Internal Revenue Bulletin 2017-44 (PDF rendition): IRS Revenue Procedures

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

# INTERNAL REVENUE BULLETIN

IRS

Bulletin No. 2017-44
October 30, 2017

## HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

## EMPLOYEE PLANS

### T.D. 9827, page 382.

This first set of temporary regulations amends final regulations
published under the provisions of the Patient Protection and
Affordable Care Act (the Affordable Care Act) and relates to
expanded exemptions to protect religious beliefs for entities
and individuals with objections based on religious beliefs
whose health plans are subject to a mandate of contraceptive
coverage through guidance issued pursuant to the Affordable
Care Act. The second set of temporary regulations, as pub-
lished in TD 9828, amends the first set of temporary regula-
tions, as published in TD 9827, to add an exemption to protect
moral convictions for entities and individuals with objections
based on those beliefs whose health plans are subject to the
mandate of contraceptive coverage.

### T.D. 9828, page 431.

The first set of temporary regulations, as published in TD
9827, amends final regulations published under the provisions
of the Patient Protection and Affordable Care Act (the Afford-
able Care Act) and relates to expanded exemptions to protect
religious beliefs for entities and individuals with objections
based on religious beliefs whose health plans are subject to a
mandate of contraceptive coverage through guidance issued
pursuant to the Affordable Care Act. This second set of tem-
porary regulations, as published in TD 9828, amends the first
set of temporary regulations, as published in TD 9827, to add
an exemption to protect moral convictions for entities and
individuals with objections based on those beliefs whose health
plans are subject to the mandate of contraceptive coverage.

### REG-115615-17, page 463.

based on religious beliefs whose health plans are subject to a
mandate of contraceptive coverage through guidance issued
pursuant to the Affordable Care Act. These proposed regula-
tions refer to that first set of temporary regulations. The
second set of temporary regulations, as published in TD 9828,
amends the first set of temporary regulations, as published in
TD 9827, to add an exemption to protect moral convictions for
entities and individuals with objections based on those beliefs
whose health plans are subject to the mandate of contracep-
tive coverage.

### REG-129631-17, page 464.

The first set of temporary regulations, as published in TD
9827, amends final regulations published under the provisions
of the Patient Protection and Affordable Care Act (the Afford-
able Care Act) and relates to expanded exemptions to protect
religious beliefs for entities and individuals with objections
based on religious beliefs whose health plans are subject to a
mandate of contraceptive coverage through guidance issued
pursuant to the Affordable Care Act. These proposed regula-
tions refer to the second set of temporary regulations, as
published in TD 9828, which amends the first set of temporary
regulations, as published in TD 9827, to add an exemption to
protect moral convictions for entities and individuals with ob-
jections based on those beliefs whose health plans are subject
to the mandate of contraceptive coverage.

### Rev. Proc. 2017-56, page 465.

This revenue procedure updates Rev. Proc. 2000-40 to take
into account the provisions of § 430 of the Internal Revenue
Code, which was enacted as part of the Pension Protection Act
of 2006. This revenue procedure provides automatic approval
for certain changes in funding method used for single-employer
defined benefit plans for calculations described under § 430.
The approvals under this revenue procedure are granted in
accordance with § 412(d)(1) of the Code and section 302(d)(1)
of the Employee Retirement Income Security Act of 1974, as
amended.

Finding Lists begin on page ii.

### Rev. Proc. 2017-57, page 474.

This revenue procedure updates Rev. Proc. 2000-41 to take
into account the enactment of subsequent legislation. This
revenue procedure sets forth the procedure for obtaining ap-
proval of the Internal Revenue Service (IRS) for a change in the
funding method used for a defined benefit plan, as provided by
§ 412(d)(1) of the Internal Revenue Code and section 302(d)(1)
of the Employee Retirement Income Security Act of 1974, as
amended (ERISA). This revenue procedure also sets forth the
procedure for obtaining approval of the IRS to revoke an
election relating to interest rates pursuant to § 430(h)(2)(D)(ii)
or § 430(h)(2)(E) of the Code and the corresponding sections
of ERISA.

## EXCISE TAX

### T.D. 9827, page 382.

### T.D. 9828, page 431.

### REG-115615-17, page 463.

### REG-129631-17, page 464.

The first set of temporary regulations, as published in TD
9827, amends final regulations published under the provisions
of the Patient Protection and Affordable Care Act (the Afford-
able Care Act) and relates to expanded exemptions to protect
religious beliefs for entities and individuals with objections
based on religious beliefs whose health plans are subject to a
mandate of contraceptive coverage through guidance issued
pursuant to the Affordable Care Act. These proposed regula-
tions refer to the second set of temporary regulations, as
published in TD 9828, which amends the first set of temporary
regulations, as published in TD 9827, to add an exemption to
protect moral convictions for entities and individuals with ob-
jections based on those beliefs whose health plans are subject
to the mandate of contraceptive coverage.

## INCOME TAX

### Notice 2017-62, page 460.

This notice provides that the IRS will not assert that cash
payments an employer makes to § 170(c) organizations (in
exchange for vacation, sick, or personal leave that its employ-
ees elect to forgo) constitute gross income or wages of the
employees under certain circumstances relating to Hurricane
or Tropical Storm Maria.

### Notice 2017-63, page 460.

This notice sets forth updates on the corporate bond monthly
yield curve, the corresponding spot segment rates for October
2017 used under § 417(e)(3)(D), the 24-month average segment
rates applicable for October 2017, and the 30-year Treasury
rates. These rates reflect the application of § 430(h)(2)(C)(iv),
which was added by the Moving Ahead for Progress in the 21st
Century Act, Public Law 112-141 (MAP-21) and amended by
section 2003 of the Highway and Transportation Funding Act of
2014 (HATFA).

## The IRS Mission

Provide America's taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.

## Introduction

The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.

Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.

Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

### Part I .- 1986 Code.

This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.

### Part II .- Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.

Part III .- Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury's Office of the Assistant Sec-
retary (Enforcement).

### Part IV .- Items of General Interest.

This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

## Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

T.D. 9827
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 54

DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2590

DEPARTMENT OF HEALTH
AND HUMAN SERVICES
45 CFR Part 147

Religious Exemptions and
Accommodations for
Coverage of Certain
Preventive Services Under
the Affordable Care Act

AGENCY: Internal Revenue Service, De-
partment of the Treasury; Employee Ben-
efits Security Administration, Department
of Labor; and Centers for Medicare &
Medicaid Services, Department of Health
and Human Services.

ACTION: Interim final rules with request
for comments.

SUMMARY: The United States has a
long history of providing conscience pro-
tections in the regulation of health care for
entities and individuals with objections
based on religious beliefs and moral con-
victions. These interim final rules expand
exemptions to protect religious beliefs for
certain entities and individuals whose
health plans are subject to a mandate of
contraceptive coverage through guidance
issued pursuant to the Patient Protection
and Affordable Care Act. These rules do
not alter the discretion of the Health
Resources and Services Administration
(HRSA), a component of the United
States Department of Health and Human
Services (HHS), to maintain the guide-
lines requiring contraceptive coverage
where no regulatorily recognized objec-
tion exists. These rules also leave the
"accommodation" process in place as an

optional process for certain exempt en-
tities that wish to use it voluntarily.
These rules do not alter multiple other
Federal programs that provide free or
subsidized contraceptives for women at
risk of unintended pregnancy.

DATES: Effective date: These interim fi-
nal rules and temporary regulations are
effective on October 6, 2017.

Comment date: Written comments on
these interim final rules are invited and
must be received by December 5, 2017.

ADDRESSES: Written comments may
be submitted to the Department of Health
and Human Services as specified below.
Any comment that is submitted will be
shared with the Department of Labor and
the Department of the Treasury, and will
also be made available to the public.

Warning: Do not include any personally
identifiable information (such as name,
address, or other contact information) or
confidential business information that you
do not want publicly disclosed. All com-
ments may be posted on the Internet and
can be retrieved by most Internet search
engines. No deletions, modifications, or
redactions will be made to the comments
received, as they are public records. Com-
ments may be submitted anonymously.

Comments, identified by "Preventive
Services," may be submitted one of four
ways (please choose only one of the ways
listed)

1\. Electronically. You may submit
electronic comments on this regulation to
http://www.regulations.gov. Follow the
"Submit a comment" instructions.

2\. By regular mail. You may mail writ-
ten comments to the following address
ONLY:

Centers for Medicare & Medicaid Services,
Department of Health and Human Services,
Attention: CMS-9940-IFC,
P.O. Box 8016,
Baltimore, MD 21244-8016.

Please allow sufficient time for mailed
comments to be received before the close
of the comment period.

3\. By express or overnight mail. You
may send written comments to the follow-
ing address ONLY:

Centers for Medicare & Medicaid Services,
Department of Health and Human Services,
Attention: CMS-9940-IFC,
Mail Stop C4-26-05,

7500 Security Boulevard,
Baltimore, MD 21244-1850

4\. By hand or courier. Alternatively,
you may deliver (by hand or courier) your
written comments ONLY to the following
addresses prior to the close of the com-
ment period:

a. For delivery in Washington, DC-

Centers for Medicare & Medicaid Services,
Department of Health and Human Services,
Room 445-G, Hubert H. Humphrey Building,
200 Independence Avenue, SW.,
Washington, DC 20201

(Because access to the interior of the
Hubert H. Humphrey Building is not read-
ily available to persons without Federal
government identification, commenters
are encouraged to leave their comments in
the CMS drop slots located in the main
lobby of the building. A stamp-in clock is
available for persons wishing to retain a
proof of filing by stamping in and retain-
ing an extra copy of the comments being
filed.)

b. For delivery in Baltimore, MD-

Centers for Medicare & Medicaid Services,
Department of Health and Human Services,
7500 Security Boulevard,
Baltimore, MD 21244-1850.

If you intend to deliver your comments
to the Baltimore address, call telephone
number (410) 786-9994 in advance to
schedule your arrival with one of our staff
members.

Comments erroneously mailed to the
addresses indicated as appropriate for
hand or courier delivery may be delayed
and received after the comment period.

Comments received will be posted
without change to www.regulations.gov.

## FOR FURTHER INFORMATION

CONTACT: Jeff Wu (310) 492-4305 or
marketreform@cms.hhs.gov for Centers
for Medicare & Medicaid Services (CMS),

Department of Health and Human Services
(HHS), Amber Rivers or Matthew Litton,
Employee Benefits Security Administration
(EBSA), Department of Labor, at (202)
693-8335; Karen Levin, Internal Revenue
Service, Department of the Treasury, at
(202) 317-5500 (not toll-free numbers).

