The U.S. Department of Labor said Thursday employers reacting to the Supreme Court’s Hobby Lobby ruling by canceling contraceptive coverage will be required to notify their employees of the change, an important administrative note for benefit advisers working with employers electing to do so.

If an employer-sponsored medical plan subject to the Employee Retirement Income Security Act (ERISA) excludes all or a subset of contraceptive services from coverage, the DOL says the plan's summary plan description “must describe the extent of the limitation or exclusion of coverage.”

For plans that reduce or eliminate coverage of contraceptive services after having provided such coverage, the DOL says employers have up to 60 days to notify employees after making such a change.

See related: Benefits industry reacts to Hobby Lobby decision

The DOL’s rulemaking came in the form of a “frequently asked question” (FAQ) about the Affordable Care Act posted to the DOL’s website, which one benefits industry legal counsel says deserves close attention by employers and their advisers.

“I am not suggesting companies immediately take this step, but a couple of things about this FAQ are worth noting if a plan sponsor is considering eliminating contraceptive coverage,” says Keith McMurdy, a labor and employment lawyer and partner with the national law firm Fox Rothschild.

“If the company is eliminating contraceptive coverage, it has to follow the ACA and ERISA notice requirements for plan changes. The change is not immediate and can only be completed after the appropriate notification time periods,” he says in a blogpost.

“Simply eliminating the coverage will not do,” McMurdy warns.

The Supreme Court on June 30 ruled 5-4 that closely held companies can opt out of providing certain types of birth control due to religious opposition. Shortly thereafter, the Senate introduced legislation that would counteract the decision.

The DOL’s notice came just a day after the Senate failed to get enough support to pass that bill.

See related story: Senate bill to overturn SCOTUS Hobby Lobby decision blocked

The DOL’s FAQ specifically refers to closely held for-profit companies which McMurdy also says “pretty clearly indicates that the DOL is applying a very narrow reading of the Supreme Court's decision,” and the court’s permission to discontinue contraceptive coverage may not directly apply to non-closely held companies at all.

For some, however, the DOL’s post-change 60-day timeframe for employee notice is not enough. Last week, New York’s attorney general, Eric Schneiderman, and state senator Andrea Stewart-Cousins introduced a bill that would require employers in their state to give employees 90 days' notice before changing contraceptive coverage.

The Reproductive Rights Disclosure Act would create one notice standard for all employers, regardless of the type of company. The Act would require employers to give 90 days’ written notice to employees, as well as the New York State Department of Labor, the Department of Financial Services, and the State Attorney General’s Office. It would also require employers to inform prospective employees of the scope of contraceptive coverage, including by posting on the company website limitations on contraception coverage. The Act also provides for a civil penalty of up to $5,000 for each violation of the new notice provisions.

“No woman should have her personal health care decisions dictated by the religious beliefs of her boss," said Schneiderman as he announced the legislations July 17. “As a senator, I fought for a strong law to protect women from discrimination in health care coverage, because we must have one set of rules for everyone. In the wake of the Supreme Court's deeply misguided Hobby Lobby decision, we need to go further to empower the women of New York state with the information they need to make their own health care choices.”

That is what the Reproductive Rights Disclosure Act would accomplish, he added.

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