respect to the allowed use of reasonable medical management techniques. These guidance documents include:

• Frequently Asked Questions on February 20, 2013 (FAQs Part XII), which, among other things, clarified the scope of reasonable medical management with respect to recommended preventive services, including contraceptive items and services. The FAQs specified that plans and issuers must cover “the full range of FDA-approved contraceptive methods” and must design reasonable medical management techniques to include accommodations for the specific medical needs of an individual. FAQs Part XII, Q14 noted that plans may, for example, cover a generic drug without cost sharing and impose cost sharing for equivalent branded drugs. If, however, a generic version is not available, or would not be medically appropriate for the patient (as determined by the attending provider, in consultation with the patient), then a plan or issuer must have a mechanism to provide coverage for the brand name drug without any cost sharing. FAQs Part XII also interpreted the statutory and regulatory requirements to cover recommended preventive services without cost sharing to mean that recommended preventive services (including contraceptive products) that are generally available without a prescription must be covered without cost sharing only when prescribed by a health care provider.

• Frequently Asked Questions on May 11, 2015 (FAQs Part XXVI), which clarified that plans and issuers must cover, without cost sharing, at least one form of contraception in each method that is identified by the FDA in its Birth Control Guide. FAQs Part XXVI further clarified the scope of reasonable medical management techniques by specifying that if multiple services and FDA-approved items within a contraceptive category are medically appropriate for an individual, the plan or issuer may use reasonable medical management techniques to determine which specific products to cover without cost sharing with respect to that individual and, subject to the relevant facts and circumstances, generally may impose cost sharing (including full cost sharing) on some items and services to encourage an individual to use other specific items and services within the chosen contraceptive category. However, if the individual's attending provider recommends a particular service or FDA-approved, -cleared, or -granted item based on a determination of medical necessity with respect to that individual, the plan or issuer must defer to the determination of the attending provider with respect to the individual involved, and cover that item or service without cost sharing. Additionally, FAQs Part XXVI specified that to the extent a plan or issuer uses reasonable medical management techniques within a specified method of contraception, the plan or issuer must have an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual or a provider (or other individual acting as a patient's authorized representative) to ensure coverage without cost sharing of any service or FDA-approved item within the specified method of contraception that has been recommended by the individual's attending provider based on a determination of medical necessity.

• Frequently Asked Questions on April 20, 2016 (FAQs Part 31), which further clarified the requirements on plans and issuers with respect to the development and implementation of an exceptions process, including that plans and issuers that meet all other requirements are permitted to develop and utilize a standard exceptions process form (such as the Medicare Part D Coverage Determination Request Form) and instructions as part of the exceptions process.

• Frequently Asked Questions on July 19, 2021 (FAQs Part 47), which followed USPSTF's release on June 11, 2019 of a recommendation with an “A” rating that clinicians offer preexposure prophylaxis (PrEP) with “effective antiretroviral therapy to persons who are at high risk of human immunodeficiency virus (HIV) acquisition.” FAQs Part 47 clarified that plans and issuers are required to cover, without cost sharing, all items and services that USPSTF recommends should be received prior to being prescribed PrEP and for ongoing follow-up and monitoring. These items and services include specific baseline and monitoring services, such as laboratory testing and adherence counseling. The FAQs also clarified that plans and issuers utilizing reasonable medical management must have an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual or a provider (or other individual acting as an authorized representative).

• Frequently Asked Questions on January 10, 2022 (FAQs Part 51), which acknowledged complaints received about compliance with the contraceptive coverage requirement and clarified currently applicable guidance. Specifically, FAQs Part 51, Q9 was issued in response to complaints and public reports of potential violations of the contraceptive coverage requirement, including that plans and issuers and pharmacy benefit managers (PBMs) were not adhering to requirements for utilizing reasonable medical management techniques. The FAQs also highlighted several examples of such potential violations, including denying coverage for all or particular brand name contraceptives, even after the individual's attending provider determines and communicates to the plan or issuer that a particular service or FDA-approved, -cleared, or -granted contraceptive product is medically necessary with respect to that individual; requiring individuals to fail first using numerous other services or FDA-approved, -cleared, or -granted contraceptive products within the same method of contraception before the plan or issuer will approve coverage for a service or FDA-approved, -cleared, or -granted contraceptive product that is medically appropriate for the individual, as determined by the individual's attending health care provider; requiring individuals to fail first using numerous other services or FDA-approved, -cleared, or -granted contraceptive products in other contraceptive methods before the plan or issuer will approve coverage for a service or FDA-approved, -cleared, or -granted contraceptive product that is medically appropriate for the individual, as determined by the individual's attending health care provider; and failing to provide an acceptable exceptions process (for example, by requiring individuals to appeal an adverse benefit determination using the plan's or issuer's internal claims and appeals process, rather than providing an exceptions process that is easily accessible, transparent, sufficiently expedient, and not unduly burdensome).

• Frequently Asked Questions on July 28, 2022 (FAQs Part 54), which further clarified the contraceptive coverage requirement and currently applicable guidance. These FAQs clarified that plans and issuers must cover, without imposing cost-sharing requirements, items and services that are integral to a recommended contraceptive service. The FAQs also stated that plans and issuers must cover any FDA-approved, -cleared, or -granted contraceptive products and services that an individual and their attending provider have determined to be medically appropriate for the individual, regardless of whether those products or services are specifically identified in the categories listed in the HRSA-supported Guidelines. For contraceptive services or FDA-approved, -cleared, or -granted contraceptive products not included in a category described in the HRSA-supported Guidelines, the FAQs stated that plans and issuers may use reasonable medical management techniques to determine which specific products to cover without cost sharing only if multiple, substantially similar services or products that are not included in a category described in the HRSA-supported Guidelines are medically appropriate for the individual. The FAQs further stated that if the individual's attending provider recommends a particular service or FDA-approved, -cleared, or -granted product not included in a category described in the HRSA-supported Guidelines based on a determination of medical necessity with respect to that individual, the plan or issuer must cover that service or product without cost sharing. The plan or issuer must defer to the determination of the attending provider and must make available an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome so the individual or their provider (or other individual acting as the individual's authorized representative) can obtain coverage for the medically necessary service or product for the individual without cost sharing as required under PHS Act section 2713 and its implementing regulations and guidance. The FAQs also encouraged plans and issuers to cover over-the-counter (OTC) emergency contraceptive products with no cost sharing when they are purchased by consumers without a prescription. FAQs Part 54, Q8 further acknowledged that the Departments continued to receive complaints and reports that participants, beneficiaries, and enrollees were being denied contraceptive coverage, in some cases due to the application of medical management techniques that were not reasonable based on all of the relevant facts and circumstances. In addition to summarizing ongoing complaints similar to those highlighted in FAQs Part 51, Q9, the Departments also noted that they were aware of complaints that plans and issuers or PBMs were imposing age limits on contraceptive coverage rather than providing these benefits to all individuals with reproductive capacity. FAQs Part 54, Q13 also described actions within the scope of the authority of the Departments of Labor and HHS to enforce the requirements of PHS Act section 2713.

• Frequently Asked Questions on January 22, 2024 (FAQs Part 64), which provided further clarifications regarding contraceptive coverage requirements, including providing guidance regarding a therapeutic equivalence approach. The FAQs explained that plans and issuers could adopt a therapeutic equivalence approach (in combination with an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome) to ensure the plan's or issuer's medical management techniques for contraceptive drugs and drug-led devices that are required to be covered under PHS Act section 2713 are reasonable. Specifically, with respect to FDA-approved contraceptive drugs and drug-led devices, if a plan or issuer utilizes medical management techniques within a specified category described in the HRSA-supported Guidelines (or group of substantially similar products that are not included in a specified category), the Departments will generally consider such medical management techniques to be reasonable if the plan or issuer covers all FDA-approved contraceptive drugs and drug-led devices in that category (or group of substantially similar products) without cost sharing, other than those for which there is at least one therapeutic equivalent drug or drug-led device that the plan or issuer covers without cost sharing.

C. Executive Orders on the Affordable Care Act and Reproductive Health

On January 28, 2021, President Biden issued Executive Order 14009, “Strengthening Medicaid and the Affordable Care Act” (E.O. 14009). Section 3 of E.O. 14009 directs the Secretaries of the Departments (the Secretaries) to review all existing regulations, guidance documents, and policies to determine whether such actions are inconsistent with protecting and strengthening Medicaid and the ACA and making high-quality health care accessible and affordable for every American.

On April 5, 2022, President Biden issued Executive Order 14070, “Continuing To Strengthen Americans' Access to Affordable, Quality Health Coverage” (E.O. 14070). Section 2 of E.O. 14070 reaffirms the goals and policy of E.O. 14009 and further directs agencies with responsibilities related to Americans' access to health coverage to consider and pursue agency actions that improve the comprehensiveness of coverage and protect consumers from low-quality coverage.

Following the U.S. Supreme Court decision in Dobbs v. Jackson Women's Health Organization ( Dobbs ), President Biden issued Executive Order 14076, “Protecting Access to Reproductive Healthcare Services” (E.O. 14076) on July 8, 2022. Section 3 of E.O. 14076 requires the Secretary of HHS to identify potential actions to “protect and expand access to the full range of reproductive healthcare services, including actions to enhance family planning services such as access to emergency contraception” and identify “ways to increase outreach and education about access to reproductive healthcare services, including by launching a public awareness initiative to provide timely and accurate information about such access, which shall . . . include promoting awareness of and access to the full range of contraceptive services.”

On June 23, 2023, President Biden issued Executive Order 14101, “Strengthening Access to Affordable, High-Quality Contraception and Family Planning Services” (E.O. 14101). Section 2 of E.O. 14101 directs the Secretaries to consider issuing guidance “to further improve Americans' ability to access contraception, without out-of-pocket expenses, under the Affordable Care Act” and to consider additional actions “to promote increased access to affordable over-the-counter contraception, including emergency contraception.”

D. FDA Approval of Daily Over-the-Counter Oral Contraceptive

On July 13, 2023, the FDA announced that it had approved a progestin-only birth control pill as the first daily oral contraceptive for use in the United States available without a prescription. Interested parties, including health care provider associations, have supported the availability of a daily OTC oral contraceptive for its potential to improve access to affordable contraception, thereby improving management of family planning and reducing unintended pregnancies. Studies have shown that challenges with access and costs are among the most common reasons cited by women for not using contraception or having gaps in contraceptive use. One large, nationally representative study found 29 percent of women reported encountering barriers to obtaining or filling an initial prescription or refills of oral contraceptive pills, specifically citing insurance coverage, getting an appointment, not having a regular provider, and difficulty accessing a pharmacy. Accordingly, the availability of a daily OTC oral contraceptive could improve access to contraception if the product is affordable, including if it is covered by insurance without cost sharing, and as a result, could reduce the number of unintended pregnancies. Beginning in March 2024, an OTC oral contraceptive has become widely available for sale online and in stores under the brand name Opill®, with a manufacturer's suggested retail price ranging from $19.99 for a 1-month supply to $89.99 for a 6-month supply.

E. OTC Preventive Products Request for Information

As discussed in sections I.A and I.C of this preamble, the Biden-Harris Administration has prioritized access to comprehensive, high-quality contraception and family planning services as critical components of women's reproductive health and overall public health. In response to E.O. 14009, E.O. 14070, E.O.14076, and E.O. 14101, and following the FDA approval of an OTC oral contraceptive, as discussed in section I.D of this preamble, the Departments issued a “Request for Information; Coverage of Over-the-Counter Preventive Services” on October 4, 2023 (OTC Preventive Products RFI). The Departments issued the OTC Preventive Products RFI to gather public feedback regarding the potential benefits and costs of requiring plans and issuers to cover OTC preventive products without cost sharing and without a prescription; learn of any potential challenges associated with providing such coverage; understand whether and how providing such coverage would benefit consumers; and assess any potential burden that plans and issuers would face if required to provide such coverage.

