FOR IMMEDIATE RELEASE
July 29, 2022
Contact: Colleen McCabe (917-410-7240 or colleen@caminopr.com)
New Affordable Care Act guidance expands access to contraception without a prescription
New guidelines require coverage of Plan B when prescribed and “encourages” coverage when obtained over the counter
Advocates urge future guidelines to mandate insurance coverage for all non-prescription, FDA-approved products
WASHINGTON — New administration guidance issued yesterday for the first time addressed the importance of insurance coverage for over-the-counter, FDA-approved contraceptives when obtained without a prescription. Health insurance providers are now “encouraged to cover [over-the-counter] emergency contraceptive products with no cost sharing when they are purchased without a prescription.” In addition, the guidance makes clear that health savings accounts (HSAs) or health flexible spending arrangements (health FSA), and health reimbursement arrangements (HRAs) may be used for contraceptives when purchased without a prescription.
Dana Singiser, co-founder of the nonprofit Contraceptive Access Initiative, praised the guidance.
“People deserve insurance coverage for FDA-approved contraception regardless of whether they obtain it from a doctor or over the counter,” Singiser said. “The administration has taken an important first step toward making over-the-counter contraception more affordable for people enrolled in many insurance plans. As the daily oral contraceptive pill moves closer to FDA approval to be sold on store shelves, it will be important for the administration to mandate, rather than recommend, insurance coverage for all FDA-approved contraceptive products available without a prescription.”
Ensuring that contraception is affordable is an essential component of health equity. Advocates and policymakers in favor of widening over-the-counter contraceptive access to include the birth control pill have been encouraging steps toward affordability, including insurance coverage.
“The AMA will work with expert stakeholders to advocate for the availability of hormonal contraception as an OTC medication and continue to study issues relevant to OTC access including full insurance coverage without cost sharing of an OTC oral contraceptive.” - American Medical Association, June 15, 2022
“The Affordability is Access Act would ensure that once the FDA determines an over-the-counter birth control option to be safe, it approves it without delay—and then would ensure that insurers fully cover over-the-counter birth control without any out-of-pocket costs. The legislation addresses the reality that for many—especially those with the tightest budgets—true access requires affordability.” - Affordability is Access Act press release.
Background on the new ACA guidance
New guidance about the implementation of the Affordable Care Act was issued yesterday, including guidance on emergency contraception:
Q5: Are plans and issuers required to cover FDA-approved emergency contraception, including emergency contraception that is available over-the-counter (OTC)?
Yes. Consistent with the HRSA-Supported Guidelines and as clarified in previous guidance regarding coverage of OTC contraceptives, plans and issuers must cover without cost sharing (1) emergency contraception (levonorgestrel), and (2) emergency contraception (ulipristal acetate), including OTC products, when the product is prescribed for an individual by their attending provider. Plans and issuers are required to cover these products without cost sharing including when they are prescribed for advanced provision.
Plans and issuers are also encouraged to cover OTC emergency contraceptive products with no cost sharing when they are purchased without a prescription.
Q6: Can a health savings account (HSA), health flexible spending arrangement (health FSA) or health reimbursement arrangement (HRA) reimburse expenses incurred for OTC contraception obtained without a prescription?
Yes. An HSA, health FSA, or HRA can reimburse an individual for the cost (or portion of the cost) incurred for OTC contraception to the extent that cost is not paid or reimbursed by another plan or coverage.
Note that, under section 223(f) of the Code, a distribution from an individual’s HSA is not included in the individual’s gross income if it is used to pay for qualified medical expenses, which, under section 223(d)(2) the Code, are medical expenses incurred by an individual (or the individual’s spouse or dependent) “but only to the extent such amounts are not compensated for by insurance or otherwise.” Therefore, expenses incurred for contraception paid or reimbursed by a plan or issuer are not qualified medical expenses for purposes of an HSA. If the entire cost of contraception is not paid or reimbursed by the plan or issuer, qualified medical expenses include the portion of the cost not paid or reimbursed by the plan or issuer.
Similarly, the cost (or the portion of the cost) of contraception paid or reimbursed by a plan or issuer cannot be reimbursed by a health FSA or HRA, but if costs for OTC contraceptives are not paid or reimbursed by a plan or issuer, they may be reimbursed from a health FSA or HRA.
As stated in Q5, plans and issuers must cover the cost of certain OTC contraceptives when prescribed for an individual by their health care provider. Plans and issuers that will cover costs of OTC contraceptives without a prescription should advise individuals not to seek reimbursement from an HSA, health FSA, or HRA for the cost (or the portion of the cost) of contraception paid or reimbursed by the plan or issuer and not to use an HSA, health FSA, or HRA (including any related debit card) to purchase contraception for which the individual intends to seek reimbursement from the plan or issuer.
Finally, if an individual mistakenly takes a distribution from an HSA for contraception costs paid or reimbursed by a plan or issuer, the individual must either (1) include the distribution in gross income, or (2) if and as permitted under Q&A-37 and -76 of IRS Notice 2004-50, 2004-33 IRB 196, repay the distribution to the HSA. If an individual mistakenly receives reimbursement from a health FSA or HRA for contraception costs covered by a plan or issuer, the individual should contact the health FSA or HRA administrator regarding correction procedures.
Background on the pill and over-the-counter applications
Since 2016, the U.S. Food and Drug Administration has worked with two pharmaceutical companies on a prescription-to-OTC switch for oral contraceptive pills. The pill’s safety and efficacy are well established after 62 years on the market, so the FDA must only be satisfied that women can understand the label and be trusted to follow the label instructions.
HRA Pharma, a Perrigo company, filed an application to the FDA on July 11, 2022, requesting approval for access to the company’s progestin-only oral contraceptive pill without the medically unnecessary barrier of a prescription. If approved, it will be the first birth control pill allowed to be sold on pharmacy shelves without a prescription.
HRA Pharma’s progestin-only pill, sometimes called the “minipill,” is preferred by 5% of pill users because it is more compatible for people who are breastfeeding or have certain health concerns.
The other pill OTC candidate, owned by Cadence Health, is the most commonly used birth control pill — preferred by 95% of pill users — and contains a combination of estrogen and progestin. It is frequently called the “combination pill.” Cadence Health has progressed toward filing an application for FDA approval for OTC status however has encountered “regulatory hurdles,” according to the New York Times.
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The nonprofit Contraceptive Access Initiative (CAI) advocates for increasing access to hormonal contraception over the counter for all ages, free from stigma, bias and coercion.