WASHINGTON — The Obama administration moved Friday to further insulate religiously affiliated hospitals and universities from paying for birth control for their female employees if they object to providing the coverage on moral grounds.
The new proposal, which follows a compromise announced by President Barack Obama last month, seeks to quell lingering objections from religious groups about a provision in the new health care law requiring employers to offer women contraceptive coverage without co-payments or other cost-sharing.
Under fire from leading Catholic hospitals and other institutions, the administration has proposed shifting the cost of providing birth control coverage onto insurance companies, while prohibiting those insurers from passing the additional cost onto employers.
But it was unclear what this would mean for large, religiously affiliated employers that self-insure rather than hire an insurance company to assume the risk of providing health benefits to their employees.
In a notice released Friday, the Department of Health and Human Services suggested these self-insured employers could pass the cost of the contraceptive coverage to whoever administers their health benefits. Large employers typically contract with an insurance company to handle billing and other administrative tasks associated with providing health benefits.
These administrators would then use funds from other sources, such as rebates they might receive from drug makers, to offset the cost of the contraceptive benefit, according to administration officials.
The Obama administration also suggested that new national health plans to be set up under the law could be required to offer supplemental contraceptive coverage to employees of religiously affiliated employers.
The proposal drew quick praise from women’s rights advocates and other groups that support broader access to contraception, including Planned Parenthood.
But it is unclear if the administration will satisfy major religious groups such as Catholic Charities USA and the Catholic Health Association of the United States, representing Catholic hospitals.
“We have to spend time reviewing it,” said the group’s president, Sister Carol Keehan, a leading backer of the new health care law who has been working with the administration to protect her members from having to pay for contraceptive coverage.
Few expect the proposal to win the support of the U.S. Conference of Catholic Bishops, which has led the fight against the requirement. That group is also reviewing the proposal, according to a spokeswoman.
Contraceptive coverage — which is now standard for most health plans — does not add significant costs to a typical premium, according to insurance industry officials. There is some evidence that it may actually help reduce overall costs by preventing expensive and unwanted pregnancies.
But the additional benefit does add an upfront cost to an insurance policy that would have to be shouldered by insurers under the administration’s plans.
In a separate regulation posted Friday, the administration indicated that student health plans at religiously affiliated colleges and universities that do not self-insure would also have to cover contraceptives without cost-sharing, but the costs would have be borne by the insurers.
Those plans that do self-insure are not subject to the contraceptive coverage mandate.