The Departments received 376 unique comments in response to the OTC Preventive Products RFI, including comments from individuals; plans and issuers; PBMs; State government agencies; and advocacy organizations representing consumers, health care providers, group health plans, hospitals, and durable medical equipment suppliers. The Departments reviewed comments received in response to the OTC Preventive Products RFI as part of the development of these proposed rules. However, these proposed rules do not address all the issues on which information was requested.

Many commenters stated that requiring plans and issuers to cover all recommended preventive services would promote health equity and improve health outcomes by reducing costs and administrative barriers to accessing preventive health care. Many commenters highlighted that prescription and cost-sharing requirements represent a particular barrier for people with lower incomes and Black, Indigenous, and People of Color (BIPOC) communities, and that requiring coverage of OTC preventive products without cost sharing and without a prescription would significantly lower these barriers, thereby increasing access to OTC preventive products in a manner that would be especially beneficial to lower-income and underserved populations.

Many commenters highlighted the particular benefit to women of requiring plans and issuers to cover OTC contraceptive items without requiring a prescription and without cost-sharing requirements. Several commenters pointed out that neither section 2713 of the PHS Act nor its implementing regulations impose a specific prescription requirement on recommended contraceptive items. These commenters also highlighted HRSA's removal of “as prescribed” language which appeared in the 2011 HRSA-supported Guidelines but does not appear in the 2016 or any subsequent version of the HRSA-supported Guidelines. In the view of these commenters, the existing prescription requirement is therefore based only on agency guidance that is within the authority of the Departments to revise.

Another commenter noted that, in the United States, approximately one-third of childbearing-aged women and those capable of becoming pregnant experience difficulties obtaining hormonal contraception, and that coverage of OTC oral contraception without a prescription and without cost sharing would improve access to reproductive care for this group. Several commenters highlighted the burdens of a prescription requirement on people seeking contraception, including requesting time off from work, unnecessary visits to the doctor, appointment wait times, and finding childcare, while a few other commenters specifically emphasized the importance of waiving cost sharing to make OTC contraceptive services truly accessible. One commenter noted that access to affordable contraception was particularly important within the context of widespread Medicaid coverage losses following the termination on March 31, 2023 of the continuous enrollment condition previously associated with the COVID-19 public health emergency (PHE). Many other commenters supported requiring coverage of OTC contraceptive services in order to ensure that women can access effective, affordable means of preventing unintended pregnancies in the wake of the Dobbs decision.

In addition to comments highlighting the benefits to women of removing prescription and cost-sharing requirements for coverage of OTC contraceptive items, several commenters noted that consumers would benefit from increased access to other specific OTC preventive products if plans and issuers were required to cover those other products without a prescription and without cost sharing. For example, several commenters stated that coverage based on prescription requirements limits access to OTC tobacco cessation products. One of these commenters emphasized that prescription requirements are a particular barrier with respect to tobacco cessation because of the nature of nicotine addiction, which typically requires multiple quit attempts. In that commenter's view, removing cost-sharing and prescription requirements would allow people to access evidence-based treatment when they are motivated to make a quit attempt, without having to wait for a medical appointment. Conversely, another commenter who acknowledged that removing cost sharing on OTC tobacco cessation products could have a positive effect on access to these products, particularly for people with low incomes, also emphasized the role of clinicians in screening for and diagnosing tobacco use disorder and recommending or prescribing effective treatments. This commenter encouraged the Departments to make an effort to preserve the clinician-patient relationship with respect to tobacco cessation products to ensure that patients are properly connected to care, including biomedical and psychiatric services that may be comorbid with tobacco use disorder.

Another commenter noted that a woman who is not pregnant or planning to become pregnant may not be under the care of a prescribing health care provider but could still benefit from the USPSTF recommendation that women who could become pregnant should consume a daily folic acid supplement. A few commenters described the disparate occurrence of spina bifida in newborns born to Spanish-speaking people, which commenters believe could be reduced if plans and issuers were required to cover OTC folic acid without cost sharing or prescription requirements.

However, several commenters identified operational barriers to widespread implementation of a requirement to cover all recommended OTC preventive products without cost sharing or a prescription. A few commenters noted potential strains on pharmacies, retailers, and the existing health care delivery system; fraud and abuse threats; and potential cost increases for plan sponsors and plan participants. For example, one commenter cited the administrative and cost burdens that pharmacies and retailers could incur if they were required to cover the upfront costs of OTC preventive products and pursue post-claim reimbursements. In that commenter's view, requiring plans and issuers to provide coverage of OTC preventive products without cost sharing could also facilitate fraudulent behavior, including sale to unauthorized persons or re-sale outside of the health care market, that could in turn create a shadow market based on overuse and misuse. This commenter highlighted the existing significant clinical and administrative burdens that already strain pharmacist and retailer resources (ranging from filling and dispensing medications to providing immunizations, patient counseling, and information about insurance eligibility and coverage), and expressed concern that the responsibility for educating consumers about potential access to and appropriateness of OTC contraceptives would fall to pharmacists and retailers at the point of sale. Another commenter noted that requiring coverage of OTC preventive products such as contraceptives, OTC naloxone, and smoking cessation products without cost sharing or a prescription would increase access to such products but advised that such requirements would increase administrative burden on pharmacists by increasing workload and costs and decreasing reimbursement for vital patient counseling and additional services. One commenter indicated that using a credit card (rather than a debit card or paper reimbursement system) would facilitate coverage of OTC preventive products, but also noted that the use of a credit card without a fixed spending limit would be more likely to lead to fraud and would necessitate implementing systems for freezing or repaying cards in the case of misuse. Another commenter indicated general support for access to recommended preventive products without cost sharing but stated that prescription requirements were necessary for many products to ensure that individual patients receive appropriate care. In that commenter's view, the cost associated with applying a market-wide OTC preventive products coverage requirement would disrupt and likely outweigh any benefits of changing long-established coverage patterns. This commenter recommended that the Departments consider establishing a standing order for Opill® only, in order to conduct a targeted roll-out of a potential broader OTC preventive products coverage requirement without overburdening the health care system by attempting to implement the changes for all OTC preventive products at once. The same commenter, however, warned against requiring coverage of OTC products that do not have meaningful market competition, such as Opill®, to avoid inadvertently driving up retail prices. Another commenter shared similar concerns regarding the potential for generating demand for preventive items and services that would ultimately be unused. A few commenters noted the particular cost and negative environmental impact that could be realized if OTC breastfeeding supplies with no cost sharing led to overconsumption of such products. One commenter urged the Departments to avoid rushing to require coverage of all OTC preventive products in order to provide sufficient advanced notice to allow plan sponsors to address operational and implementation issues.

While several commenters expressed concern that current prescription requirements restrict access to breastfeeding services and supplies, many commenters stated that removing the prescription requirement for breastfeeding services and supplies could have a detrimental effect on breastfeeding parents and newborns. These commenters stated that consumers currently benefit from the expertise provided by lactation consultants and other specially trained staff at durable medical equipment suppliers contracted with plans and issuers to provide breast pumps. These commenters also expressed the view that removing the prescription requirement would make it more likely that a consumer would be forced to select breastfeeding supplies in a retail environment with fewer breast pump options and less privacy and support.

In the OTC Preventive Products RFI, the Departments also requested feedback from interested parties based on their experiences with the requirement to cover OTC COVID-19 diagnostic tests during the COVID-19 PHE. During the COVID-19 PHE, plans and issuers were required to cover OTC COVID-19 diagnostic tests without a prescription from a health care provider and without imposing any cost-sharing requirements, prior authorization, or other medical management requirements. However, the Departments permitted plans and issuers that met certain safe harbor requirements to implement cost and quantity limits to contain costs and combat potential fraud and abuse with respect to coverage of OTC COVID-19 diagnostic tests. A few commenters encouraged the Departments to use experiences with coverage of OTC COVID-19 diagnostic tests as a roadmap for future coverage of other recommended preventive services. However, another commenter cautioned the Departments against regulating the routine use of recommended preventive services by applying requirements used during an unprecedented public health emergency, in order to avoid issues the commenter reported taking place during the COVID-19 PHE, such as overconsumption of COVID-19 diagnostic tests, price gouging of products by manufacturers, and limited opportunities for health plans to contain waste and abuse. Another commenter acknowledged that coverage requirements for OTC COVID-19 diagnostic tests improved patient access to the tests by removing the barriers related to out-of-pocket costs and obtaining prescriptions but described a number of other issues associated with the testing coverage requirement. According to this commenter, implementation challenges included below-cost reimbursement, inconsistent requirements across plans and providers, and lack of reimbursement for pharmacies. In particular, this commenter noted that the average cost to a retail pharmacy provider to dispense a drug—separate from the cost of acquiring the medication itself—is $12.40, and that any future OTC coverage requirements should reimburse pharmacies for both the acquisition and dispensing of products. Another commenter, citing the speed with which the OTC COVID-19 diagnostic testing program was implemented, urged the Departments to proceed deliberately with the implementation of any broader OTC preventive products coverage requirements. According to this commenter, the rapid implementation of the testing coverage requirements during the PHE contributed to consumer confusion and led to many thousands of consumers failing to seek reimbursement for tests that were eligible to be covered.

F. Transparency in Coverage Under the ACA and Implementing Regulations

Section 2715A of the PHS Act provides that non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage must comply with section 1311(e)(3) of the ACA, which addresses transparency in health coverage and imposes certain reporting and disclosure requirements for health plans that are seeking certification as qualified health plans (QHPs) to be offered on an American Health Benefits Exchange (generally referred to as an Exchange or Marketplace) (as defined by section 1311(b)(1) of the ACA). A plan or issuer of coverage that is not offered through an Exchange and that is subject to section 2715A of the PHS Act is required to submit the required information to the Secretary of HHS and the relevant State's insurance commissioner, and to make that information available to the public.

Section 1311(e)(3)(C) of the ACA requires plans, as a requirement of certification as a QHP, to permit individuals to learn about the amount of cost sharing (including deductibles, copayments, and coinsurance) that the individual would be responsible for paying with respect to the furnishing of a specific item or service by an in-network provider in a timely manner upon the request of the individual. Section 1311(e)(3)(C) of the ACA specifies that, at a minimum, such information must be made available to the individual through an internet website and through other means for individuals without access to the internet.

On March 27, 2012, HHS issued the “Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers” final rule (Exchange Establishment final rule) that implemented sections 1311(e)(3)(A) through (C) of the ACA at 45 CFR 155.1040(a) through (c) and 156.220. The Exchange Establishment final rule created standards for QHP issuers to submit specific information related to transparency in coverage.

On November 12, 2020, the Departments issued “Transparency in Coverage” final rules (Transparency in Coverage final rules) implementing transparency reporting requirements for non-grandfathered group health plans and health insurance issuers offering non-grandfathered group and individual health insurance coverage. Implementing section 1311(e)(3)(C) of the ACA and section 2715A of the PHS Act, these rules require plans and issuers to disclose cost-sharing information for all covered items and services available to a participant, beneficiary, or enrollee through an internet-based self-service tool via the plan's or issuer's member portal or, if requested by the individual, on paper. The requirement to disclose cost-sharing information for all covered items and services includes covered contraceptive items or services.

The Transparency in Coverage final rules enumerate seven cost-related elements that plans and issuers must disclose in response to a search query by a participant, beneficiary, or enrollee for a covered item or service furnished by a provider or providers. The self-service tool must provide an estimate of the participant's, beneficiary's, or enrollee's cost-sharing liability for the covered item or service, which is calculated based on the following elements: (a) accumulated amounts with respect to any deductibles or maximum out-of-pocket limits; and either (b) the in-network rate, comprising a negotiated rate or underlying fee schedule rate as applicable to the payment model; or (c) an out-of-network allowed amount or any other rate that provides a more accurate estimate of an amount a plan or issuer will pay for the requested covered item or service from an out-of-network provider. Self-service tool results must also reflect a list of the items and services included in a bundled payment arrangement, if applicable; notification that coverage of a specific item or service is subject to a prerequisite, as applicable; and certain disclaimers in plain language describing the limitations of the estimate or other qualifications regarding the cost-sharing information disclosed.