Customer Service Information: Indi-
viduals interested in obtaining informa-
tion from the Department of Labor concern-
ing employment-based health coverage laws
may call the EBSA Toll-Free Hotline at
1-866-444-EBSA (3272) or visit the Depart-
ment of Labor's website (www.dol.gov/
ebsa). Information from HHS on private
health insurance coverage can be found on
CMS's website (www.cms.gov/cciio), and
information on health care reform can be
found at www.HealthCare.gov.

## SUPPLEMENTARY INFORMATION:

### I. Background

Congress has consistently sought to pro-
tect religious beliefs in the context of health
care and human services, including health
insurance, even as it has sought to promote
access to health services.1 Against that
backdrop, Congress granted the Health
Resources and Services Administration
(HRSA), a component of the United States
Department of Health and Human Services
(HHS), discretion under the Patient Protec-
tion and Affordable Care Act to specify that
certain group health plans and health insur-
ance issuers shall cover, "with respect to

women, such additional preventive care and
screenings . .. as provided for in compre-
hensive guidelines supported by" by HRSA
(the "Guidelines"). Public Health Service
Act section 2713(a)(4). HRSA exercised
that discretion under the last Administration
to require health coverage for, among other
things, certain contraceptive services,2 while
the administering agencies-the Depart-
ments of Health and Human Services, La-
bor, and the Treasury (collectively, "the De-
partments"3)-exercised the same
discretion to allow exemptions to those re-
quirements. Through rulemaking, including
three interim final rules, the Departments
allowed exemptions and accommodations
for certain religious objectors where the
Guidelines require coverage of contracep-
tive services. Many individuals and entities
challenged the contraceptive coverage re-
quirement and regulations (hereinafter, the
"contraceptive Mandate," or the "Mandate")
as being inconsistent with various legal pro-
tections, including the Religious Freedom
Restoration Act, 42 U.S.C. 2000bb-1.
Much of that litigation continues to this day.

ment and by Congress in the Religious
Freedom Restoration Act of 1993; Con-
gress' history of providing protections for
religious beliefs regarding certain health
services (including contraception, steril-
ization, and items or services believed to
involve abortion); the discretion afforded
under section 2713(a)(4) of the PHS Act;
the structure and intent of that provision
in the broader context of section 2713 and
the Patient Protection and Affordable
Care Act; the regulatory process and com-
ments submitted in various requests for
public comments (including in the Depart-
ments' 2016 Request for Information).

In light of these factors, the Depart-
ments issue these new interim final rules
to better balance the Government's inter-
est in ensuring coverage for contraceptive
and sterilization services in relation to the
Government's interests, including as re-
flected throughout Federal law, to provide
conscience protections for individuals and
entities with sincerely held religious be-
liefs in certain health care contexts, and to
minimize burdens in our regulation of the
health insurance market.

#### A. The Affordable Care Act

1See, for example, 42 U.S.C. 300a-7 (protecting individuals and health care entities from being required to provide or assist sterilizations, abortions, or other lawful health services if it would
violate their "religious beliefs or moral convictions"); 42 U.S.C. 238n (protecting individuals and entities that object to abortion); Consolidated Appropriations Act of 2017, Div. H, Title
V, Sec. 507(d) (Departments of Labor, HHS, and Education, and Related Agencies Appropriations Act), Pub. L. No. 115-31 (protecting any "health care professional, a hospital, a
provider-sponsored organization, a health maintenance organization, a health insurance plan, or any other kind of health care facility, organization, or plan" in objecting to abortion for any
reason); Id. at Div. C, Title VIII, Sec. 808 (regarding any requirement of "the provision of contraceptive coverage by health insurance plans" in the District of Columbia, "it is the intent
of Congress that any legislation enacted on such issue should include a 'conscience clause' which provides exceptions for religious beliefs and moral convictions."); Id. at Div. C, Title VII,
Sec. 726(c) (Financial Services and General Government Appropriations Act) (protecting individuals who object to prescribing or providing contraceptives contrary to their "religious beliefs
or moral convictions"); Id. at Div. I, Title III (Department of State, Foreign Operations, and Related Programs Appropriations Act) (protecting applicants for family planning funds based
on their "religious or conscientious commitment to offer only natural family planning"); 42 U.S.C. 290bb-36 (prohibiting the statutory section from being construed to require suicide related
treatment services for youth where the parents or legal guardians object based on "religious beliefs or moral objections"); 42 U.S.C. 290kk-1 (protecting the religious character of
organizations participating in certain programs and the religious freedom of beneficiaries of the programs); 42 U.S.C. 300x-65 (protecting the religious character of organizations and the
religious freedom of individuals involved in the use of government funds to provide substance abuse services); 42 U.S.C. 604a (protecting the religious character of organizations and the
religious freedom of beneficiaries involved in the use of government assistance to needy families); 42 U.S.C. 1395w-22(j)(3)(B) (protecting against forced counseling or referrals in Medicare
Choice, now Medicare Advantage, managed care plans with respect to objections based on "moral or religious grounds"); 42 U.S.C. 1396a(w)(3) (ensuring particular Federal law does not
infringe on "conscience" as protected in State law concerning advance directives); 42 U.S.C. 1396u-2(b)(3) (protecting against forced counseling or referrals in Medicaid managed care plans
with respect to objections based on "moral or religious grounds"); 42 U.S.C. 5106i (prohibiting certain Federal statutes from being construed to require that a parent or legal guardian provide
a child any medical service or treatment against the religious beliefs of the parent or legal guardian); 42 U.S.C. 2996f(b) (protecting objection to abortion funding in legal services assistance
grants based on "religious beliefs or moral convictions"); 42 U.S.C. 14406 (protecting organizations and health providers from being required to inform or counsel persons pertaining to
assisted suicide); 42 U.S.C. 18023 (blocking any requirement that issuers or exchanges must cover abortion); 42 U.S.C. 18113 (protecting health plans or health providers from being required
to provide an item or service that helps cause assisted suicide); also, see 8 U.S.C. 1182(g) (protecting vaccination objections by "aliens" due to "religious beliefs or moral convictions");
18 U.S.C. 3597 (protecting objectors to participation in Federal executions based on "moral or religious convictions"); 20 U.S.C. 1688 (prohibiting sex discrimination law to be used to require
assistance in abortion for any reason); 22 U.S.C. 7631(d) (protecting entities from being required to use HIV/AIDS funds contrary to their "religious or moral objection").

2This document's references to "contraception," "contraceptive," "contraceptive coverage," or "contraceptive services" generally includes contraceptives, sterilization, and related patient
education and counseling, unless otherwise indicated.

3Note, however, that in sections under headings listing only two of the three Departments, the term "Departments" generally refers only to the two Departments listed in the heading.
4In this document, we generally use "accommodation" and "accommodation process" interchangeably.

fordable Care Act, President Obama is-
sued Executive Order 13535 (March 24,
2010), which declared that, "[u]nder the
Act, longstanding Federal laws to protect
conscience (such as the Church Amend-
ment, 42 U.S.C. 300a-7, and the Weldon
Amendment, section 508(d)(1) of Public
Law 111-8) remain intact" and that "[n]u-
merous executive agencies have a role in
ensuring that these restrictions are en-
forced, including the HHS."

The Affordable Care Act reorganizes,
amends, and adds to the provisions of part
A of title XXVII of the Public Health
Service Act (PHS Act) relating to group
health plans and health insurance issuers
in the group and individual markets. In
addition, the Affordable Care Act adds
section 715(a)(1) to the Employee Re-
tirement Income Security Act of 1974
(ERISA) and section 9815(a)(1) to the
Internal Revenue Code (Code) to incorpo-
rate the provisions of part A of title
XXVII of the PHS Act into ERISA and
the Code, and thereby make them appli-
cable to certain group health plans regu-
lated under ERISA or the Code. The sec-
tions of the PHS Act incorporated into
ERISA and the Code are sections 2701
through 2728 of the PHS Act.

These interim final rules concern sec-
tion 2713 of the PHS Act. Where it ap-
plies, section 2713(a)(4) of the PHS Act
requires coverage without cost sharing for
"such additional" women's preventive
care and screenings "as provided for" and
"supported by" guidelines developed by
HRSA/HHS. The Congress did not spec-
ify any particular additional preventive
care and screenings with respect to women
that HRSA could or should include in its
Guidelines, nor did Congress indicate whether
the Guidelines should include contraception
and sterilization.

The Departments have consistently in-
terpreted section 2714(a)(4) PHS Act's
grant of authority to include broad discre-
tion to decide the extent to which HRSA
will provide for and support the coverage
of additional women's preventive care
and screenings in the Guidelines. In turn,
the Departments have interpreted that dis-
cretion to include the ability to exempt
entities from coverage requirements an-

nounced in HRSA's Guidelines. That in-
terpretation is rooted in the text of section
2713(a)(4) of the PHS Act, which allows
HRSA to decide the extent to which the
Guidelines will provide for and support
the coverage of additional women's pre-
ventive care and screenings.

Accordingly, the Departments have con-
sistently interpreted section 2713(a)(4) of
the PHS Act's reference to "comprehensive
guidelines supported by HRSA for purposes
of this paragraph" to grant HRSA authority
to develop such Guidelines. And because
the text refers to Guidelines "supported by
HRSA for purposes of this paragraph," the
Departments have consistently interpreted
that authority to afford HRSA broad discre-
tion to consider the requirements of cover-
age and cost-sharing in determining the na-
ture and extent of preventive care and
screenings recommended in the guidelines.
(76 FR 46623). As the Departments have
noted, these Guidelines are different from
"the other guidelines referenced in section
2713(a) of the PHS Act, which pre-dated the
Affordable Care Act and were originally
issued for purposes of identifying the non-
binding recommended care that providers
should provide to patients." Id. Guidelines
developed as nonbinding recommendations
for care implicate significantly different le-
gal and policy concerns than guidelines
developed for a mandatory coverage re-
quirement. To guide HRSA in exercising
the discretion afforded to it in section
2713(a)(4) of the PHS Act, the Departments
have previously promulgated regulations
defining the scope of permissible exemp-
tions and accommodations for such guide-
lines. (45 CFR 147.131). The interim final
rules set forth herein are a necessary and
appropriate exercise of the authority of
HHS, of which HRSA is a component, and
of the authority delegated to the Depart-
ments collectively as administrators of the
statutes. (26 U.S.C. 9833; 29 U.S.C. 1191c;
42 U.S.C. 300gg-92).

