(Bloomberg) — An exemption allowing religious groups to avoid covering the cost of birth control as required by the U.S. Affordable Care Act won’t be expanded, the Obama administration said.

Churches and religious groups don’t have to comply with a provision of the law requiring that most employer health plans cover the cost of contraceptives. Universities, hospitals and other nonprofits associated with faith groups also are exempt from paying for the coverage. The administration, in its final regulation issued Friday, rejected a request by some businesses for a similar accommodation.

Companies including Hobby Lobby Stores Inc. have challenged the government over the provision of the 2010 U.S. health law requiring employers and insurers to provide preventive health services without charge to their workers, a category the administration said includes birth control. The final rule largely adheres to a proposal made in February that was designed to dispel concerns of companies and organizations that objected on religious grounds.

The decision “reinforces our commitment to respect the concerns of houses of worship and other nonprofit religious organizations that object to contraceptive coverage, while helping to ensure that women get the care they need, regardless of where they work,” Health and Human Services Secretary Kathleen Sebelius said in a statement.

The rule was issued by HHS, the Labor Department and the Internal Revenue Service.

Lawsuits filed

The administration has been sued 65 times over the birth control requirement, including 33 cases filed by for-profit companies, according to the National Women’s Law Center, a nonprofit in Washington, D.C., that supports insurance coverage for contraception. Twenty companies have been granted an injunction or other temporary relief from the requirement while the cases wind their way through court, according to the NWLC.

A federal appeals court in Denver ruled June 27 that Hobby Lobby and another company, Mardel Inc., were likely to succeed at challenging the requirement by arguing that it violates their religious freedom. The ruling granted the companies an injunction against having to cover birth control, reversing a lower court’s decision.

Hobby Lobby’s owner, David Green, has said he doesn’t object to providing preventive birth control. He refuses to cover two emergency birth-control pills, Teva Pharmaceutical Industries Ltd.’s Plan B One-Step and Actavis Inc.’s Ella, which are taken after sex, because he believes they cause abortions.

Legal situation

The Becket Fund for Religious Liberty, a nonprofit in Washington representing Hobby Lobby and eight other groups suing the government over the birth control issue, says the final rule doesn’t change the legal landscape.

“There’s a fundamental conflict that’s really just going to get resolved in court,” says Eric Rassbach, deputy general counsel at the Becket Fund.

Under the rule, workers at Catholic universities and hospitals, or similar institutions associated with other faiths, will get birth control coverage with minimal involvement in the process by their employers.

A nonprofit associated with a religious group that doesn’t want to pay for the coverage must inform its insurer or the company that administers its health plan, if it is self-insured, the government said. The insurer then pays for the services without using any money received from the nonprofit.

Insufficient protection

That process doesn’t sufficiently protect religious nonprofits from having to provide access to morning-after pills like Plan B and Ella, Rassbach says. Four of the fund’s clients are colleges and universities with religious affiliations that are suing the government over the requirement.

“They’re being asked to be the gatekeepers to these services,” Rassbach says.

The government said it doesn’t know of any self-insuring nonprofits that don’t employ a separate company, called a third-party administrator, to handle their benefits. If there are nonprofits without such an administrator, the rule provides a “safe harbor” from enforcement of the birth control requirement, meaning they wouldn’t have to comply with it.

The rule is unlikely to add costs for insurers who have to pay for the services, says Chiquita Brooks-Lasure, deputy director of policy and regulation at the Center for Consumer Information and Insurance Oversight at HHS, which is implementing much of the ACA.

“We do strongly believe that the cost of contraceptive services will be absolutely cost-neutral and offset by improvements to women’s health as well as reduced pregnancies,” she says.

Third-party administrators, which won’t financially benefit from reduced births, will be reimbursed for the coverage by the government. The administration offered no estimate of what those reimbursements would cost.

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