With respect to requests for cost-sharing information for items or services that are recommended preventive services under section 2713 of the PHS Act, if the plan or issuer cannot determine whether the request is for preventive or non-preventive purposes, the plan or issuer must display the cost-sharing liability that applies for non-preventive purposes along with a statement that the item or service may not be subject to cost sharing if it is billed as a preventive service. Displaying a non-zero cost-sharing liability in these circumstances helps protect against unexpected medical bills by ensuring participants, beneficiaries, and enrollees are aware of their potential cost-sharing liability while the statement ensures that consumers are made aware they can access recommended preventive services without cost sharing. Alternatively, the Transparency in Coverage final rules permit a plan or issuer to allow a participant, beneficiary, or enrollee to request cost-sharing information for the specific preventive or non-preventive item or service by including terms such as “preventive,” “non-preventive,” or “diagnostic” as a means to request the most accurate cost-sharing information.

Plans and issuers must ensure users can search for cost-sharing information for a covered item or service by a specific in-network provider or by all in-network providers using either a descriptive term or a billing code. For covered items or services furnished by out-of-network providers, users can search for an out-of-network allowed amount, percentage of billed charges, or other rate that provides a reasonably accurate estimate of the amount a plan or issuer will pay for a covered item or service provided by out-of-network providers. Users must also be able to input other factors utilized by the plan or issuer that are relevant for determining the applicable cost-sharing information or out-of-network allowed amount, such as location of service, facility name, or dosage and permit refining and reordering of search results.

II. Overview of the Proposed Rules

A. Coverage of Recommended Preventive Services

1. Reasonable Medical Management of Recommended Preventive Services: Exceptions Process

The Departments' regulations implementing section 2713 of the PHS Act aim to strike a balance between ensuring participants, beneficiaries, and enrollees do not face undue barriers to accessing their coverage of recommended preventive services as required by law and allowing plans and issuers to contain costs, promote efficient delivery of care, and minimize risks of fraud, waste, and abuse. To this end, current regulations permit plans and issuers to use reasonable medical management techniques to determine the frequency, method, treatment, or setting for coverage of a recommended preventive service, to the extent not specified in the applicable recommendation or guideline. The Departments have previously explained, in the context of certain recommended preventive services, that they generally do not consider medical management techniques with respect to recommended preventive services to be reasonable absent the availability of an exceptions process.

As noted in previously issued guidance and described in section I.B of this preamble, the Departments continue to receive complaints of potential violations related to the application of medical management techniques that are not reasonable, including failing to provide an exceptions process that meets the standards set forth in guidance. Further, the U.S. House of Representatives' Committee on Oversight and Reform (Oversight Committee) published a report in October 2022 documenting the findings of its investigation into contraceptive coverage for individuals enrolled in private health coverage. The Oversight Committee found that insurers and PBMs surveyed denied an average of at least 40 percent of exception requests related to contraceptive coverage, with one PBM denying more than 80 percent of requests in a year. To reinforce the requirement that medical management techniques must be reasonable, the Departments propose to codify that plans and issuers that utilize reasonable medical management techniques with respect to recommended preventive services would be required to accommodate any individual for whom a particular item or service would not be medically appropriate, as determined by the individual's attending provider, by having a mechanism for covering or waiving the otherwise applicable cost sharing for the medically necessary item or service. Specifically, under these proposed rules, consistent with previous guidance, if utilizing reasonable medical management techniques, a plan or issuer would be required to have an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual or a provider (or other person acting as the individual's authorized representative) under which the plan or issuer covers without cost sharing the recommended preventive service according to the frequency, method, treatment, or setting determined to be medically necessary with respect to the individual, as determined by the individual's attending provider. The exceptions process would ensure that an individual can access medically necessary recommended preventive services without cost sharing and would prevent medical management from functioning as an unreasonable barrier to coverage under section 2713 of the PHS Act. The Departments are authorized to issue this proposal, implementing section 2713 of the PHS Act, by section 9833 of the Code, section 734 of ERISA, and section 2792 of the PHS Act. Nothing in this proposal, if finalized, would require an entity to provide coverage or payments for a contraceptive for which they have an exemption under 26 CFR 54.9815-2713A, 29 CFR 2590.715-2713A, and 45 CFR 147.131 through 45 CFR 147.133.

While prior guidance has generally focused on the use of an exceptions process in the context of coverage of contraceptive services, it has not been limited to that context. For example, the Departments' guidance with respect to coverage of PrEP to prevent HIV acquisition has similarly stated that where a plan or issuer uses reasonable medical management techniques—such as covering a generic version of PrEP without cost sharing and imposing cost sharing on an equivalent branded version—a plan or issuer must have an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual or a provider (or other individual acting as an authorized representative) that waives otherwise applicable cost sharing for the particular PrEP medication (generic or branded) for any individual for whom the plan's or issuer's preferred medication “would be medically inappropriate, as determined by the individual's health care provider.”

Therefore, the Departments propose to reorganize and amend 26 CFR 54.9815-2713(a)(4), 29 CFR 2590.715-2713(a)(4), and 45 CFR 147.130(a)(4) by adding a new paragraph (a)(4)(i) to include existing language with minor technical edits for clarity and to add a new paragraph (a)(4)(ii) to specify that, in order for a plan's or issuer's medical management techniques with respect to a recommended preventive service to be considered reasonable, the plan or issuer would be required to have an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on a participant, beneficiary, or enrollee or attending provider (or other person acting as the individual's authorized representative). Under this proposal, an exceptions process would be required to ensure that an individual can receive coverage, without cost-sharing requirements, for a recommended preventive service according to the frequency, method, treatment, or setting that is medically necessary with respect to the individual, as determined by the individual's attending provider. For example, a plan or issuer may typically provide coverage without cost sharing for only a generic version of a recommended preventive service; an individual who experiences side effects from the covered generic version and whose attending provider has determined that the brand-name version of the recommended preventive services is medically necessary for the individual would be able to use the exceptions process to obtain the brand-name version without cost sharing, even though the plan or issuer typically does not provide coverage for the brand-name version (or provides coverage with cost sharing) This proposed change is necessary to effectuate the statutory requirement under PHS Act section 2713 that plans and issuers provide coverage of recommended preventive services without cost sharing, because without such an exceptions process, a plan's or issuer's medical management techniques could have the effect of preventing an individual from receiving coverage without cost sharing of medically necessary recommended preventive services.

Under this proposal and consistent with previous guidance, a plan or issuer would be required to defer to the determination of an individual's attending provider regarding medical necessity with respect to the individual. Previously issued guidance has used the terms “medically necessary” and “medically appropriate” interchangeably when referring to the appropriate standard for this clinical determination. However, in these proposed rules, the Departments propose to use the phrase “medically necessary” to establish uniform terminology and avoid confusion from the use of different terms. The Departments have determined that a standard based on “medical necessity” would more accurately comport with the goal of allowing plans and issuers to use reasonable medical management techniques to control costs, while ensuring every participant, beneficiary, and enrollee receives coverage without cost sharing for a form of a recommended preventive service that is suitable for the individual.

These proposed rules use the term “medically appropriate” to refer to a range of potential options that are generally acceptable to address a condition or achieve a preventive health goal. However, a preventive service that is medically appropriate for most individuals (to whom the recommendation or guidelines applies) may not be medically appropriate to address a condition or achieve a preventive health goal in the context of other health factors specific to a certain individual. In these cases, another form of the preventive service would be medically necessary for that individual. In making a determination of whether a service is medically necessary, a provider might consider factors such as severity of side effects, differences in permanence and reversibility of a recommended preventive service, and ability to adhere to the appropriate use of the recommended preventive service, as determined by the attending provider. Under these proposed rules, if the recommended preventive service covered by the plan or issuer is not medically appropriate for the individual, as determined by the individual's attending provider, the plan or issuer would be required, through the exceptions process, to cover without cost sharing an alternative recommended preventive service that the individual's attending provider determines is medically necessary for that individual.

For example, if a plan typically covers a generic tobacco cessation product (Gum A) without cost sharing, but an individual is allergic to an inactive ingredient in Gum A and the individual's attending provider determines that Gum B is medically necessary for the individual to achieve the preventive health benefits of the recommended preventive service without adverse side effects, then the plan or issuer would be required to provide coverage of Gum B without cost sharing through the exceptions process. However, if Gum A is medically appropriate for the individual, the plan would not be required to provide coverage of Gum B without cost sharing through the exceptions process solely on the basis that Gum B is also medically appropriate for the individual.

The Departments request comment on the terminology used in the context of the exceptions process. The Departments also request comment generally on any operational or technical barriers to implementing the proposed requirement that plans and issuers defer to the attending provider's determination of medical necessity using an exceptions process for recommended preventive services separate from the required internal claims and appeals process, and what additional guidance or requirements would support implementation of this requirement (for example, with respect to documentation of the determination or communication with the individual or their attending provider or other representative regarding a request for a coverage exception).

Consistent with prior guidance, the Departments would determine whether a plan's or issuer's exceptions process is easily accessible, transparent, sufficiently expedient, and not unduly burdensome based on all relevant facts and circumstances, including whether and how a plan or issuer provides notice of the availability of an exceptions process and what steps an individual or their provider or other authorized representative is required to initiate and complete in order to seek an exception.

For this purpose, the Departments would consider an exceptions process to be easily accessible if plan documentation includes relevant information regarding the exceptions process under the plan or coverage, including how to access the exceptions process without initiating an appeal pursuant to the plan's or issuer's internal claims and appeals procedures, the types of reasonable information the plan or issuer requires as part of a request for an exception, and contact information for a representative of the plan or issuer who can answer questions related to the exceptions process. The Departments would also encourage plans and issuers to make this information available in a format and manner that is readily accessible, such as electronically (on a website, for example) and on paper. The Departments request comment on how plans and issuers could ensure that this information is readily available and accessible, such as any specific formats, mechanisms, or other best practices that could promote access to information about the exceptions process.

The Departments would consider an exceptions process to be transparent if, at a minimum, the information relevant to the exceptions process (including, if used, a standard exceptions process form with instructions) is included and prominently displayed in plan documents (including in, or along with, the summary plan description for plans subject to ERISA), and in any other plan materials, including on the plan's or issuer's website, that describe the terms of the plan's or issuer's coverage of preventive services. The Departments request comment on the extent to which plans and issuers currently make such information available and accessible and to whom (for example, to prospective and current participants, beneficiaries, and enrollees and their providers), whether any additional individuals or groups should have access to this information if this proposal is finalized, and whether the Departments should finalize more specific standards regarding transparency or accessibility of information about the exceptions process in regulation.

The Departments would consider an exceptions process to be sufficiently expedient if it makes a determination of a claim according to a timeframe and in a manner that takes into account the nature of the claim (for example, pre-service or post-service) and the medical exigencies involved for a claim involving urgent care. The Departments request comment on appropriate additional standards for an exceptions process to be considered sufficiently expedient under these proposed rules. Specifically, the Departments request comment on whether the regulations should contain specific timeframes, and if so, what timeframes would be appropriate, as well as whether the regulations should specify the manner in which plans and issuers should issue a determination (for example, on paper, electronically, or both).

For example, as the Departments specifically noted in prior guidance, it would be unduly burdensome on participants, beneficiaries, and enrollees for a plan or issuer to deny coverage without cost sharing and require an individual or their authorized representative to file an appeal under the plan's or issuer's process for appealing adverse benefit determinations in order to obtain an exception to the standard contraceptive coverage policy. Under 26 CFR 54.9815-2719, 29 CFR 2560.503-1, 29 CFR 2590.715-2719, and 45 CFR 147.136, plans and issuers must render a determination on an internal appeal in no more than 15 calendar days (in the case of a pre-service claim) or no more than 30 calendar days (in the case of a post-service claim). Because most claims for recommended preventive services likely would not meet the definition of a “claim involving urgent care,” the expedited timelines that apply to an appeal of a claim involving urgent care likely would not apply to a claim for a recommended preventive service. In the absence of a separate exceptions process, an individual could therefore be required to pursue a standard internal appeals process to seek coverage of a recommended preventive service, which could result in a coverage delay of up to 30 calendar days for a post-service claim or 15 calendar days for a pre-service claim. Such a delay, when combined with the ability of plans and issuers to use medical management techniques to limit coverage of recommended preventive services outside of an exceptions process, is not aligned with the statutory requirement to provide coverage without cost sharing for all required preventive services, because many individuals would be compelled to pay out-of-pocket for the recommended preventive service determined by their attending provider to be medically necessary or accept the form of the recommended preventive service covered by the plan or issuer as a result of medical management techniques, even if it may cause adverse effects that an alternate form of the recommended preventive service would not cause.