Our interpretation of section 2713(a)(4)
of the PHS Act is confirmed by the Afford-
able Care Act's statutory structure. Con-
gress did not intend to require entirely uni-
form coverage of preventive services (76
FR 46623). To the contrary, Congress
carved out an exemption from section 2713

of the PHS Act for grandfathered plans. In
contrast, this exemption is not applicable to
many of the other provisions in Title I of the
Affordable Care Act-provisions previ-
ously referred to by the Departments as pro-
viding "particularly significant protections."
(75 FR 34540). Those provisions include:
section 2704 of the PHS Act, which prohib-
its preexisting condition exclusions or other
discrimination based on health status in
group health coverage; section 2708 of the
PHS Act, which prohibits excessive waiting
periods (as of January 1, 2014); section
2711 of the PHS Act, which relates to life-
time limits; section 2712 of the PHS Act,
which prohibits rescission of health insur-
ance coverage; section 2714 of the PHS Act,
which extends dependent coverage until age
26; and section 2718 of the PHS Act, which
imposes a medical loss ratio on health in-
surance issuers in the individual and group
markets (for insured coverage), or requires
them to provide rebates to policyholders.
(75 FR 34538, 34540, 34542). Conse-
quently, of the 150 million nonelderly peo-
ple in America with employer-sponsored
health coverage, approximately 25.5 million
are estimated to be enrolled in grandfathered
plans not subject to section 2713 of the PHS
Act.5 As the Supreme Court observed,
"there is no legal requirement that grandfa-
thered plans ever be phased out." Burwell v.
Hobby Lobby Stores, Inc., 134 S. Ct. 2751,
2764 n.10 (2014).

The Departments' interpretation of
section 2713(a)(4) of the PHS Act to per-
mit HRSA to establish exemptions from
the Guidelines, and of the Departments'
own authority as administering agencies
to guide HRSA in establishing such ex-
emptions, is also consistent with Execu-
tive Order 13535. That order, issued upon
the signing of the Affordable Care Act,
specified that "longstanding Federal laws
to protect conscience . . . remain intact,"
including laws that protect religious be-
liefs (and moral convictions) from certain
requirements in the health care context.
While the text of Executive Order 13535
does not require the expanded exemptions
issued in these interim final rules, the ex-
panded exemptions are, as explained be-
low, consistent with longstanding Federal
laws to protect religious beliefs regarding

5Kaiser Family Foundation & Health Research & Educational Trust, "Employer Health Benefits, 2017 Annual Survey," available at http://files.kff.org/attachment/Report-Employer-Health-
Benefits-Annual-Survey-2017.

certain health matters, and are consistent
with the intent that the Affordable Care
Act would be implemented in accordance
with the protections set forth in those
laws.

##### B. The Regulations Concerning Women's Preventive Services

On July 19, 2010, the Departments is-
sued interim final rules implementing sec-
tion 2713 of the PHS Act (75 FR 41726).
Those interim final rules charged HRSA
with developing the Guidelines authorized
by section 2713(a)(4) of the PHS.

### 1. The Institute of Medicine Report

In developing the Guidelines, HRSA
relied on an independent report from the
Institute of Medicine (IOM, now known
as the National Academy of Medicine) on
women's preventive services, issued on
July 19, 2011, "Clinical Preventive Ser-
vices for Women, Closing the Gaps"
(IOM 2011). The IOM's report was
funded by the HHS Office of the Assis-
tant Secretary for Planning and Evalua-
tion (ASPE), pursuant to a funding
opportunity that charged the IOM to
conduct a review of effective preventive
services to ensure women's health and
well-being.6

The IOM made a number of recom-
mendations with respect to women's pre-
ventive services. As relevant here, the
IOM recommended that the Guidelines
cover the full range of Food and Drug
Administration (FDA)-approved contra-
ceptive methods, sterilization procedures,
and patient education and counseling for
women with reproductive capacity. Be-
cause FDA includes in the category of
"contraceptives" certain drugs and de-
vices that may not only prevent concep-
tion (fertilization), but may also prevent
implantation of an embryo,7 the IOM's
recommendation included several contra-
ceptive methods that many persons and

organizations believe are abortifacient-
that is, as causing early abortion-and
which they conscientiously oppose for
that reason distinct from whether they also
oppose contraception or sterilization.

One of the 16 members of the IOM
committee, Dr. Anthony LoSasso, a Pro-
fessor at the University of Illinois at Chi-
cago School of Public Health, wrote a
formal dissenting opinion. He argued that
the IOM committee did not have sufficient
time to evaluate fully the evidence on
whether the use of preventive services be-
yond those encompassed by the United
States Preventive Services Task Force
(USPSTF), HRSA's Bright Futures Proj-
ect, and the Advisory Committee on Im-
munization Practices (ACIP) leads to
lower rates of disability or disease and
increased rates of well-being. He further
argued that "the recommendations were
made without high quality, systematic ev-
idence of the preventive nature of the ser-
vices considered," and that "the commit-
tee process for evaluation of the evidence
lacked transparency and was largely sub-
ject to the preferences of the committee's
composition. Troublingly, the process
tended to result in a mix of objective and
subjective determinations filtered through
a lens of advocacy." Dr. LoSasso also
raised concerns that the committee did not
have time to develop a framework for
determining whether coverage of any
given preventive service leads to a reduc-
tion in healthcare expenditure.8 (IOM
2011 at 231-32). In its response to Dr.
LoSasso, the other 15 committee members
stated, in part, that "At the first committee
meeting, it was agreed that cost consider-
ations were outside the scope of the
charge, and that the committee should not
attempt to duplicate the disparate review
processes used by other bodies, such as
the USPSTF, ACIP, and Bright Futures.
HHS, with input from this committee,
may consider other factors including cost
in its development of coverage decisions."

### 2. HRSA's 2011 Guidelines and the Departments' Second Interim Final Rules

On August 1, 2011, HRSA released
onto its website its Guidelines for wom-
en's preventive services, adopting the
recommendations of the IOM. https://
www.hrsa.gov/womensguidelines/ The
Guidelines included coverage for all
FDA-approved contraceptives, steriliza-
tion procedures, and related patient ed-
ucation and counseling for women with
reproductive capacity, as prescribed by
a health care provider.

In administering this Mandate, on Au-
gust 1, 2011, the Departments promul-
gated interim final rules amending our
2010 interim final rules. (76 FR 46621)
(2011 interim final rules). The 2011 in-
terim final rules specify that HRSA has
the authority to establish exemptions from
the contraceptive coverage requirement
for certain group health plans established
or maintained by certain religious em-
ployers and for health insurance coverage
provided in connection with such plans.9
The 2011 interim final rules defined an
exempt "religious employer" narrowly as
one that: (1) had the inculcation of reli-
gious values as its purpose; (2) primarily
employed persons who shared its religious
tenets; (3) primarily served persons who
shared its religious tenets; and (4) was a
nonprofit organization, as described in
section 6033(a)(1) and (a)(3)(A)(i) or (iii)
of the Code. Those relevant sections of the
Code include only churches, their inte-
grated auxiliaries, conventions or associ-
ations of churches, and the exclusively
religious activities of a religious order.
The practical effect of the rules' definition
of "religious employer" was to create po-
tential uncertainty about whether employ-
ers, including many of those houses of
worship or their integrated auxiliaries,
would fail to qualify for the exemption if
they engaged in outreach activities toward
persons who did not share their religious

6Because section 2713(a)(4) of the PHS Act specifies that the HRSA Guidelines shall include preventive care and screenings "with respect to women," the Guidelines exclude services relating
to a man's reproductive capacity, such as vasectomies and condoms.

7FDA's guide "Birth Control: Medicines To Help You," specifies that various approved contraceptives, including Levonorgestrel, Ulipristal Acetate, and IUDs, work mainly by preventing
fertilization and "may also work ... by preventing attachment (implantation) to the womb (uterus)" of a human embryo after fertilization. Available at https://www.fda.gov/forconsumers/
byaudience/forwomen/freepublications/ucm313215.htm.

8The Departments do not relay these dissenting remarks as an endorsement of the remarks, but to describe the history of the Guidelines, which includes this part of the report that IOM
provided to HRSA.

9The 2011 amended interim final rules were issued and effective on August 1, 2011, and published in the Federal Register on August 3, 2011. (76 FR 46621).

tenets.10 As the basis for adopting that
limited definition of religious employer,
the 2011 interim final rules stated that
they relied on the laws of some "States
that exempt certain religious employers
from having to comply with State law
requirements to cover contraceptive ser-
vices." (76 FR 46623). That same day,
HRSA exercised the discretion described
in the 2011 interim final rules to provide
the exemption.

### 3. The Departments' Subsequent Rulemaking on the Accommodation and Third Interim Final Rules

Final regulations issued on February
10, 2012, adopted the definition of "reli-
gious employer" in the 2011 interim final
rules without modification (2012 final reg-
ulations).11 (77 FR 8725). The exemption
did not require religious employers to file
any certification form or comply with any
other information collection process.

Contemporaneous with the issuance of
the 2012 final regulations, HHS-with the
agreement of the Department of Labor
(DOL) and the Department of the Trea-
sury-issued guidance establishing a tem-
porary safe harbor from enforcement of
the contraceptive coverage requirement
by the Departments with respect to group
health plans established or maintained by
certain nonprofit organizations with reli-
gious objections to contraceptive cover-
age (and the group health insurance cov-
erage provided in connection with such
plans).12 The guidance provided that the
temporary safe harbor would remain in
effect until the first plan year beginning on
or after August 1, 2013. The temporary
safe harbor did not apply to for-profit en-
tities. The Departments stated that, during
the temporary safe harbor, the Depart-
ments would engage in rulemaking to
achieve "two goals-providing contracep-
tive coverage without cost-sharing to in-
dividuals who want it and accommodating

non-exempted, nonprofit organizations'
religious objections to covering contra-
ceptive services." (77 FR 8727).

On March 21, 2012, the Departments
published an advance notice of proposed
rulemaking (ANPRM) that described pos-
sible approaches to achieve those goals
with respect to religious nonprofit organi-
zations, and solicited public comments on
the same. (77 FR 16501). Following re-
view of the comments on the ANPRM, the
Departments published proposed regula-
tions on February 6, 2013 (2013 NPRM)
(78 FR 8456).

