Not So Fast on the Accommodation Workaround

Not So Fast on the Accommodation Workaround July 7, 2014

The day after the Supreme Court ruling in the Hobby Lobby case, I wrote that the administration should be able to essentially moot the decision by extending the accommodation given to religious non-profits to for-profit companies as well. Turns out it isn’t quite that easy.

According to Bloomberg’s Alex Wayne, under the current system the administrator of a religious non-profit’s health plan pays for objectionable forms of birth controls, and the government reimburses them. The third-party administrators say the government doesn’t have a way to pay them back yet.

Here’s how it should work: the third-party administrator would either find an insurer to cover the cost of the birth control, or pay for it themselves and find a partner insurer through the exchange. Then, the government reimburses the insurer and, if necessary, the insurer reimburses the administrator. But administrators who aren’t tied to insurance companies haven’t been able to get insurers to agree to that deal and the Department of Health and Human Services says they don’t have the legal authority to pay the administrators directly.

The problem doesn’t affect all administrators, but there are 300 of them across the country looking at paying millions of dollars. As we explained earlier this week, the Supreme Court heavily implied that Obama should make that same accommodation available to for profits. Mike Ferguson, the chief executive officer of a trade group that represents insurance administrators, told Bloomberg he’s worried that would only make things worse for them. “If that is the accommodation the administration chooses, then it would create the same problems, in our view, that are currently in play for the nonprofit religious organizations,” he said.

Well that changes things a lot. I did not realize that the government was reimbursing insurance administrators as part of the accommodation. That means it does require Congressional action to appropriate the money to pay for it. In other words, I was completely wrong.

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