Therefore, a plan or issuer would not have an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual (or provider or other person acting as the individual's authorized representative) under these proposed rules if the plan or issuer requires participants, beneficiaries, or enrollees to appeal an adverse benefit determination using the plan's or issuer's internal claims and appeals process as the means to obtain an exception. The Departments request comment on whether plans and issuers should be permitted to require an individual or their authorized representative to use the existing process for urgent care claims under 26 CFR 54.9815-2719(b)(2)(ii)(B), 29 CFR 2560.503-1(b)(2)(ii)(B), and 45 CFR 147.136(b)(2)(ii)(B) (regardless of whether the recommended preventive service meets the definition of a “claim involving urgent care”) to obtain an exception to the standard preventive services coverage policy. The Departments also request comment on whether a health plan that is subject to the essential health benefit (EHB) prescription drug exception process standards at 45 CFR 156.122(c) should be permitted to require an individual or their authorized representative to use the existing standard or expedited prescription drug exception request process when seeking an exception for a recommended preventive service that is a prescription drug, or all recommended preventive services.

The Departments previously noted that plans and issuers may develop a standard exceptions process form with instructions as part of ensuring that the plan's or issuer's exceptions process is easily accessible, transparent, sufficiently expedient, and not unduly burdensome on the individual or provider (or other individual acting as a patient's authorized representative). A standardized form that is not unnecessarily long and that has clear instructions could reduce burden on individuals or their authorized representative. The proposed amendments at 26 CFR 54.9815-2713(a)(4)(ii), 29 CFR 2590.715-2713(a)(4)(ii), and 45 CFR 147.130(a)(4)(ii) would not require that plans and issuers develop and utilize a standard exceptions process form. However, the Departments continue to encourage plans and issuers to make any such standard exceptions process form, whether developed by a plan or issuer, or the Medicare Part D Coverage Determination form, readily available, both in paper and electronically (such as on a website). The Departments request comment on whether the Medicare Part D Coverage Determination form, or another existing format, would be an appropriate model for plans and issuers implementing a standardized exceptions process under these proposed rules. Alternatively, the Departments request comment on whether it would be beneficial to interested parties if the Departments developed and made available a new standard form for an exceptions process, what information should be included in any such form, and whether use of such a standardized form should be required or optional. The Departments anticipate that most, if not all, plans and issuers have an existing exceptions process for recommended preventive services, or a process for other services that can be adapted to meet these requirements for recommended preventive services at minimal cost. The Departments request comment on this assumption and on all other aspects of this proposal.

2. Coverage of Contraceptive Items

Section 2713(a)(4) of the PHS Act was enacted to ensure that plans and issuers cover women's preventive health needs. Contraceptive coverage is an essential component of women's health care, as recognized by its inclusion in the HRSA-supported Guidelines, in part because contraception is effective at reducing unintended pregnancies and associated negative maternal-infant outcomes. Unintended pregnancies, which account for approximately 42 percent of pregnancies annually in the United States, are a major public health concern. Coverage requirements that promote equitable access to medically appropriate contraceptive items and services are an essential component of high-quality reproductive health care with wide-ranging social and economic benefits. Research shows that many women are not using their contraceptive of choice, for reasons that include concerns about side effects, cost, lack of availability, or inability to get a provider appointment. Coverage that allows individuals to identify and obtain a medically necessary contraceptive (accounting for variables such as hormonal properties, side effects, and delivery mechanisms, among other factors) without cost sharing could improve quality of life, reduce behaviors such as discontinuing contraception, and result in more effective use of contraception to prevent unintended pregnancy. As noted in the preamble to the 2023 proposed rules, increased contraceptive coverage can improve access to care, and therefore also help to address racial inequities in reproductive health care that contribute to lifelong disproportionate health outcomes for women in underserved communities, including disparate maternal health outcomes.

Additionally, there has been significant activity related to coverage of contraceptive services and several new developments, including legal developments, that have affected women's needs regarding access to affordable contraception since the publication of the July 2010 interim final rules. The Departments continue to receive complaints and are aware of other reports documenting plans' and issuers' failure to provide coverage of the full range of contraceptive services. Coverage issues leading to lack of access to contraception were also substantiated in comments received in response to the OTC Preventive Products RFI. Other developments have included the Dobbs decision and subsequent State-level restrictions on access to abortion and emergency contraception, which have made it more challenging for women in some States to obtain contraception and quality family planning care, including because health care providers have been forced to close or chosen to relocate to a different State; Executive Orders related to reproductive health care; and FDA approval of the first daily OTC oral contraceptive. As a result, the Departments have determined that it is necessary to propose amendments to the regulations governing how plans and issuers cover contraception and, as discussed in section II.B of this preamble, how they communicate information about this coverage to participants, beneficiaries, and enrollees.

The Departments are interested in minimizing barriers to coverage and expanding the scope of coverage without cost sharing for all recommended preventive services, in alignment with section 2713 of the PHS Act. The Departments also recognize that the proposals described in this section II.A.2 of this preamble, if finalized, could require significant changes to current plan and issuer operations. Therefore, the Departments propose an incremental approach in this rulemaking with respect to the types of recommended services addressed that is focused initially on expanding coverage of contraception. This incremental approach would facilitate implementation for plans, issuers, and other interested parties and allow the Departments to gather additional feedback on challenges and benefits of adopting these proposed policies before considering whether and how to propose similar requirements with respect to other recommended preventive services. Focusing first on contraceptive items is appropriate due to ongoing and widely reported concerns regarding challenges faced by consumers in accessing contraceptive items and services without cost sharing, as well as recent developments affecting access to reproductive health care.

As described in FAQs Part 51, Q9, FAQs Part 54, Q8, and sections I.B and II.A.2 of this preamble, the Departments continue to receive complaints and are aware of other credible reports that some plans and issuers frequently restrict access to contraceptive items and services that should be covered without cost sharing. For instance, in addition to widespread denials of exceptions process requests as described in section II.A.1 of this preamble, the October 2022 Oversight Committee report identified at least 34 different contraceptive items that were commonly excluded from coverage or for which cost-sharing requirements often were applied. Additionally, a recent investigation by the Vermont Department of Financial Regulation, the agency responsible for regulating issuers in that State, found that three issuers in Vermont violated State and Federal law by failing to provide coverage of contraceptive services without cost sharing. The investigation found that between 2017 and 2021, the issuers inappropriately charged patients $1.5 million for contraceptive items and services that should have been provided free of any out-of-pocket costs, resulting in a finding that 9,000 people were entitled to receive restitution for cost sharing that was incorrectly applied for contraceptive services. The investigation prompted a Congressional request to the Government Accountability Office for an investigation into plan and issuer compliance with ACA requirements to cover contraceptive items without cost sharing. In addition, the Centers for Medicare & Medicaid Services, as part of targeted market conduct examinations conducted on behalf of HHS, has identified multiple violations of the requirements of section 2713(a)(1) of the PHS Act and implementing regulations related to contraceptive coverage and continues to investigate additional complaints alleging violations. Additional reports of noncompliance documented by members of Congress, advocacy organizations, and media reports were cited by the Secretaries in their June 27, 2022 letter to group health plan sponsors and issuers. Given these reported instances of continued obstacles for women in accessing contraception, and within the context of several States' efforts to restrict access to reproductive health care following the Dobbs decision, the Departments have determined it is appropriate for these proposed rules to begin with addressing barriers to contraceptive services.

Furthermore, focusing on contraception is consistent with recent Executive Orders. As described in section I.C of this preamble, President Biden issued E.O. 14101, which directed the Secretaries to consider actions that would, to the greatest extent permitted by law, ensure coverage of comprehensive contraceptive care, including all contraceptives approved, cleared, or granted by the FDA, without cost sharing for participants, beneficiaries, and enrollees; and streamline the process for patients and health care providers to request coverage, without cost sharing, of medically necessary contraception. Further, section 2(b) of E.O. 14101 instructed the Secretaries to consider actions that would promote increased access to affordable OTC contraception. Consistent with E.O. 14101, and in consideration of the availability of OTC oral contraceptives, these proposed rules would promote coverage and streamline access to all medically necessary contraception, including the newly FDA-approved OTC daily oral contraceptive, by removing prescription and cost barriers for consumers.

The Departments acknowledge the possibility that increasing coverage without cost sharing for recommended preventive services, as discussed in this section II.A.2 of this preamble, could lead to greater demand for those services and potentially higher prices charged by providers. These increased costs could result in higher costs to consumers, both in the form of higher premiums for people with insurance and in the form of higher out-of-pocket costs for people who do not use insurance coverage to obtain OTC contraceptive products. The potential increases in cost further justify the incremental approach taken in these proposed rules. In addition, comments in response to the OTC Preventive Products RFI suggested that requiring coverage of all OTC preventive products may be challenging for some types of preventive care. For these reasons, the Departments propose to amend the preventive services regulations with respect to only contraceptive items at this time by inserting a new paragraph (a)(6) at 26 CFR 54.9815-2713, 29 CFR 2590.715-2713, and 45 CFR 147.130. The Departments' issuance of these proposals implementing section 2713 of the PHS Act is authorized by section 9833 of the Code, section 734 of ERISA, and section 2792 of the PHS Act.

First, the Departments propose to define the terms “drug-led combination product” in proposed new paragraph (a)(6)(i)(A) and “therapeutic equivalent” in proposed new paragraph (a)(6)(i)(B) for purposes of the proposed new paragraph (a)(6). Second, the Departments propose in proposed new paragraph (a)(6)(ii) to require that plans and issuers cover, without requiring a prescription and without imposing cost-sharing requirements, recommended contraceptive items that are available OTC and for which the applicable recommendation or guideline does not require a prescription. Third, the Departments propose in proposed new paragraph (a)(6)(iii) that, in order for medical management techniques to be considered reasonable, plans and issuers would be required to utilize a therapeutic equivalence approach for recommended contraceptive drugs and drug-led combination products.

The Departments request comment on whether to finalize these policies only with respect to contraception as proposed, or to instead finalize these policies with respect to all preventive services, or with respect to a larger subset of preventive services. In particular, the Departments request comment on issues related to coverage of additional specific OTC preventive products without a prescription (for example, tobacco cessation items) in addition to OTC contraceptive items, or all OTC preventive products without a prescription. The Departments also request comment on the experiences (particularly with respect to administrative challenges, consumer experiences, and costs) of any plans and issuers that currently provide coverage for any OTC preventive products without requiring a prescription, and how those experiences could inform the implementation of these proposed rules, if finalized. The Departments further request comment on whether and to what extent these proposals could affect the ability of plans and issuers to negotiate or otherwise limit costs for contraceptive items, including OTC contraceptive items and contraceptive drugs and drug-led combination products, and what additional rulemaking or guidance would be necessary to ensure that plans and issuers retain the ability to do so.