The 2013 NPRM proposed to expand
the definition of "religious employer" for
purposes of the religious employer ex-
emption. Specifically, it proposed to re-
quire only that the religious employer be
organized and operate as a nonprofit entity
and be referred to in section 6033(a)(3)
(A)(i) or (iii) of the Code, eliminating the
requirements that a religious employer (1)
have the inculcation of religious values as
its purpose, (2) primarily employ persons
who share its religious tenets, and (3) pri-
marily serve persons who share its reli-
gious tenets.

The 2013 NPRM also proposed to cre-
ate a compliance process, which it called
an accommodation, for group health plans
established, maintained, or arranged by
certain eligible religious nonprofit organi-
zations that fell outside the houses of wor-
ship and integrated auxiliaries covered by
section 6033(a)(3)(A)(i) or (iii) of the
Code (and, thus, outside of the religious
employer exemption). The 2013 NPRM
proposed to define such eligible organiza-
tions as nonprofit entities that hold them-
selves out as religious, oppose providing
coverage for certain contraceptive items
on account of religious objections, and
maintain a certification to this effect in
their records. The 2013 NPRM stated,
without citing a supporting source, that
employees of eligible organizations "may
be less likely than" employees of exempt

houses of worship and integrated auxilia-
ries to share their employer's faith and
opposition to contraception on religious
grounds. (78 FR 8461). The 2013 NPRM
therefore proposed that, in the case of an
insured group health plan established or
maintained by an eligible organization,
the health insurance issuer providing
group health insurance coverage in con-
nection with the plan would provide con-
traceptive coverage to plan participants
and beneficiaries without cost sharing,
premium, fee, or other charge to plan par-
ticipants or beneficiaries enrolled in the
eligible organization's plan-and without
any cost to the eligible organization.13 In
the case of a self-insured group health
plan established or maintained by an eli-
gible organization, the 2013 NPRM pre-
sented potential approaches under which
the third party administrator of the plan
would provide or arrange for contracep-
tive coverage to plan participants and ben-
eficiaries.

On August 15, 2012, the Departments
also extended our temporary safe harbor
until the first plan year beginning on or
after August 1, 2013.

The Departments published final regu-
lations on July 2, 2013 (July 2013 final
regulations). (78 FR 39869). The July
2013 final regulations finalized the expan-
sion of the exemption for houses of wor-
ship and their integrated auxiliaries. Al-
though some commenters had suggested
that the exemption be further expanded,
the Departments declined to adopt that
approach. The July 2013 regulations
stated that, because employees of object-
ing houses of worship and integrated aux-
iliaries are relatively likely to oppose con-
traception, exempting those organizations
"does not undermine the governmental in-
terests furthered by the contraceptive cov-
erage requirement." (78 FR 39874). But,
like the 2013 NPRM, the July 2013 regu-
lations assumed that "[h]ouses of worship
and their integrated auxiliaries that object

10See, for example, Comments of the United States Conference of Catholic Bishops on Interim Final Rules on Preventive Services, File Code CMS-9992-IFC2 (Aug. 31, 2011).

11The 2012 final regulations were published on February 15, 2012 (77 FR 8725).

12Guidance on the Temporary Enforcement Safe Harbor for Certain Employers, Group Health Plans, and Group Health Insurance Issuers with Respect to the Requirement to Cover
Contraceptive Services Without Cost Sharing Under section 2713 of the Public Health Service Act, Section 715(a)(1) of the Employee Retirement Income Security Act, and Section
9815(a)(1) of the Internal Revenue Code, issued on February 10, 2012, and reissued on August 15, 2012. Available at: http://www.lb7.uscourts.gov/documents/12cv3932.pdf. The guidance,
as reissued on August 15, 2012, clarified, among other things, that plans that took some action before February 10, 2012, to try, without success, to exclude or limit contraceptive coverage
were not precluded from eligibility for the safe harbor. The temporary enforcement safe harbor was also available to insured student health insurance coverage arranged by nonprofit
institutions of higher education with religious objections to contraceptive coverage that met the conditions set forth in the guidance. See final rule entitled "Student Health Insurance
Coverage" published March 21, 2012 (77 FR 16457).

13The NPRM proposed to treat student health insurance coverage arranged by eligible organizations that are institutions of higher education in a similar manner.

to contraceptive coverage on religious
grounds are more likely than other em-
ployers to employ people of the same faith
who share the same objection" to contra-
ceptives. (Id.)

The July 2013 regulations also final-
ized an accommodation for eligible orga-
nizations. Under the accommodation, an
eligible organization was required to sub-
mit a self-certification to its group health
insurance issuer or third party administra-
tor, as applicable. Upon receiving that
self-certification, the issuer or third party
administrator would provide or arrange
for payments for the contraceptive ser-
vices to the plan participants and benefi-
ciaries enrolled in the eligible organiza-
tion's plan, without requiring any cost
sharing on the part of plan participants
and beneficiaries and without cost to the
eligible organization. With respect to self-
insured plans, the third party administra-
tors (or issuers they contracted with)
could receive reimbursements by reducing
user fee payments (to Federally facilitated
Exchanges) by the amounts paid out for
contraceptive services under the accom-
modation, plus an allowance for certain
administrative costs, as long as the Secre-
tary of the Department of Health and Hu-
man Services requests and an authorizing
exception under OMB Circular No.
A-25R is in effect.14 With respect to fully
insured group health plans, the issuer was
expected to bear the cost of such pay-
ments,15 and HHS intended to clarify in
guidance that the issuer could treat those
payments as an adjustment to claims costs
for purposes of medical loss ratio and risk
corridor program calculations.

With respect to self-insured group
health plans, the July 2013 final regula-
tions specified that the self-certification
was an instrument under which the plan
was operated and that it obligated the
third party administrator to provide or
arrange for contraceptive coverage by
operation of section 3(16) of ERISA.
The regulations stated that, by submit-
ting the self-certification form, the eli-
gible organization "complies" with the
contraceptive coverage requirement and

does not have to contract, arrange, pay,
or refer for contraceptive coverage. See,
for example, Id. at 39874, 39896. Con-
sistent with these statements, the De-
partments, through the Department of
Labor, issued a self-certification form,
EBSA Form 700. The form stated, in
indented text labeled as a "Notice to
Third Party Administrators of Self-
Insured Health Plans," that "[t]he obli-
gations of the third party administrator
are set forth in 26 CFR 54.9815-2713A,
29 CFR 2510.3-16, and 29 CFR
2590.715-2713A" and concluded, in un-
indented text, that "[t]his form is an
instrument under which the plan is op-
erated."

The Departments extended the tempo-
rary safe harbor again on June 20, 2013, to
encompass plan years beginning on or af-
ter August 1, 2013, and before January 1,
2014. The guidance extending the safe
harbor included a form to be used by an
organization during this temporary period
to self-certify that its plan qualified for the
temporary safe harbor if no prior form had
been submitted.

### 4. Litigation Over the Mandate and the Accommodation Process

During the period when the Depart-
ments were publishing and modifying our
regulations, organizations and individuals
filed dozens of lawsuits challenging the
Mandate. Plaintiffs included religious
nonprofit organizations, businesses run by
religious families, individuals, and others.
Religious plaintiffs principally argued that
the Mandate violated the Religious Free-
dom Restoration Act of 1993 (RFRA) by
forcing them to provide coverage or pay-
ments for sterilization and contraceptive
services, including what they viewed as
early abortifacient items, contrary to their
religious beliefs. Based on this claim, in
July 2012 a Federal district court issued a
preliminary injunction barring the Depart-
ments from enforcing the Mandate against
a family-owned business. Newland v.
Sebelius, 881 F. Supp. 2d. 1287 (D. Colo.
2012). Multiple other courts proceeded

to issue similar injunctions against the
Mandate, although a minority of courts
ruled in the Departments' favor. Compare
Tyndale House Publishers, Inc. v. Sebe-
lius, 904 F. Supp. 2d 106 (D.D.C. 2012),
and The Seneca Hardwood Lumber Com-
pany, Inc. v. Sebelius (sub nom Geneva
Coll. v. Sebelius), 941 F. Supp. 2d 672
(W.D. Pa. 2013), with O'Brien v. U.S.
Dep't of Health & Human Servs., 894 F.
Supp. 2d 1149 (E.D. Mo. 2012).

A circuit split swiftly developed in
cases filed by religiously motivated for-
profit businesses, to which neither the re-
ligious employer exemption nor the eligi-
ble organization accommodation (as then
promulgated) applied. Several for-profit
businesses won rulings against the Man-
date before the Unites States Court of
Appeals for the Tenth Circuit, sitting en
banc, while similar rulings against the De-
partments were issued by the Seventh and
District of Columbia (D.C.) Circuits.
Hobby Lobby Stores, Inc. v. Sebelius, 723
F.3d 1114 (10th Cir. 2013); Korte v. Sebe-
lius, 735 F.3d 654 (7th Cir. 2013); Gilardi
v. U.S. Dep't of Health & Human Servs.,
733 F.3d 1208 (D.C. Cir. 2013). The
Third and Sixth Circuits disagreed with
similar plaintiffs, and in November 2013
the U.S. Supreme Court granted certiorari
in Hobby Lobby and Conestoga Wood
Specialties Corp. v. Secretary of U.S. De-
partment of Health & Human Services,
724 F.3d 377 (3d Cir. 2013), to resolve the
circuit split.

On June 30, 2014, the Supreme Court
ruled against the Departments and held
that, under RFRA, the Mandate could not
be applied to the closely held for-profit
corporations before the Court because
their owners had religious objections to
providing such coverage.16 Burwell v.
Hobby Lobby Stores, Inc. 134 S. Ct. 2751
(2014). The Court held that the "contra-
ceptive mandate 'substantially burdens'
the exercise of religion" as applied to em-
ployers that object to providing contracep-
tive coverage on religious grounds, and
that the plaintiffs were therefore entitled
to an exemption unless the Mandate was
the least restrictive means of furthering a

14See also 45 CFR 156.50. Under the regulations, if the third party administrator does not participate in a Federally facilitated Exchange as an issuer, it is permitted to contract with an insurer
which does so participate, in order to obtain such reimbursement. The total contraceptive user fee adjustment for the 2015 benefit year was $33 million.

15"[P]roviding payments for contraceptive services is cost neutral for issuers." (78 FR 39877).

16The Supreme Court did not decide whether RFRA would apply to publicly traded for-profit corporations. See 134 S. Ct. at 2774.

compelling governmental interest. Id. at
2775. The Court observed that, under the
compelling interest test of RFRA, the De-
partments could not rely on interests
"couched in very broad terms, such as
promoting 'public health' and 'gender
equality,' but rather, had to demonstrate
that a compelling interest was served by
refusing an exemption to the "particular
claimant[s]" seeking an exemption. Id. at
2779. Assuming without deciding that a
compelling interest existed, the Court held
that the Government's goal of guarantee-
ing coverage for contraceptive methods
without cost sharing could be achieved in
a less restrictive manner. The Court ob-
served that "[t]he most straightforward
way of doing this would be for the Gov-
ernment to assume the cost of providing
the four contraceptives at issue to any
women who are unable to obtain them
under their health-insurance policies
due to their employers' religious objec-
tions." Id. at 2780. The Court also ob-
served that the Departments had "not
provided any estimate of the average
cost per employee of providing access to
these contraceptives," nor "any statistics
regarding the number of employees who
might be affected because they work for
corporations like Hobby Lobby, Cones-
toga, and Mardel". Id. at 2780-81. But
the Court ultimately concluded that it
"need not rely on the option of a new,
government-funded program in order to
conclude that the HHS regulations fail
the least-restrictive means test" because
"HHS itself ha[d] demonstrated that it
ha[d] at its disposal an approach that is
less restrictive than requiring employers
to fund contraceptive methods that vio-
late their religious beliefs." Id. at 2781-82.
The Court explained that the "already estab-
lished" accommodation process available
to nonprofit organizations was a less-
restrictive alternative that "serve[d] HHS's
stated interests equally well," although the
Court emphasized that its ruling did not
decide whether the accommodation process
"complie[d] with RFRA for purposes of all
religious claims". Id. at 2788-82.

Meanwhile, another plaintiff obtained
temporary relief from the Supreme Court
in a case challenging the accommodation
under RFRA. Wheaton College, a Chris-
tian liberal arts college in Illinois, ob-
jected that the accommodation was a com-

pliance process that rendered it complicit
in delivering payments for abortifacient
contraceptive services to its employees.
Wheaton College refused to execute the
EBSA Form 700 required under the July
2013 final regulations. It was denied a
preliminary injunction in the Federal dis-
trict and appellate courts, and sought an
emergency injunction pending appeal
from the Unites States Supreme Court on
June 30, 2014. On July 3, 2014, the Su-
preme Court issued an interim order in
favor of the College, stating that, "[i]f the
[plaintiff] informs the Secretary of Health
and Human Services in writing that it is a
nonprofit organization that holds itself out
as religious and has religious objections to
providing coverage for contraceptive ser-
vices, the [Departments of Labor, Health
and Human Services, and the Treasury]
are enjoined from enforcing [the Man-
date] against the [plaintiff] ... pending
final disposition of appellate review."
Wheaton College v. Burwell. 134 S. Ct.
2806, 2807 (2014). The order stated that
Wheaton College did not need to use
EBSA Form 700 or send a copy of the
executed form to its health insurance is-
suers or third party administrators to meet
the condition for injunctive relief. Id.

In response to this litigation, on August
27, 2014, the Departments simultaneously
issued a third set of interim final rules
(August 2014 interim final rules) (79 FR
51092), and a notice of proposed rulemak-
ing (August 2014 proposed rules) (79 FR
51118). The August 2014 interim final
rules changed the accommodation process
so that it could be initiated either by self-
certification using EBSA Form 700 or
through a notice informing the Secretary
of the Department of Health and Human
Services that an eligible organization had
religious objections to coverage of all or a
subset of contraceptive services. (79 FR
51092). In response to Hobby Lobby, the
August 2014 proposed rules extended the
accommodation process to closely held
for-profit entities with religious objections
to contraceptive coverage, by including
them in the definition of eligible organi-
zations. (79 FR 51118). Neither the Au-
gust 2014 interim final rules nor the Au-
gust 2014 proposed rules extended the
exemption, and neither added a certifica-
tion requirement for exempt entities.

In October 2014, based on an interpre-
tation of the Supreme Court's interim or-
der, HHS deemed Wheaton College as
having submitted a sufficient notice to
HHS. HHS conveyed that interpretation to
the DOL, so as to trigger the accommo-
dation process.

On July 14, 2015, the Departments fi-
nalized both the August 2014 interim final
rules and the August 2014 proposed rules
in a set of final regulations (the July 2015
final regulations) (80 FR 41318). (The
July 2015 final regulations also encom-
passed issues related to other preventive
services coverage.) The preamble to the
July 2015 final regulations stated that,
through the accommodation, payments for
contraceptives and sterilization would be
provided in a way that is "seamless" with
the coverage that eligible employers pro-
vide to their plan participants and benefi-
ciaries. Id. at 41328. The July 2015 final
regulations allowed eligible organizations
to submit a notice to HHS as an alterna-
tive to submitting the EBSA Form 700,
but specified that such notice must include
the eligible organization's name and an
expression of its religious objection, along
with the plan name, plan type, and name
and contact information for any of the
plan's third party administrators or health
insurance issuers. The Departments indi-
cated that such information represents the
minimum information necessary for us to
administer the accommodation process.

When an eligible organization main-
tains an insured group health plan or stu-
dent health plan and provides the alterna-
tive notice, the July 2015 final regulations
provide that HHS will inform the health
insurance issuer of its obligations to cover
contraceptive services to which the eligi-
ble organization objects. Where an eligi-
ble organization maintains a self-insured
plan under ERISA and provides the alter-
native notice, the regulations provide that
DOL will work with HHS to send a sep-
arate notification to the self-insured plan's
third party administrator(s). The regula-
tions further provide that such notification
is an instrument under which the plan is
operated for the purposes of section 3(16)
of ERISA, and the instrument would des-
ignate the third party administrator as the
entity obligated to provide or arrange for
payments for contraceptives to which the
eligible organization objects. The July

2015 final regulations continue to apply
the amended notice requirement to eligi-
ble organizations that sponsor church
plans exempt from ERISA pursuant to
section 4(b)(2) of ERISA, but acknowl-
edge that, with respect to the operation of
the accommodation process, section 3(16)
of ERISA does not provide a mechanism
to impose an obligation to provide contra-
ceptive coverage as a plan administrator
on those eligible organizations' third party
administrators. (80 FR 41323).

Meanwhile, a second split among Fed-
eral appeals courts had developed involving
challenges to the Mandate's accommoda-
tion. Many religious nonprofit organizations
argued that the accommodation impermissi-
bly burdened their religious beliefs because
it utilized the plans the organizations them-
selves sponsored to provide services to
which they objected on religious grounds.
They objected to the self-certification re-
quirement on the same basis. Federal district
courts split in the cases, granting prelimi-
nary injunction motions to religious groups
in the majority of cases, but denying them to
others. In most appellate cases, religious
nonprofit organizations lost their challenges,
where the courts often concluded that the
accommodation imposed no substantial bur-
den on their religious exercise under RFRA.
For example, Priests for Life v. U.S. Dep't
of Health and Human Servs., 772 F. 3d 229
(D.C. Cir. 2014); Little Sisters of the Poor
Home for the Aged v. Burwell, 794 F.3d
1151 (10th Cir. 2015); Geneva Coll. v. Sec'y
U.S. Dep't of Health & Human Servs., 778
F.3d 422 (3d Cir. 2015). But the Eighth
Circuit disagreed and ruled in favor of reli-
gious nonprofit employers. Dordt College v.
Burwell, 801 F.3d 946, 949-50 (8th Cir.
2015) (relying on Sharpe Holdings, Inc. v.
U.S. Dep't of Health & Human Servs., 801
F.3d 927 (8th Cir. 2015)).

On November 6, 2015, the U.S. Su-
preme Court granted certiorari in seven
similar cases under the title of a filing
from the Third Circuit, Zubik v. Burwell.
The Court held oral argument on March
23, 2016, and, after the argument, asked
the parties to submit supplemental briefs
addressing "whether and how contracep-
tive coverage may be obtained by peti-
tioners' employees through petitioners'

insurance companies, but in a way that
does not require any involvement of peti-
tioners beyond their own decision to pro-
vide health insurance without contracep-
tive coverage to their employees". In a
brief filed with the Supreme Court on
April 12, 2016, the Government stated on
behalf of the Departments that the accom-
modation process for eligible organiza-
tions with insured plans could operate
without any self-certification or written
notice being submitted by eligible organi-
zations.

On May 16, 2016, the Supreme Court
issued a per curiam opinion in Zubik, va-
cating the judgments of the Courts of Ap-
peals and remanding the cases "in light of
the substantial clarification and refinement
in the positions of the parties" in their
supplemental briefs. (136 S. Ct. 1557,
1560 (2016).) The Court stated that it an-
ticipated that, on remand, the Courts of
Appeals would "allow the parties suffi-
cient time to resolve any outstanding is-
sues between them." Id. The Court also
specified that "the Government may not
impose taxes or penalties on petitioners
for failure to provide the relevant notice"
while the cases remained pending. Id. at
1561.

After remand, as indicated by the De-
partments in court filings, some meetings
were held between attorneys for the Gov-
ernment and for the plaintiffs in those
cases. Separately, at various times after
the Supreme Court's remand order, HHS
and DOL sent letters to the issuers and
third party administrators of certain plain-
tiffs in Zubik and other pending cases,
directing the issuers and third party ad-
ministrators to provide contraceptive cov-
erage for participants in those plaintiffs'
group health plans under the accommoda-
tion. The Departments also issued a Re-
quest for Information (RFI) on July 26,
2016, seeking public comment on options
for modifying the accommodation process
in light of the supplemental briefing in
Zubik and the Supreme Court's remand
order. (81 FR 47741). Public comments
were submitted in response to the RFI,
during a comment period that closed on
September 20, 2016.

On December 20, 2016, HRSA up-
dated the Guidelines via its website,
https://www.hrsa.gov/womensguidelines
2016/index.html. HRSA announced that,
for plans subject to the Guidelines, the up-
dated Guidelines would apply to the first
plan year beginning after December 20,
2017. Among other changes, the updated
Guidelines specified that the required con-
traceptive coverage includes follow-up care
(for example, management and evaluation,
as well as changes to, and removal or dis-
continuation of, the contraceptive method).
They also specified that coverage should
include instruction in fertility awareness-
based methods for women desiring an alter-
native method of family planning. HRSA
stated that, with the input of a committee
operating under a cooperative agreement,
HRSA would review and periodically up-
date the Women's Preventive Services'
Guidelines. The updated Guidelines did not
alter the religious employer exemption or
accommodation process.