Along with the incremental approach proposed in this rulemaking focused on contraception, the Departments anticipate issuing another notice of proposed rulemaking in the near future to address additional issues related to coverage of preventive services more generally.

a. Coverage of OTC Contraceptive Items Without Cost Sharing

As discussed in section I.B of this preamble, the Departments' previously issued guidance provides that preventive health care items generally available OTC to patients (such as folic acid and certain contraceptive products, including contraceptive sponges, spermicides, and emergency contraception (levonorgestrel)) must be covered without cost sharing under section 2713 of the PHS Act only when prescribed by a health care provider. This approach reflected the traditional role of health coverage in providing benefits for health care items and services for which there is provider involvement. However, the FDA's approval of a daily OTC oral contraceptive without a prescription, in combination with the reasons outlined earlier in this preamble, have prompted the Departments to revisit this approach. As commenters to the OTC Preventive Products RFI noted, neither section 2713 of the PHS Act and its implementing regulations nor the current HRSA-supported Guidelines require a prescription as a condition of coverage without cost sharing for recommended preventive services that are available OTC, except to the extent a particular recommendation or guideline requires that an individual is prescribed an item or service. Therefore, with respect to contraceptive items that can be lawfully obtained by a participant, beneficiary, or enrollee without a prescription and for which the applicable recommendation or guideline does not require a prescription, the Departments propose in new paragraph (a)(6)(ii) that a plan or issuer would not be considered to comply with 26 CFR 54.9815-2713(a)(1), 29 CFR 2590.715-2713(a)(1), and 45 CFR 147.130(a)(1), unless the plan or issuer provides coverage for the contraceptive item without requiring a prescription and without imposing any cost-sharing requirements. As noted by many commenters to the OTC Preventive Products RFI, out-of-pocket costs and prescription requirements make it more difficult for women to access contraception, including contraceptive items that are available without a prescription, such as oral contraceptives recently approved by the FDA for OTC sale. The Departments agree with commenters that these obstacles present greater challenges to women in underserved communities, including those with lower incomes and who are members of underserved racial and ethnic groups, reinforcing structural barriers to health care and contributing to reproductive health disparities. Although some plans and issuers have voluntarily, or as required by State law, provided coverage of OTC contraceptive items without a prescription and without cost-sharing requirements or with limits on cost sharing, the Departments understand that many women lack such coverage. In response to a specific question regarding how commonly plans and issuers provide coverage for OTC preventive products without requiring a prescription, many commenters asserted that most plans and issuers cover OTC preventive products only when they are prescribed. The Departments have determined, therefore, that requiring (rather than encouraging) coverage of OTC contraceptive items without cost sharing and without a prescription, as proposed in these rules, is critical to ensuring that coverage requirements provide women with access to contraceptives as required under section 2713 of the PHS Act and the applicable HRSA-supported Guidelines, and to realizing the goal of promoting access to reproductive health care.

Under this proposal, the requirement to cover OTC contraceptive items would be subject to the specific coverage requirements applicable to all recommended preventive services in 26 CFR 54.9815-2713, 29 CFR 2590.715-2713, and 45 CFR 147.130. However, the Departments recognize that the provision and coverage of OTC contraceptive items present unique issues that plans and issuers may not encounter when covering other recommended services. Therefore, the following sections of this preamble discuss how plans and issuers would be expected to comply with certain existing requirements with respect to coverage of OTC contraceptive items.

(1) In-Network and Out-of-Network Coverage of OTC Contraceptive Items

Under section 2713 of the PHS Act and its implementing regulations at 26 CFR 54.9815-2713(a)(3)(i) and (ii), 29 CFR 2590.715-2713(a)(3)(i) and (ii), and 45 CFR 147.130(a)(3)(i) and (ii), a plan or issuer is not required to provide coverage for recommended preventive services delivered by an out-of-network provider if the plan or issuer has a network of providers. Similarly, nothing precludes a plan or issuer that has a network of providers from imposing cost-sharing requirements on recommended preventive services delivered by an out-of-network provider. However, if a plan or issuer does not have a provider in its network who can provide a recommended preventive service, the plan or issuer must cover the recommended preventive service, without cost sharing, when furnished by an out-of-network provider. Nothing under section 2713 of the PHS Act nor its implementing regulations requires a plan or issuer to establish a provider network.

The Departments are not proposing to amend these requirements with respect to OTC contraceptive items. Therefore, a plan or issuer that has a network of providers that can provide OTC contraceptive items would not be required to provide coverage, or waive cost sharing, for OTC contraceptive items that are provided by an out-of-network provider. For example, if a plan or issuer has a network of pharmacies (including mail-order pharmacies) that can provide OTC contraceptive items without a prescription, the plan or issuer would not be required to provide coverage (nor waive cost sharing) if a participant, beneficiary, or enrollee obtains a covered OTC contraceptive item at an out-of-network pharmacy or other retailer.

The Departments understand, based on responses to the OTC Preventive Products RFI and communications with plans and issuers regarding coverage of OTC COVID-19 diagnostic tests during and after the COVID-19 PHE, that network contracts between plans and issuers and pharmacies that are located in a retail store typically include only the pharmacies as the in-network providers. The retail stores at which the pharmacies are located are treated as separate entities. In these cases, the pharmacy point of sale would be considered an in-network provider at which an OTC contraceptive would be covered without cost sharing, but a non-pharmacy point of sale (for example, a cash register, self-check-out, or vending machine in the front of a retail store, unaffiliated with the pharmacy department) would not be considered an in-network provider. Although participants, beneficiaries, and enrollees would typically be able to purchase OTC contraceptives from the front of the retail store, these proposed rules would not require a plan or issuer with a network of pharmacies to also cover without cost sharing OTC contraceptive items that are purchased at a retail store that is co-located with an in-network pharmacy. If the plan or issuer has a network of pharmacies that provide coverage for OTC contraceptive items without cost sharing, that plan or issuer would be considered to have a network of providers to provide benefits for OTC contraceptive items and therefore would not be required to cover OTC contraceptive items purchased at a retail store that is not part of its network. For example, emergency contraception could be available in multiple locations in the same retail store: behind the pharmacy counter through an in-network pharmacy where a consumer typically provides health coverage information to allow the pharmacy to process a claim for coverage; and “off the shelf” in a non-pharmacy section of the same store. This could result in a participant, beneficiary, or enrollee being able to access an OTC contraceptive item at an in-network pharmacy without paying any out-of-pocket costs at the pharmacy counter point of sale, while being liable for the full cost of the identical OTC contraceptive item if it was purchased at a non-pharmacy point of sale. The Departments request comment on the potential impact on consumers, pharmacies, and retail stores with this proposed approach.

The Departments would expect that in-network coverage for OTC contraceptive items and services would be provided in a manner that is comparable to coverage for other recommended preventive services. For example, the Departments would expect that a plan or issuer that does not preference the use of a mail-order pharmacy for coverage of prescription-only recommended preventive services would not preference the use of a mail-order pharmacy for coverage of OTC contraceptives. As another example, a plan or issuer should not impose shipping costs on an OTC contraceptive item that is furnished via mail order if the plan or issuer would not impose shipping costs on a comparable prescription product. Likewise, to the extent that a plan or issuer generally covers a recommended preventive service that requires a prescription without cost sharing at the in-network pharmacy point of sale, without requiring consumers to pursue post-purchase reimbursement, the Departments would expect that the plan or issuer would generally cover OTC contraceptive items at the in-network pharmacy point of sale in the same manner. Plans and issuers that require participants, beneficiaries, or enrollees to present information, such as an insurance card, to allow an in-network pharmacy to process a claim for a prescription-only recommended preventive service may require similar information to process a claim for an OTC contraceptive item. The Departments request comment on the appropriate approach for coverage in a scenario in which a plan's or issuer's preferred OTC contraceptive item is out of stock at an in-network pharmacy, while a non-preferred version is available. Specifically, the Departments request comment on whether plans or issuers should be required to cover the non-preferred version without cost-sharing requirements at the in-network pharmacy, without requiring the consumer to pursue an exceptions process when a preferred version is unavailable at an in-network pharmacy. The Departments also request comment on whether and how plans and issuers should document the unavailability of a preferred OTC contraceptive for coverage purposes.

As noted earlier, plans and issuers are not required to establish a provider network in order to provide coverage of recommended preventive services and would not be required to contract with providers for the purpose of providing in-network coverage of OTC contraceptive items if these proposed rules are finalized. Under 26 CFR 54.9815-2713(a)(3)(ii), 29 CFR 2590.715-2713(a)(3)(ii), and 45 CFR 147.130(a)(3)(ii), a plan or issuer that lacks an in-network provider who can provide an OTC contraceptive item would be obligated to cover the OTC contraceptive item when provided by an out-of-network provider without imposing cost sharing.

In the absence of a provider network, the Departments encourage plans and issuers to establish processes to ensure that participants, beneficiaries, and enrollees can obtain OTC contraceptive items from out-of-network providers without incurring out-of-pocket costs and without encountering significant barriers to access. The Departments are not proposing to specify in these proposed rules how a plan or issuer would do so, but would encourage plans and issuers to establish a robust approach with multiple entry points to ensure that participants, beneficiaries, and enrollees can access out-of-network OTC contraceptive items with no out-of-pocket costs and without friction at the point of sale. The Departments request comment on what additional standards or guidance would be helpful to ensure that participants, beneficiaries, and enrollees can use their health coverage to access OTC contraceptive items from out-of-network providers without cost sharing, while allowing plans and issuers flexibility to effectively implement the requirement to cover OTC contraceptive items, if finalized.

If these requirements are finalized, plans and issuers should ensure that processes that require participants, beneficiaries, or enrollees to pay out-of-pocket for OTC contraceptive items and pursue reimbursement do not present unreasonable barriers to accessing OTC contraceptive items provided by either an in-network or out-of-network provider. A traditional post-purchase reimbursement process might require consumers to bear the upfront cost of an OTC contraceptive item as well as the administrative burden of requesting reimbursement, providing documentation either on paper or electronically, and absorbing the financial impact of a delayed reimbursement while a reimbursement request is being reviewed and processed by the plan or issuer. For example, while it would be reasonable for a plan or issuer to require a form and receipt or other proof of purchase, post-purchase reimbursement programs that require an individual to submit multiple documents or involve numerous steps that unduly delay an individual's reimbursement for an OTC contraceptive item would not be reasonable under these proposed rules.

Further, the Departments would strongly encourage plans and issuers to consider implementing additional methods for providing coverage of OTC contraceptive items without cost sharing, in addition to or in lieu of a traditional post-purchase reimbursement process. For example, plans and issuers could consider providing access to pre-paid accounts that are programmed to cover upfront costs associated with OTC contraceptive items at the point of sale, either by issuing physical debit or credit cards or providing access to a linked smartphone application or QR code to participants, beneficiaries, or enrollees, provided funds were sufficient to cover costs associated with OTC contraceptive items, the mechanism for delivery was programmed with sufficient guardrails to prevent funds from being applied to items that were not covered, and the method of access was otherwise implemented consistent with applicable law. Subject to the requirements for utilizing reasonable medical management techniques and consistent with previously issued guidance (including providing access to an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual, a provider, or other authorized representative), plans and issuers would be able to utilize reasonable medical management techniques to contain costs and promote efficient delivery of care, and could consider how to do so within the context of such an approach for out-of-network coverage of OTC contraceptive items. For example, a plan or issuer would be able to program a debit or credit card or linked account to limit reimbursement to a set amount within a specified period of time, provided such limitations do not unreasonably limit coverage of covered OTC contraceptive items.

The Departments are aware that some OTC contraceptive items, such as software applications granted marketing authorization by the FDA for use as contraception, are typically not furnished by in-network providers (for example, because consumers purchase them directly from a manufacturer or vendor website). As with other recommended preventive services for which a plan or issuer does not have an in-network provider who can provide the item or service, the plan or issuer would be required to cover the item or service when delivered by an out-of-network provider and could not impose cost sharing with respect to the item or service. The Departments request comment on whether additional guidance is necessary to ensure that individuals would be able to use their health coverage to obtain OTC contraceptive items that are typically obtained outside of the traditional system of network providers with zero cost sharing and without unnecessarily burdensome reimbursement requirements, while permitting plans and issuers to utilize reasonable medical management techniques.

The Departments request comment on how plans and issuers would likely operationalize out-of-network coverage and whether the Departments should adopt specific standards for out-of-network coverage with respect to OTC contraceptive items. In addition, participants, beneficiaries, and enrollees would benefit if plans and issuers provide access to a broad network of providers with the capacity to provide the full range of OTC contraceptive items, and the Departments request comment on how to support and incentivize plans and issuers to develop such networks.

(2) Reasonable Medical Management Techniques for OTC Contraceptive Services

As discussed in section II.A.1 of this preamble, to the extent not specified in the applicable recommendation or guideline, plans and issuers may rely on the relevant clinical evidence base and established reasonable medical management techniques to determine the frequency, method, treatment, or setting for coverage of a recommended preventive health service. In prior guidance, the Departments have stated that if a plan or issuer utilizes medical management techniques within a specified category of contraception (or, with respect to contraceptive categories not specifically described in the HRSA-supported Guidelines, a group of substantially similar services or products), the use of those techniques will not be considered reasonable unless the plan or issuer has an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual or their attending provider (or other individual acting as the individual's authorized representative) allowing such individual to obtain coverage for a service or FDA-approved, -cleared, or -granted product determined to be medically necessary, as determined by the individual's attending provider. The Departments are not proposing amendments to the medical management provisions specific to OTC contraceptive items. Therefore, these standards, as well as the new standards proposed in these rules, would apply to a plan's or issuer's use of medical management techniques with respect to OTC contraceptive items in the same manner and to the same extent as they would apply to other recommended preventive services.

The Departments recognize that plans and issuers may encounter unique issues related to medical management if the Departments finalize the proposed requirements to cover OTC contraceptive items. In the OTC Preventive Products RFI, the Departments requested comment on what types of reasonable medical management techniques plans and issuers would consider implementing if recommended OTC preventive products were required to be covered without cost sharing. In response, some commenters suggested plans and issuers could limit the number of products an individual could obtain during a given period as a guardrail for OTC contraceptive services. One commenter stated that quantity limits would help prevent inequitable distribution and stockpiling for resale of OTC contraceptive services. Another commenter urged the Departments to allow plans and issuers to limit the initial purchase of OTC contraceptive services until there is more understanding of the cost implications and distribution channels for OTC preventive services. Other commenters discouraged the use of quantity limits as a medical management technique out of concern that such limits would discourage continuation of use, by creating new access barriers for individuals that already face challenges engaging with the health care system, in particular individuals that are members of underserved communities. In addition, a commenter expressed concern about the difficulty in predicting the need for emergency contraception.

Some commenters advocated for 12-month quantity limits for monthly OTC contraceptive services in order to balance the health equity concerns of individuals with the implementation challenges that may arise for retailers and plans and issuers transitioning to covering OTC contraceptive services without a prescription and without cost sharing. Some commenters noted that there is already ample precedent for requiring coverage of extended supplies of contraceptives, with at least 25 States and the District of Columbia requiring Medicaid and private payers to cover the dispensing of an extended (usually 12-month) supply of prescription contraceptives. One commenter to the OTC Preventive Products RFI stated that purchasing contraceptive items in larger dispensing quantities may create opportunities for plans and issuers to negotiate pricing discounts that will decrease per-unit costs for plans and issuers as well as suppliers and distributors. The Departments note that when the OTC oral contraceptive became available in March 2024 for sale online and in stores under the brand name Opill®, the manufacturer's suggested retail price for a 6-month supply was cheaper (per-month) than the manufacturer's suggested retail price for a 1-month supply.

Literature on contraception shows that dispensing a multi-month supply of prescription oral contraceptive pills at one time during the plan year is generally associated with increased continuation of contraception use, decreased occurrence of unintended pregnancy, and greater cost savings, but also more pill waste, compared to dispensing a single month's supply. Research also shows that advance provision of emergency contraception significantly increases its use without adversely affecting the use of routine contraception, which suggests that it may be beneficial for women to receive more than one unit of emergency contraception at a time, in order to realize the benefits of advance provision for future use. Limitations on the supply of OTC contraception dispensed at one time should take into account the clinical evidence base regarding benefits to consumers, including as described in this section II.a.2.

Given the evidence regarding benefits to consumers of a multi-month supply of prescription oral contraceptive pills, the Departments would generally not consider coverage limitations that only allow for a 1-month supply of an OTC oral contraception per instance of dispensing to be reasonable or consistent with the requirement to cover recommended preventive services under 26 CFR 54.9815-2713(a)(4), 29 CFR 2590.715-2713(a)(4), and 45 CFR 147.130(a)(4) if there is no clinical basis for limiting the quantity to be dispensed at one time. The Departments seek comment, with respect to all forms of OTC contraceptives, on whether other quantity limits (such as a 6-month limit on OTC oral contraception or a 3-unit limit on OTC emergency contraception per instance of dispensing) should be considered reasonable or unreasonable, and what additional facts and circumstances should be considered when determining the reasonableness of a particular quantity limit with respect to OTC contraception, such as initial success with a shorter supply of OTC contraception. The Departments also request comment on the circumstances under which participants, beneficiaries, and enrollees who receive an initial extended quantity of OTC contraception could access a different form of contraception without incurring cost sharing before finishing the initial extended quantity (for example, before a 6-month supply is exhausted).

Some commenters to the OTC Preventive Products RFI suggested individuals should be required to submit evidence to a plan or issuer that a particular form of prescription birth control is inappropriate before receiving coverage for an OTC contraceptive service. The Departments previously issued guidance that it is not a reasonable medical management technique to require individuals to fail first using numerous other services or FDA-approved, -cleared, or -granted contraceptive products before the plan or issuer will approve coverage for the service or FDA-approved, -cleared, or -granted contraceptive product that is medically necessary for the individual, as determined by the individual's attending provider. Within the context of medical management of OTC contraceptive items, the Departments would not consider it reasonable either to impose a prescription requirement for OTC contraception as a form of medical management, including requiring an individual to fail first using a prescription-only contraceptive item before providing coverage of an OTC contraceptive item without cost sharing, or to require an individual to fail first with numerous prescription or OTC contraceptive items before the plan or issuer will approve coverage for a medically necessary OTC contraceptive item.

Other commenters suggested that a plan or issuer could consider implementing age-based limitations or gender-based requirements instead of offering benefits to all individuals with reproductive capacity. The Departments would not consider age- and gender-based medical management with respect to OTC contraceptive services to be reasonable unless the medical management technique relies on a clinical rationale for limiting access to individuals of a certain age or gender and is consistent with FDA approvals of any particular OTC contraceptive product. The Departments have stated in previous guidance that imposing an age limit on contraceptive coverage instead of providing these benefits to all women would not be considered a reasonable medical management technique.

A commenter suggested that implementing prior authorization requirements with respect to certain OTC items would not be an unreasonable medical management technique. However, such medical management techniques create barriers for consumers accessing contraceptive services with a prescription and would create similar barriers for consumers accessing contraceptives services without a prescription, with the added challenge that consumers seeking to obtain OTC contraceptive items are likely navigating such requirements without the assistance of a provider. Such requirements could be used as a means of circumventing the requirement to provide coverage of contraception without cost sharing and without a prescription. Therefore, under these proposed rules, coverage requirements that, in practice, operate as substitutes for a prescription coverage requirement by requiring the involvement of a provider (such as prior authorization processes that require provider involvement or other clinical expertise or a requirement that individuals receive counseling from a pharmacist prior to accessing an OTC contraceptive item) would not be considered reasonable medical management techniques with respect to OTC contraceptive items.

Under these proposed rules, plans and issuers generally could adopt medical management techniques with respect to OTC contraceptive items that are not described as unreasonable in this preamble as long as they are otherwise consistent with proposed 26 CFR 54.9815-2713(a)(4), 29 CFR 2590.715-2713(a)(4), and 45 CFR 147.130(a)(4) and existing guidance and the plan or issuer makes available an exceptions process as described in these proposed rules. The Departments request comment on what other medical management techniques plans and issuers would consider applying to OTC contraceptive items, including whether such techniques should be considered reasonable or unreasonable. The Departments request comment on the proposed interpretation of reasonable medical management requirements with respect to OTC contraceptive items, including whether any final regulations should specify or use examples to illustrate in the regulatory text the Departments' interpretation of reasonable medical management for OTC contraceptive items.

(3) Other Considerations

The Departments acknowledge the concerns raised by commenters to the OTC Preventive Products RFI, such as risks to patient privacy, of overconsumption, and of fraud, waste, or abuse, that some commenters believe could be exacerbated with increased coverage with no cost sharing of OTC contraceptive items. These concerns could be heightened with respect to OTC items and services that do not require the input of a provider in the form of a prescription and may be further increased within the context of out-of-network providers with whom plans and issuers do not have contractual relationships. For example, plans and issuers may wish to ensure that individuals are obtaining OTC contraceptive items to prevent pregnancy rather than solely to address another underlying condition (such as to treat anemia or manage premenstrual symptoms) or to ensure that an individual is obtaining condoms for the use of a woman covered under the plan, rather than for use by another individual. Several commenters to the OTC Preventive Products RFI highlighted concerns that coverage of OTC preventive products without cost sharing could incentivize overconsumption or waste of such products. Additionally, OTC contraceptive items may present particular challenges with respect to patient privacy, given the deeply personal nature of reproductive health care and the dynamic nature of State laws governing access to reproductive health care.

The Departments anticipate that plans and issuers with a network of providers would mitigate these risks by using existing claims processing systems with respect to in-network coverage, but acknowledge that coverage through pathways other than an in-network pharmacy may present privacy challenges (for example, because non-provider retailers are not required to implement the same privacy and security safeguards as they are with respect to back-pharmacy transactions). The Departments request comment on how best to encourage plans and issuers to develop mechanisms that promote access to OTC contraceptive items in accordance with these proposed regulations, if finalized, while protecting patient privacy and allowing plans and issuers to identify and address risks including waste, fraud, and abuse.

The Departments further request comment on how the proposed exceptions process requirement should apply with respect to OTC contraceptives items, for which no provider involvement is generally required. The proposed exceptions process requirement described in section II.A.1 of this preamble refers to the determination of an individual's attending provider. Thus, the Departments request comment on what information individuals should be required to provide to seek an exception to access coverage for an OTC contraceptive item that is not typically covered, including how plans and issuers could determine whether an OTC contraceptive item is medically necessary, and whether any additional changes are necessary for an exceptions process when used to seek coverage, without cost sharing, for an OTC contraceptive item.

The Departments also request comment on whether it would be beneficial to define a new term to refer to contraception that would be subject to the proposed amendments to 26 CFR 54.9815-2713(a)(6), 29 CFR 2590.715-2713(a)(6), and 45 CFR 147.130(a)(6); and if so, request feedback on the appropriate term and scope of the definition. For example, the Departments request comment on whether to define “contraceptive item,” “contraceptive product,” or “contraceptive items and services” within the context of these proposed rules; and whether the term would refer to all contraceptive items and services recommended under the HRSA-supported Guidelines, all contraceptive items and services recommended under 26 CFR 54.9815-2713(a)(1), 29 CFR 2590.715-2713(a)(1), and 45 CFR 147.130(a)(1); or another subset of recommended preventive services.

b. Therapeutic Equivalence Approach to Reasonable Medical Management for Contraceptive Drugs and Drug-Led Combination Products

As discussed in section II.A.2 of this preamble, despite repeated clarification in guidance, the Departments have continued to receive complaints and reports that participants, beneficiaries, and enrollees are being denied coverage for contraceptives that their attending providers have prescribed, in some cases due to the application of medical management techniques that are not reasonable based on all the relevant facts and circumstances. The Departments are also aware of investigations and other credible reports that have documented plans and issuers using potentially unreasonable medical management techniques. In response to these reports, the Departments issued FAQs Part 64 on January 22, 2024, which set forth a therapeutic equivalence approach that plans and issuers can, but are not required to, use (in combination with an easily accessible, transparent, and sufficiently expedient exceptions process) to comply with PHS Act section 2713 and its implementing regulations with respect to FDA-approved contraceptive drugs and drug-led devices, as an alternative to standards that had been set forth in previous guidance and described in section II.A.1 of this preamble. The Departments have determined that it is necessary to require the therapeutic equivalence approach to ensure coverage of the full range of FDA-approved contraceptive items that are drugs and drug-led combination products. The proposed therapeutic equivalence approach would serve as a guardrail against the widespread use of narrow drug formularies, which the Departments understand plans and issuers use to limit costs, but can have the effect of limiting access to medically appropriate contraceptive drugs and drug-led combination products. This proposed regulation would limit the use of such techniques with respect to recommended contraceptive drugs and drug-led combination products.