On January 9, 2017, the Departments
issued a document entitled, "FAQs About
Affordable Care Act Implementation Part
36" (FAQ).17 The FAQ stated that, after
reviewing comments submitted in re-
sponse to the 2016 RFI and considering
various options, the Departments could
not find a way at that time to amend the
accommodation so as to satisfy objecting
eligible organizations while pursuing the
Departments' policy goals. Thus, the liti-
gation on remand from the Supreme Court
remains unresolved.

A separate category of unresolved liti-
gation involved religious employees as
plaintiffs. For example, in two cases, the
plaintiff-employees work for a nonprofit
organization that agrees with the employ-
ees (on moral grounds) in opposing cov-
erage of certain contraceptives they be-
lieve to be abortifacient, and that is
willing to offer them insurance coverage
that omits such services. See March for
Life v. Burwell, 128 F. Supp. 3d 116
(D.D.C. 2015); Real Alternatives, 150 F.
Supp. 3d 419, affirmed by 867 F.3d 338
(3d Cir. 2017). In another case, the
plaintiff-employees work for a State gov-
ernment entity that the employees claim is
willing, under State law, to provide a plan

17Available at: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-36.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-
FAQs/Downloads/ACA-FAQs-Part36_1-9-17-Final.pdf.

omitting contraception consistent with the
employees' religious beliefs. See Wieland
v. HHS, 196 F. Supp. 3d 1010 (E.D. Mo.
2016). Those and similar employee-
plaintiffs generally contend that the Man-
date violates their rights under RFRA by
making it impossible for them to obtain
health insurance consistent with their re-
ligious beliefs, either from their willing
employer or in the individual market, be-
cause the Departments offer no exemp-
tions encompassing either circumstance.
Such challenges have seen mixed success.
Compare, for example, Wieland, 196 F.
Supp. 3d at 1020 (concluding that the
Mandate violates the employee plaintiffs'
rights under RFRA and permanently en-
joining the Departments) and March for
Life, 128 F. Supp. 3d at 133-34 (same),
with Real Alternatives, 2017 WL 3324690
at *18 (affirming dismissal of employee
plaintiffs' RFRA claim).

On May 4, 2017, the President issued
an "Executive Order Promoting Free
Speech and Religious Liberty." Regarding
"Conscience Protections with Respect to
Preventive-Care Mandate," that order in-
structs "[t]he Secretary of the Treasury,
the Secretary of Labor, and the Secre-
tary of Health and Human Services [to]
consider issuing amended regulations,
consistent with applicable law, to ad-
dress conscience-based objections to the
preventive-care mandate promulgated
under section 300gg-13(a)(4) of title 42,
United States Code."

### II. RFRA and Government Interests Underlying the Mandate

RFRA provides that the Government
"shall not substantially burden a person's
exercise of religion even if the burden
results from a rule of general applicabil-
ity" unless the Government "demonstrates
that application of the burden to the per-
son-(1) is in furtherance of a compelling
governmental interest; and (2) is the least
restrictive means of furthering that com-
pelling governmental interest." 42 U.S.C.
2000bb-1(a) and (b). In Hobby Lobby, the
Supreme Court had "little trouble conclud-
ing" that, in the absence of an accommoda-
tion or exemption, "the HHS contraceptive
mandate 'substantially burden[s]' the exer-
cise of religion. 42 U.S.C. 2000bb-1(a)."
134 S. Ct. at 2775. And although the Su-
preme Court did not resolve the RFRA

claims presented in Zubik on their merits, it
instructed the parties to consider alternative
accommodations for the objecting plaintiffs,
after the Government suggested that such
alternatives might be possible.

Despite multiple rounds of rulemaking,
however, the Departments have not as-
suaged the sincere religious objections to
contraceptive coverage of numerous organi-
zations, nor have we resolved the pending
litigation. To the contrary, the Departments
have been litigating RFRA challenges to the
Mandate and related regulations for more
than 5 years, and dozens of those challenges
remain pending today. That litigation, and
the related modifications to the accommo-
dation, have consumed substantial govern-
mental resources while creating uncertainty
for objecting organizations, issuers, third
party administrators, employees, and bene-
ficiaries. Consistent with the President's Ex-
ecutive Order and the Government's desire
to resolve the pending litigation and prevent
future litigation from similar plaintiffs, the
Departments have concluded that it is ap-
propriate to reexamine the exemption and
accommodation scheme currently in place
for the Mandate.

These interim final rules (and the com-
panion interim final rules published else-
where in this Federal Register) are the
result of that reexamination. The Depart-
ments acknowledge that coverage of con-
traception is an important and highly sen-
sitive issue, implicating many different
views, as reflected in the comments re-
ceived on multiple rulemakings over the
course of implementation of section
2713(a)(4) of the PHS Act. After recon-
sidering the interests served by the Man-
date in this particular context, the objec-
tions raised, and the applicable Federal
law, the Departments have determined
that an expanded exemption, rather than
the existing accommodation, is the most
appropriate administrative response to the
religious objections raised by certain en-
tities and organizations concerning the
Mandate. The Departments have accord-
ingly decided to revise the regulations
channeling HRSA authority under section
2713(a)(4) of the PHS to provide an ex-
emption from the Mandate to a broader
range of entities and individuals that ob-
ject to contraceptive coverage on religious
grounds, while continuing to offer the ex-
isting accommodation as an optional al-

ternative. The Departments have also de-
cided to create a process by which a
willing employer and issuer may allow an
objecting individual employee to obtain
health coverage without contraceptive cov-
erage. These interim final rules leave
unchanged HRSA's authority to decide
whether to include contraceptives in the
women's preventive services Guidelines for
entities that are not exempted by law, reg-
ulation, or the Guidelines. These rules
also do not change the many other mech-
anisms by which the Government ad-
vances contraceptive coverage, particu-
larly for low-income women.

In addition to relying on the text of
section 2713(a)(4) of the PHS Act and the
Departments' discretion to promulgate
rules to carry out the provisions of the
PHS Act, the Departments also draw on
Congress' decision in the Affordable Care
Act neither to specify that contraception
must be covered nor to require inflexible
across-the-board application of section
2713 of the PHS Act. The Departments
further consider Congress' extensive his-
tory of protecting religious objections
when certain matters in health care are
specifically regulated-often specifically
with respect to contraception, steriliza-
tion, abortion, and activities connected to
abortion.

Notable among the many statutes (listed
in footnote 1 in Section I-Background) that
include protections for religious beliefs are,
not only the Church Amendments, but also
protections for health plans or health care
organizations in Medicaid or Medicare Ad-
vantage to object “on moral or religious
grounds" to providing coverage of certain
counseling or referral services. (42 U.S.C.
1395w-22(j)(3)(B); 42 U.S.C. 1396u-
2(b)(3)). In addition, Congress has protected
individuals who object to prescribing or pro-
viding contraceptives contrary to their reli-
gious beliefs. Consolidated Appropriations
Act of 2017, Division C, Title VII, Sec.
726(c) (Financial Services and General
Government Appropriations Act), Pub. L.
No. 115-31 (May 5, 2017). Congress like-
wise provided that, if the District of Colum-
bia requires "the provision of contraceptive
coverage by health insurance plans," "it is
the intent of Congress that any legislation
enacted on such issue should include a 'con-
science clause' which provides exceptions
for religious beliefs and moral convictions".

Id. at Division C, Title VIII, Sec. 808. In
light of the fact that Congress did not re-
quire HRSA to include contraception in
Guidelines issued under section 2713 of the
PHS Act, we consider it significant, in sup-
port of the implementation of those Guide-
lines by the expanded exemption in these
interim final rules, that Congress' most re-
cent statement on the prospect of Govern-
ment mandated contraceptive coverage was
to express the specific intent that a con-
science clause be provided and that it should
protect religious beliefs.

The Departments' authority to guide
HRSA's discretion in determining the
scope of any contraceptive coverage re-
quirement under section 2713(a)(4) of the
PHS Act includes the authority to provide
exemptions and independently justifies
this rulemaking. The Departments have
also determined that requiring certain ob-
jecting entities or individuals to choose
between the Mandate, the accommoda-
tion, or penalties for noncompliance vio-
lates their rights under RFRA.

#### A. Elements of RFRA

##### 1. Substantial Burden

The Departments believe that agencies
charged with administering a statute or
associated regulations or guidance that
imposes a substantial burden on the exer-
cise of religion under RFRA have discre-
tion in determining how to avoid the im-
position of such burden. The Departments
have previously contended that the Man-
date does not impose a substantial burden
on entities and individuals. With respect
to the coverage Mandate itself, apart from
the accommodation, and as applied to en-
tities with religious objections, our argu-
ment was rejected in Hobby Lobby, which
held that the Mandate imposes a substan-
tial burden. (134 S. Ct. at 2775-79.) With
respect to whether the Mandate imposes a
substantial burden on entities that may
choose the accommodation, but must
choose between the accommodation, the
Mandate, or penalties for noncompliance,
a majority of Federal appeals courts have
held that the accommodation does not im-
pose a substantial burden on such entities
(mostly religious nonprofit entities).

The Departments have reevaluated our
position on this question, however, in

light of all the arguments made in various
cases, public comments that have been
submitted, and the concerns discussed
throughout these rules. We have con-
cluded that requiring certain objecting en-
tities or individuals to choose between the
Mandate, the accommodation, or penal-
ties for noncompliance imposes a sub-
stantial burden on religious exercise un-
der RFRA. We believe that the Court's
analysis in Hobby Lobby extends, for
the purposes of analyzing a substantial
burden, to the burdens that an entity
faces when it religiously opposes partic-
ipating in the accommodation process or
the straightforward Mandate, and is sub-
ject to penalties or disadvantages that
apply in this context if it chooses nei-
ther. As the Eighth Circuit stated in
Sharpe Holdings, "[i]n light of [non-
profit religious organizations'] sincerely
held religious beliefs, we conclude that
compelling their participation in the ac-
commodation process by threat of se-
vere monetary penalty is a substantial
burden on their exercise of religion. . ..
That they themselves do not have to
arrange or pay for objectionable contra-
ceptive coverage is not determinative of
whether the required or forbidden act is
or is not religiously offensive". (801
F.3d at 942.)

Our reconsideration of these issues has
also led us to conclude, consistent with the
rulings in favor of religious employee
plaintiffs in Wieland and March for Life
cited above, that the Mandate imposes a
substantial burden on the religious beliefs
of individual employees who oppose con-
traceptive coverage and would be able to
obtain a plan that omits contraception
from a willing employer or issuer (as ap-
plicable), but cannot obtain one solely be-
cause of the Mandate's prohibition on that
employer and/or issuer providing them
with such a plan.

Consistent with our conclusion earlier
this year after the remand of cases in Zu-
bik and our reviewing of comments sub-
mitted in response to the 2016 RFI, the
Departments believe there is not a way to
satisfy all religious objections by amend-
ing the accommodation. Accordingly, the
Departments have decided it is necessary
and appropriate to provide the expanded
exemptions set forth herein.

##### 2. Compelling Interest

Although the Departments previously
took the position that the application of
the Mandate to certain objecting employ-
ers was necessary to serve a compelling
governmental interest, the Departments
have now concluded, after reassessing the
relevant interests and for the reasons
stated below, that it does not. Under such
circumstances, the Departments are re-
quired by law to alleviate the substantial
burden created by the Mandate. Here, in-
formed by the Departments' reassessment
of the relevant interests, as well as by our
desire to bring to a close the more than 5
years of litigation over RFRA challenges
to the Mandate, the Departments have de-
termined that the appropriate administra-
tive response is to create a broader exemp-
tion, rather than simply adjusting the
accommodation process.

RFRA requires the Government to re-
spect religious beliefs under "the most
demanding test known to constitutional
law": where the Government imposes a
substantial burden on religious exercise, it
must demonstrate a compelling govern-
mental interest and show that the law or
requirement is the least restrictive means
of furthering that interest. City of Boerne
v. Flores, 521 U.S. 507, 534 (1997). For
an interest to be compelling, its rank must
be of the "highest order". Church of the
Lukumi Babalu Aye, Inc. v. City of Hia-
leah, 508 U.S. 520, 546 (1993); see also
Sherbert v. Verner, 374 U.S. 398, 406-09
(1963); Wisconsin v. Yoder, 406 U.S. 205,
221-29 (1972). In applying RFRA, the
Supreme Court has "looked beyond
broadly formulated interests justifying the
general applicability of government man-
dates and scrutinized the asserted harm of
granting specific exemptions to particular
religious claimants." Gonzales v. O Cen-
tro Espirita Beneficente Uniao do Vegetal,
546 U.S. 418, 431 (2006). To justify a
substantial burden on religious exercise
under RFRA, the Government must show it
has a compelling interest in applying the
requirement to the "particular claimant[s]
whose sincere exercise of religion is being
substantially burdened." Id. at 430-31.
Moreover, the Government must meet the
"exceptionally demanding" least-restrictive-
means standard. Hobby Lobby, 134 S. Ct. at
2780. Under that standard, the Government

must establish that "it lacks other means of
achieving its desired goal without imposing
a substantial burden on the exercise of reli-
gion by the objecting parties." Id.

Upon further examination of the rele-
vant provisions of the Affordable Care
Act and the administrative record on
which the Mandate was based, the Depart-
ments have concluded that the application
of the Mandate to entities with sincerely
held religious objections to it does not
serve a compelling governmental interest.
The Departments have reached that con-
clusion for multiple reasons, no one of
which is dispositive.

First, Congress did not mandate that
contraception be covered at all under the
Affordable Care Act. Instead, Congress
merely provided for coverage of “such
additional preventive care and screenings"
for women "provided for in comprehen-
sive guidelines supported by [HRSA]."
Congress, thus, left the identification of
any additional required preventive ser-
vices for women to administrative discre-
tion. The fact that Congress granted the
Departments the authority to promulgate
all rules appropriate and necessary for the
administration of the relevant provisions
of the Code, ERISA, and the PHS Act,
including by channeling the discretion
Congress afforded to HRSA to decide
whether to require contraceptive cover-
age, indicates that the Departments' judg-
ment should carry particular weight in
considering the relative importance of the
Government's interest in applying the
Mandate to the narrow population of en-
tities exempted in these rules.

Second, while Congress specified that
many health insurance requirements
added by the Affordable Care Act-in-
cluding provisions adjacent to section
2713 of the PHS Act-were so important
that they needed to be applied to all health
plans immediately, the preventive ser-
vices requirement in section 2713 of the
PHS Act was not made applicable to
"grandfathered plans." That feature of the
Affordable Care Act is significant: as
cited above, seven years after the Afford-
able Care Act's enactment, approximately
25.5 million people are estimated to be
enrolled in grandfathered plans not sub-
ject to section 2713 of the PHS Act. We
do not suggest that a requirement that is
inapplicable to grandfathered plans or oth-

erwise subject to exceptions could never
qualify as a serving a compelling interest
under RFRA. For example, "[e]ven a
compelling interest may be outweighed in
some circumstances by another even
weightier consideration." Hobby Lobby,
134 S. Ct. at 2780. But Congress' decision
not to apply section 2713 of the PHS Act
to grandfathered plans, while deeming
other requirements closely associated in
the same statute as sufficiently important
to impose immediately, is relevant to our
assessment of the importance of the Gov-
ernment interests served by the Mandate.
As the Departments observed in 2010,
those immediately applicable require-
ments were "particularly significant."
(75 FR 34540). Congress' decision to
leave section 2713 out of that category
informs the Departments' assessment of
the weight of the Government's interest in
applying the Guidelines issued pursuant to
section 2713 of the PHS Act to religious
objectors.

Third, various entities that brought le-
gal challenges to the Mandate (including
some of the largest employers) have been
willing to provide coverage of some,
though not all, contraceptives. For exam-
ple, the plaintiffs in Hobby Lobby were
willing to provide coverage with no cost
sharing of 14 of 18 FDA-approved wom-
en's contraceptive and sterilization meth-
ods. (134 S. Ct. at 2766.) With respect to
organizations and entities holding those
beliefs, the fact that they are willing to
provide coverage for various contracep-
tive methods significantly detracts from
the government interest in requiring that
they provide coverage for other contra-
ceptive methods to which they object.

Fourth, the case for a compelling inter-
est is undermined by the existing accom-
modation process, and how it applies to
certain similarly situated entities based on
whether or not they participate in certain
self-insured group health plans, known as
church plans, under applicable law. The
Departments previously exempted eligible
organizations from the contraceptive cov-
erage requirement, and created an accom-
modation under which those organizations
bore no obligation to provide for such cov-
erage after submitting a self-certification or
notice. Where a non-exempt religious orga-
nization uses an insured group health plan
instead of a self-insured church plan, the

health insurance issuer would be obliged to
provide contraceptive coverage or payments
to the plan's participants under the accom-
modation. Even in a self-insured church
plan context, the preventive services re-
quirement in section 2713(a)(4) of the PHS
Act applies to the plan, and through the
Code, to the religious organization that
sponsors the plan. But under the accommo-
dation, once a self-insured church plan files
a self-certification or notice, the accommo-
dation relieves it of any further obligation
with respect to contraceptive services cov-
erage. Having done so, the accommodation
process would normally transfer the obliga-
tion to provide or arrange for contraceptive
coverage to a self-insured plan's third party
administrator (TPA). But the Departments
lack authority to compel church plan TPAs
to provide contraceptive coverage or levy
fines against those TPAs for failing to pro-
vide it. This is because church plans are
exempt from ERISA pursuant to section
4(b)(2) of ERISA. Section 2761(a) of the
PHS Act provides that States may enforce
the provisions of title XXVII of the PHS
Act as they pertain to issuers, but not as they
pertain to church plans that do not provide
coverage through a policy issued by a health
insurance issuer. The combined result of
PHS Act section 2713's authority to remove
contraceptive coverage obligations from
self-insured church plans, and HHS's and
DOL's lack of authority under the PHS Act
or ERISA to require TPAs to become ad-
ministrators of those plans to provide such
coverage, has led to significant incongruity
in the requirement to provide contraceptive
coverage among nonprofit organizations
with religious objections to the coverage.

More specifically, issuers and third
party administrators for some, but not all,
religious nonprofit organizations are sub-
ject to enforcement for failure to provide
contraceptive coverage under the accom-
modation, depending on whether they par-
ticipate in a self-insured church plan. Nota-
bly, many of those nonprofit organizations
are not houses of worship or integrated
auxiliaries. Under section 3(33)(C)(iv) of
ERISA, many organizations in self-insured
church plans need not be churches, but can
merely "share[] common religious bonds
and convictions with [a] church or conven-
tion or association of churches". The effect
is that many similar religious organizations
are being treated very differently with re-

spect to their employees receiving contra-
ceptive coverage-depending on whether
the organization is part of a church plan-
even though the Departments claimed a
compelling interest to deny exemptions to
all such organizations. In this context, the
fact that the Mandate and the Departments'
application thereof "leaves appreciable
damage to [their] supposedly vital interest
unprohibited" is strong evidence that the
Mandate "cannot be regarded as protecting
an interest 'of the highest order." Lukumi,
508 U.S. at 520 (citation and quotation
marks omitted).

Fifth, the Departments' previous asser-
tion that the exemption for houses of wor-
ship was offered to respect a certain
sphere of church autonomy (80 FR 41325)
does not adequately explain some of the
disparate results of the existing rules. And
the desire to respect church autonomy is
not grounds to prevent the Departments
from expanding the exemption to other
religious entities. The Departments previ-
ously treated religious organizations that
operate in a similar fashion very differ-
ently for the purposes of the Mandate.
For example, the Departments exempted
houses of worship and integrated auxilia-
ries that may conduct activities, such as
the operating of schools, that are also con-
ducted by non-exempt religious nonprofit
organizations. Likewise, among religious
nonprofit groups that were not exempt as
houses of worship or integrated auxilia-
ries, many operate their religious activities
similarly even if they differ in whether
they participate in self-insured church
plans. As another example, two religious
colleges might have the same level of
religiosity and commitment to defined
ideals, but one might identify with a spe-
cific large denomination and choose to be
in a self-insured church plan offered by
that denomination, while another might
not be so associated or might not have as
ready access to a church plan and so might
offer its employees a fully insured health
plan. Under the accommodation, employ-
ees of the college using a fully insured
plan (or a self-insured plan that is not a

church plan) would receive coverage of
contraceptive services without cost shar-
ing, while employees of the college par-
ticipating in the self-insured church plan
would not receive the coverage where that
plan required its third party administrator
to not offer the coverage.