Therefore, the Departments propose to amend 26 CFR 54.9815-2713, 29 CFR 2590.715-2713, and 45 CFR 147.130 to add a new paragraph (a)(6)(iii) that would specify that a plan's or issuer's medical management techniques are not considered to be reasonable unless the plan or issuer provides coverage for recommended preventive services that are contraceptive drugs and drug-led combination products, other than those items for which there is at least one therapeutic equivalent drug or drug-led combination product, as applicable, for which the plan or issuer provides coverage without imposing any cost-sharing requirements, consistent with the therapeutic equivalence approach described in FAQs Part 64. The Departments also propose to define “therapeutic equivalent” for purposes of this proposed provision as having the meaning given the term “therapeutic equivalents” in 21 CFR 314.3(b), which defines “therapeutic equivalents” as “approved drug products that are pharmaceutical equivalents for which bioequivalence has been demonstrated, and that can be expected to have the same clinical effect and safety profile when administered to patients under the conditions specified in the labeling.”

Under this proposal, consistent with FAQs Part 64, a therapeutic equivalent drug or drug-led combination product would be one that is designated with a code with the first letter “A” in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book). If the Orange Book does not identify a therapeutic equivalent for a given drug or drug-led combination product, that drug or drug-led combination product would have no therapeutic equivalent for purposes of these proposed rules, and a plan or issuer would not be permitted to use medical management techniques to deny coverage of (or impose cost sharing on) that drug or drug-led combination product. For example, assume that there are six oral contraceptives (Pill A, Pill B, Pill W, Pill X, Pill Y, and Pill Z) listed in the Orange Book that are within the HRSA-supported Guidelines category of contraceptives known as “oral contraceptives (combined pill).” If the Orange Book does not identify a therapeutic equivalent for either Pill A or Pill B, but identifies the latter four (Pill W, Pill X, Pill Y, and Pill Z) as therapeutic equivalents of each other, then under these proposed rules, the plan would be required to cover without cost sharing Pill A and Pill B, for which there are no therapeutic equivalents. The plan could utilize reasonable medical management techniques that result in it covering only one of Pill W, Pill X, Pill Y, or Pill Z without cost sharing because all four are therapeutically equivalent to each other (provided the plan has an exceptions process that ensures an individual can receive coverage, without cost sharing, for any of Pill W, Pill X, Pill Y, or Pill Z, in the circumstances discussed in more detail in section II.A.1 of this preamble).

In the Orange Book, the FDA evaluates only multisource prescription drug products for therapeutic equivalence. Therefore, the FDA does not evaluate therapeutic equivalence for OTC drugs or OTC drug-led combination products and the Orange Book does not categorize such products as a “therapeutic equivalent” of any other drug or drug-led combination product. As described in section II.A.2, the Departments are proposing to require plans and issuers to provide coverage of OTC contraceptives without cost sharing and without requiring a prescription. If both the therapeutic equivalence proposal described in this preamble section and the OTC contraceptive coverage proposal are finalized, plans and issuers would be required to cover all OTC contraceptive items that are drugs and drug-led combination products without cost sharing. The Departments request comment on the potential impacts to interested parties, including participants, beneficiaries, and enrollees and plans and issuers, if both proposals are finalized. The Departments further request comment on whether an alternative approach to therapeutic equivalence would be appropriate for OTC contraceptive drugs and drug-led combination products. If so, the Departments request comment on what medical management techniques would be appropriate and reasonable while balancing the goals of increasing consumer access to OTC contraceptive drugs and drug-led combination products and containing costs. For example, the Departments seek comment on whether plans and issuers should be permitted to provide coverage without cost-sharing or prescription requirements of a preferred generic version of an OTC contraceptive, while only covering the brand version without cost-sharing or prescription requirements subject to an exceptions process.

In addition to satisfying the therapeutic equivalence approach, the Departments would not consider a plan's or issuer's medical management techniques with respect to recommended contraceptive services to be reasonable unless the plan or issuer meets existing standards under applicable regulations and guidance, to the extent not superseded by the other proposals in these proposed rules. For example, as described in FAQs Part 54, Q8, a plan's or issuer's medical management techniques would generally be considered reasonable only if the plan or issuer utilizes reasonable medical management techniques within a specified category described in the HRSA-supported Guidelines (or group of substantially similar products that are not included in a specified category). Therefore, if a plan or issuer provided coverage consistent with the proposed therapeutic equivalence approach, but used medical management techniques to deny coverage or impose cost sharing for all contraceptives in another category (or other groups of substantially similar products), such as the category for sterilization surgery for women, the plan's or issuer's medical management techniques would not be considered to be reasonable. Similarly, consistent with FAQs Part 54, Q8, the Departments would not consider a plan's or issuer's medical management techniques to be reasonable if the plan or issuer requires an individual to fail first using numerous contraceptives within a category prior to providing coverage consistent with the proposed therapeutic equivalence approach.

In addition, consistent with FAQs Part 64, the Departments would not consider the use of medical management techniques to be reasonable where a plan or issuer provides coverage consistent with the proposed therapeutic equivalence approach but fails to provide an exceptions process that meets the standards proposed in these rules. Requiring plans and issuers that utilize reasonable medical management to both apply the therapeutic equivalence approach and provide an exceptions process would be particularly important in instances where the plan's or issuer's preferred method is not medically appropriate for an individual. Consider an example in which there are three products within the HRSA-supported Guidelines category of “the contraceptive patch” (Patch A, Patch B, and Patch C) and the Orange Book identifies all three products as therapeutic equivalents to each other. Under the proposed therapeutic equivalence approach, a plan or issuer would be permitted to utilize reasonable medical management techniques that result in it generally covering only one of Patch A, Patch B, or Patch C without cost sharing because all are therapeutically equivalent to each other. However, without an exceptions process, a person who, for example, has an allergy to a non-therapeutic ingredient in Patch A such as a dye or an adhesive could not access an alternative such as Patch B or Patch C that is determined to be medically necessary by the individual's attending provider, and as a result, would be denied the coverage required under PHS Act section 2713.

The Departments propose to define “drug-led combination product” at 26 CFR 54.9815-2713(a)(6)(i)(A), 29 CFR 2590.715-2713(a)(6)(i)(A), and 45 CFR 147.130(a)(6)(i)(A) as “a combination product, as defined under 21 CFR 3.2(e), that comprises a drug and a device, and for which the drug component provides the primary mode of action.” The term “combination products” refers to the existing FDA definition of “combination product” at 21 CFR 3.2(e), and would apply only to drug-led combination products within the context of the proposed therapeutic equivalence approach discussed in this section II.A.2.b of this preamble. While this proposal would not prevent plans and issuers from applying a therapeutic equivalence approach to other recommended preventive services, the Departments request comment on whether plans and issuers utilizing reasonable medical management of recommended preventive services other than contraceptive drugs and drug-led combination products should be required to apply the therapeutic equivalence approach as described in these proposed rules.

B. Communicating OTC Contraceptive Coverage Requirements

Because plans and issuers have not traditionally provided coverage for health items that can be purchased directly by a consumer without a prescription, participants, beneficiaries, and enrollees may not be aware that their health plan or coverage would cover OTC contraceptive items without cost sharing and without a prescription if these proposed rules are finalized. The Departments expect that without sufficient communication about this new coverage requirement from plans and issuers, consumers' lack of awareness may lead to minimal use of this benefit. Therefore, these proposed rules propose new requirements under 26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2, and 45 CFR 147.211 that would ensure participants, beneficiaries, and enrollees are informed of this new coverage.

Section 2715A of the PHS Act provides that non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage must comply with section 1311(e)(3) of the ACA. Through section 1311(e)(3)(C) of the ACA, section 2715A of the PHS Act requires plans and issuers to permit individuals to learn the amount of cost sharing (including deductibles, copayments, and coinsurance) associated with a specific item or service furnished by an in-network provider upon the individual's request.

Under the Departments' rulemaking authority in section 9833 of the Code, section 734 of ERISA, and 2792 of the PHS Act to implement section 2715A of the PHS Act, the Departments propose to require that plans and issuers permit individuals to learn the amount of cost sharing associated with OTC contraceptive items covered by their plan or coverage without a prescription. Specifically, the Departments propose to amend 26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2, and 45 CFR 147.211 to add a new paragraph (b)(1)(vi) that would require plans and issuers to provide information to participants, beneficiaries, and enrollees explaining that OTC contraceptive items are covered without cost sharing and without a prescription consistent with these proposed rules when participants, beneficiaries, and enrollees request cost-sharing information for any covered contraceptive item or service. By promoting awareness of coverage of OTC contraceptive items without cost-sharing or prescription requirements, these proposals serve as important companions to proposed 26 CFR 54.9815-2713(a)(6), 29 CFR 2590.715-2713(a)(6), and 45 CFR 147.130(a)(6), described in section II.A.2.a of this preamble.

In accordance with PHS Act section 2715A and ACA section 1311(e)(3)(C), under current 26 CFR 54.9815-2715A2(b), 29 CFR 2590.715-2715A2(b), and 45 CFR 147.211(b), plans and issuers must disclose an estimate of the participant's, beneficiary's, or enrollee's cost-sharing liability for all covered items or services furnished by a provider or providers, through the Transparency in Coverage internet-based self-service tool or, if requested by the individual, paper. Under current rules, if a participant, beneficiary, or enrollee uses the self-service tool to look up contraceptive items or services with respect to an in-network pharmacy (or to look up the out-of-network cost sharing for these items or services for a plan or issuer that does not have a provider in its network that can provide the preventive item), the self-service tool would display the non-zero dollar cost-sharing liability for the individual that is associated with being billed as non-preventive (if applicable), along with a statement that the contraceptive item or service may not be subject to cost sharing if it is billed as preventive. For contraceptive items that are only covered by the plan or coverage for preventive purposes (including because they are only indicated for preventive purposes), current rules require the self-service tool to reflect a zero-dollar cost-sharing liability. The Departments note also that some contraceptive items may be covered for non-preventive purposes (either with or without a prescription), and in this case the self-service tool would reflect the non-zero dollar cost-sharing liability. The Departments also note that under current rules, plans and issuers are not required to disclose any cost-sharing information through the self-service tool for non-covered items and services, including with respect to contraceptive items and services. Nothing in these proposed rules alters these disclosure requirements.

As discussed in section II.A.2 of this preamble, the Departments are proposing to require plans and issuers to cover OTC contraceptive items without a prescription and without imposing cost-sharing requirements. To ensure individuals are aware that OTC contraceptive items are covered consistent with these proposed rules, plans and issuers would be required to inform individuals of this benefit under the plan or coverage. Participants, beneficiaries, and enrollees should have access to more robust information to ensure they understand their plan's or issuer's policies regarding coverage of OTC contraceptive items without a prescription and without cost sharing, and in the Departments' view, the self-service tool would offer an effective means of communicating such information. Therefore, the Departments propose to require plans and issuers to make an additional cost-sharing information disclosure to participants, beneficiaries, and enrollees in new proposed 26 CFR 54.9815-2715A2(b)(1)(vi), 29 CFR 2590.715-2715A2(b)(1)(vi), and 45 CFR 147.211(b)(1)(vi). Specifically, if a participant, beneficiary, or enrollee requests cost-sharing information for any covered contraceptive item or service through a self-service tool, the proposed rules would require the response through the self-service tool or, if requested, on paper to include with the information a statement explaining that OTC contraceptive items are covered without cost sharing and without a prescription. This statement would be required to include a phone number and internet link that a participant, beneficiary, or enrollee could use to learn more information about the plan's or policy's contraception coverage. This could be a link to an existing web page and a general customer service line that the plan or issuer already maintains.

The requirement to provide this information would be triggered by a search in the self-service tool for any covered contraceptive items or services, including items or services that are not drugs or drug-led combination products or are not available without a prescription, so that any user seeking options to prevent pregnancy would be made aware that OTC contraceptive items are covered without cost sharing. Under this proposed requirement, the disclosure would be required regardless of whether the user is searching for cost-sharing information for contraceptive items and services from an in-network or out-of-network provider, or if the plan or coverage maintains no network of providers. As such, plans and issuers, including those without a network of providers, would be required to disclose that they will cover OTC contraceptive items without cost sharing or a prescription in accordance with proposed 26 CFR 54.9815-2713(a)(6), 29 CFR 2590.715-2713(a)(6), and 45 CFR 147.130(a)(3)(ii). The Departments note that because the self-service tool requirements apply to covered items and services, the disclosure requirements proposed in this section would not apply to plans and issuers that do not cover contraceptive items or services based on an objection under 45 CFR 147.132 or 147.133. The Departments request comment on whether and how these proposed requirements should apply to entities that have an objection to only some contraceptive items and services.

The Departments also request comment on whether plans and issuers should have the option to include in the statement either a phone number or an internet link—rather than both—to where a participant, beneficiary, or enrollee can learn more about the plan's or policy's contraception coverage. The Departments are interested in better understanding the benefits and burdens associated with each approach.

The Departments also request comment on whether plans and issuers should be required to include in this statement the general names or types of OTC contraceptive items that are covered without a prescription and without cost sharing (for example, “daily oral contraceptive,” “Plan B (levonorgestrel),” or “condoms”). Under this approach, users would not need to call the provided phone number or navigate to the linked web page and could simply copy and paste the provided product names into the self-service tool's search field to find local pharmacies where they can access the product without a prescription and without cost sharing. In particular, the Departments request comment on the burdens on plans and issuers to provide a list that may need to be updated in the self-service tool's statement as circumstances change (such as if additional OTC contraceptive items come to market or new therapeutic equivalents become available) or that could require multiple alternative disclosures for a plan or issuer that has coverage options across geographic regions based on availability in the specific market. In addition, the Departments request comment on potential benefits to consumers of listing in the tool itself the OTC contraceptive items covered without a prescription and without cost sharing, rather than having to gather this information by clicking an internet link or calling a customer service line.

The Departments also request comment on whether plans and issuers should be required to include in the statement information on coverage of therapeutic equivalents or the exceptions process under these proposed rules and, if so, how disclosures should be presented to ensure the additional information is meaningful and actionable for consumers. For example, the Departments request comment on whether the statement should indicate that an exceptions process is available so individuals can receive coverage for any recommended preventive service, including an OTC contraceptive item, that is medically necessary for the individual; and, if so, how to present this information in a way that would be meaningful and actionable for consumers. Similarly, the Departments request comment on whether the statement should disclose that plans and issuers must cover all FDA-approved contraceptive drugs and drug-led combination products without cost sharing, other than those for which there is at least one therapeutic equivalent drug or drug-led combination product that the plan or issuer covers without cost sharing; and, if so, how to present this information in a way that would be meaningful and actionable for consumers.

The Departments also request comment regarding the challenges of implementing and maintaining such statements, information about their potential effectiveness in improving access to OTC contraceptive items, and other information that could help inform potential future disclosures related to other recommended preventive services. The Departments also request comment on whether additional self-service tool requirements need to be specified to ensure plans and issuers fully inform participants, beneficiaries, and enrollees of the availability of covered OTC contraceptive items without cost sharing.

Lastly, the Departments believe that broadly disseminating information on the availability and coverage of OTC contraceptive items without cost sharing to eligible individuals and members of the public would increase access to this benefit, if finalized as proposed, and would allow individuals to select the plan that best meets their needs. Therefore, the Departments request comment on how plans and issuers could efficiently and effectively provide such information to eligible individuals, participants, beneficiaries, enrollees, and members of the public, including the relative benefits and burdens of doing so. For example, the Departments are interested in whether it would be feasible for plans and issuers to provide general coverage and cost-sharing information on a public website. Similarly, the Departments are interested in whether plans and issuers should be required to provide more tailored cost and benefit information to participants, beneficiaries, or enrollees when they provide other relevant plan documents, such as Summaries of Benefits and Coverage (SBCs) or drug formularies. The Departments also request comment on how plans and issuers can make information available to participants, beneficiaries, and enrollees about the specific steps they would need to take to access OTC contraceptive items without cost sharing, particularly when plans and issuers do not have network providers available that can provide access to such items. Lastly, the Departments request comment on additional ways to communicate this information effectively to individuals in vulnerable and underserved communities.

C. Applicability

The proposed amendments to 26 CFR 54.9815-2713(a)(4), 29 CFR 2590.715-2713(a)(4), and 45 CFR 147.130(a)(4) regarding an exceptions process would apply on the effective date of the final rules. The Departments assume that most plans and issuers generally already have in place an exceptions process for recommended preventive services to align with previously issued guidance, although the Departments acknowledge in section IV.B.2.d of this preamble that some plans and issuers could incur costs to develop or update an exceptions process to comply with these proposed rules, if finalized. While prior guidance has generally focused on the use of an exceptions process in the context of contraceptive coverage and coverage of PrEP to prevent HIV, the Departments expect that plans and issuers could adapt existing exceptions processes to accommodate additional recommended preventive services as necessary to comply with the proposed amendments by the effective date of the final rules.

The Departments propose delayed applicability dates for the proposed amendments to the preventive services regulations that are specific to contraceptive items. Specifically, the Departments propose that the proposed provisions of 26 CFR 54.9815-2713(a)(6), 29 CFR 2590.715-2713(a)(6), and 45 CFR 147.130(a)(6) would apply for plan years (in the individual market, policy years) beginning on or after January 1, 2026. These proposed rules, if finalized, would mandate the use of the currently optional therapeutic equivalence approach described in FAQs Part 64, where applicable, and newly require the coverage of OTC contraceptive items without a prescription. In the Departments' view, the proposed applicability dates appropriately balance the need for improved access to coverage of recommended preventive services with the time necessary for plans and issuers to make the systems and operational changes to implement these proposals.

Until any final rules are issued and applicable, the Departments would continue to consider plans and issuers that provide coverage consistent with the therapeutic equivalence approach and have an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome as outlined in FAQs Part 64 to be in compliance with section 2713 of the PHS Act and its implementing regulations with respect to coverage of recommended contraceptives that are drugs and drug-led devices.

To align with applicability dates for the proposed requirements for OTC contraceptive items and therapeutic equivalents, the proposed requirements in 26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2 and 45 CFR 147.211 that would direct plans and issuers to disclose information related to contraceptive coverage in the self-service tool would be applicable to plans and issuers for plan years (or in the individual market, policy years) beginning on or after January 1, 2026.

The Departments request comment on the proposed applicability dates. With respect to the proposed delayed applicability dates, the Departments request comment on whether an earlier applicability date (such as the effective date of any final rules) would be feasible.

III. Severability

In the event that any provision of these proposed rules, if finalized, is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, the Departments intend that these rules shall be construed so as to continue to give maximum effect to these rules as permitted by law, unless the holding shall be one of utter invalidity or unenforceability. In the event a provision is found to be utterly invalid or unenforceable, the provision shall be severable from these proposed rules as finalized, as well as the final rules they amend and shall not affect the remainder thereof or the application of the provision to persons not similarly situated or to dissimilar circumstances.

In these rules, the Departments are proposing several amendments to reduce barriers to coverage and promote access to recommended preventive services, including OTC contraceptive items. The Departments' authority under section 9833 of the Code, section 734 of ERISA, sections 2713, 2715A, and 2792 of the PHS Act, and sections 1311(e)(3)(C) and 1321 of the ACA to propose these amendments is well-established in law and long-standing practice and should be upheld in any legal challenge. However, in the event that any portion of the final rules related to any of the proposals in these rules, if finalized, is declared invalid, the Departments intend that the other provisions would be severable, except as described in this section of the preamble. For example, if a court were to find unlawful (1) the requirement that plans and issuers utilizing medical management techniques provide an exceptions process in order for such techniques to be considered reasonable; (2) the requirement to provide coverage for OTC contraceptive items without requiring a prescription or imposing cost sharing; or (3) the therapeutic equivalence approach to reasonable medical management for contraceptive items that are drugs and drug-led combination products, the Departments intend the remaining provisions of the rules to stand. Additionally, the Departments intend for the proposed amendments to the preventive services regulations to remain in place in the event that a court were to find unlawful any portion of the rules, if finalized, with respect to the proposals related to disclosing information related to contraceptive coverage through the self-service tool. However, the Departments do not intend for the disclosure through the self-service tool to remain in place in the event that a court were to find unlawful the requirement to provide coverage for OTC contraceptive items without requiring a prescription or imposing cost sharing, as the disclosure requirements would not provide meaningful information to consumers in the absence of these underlying coverage requirements.

IV. Regulatory Impact Analysis

A. Summary—Departments of Health and Human Services and Labor

These proposed rules would make several changes to the requirements for non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage to provide coverage of certain recommended preventive services without cost sharing under section 2713 of the PHS Act and its implementing regulations. First, these proposed rules would provide that medical management techniques used by plans and issuers with respect to recommended preventive services, including contraceptive items, would not be considered reasonable unless the plan or issuer provides an easily accessible, transparent, and sufficiently expedient exceptions process that allows an individual to receive coverage without cost-sharing requirements for a recommended preventive service according to the frequency, method, treatment, or setting that is medically necessary with respect to the individual, as determined by the individual's attending provider. These proposed rules also would require plans and issuers to cover recommended OTC contraceptive items without a prescription and without imposing cost-sharing requirements. These proposed rules would further require plans and issuers to cover all recommended contraceptive items that are drugs and drug-led combination products without imposing cost-sharing requirements, unless a therapeutic equivalent of the drug or drug-led combination product is covered without cost sharing. Lastly, these proposed rules would amend the Transparency in Coverage final rules implementing section 2715A of the PHS Act and section 1311(e)(3) of the ACA by requiring plans and issuers to provide information related to contraceptive coverage and cost-sharing requirements, including a statement explaining the coverage of OTC contraceptive items without cost sharing, in their Transparency in Coverage internet-based self-service tool or, if requested by the individual, on paper.

The Departments have examined the impacts of these proposed rules as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), Executive Order 14094 on Modernizing Regulatory Review (April 6, 2023), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), and Executive Order 13132 on Federalism (August 4, 1999).

B. Executive Orders 12866, 13563, and 14094—Departments of Health and Human Services and Labor

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 14094 (Modernizing Regulatory Review) amends section 3(f) of Executive Order 12866 (Regulatory Planning and Review). The amended section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) having an annual effect on the economy of $200 million or more in any 1 year (adjusted every 3 years by the Administrator of the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) for changes in gross domestic product), or adversely affecting in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, Territorial, or Tribal governments or communities; (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in Executive Order 12866, as specifically authorized in a timely manner by the Administrator of OIRA in each case.

A regulatory impact analysis (RIA) must be prepared for rules deemed significant under section 3(f). Based on the Departments' estimates, OMB's OIRA has determined this rulemaking is significant under section 3(f)(1) as measured by the $200 million or more in any 1 year threshold. Therefore, OMB has reviewed these proposed rules, and the Departments have provided the following assessment of their impact.

1. Need for Regulatory Action

As discussed in section II of this preamble, ongoing complaints and reports of noncompliance with section 2713 of the PHS Act and its implementing regulations indicate that participants, beneficiaries, and enrollees face barriers when attempting to use their coverage to access recommended preventive services without cost sharing. As a result of these concerns and other significant activity related to preventive services, the Departments are proposing to amend the regulations governing coverage of recommended preventive services in order to ensure that participants, beneficiaries, and enrollees would be able to access the full range of recommended preventive services to which they are entitled, with particular focus on strengthening coverage requirements with respect to recommended contraceptive items for women, as summarized in section IV.A of this preamble. The Departments consider these provisions to be timely and necessary given the ongoing documented challenges faced by consumers in accessing recommended preventive services, as discussed further in section IV.B.2.a of this preamble.

2. Summary of Impacts

In accordance with Executive Order 12866 and OMB Circular A-4, table 1 depicts an accounting statement summarizing the Departments' assessment of the benefits, costs, and transfers associated with these regulatory actions. The Departments are unable to quantify all benefits, costs, and transfers associated with these proposed rules, but have sought, where possible, to describe these non-quantified impacts.