As the Supreme Court recently con-
firmed, a self-insured church plan exempt
from ERISA through ERISA 3(33) can
include a plan that is not actually estab-
lished or maintained by a church or by a
convention or association of churches, but
is maintained by "an organization . . . the
principal purpose or function of which is
the administration or funding of a plan or
program for the provision of retirement
benefits or welfare benefits, or both, for
the employees of a church or a convention
or association of churches, if such organi-
zation is controlled by or associated with a
church or a convention or association of
churches" (a so-called "principal-purpose
organization"). See Advocate Health Care
Network v. Stapleton, 137 S. Ct. 1652,
1656-57 (U.S. June 5, 2017); ERISA
3(33)(C). While the Departments take no
view on the status of these particular
plans, the Departments acknowledge that
the church plan exemption not only in-
cludes some non-houses-of-worship as or-
ganizations whose employees can be cov-
ered by the plan, but also, in certain
circumstances, may include plans that are
not themselves established and main-
tained by houses of worship. Yet, such
entities and plans-if they file a self-
certification or notice through the existing
accommodation-are relieved of obliga-
tions under the contraceptive Mandate and
their third party administrators are not
subject to a requirement that they provide
contraceptive coverage to their plan par-
ticipants and beneficiaries.

After considering the differential treat-
ment of various religious nonprofit orga-
nizations under the previous accommoda-
tion, the Departments conclude that it is
appropriate to expand the exemption to
other religious nonprofit organizations
with sincerely held religious beliefs op-

posed to contraceptive coverage. We also
conclude that it is not appropriate to limit
the scope of a religious exemption by re-
lying upon a small minority of State laws
that contain narrow exemptions that focus
on houses of worship and integrated aux-
iliaries. (76 FR 46623.)

Sixth, the Government's interest in en-
suring contraceptive coverage for employ-
ees of particular objecting employers is
undermined by the characteristics of many
of those employers, especially nonprofit
employers. The plaintiffs challenging the
existing accommodation include, among
other organizations, religious colleges and
universities, and religious orders that pro-
vide health care or other charitable ser-
vices. Based in part on our experience
litigating against such organizations, the
Departments now disagree with our pre-
vious assertion that "[h]ouses of worship
and their integrated auxiliaries that object
to contraceptive coverage on religious
grounds are more likely than other em-
ployers to employ people of the same faith
who share the same objection."18 (78 FR
39874.) Although empirical data was not
required to reach our previous conclusion,
we note that the conclusion was not sup-
ported by any specific data or other
source, but instead was intended to be a
reasonable assumption. Nevertheless, in
the litigation and in numerous public com-
ments submitted throughout the regula-
tory processes described above, many
religious nonprofit organizations have in-
dicated that they possess deep religious
commitments even if they are not houses
of worship or their integrated auxiliaries.
Some of the religious nonprofit groups
challenging the accommodation claim that
their employees are required to adhere to a
statement of faith which includes the en-
tities' views on certain contraceptive
items.19 The Departments recognize, of
course, that not all of the plaintiffs chal-
lenging the accommodation require all of
their employees (or covered students) to
share their religious objections to contra-
ceptives. At the same time, it has become
apparent from public comments and from

18In changing its position, an agency "need not demonstrate to a court's satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new
policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates." FCC v.
Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).

19See, for example, Geneva College v. Sebelius, 929 F. Supp. 2d 402, 411 (W.D. Pa. 2013); Grace Schools v. Sebelius, 988 F. Supp. 2d 935, 943 (N.D. Ind. 2013); Comments of the Council
for Christian Colleges & Universities, re: CMS-9968-P (filed Apr. 8, 2013) ("On behalf of [] 172 higher education institutions. . . a requirement for membership in the CCCU is that full-time
administrators and faculty at our institutions share the Christian faith of the institution.").

court filings in dozens of cases-encom-
passing hundreds of organizations-that
many religious nonprofit organizations
express their beliefs publicly and hold
themselves out as organizations for whom
their religious beliefs are vitally impor-
tant. Employees of such organizations,
even if not required to sign a statement of
faith, often have access to, and knowledge
of, the views of their employers on con-
traceptive coverage, whether through the
organization's published mission state-
ment or statement of beliefs, through em-
ployee benefits disclosures and other
communications with employees and pro-
spective employees, or through publicly
filed lawsuits objecting to providing such
coverage and attendant media coverage.
In many cases, the employees of religious
organizations will have chosen to work
for those organizations with an under-
standing-explicit or implicit-that they
were being employed to advance the or-
ganization's goals and to be respectful of
the organization's beliefs even if they do
not share all of those beliefs. Religious
nonprofit organizations that engage in ex-
pressive activity generally have a First
Amendment right of expressive association
and religious free exercise to choose to hire
persons (or, in the case of students, to admit
them) based on whether they share, or at
least will be respectful of, their beliefs.20

Given the sincerely held religious be-
liefs of many religious organizations,
imposing the contraceptive-coverage re-
quirement on those that object based on
such beliefs might undermine the Govern-
ment's broader interests in ensuring health
coverage by causing the entities to stop
providing health coverage. For example,
because the Affordable Care Act does not
require institutions of higher education to
arrange student coverage, some institutions
of higher education that object to the Man-
date appear to have chosen to stop arranging

student plans rather than comply with the
Mandate or be subject to the accommoda-
tion with respect to such populations.21

Seventh, we now believe the adminis-
trative record on which the Mandate rests
is insufficient to meet the high threshold
to establish a compelling governmental
interest in ensuring that women covered
by plans of objecting organizations re-
ceive cost-free contraceptive coverage
through those plans. To begin, in support
of the IOM's recommendations, which
HRSA adopted, the IOM identified sev-
eral studies showing a preventive services
gap because women require more preven-
tive care than men. (IOM 2011 at 19-21).
Those studies did not identify contracep-
tives or sterilization as composing a spe-
cific portion of that gap, and the IOM did
not consider or establish in the report
whether any cost associated with that gap
remains after all other women's preven-
tive services are covered without cost-
sharing. Id. Even without knowing what
the empirical data would show about that
gap, the coverage of the other women's
preventive services required under both
the HRSA Guidelines and throughout sec-
tion 2713(a) of the PHS Act-including
annual well-woman visits and a variety of
tests, screenings, and counseling servic-
es-serves at a minimum to diminish the
cost gap identified by IOM for women
whose employers decline to cover some or
all contraceptives on religious grounds.22

Moreover, there are multiple Federal,
State, and local programs that provide free
or subsidized contraceptives for low-
income women. Such Federal programs
include, among others, Medicaid (with a
90 percent Federal match for family plan-
ning services), Title X, community health
center grants, and Temporary Assistance for
Needy Families. According to the Guttm-
acher Institute, government-subsidized fam-
ily planning services are provided at 8,409

health centers overall.23 The Title X pro-
gram, for example, administered by the
HHS Office of Population Affairs (OPA),
provides a wide variety of voluntary family
planning information and services for cli-
ents based on their ability to pay, through a
network that includes nearly 4,000 family
planning centers. http://www.hhs.gov/opa/
title-x-family-planning/ Individuals with
family incomes at or below the HHS pov-
erty guideline (for 2017, $24,600 for a fam-
ily of four in the 48 contiguous States and
the District of Columbia) receive services at
no charge unless a third party (governmental
or private) is authorized or obligated to pay
for these services. Individuals with incomes
in excess of 100 percent up to 250 percent of
the poverty guideline are charged for ser-
vices using a sliding fee scale based on
family size and income. Unemancipated mi-
nors seeking confidential services are as-
sessed fees based on their own income level
rather than their family's income. The avail-
ability of such programs to serve the most
at-risk women (as defined in the IOM re-
port) diminishes the Government's interest
in applying the Mandate to objecting em-
ployers. Many forms of contraception are
available for around $50 per month, includ-
ing long-acting methods such as the
birth control shot and intrauterine de-
vices (IUDs).24 Other, more permanent
forms of contraception like implantables
bear a higher one-time cost, but when
calculated over the duration of use, cost
a similar amount.25 Various State pro-
grams supplement the Federal programs
referenced above, and 28 States have
their own mandates of contraceptive
coverage as a matter of State law. This
existing inter-governmental structure
for obtaining contraceptives signifi-
cantly diminishes the Government's in-
terest in applying the Mandate to em-
ployers over their sincerely held
religious objections.

20Notably, "the First Amendment simply does not require that every member of a group agree on every issue in order for the group's policy to be 'expressive association." Boy Scouts of
America v. Dale, 530 U.S. 640, 655 (2000).

21See, for example, Manya Brachear Pashman, "Wheaton College ends coverage amid fight against birth control mandate," Chicago Tribune (July 29, 2015); Laura Bassett, "Franciscan
University Drops Entire Student Health Insurance Plan Over Birth Control Mandate," HuffPost (May 15, 2012).

22The Departments are not aware of any objectors to the contraceptive Mandate that are unwilling to cover any of the other preventive services without cost sharing as required by PHS
Act section 2713.

23"Facts on Publicly Funded Contraceptive Services in the United States," March 2016.

24See, for example, Caroline Cunningham, "How Much Will Your Birth Control Cost Once the Affordable Care Act Is Repealed?" Washingtonian (Jan. 17, 2017), available at
https://www.washingtonian.com/2017/01/17/how-much-will-your-birth-control-cost-once-the-affordable-care-act-is-repealed/; also, see https://www.plannedparenthood.org/learn/birth-
control.

25 Id.

The record also does not reflect that the
Mandate is tailored to the women most
likely to experience unintended preg-
nancy, identified by the 2011 IOM report
as "women who are aged 18 to 24 years
and unmarried, who have a low income,
who are not high school graduates, and
who are members of a racial or ethnic
minority". (IOM 2011 at 102). For exam-
ple, with respect to religiously objecting
organizations, the Mandate applies in
employer-based group health plans and
student insurance at private colleges and
universities. It is not clear that applying
the Mandate among those objecting enti-
ties is a narrowly tailored way to benefit
the most at-risk population. The entities
appear to encompass some such women,
but also appear to omit many of them and
to include a significantly larger cross-
section of women as employees or plan
participants. At the same time, the Man-
date as applied to objecting employers
appears to encompass a relatively small
percentage of the number of women im-
pacted by the Mandate overall, since most
employers do not appear to have consci-
entious objections to the Mandate.26 The
Guttmacher Institute, on which the IOM
relied, further reported that 89 percent of
women who are at risk of unintended
pregnancy and are living at 0 through 149
percent of the poverty line are already

using contraceptives, as are 92 percent of
those with incomes of 300 percent or
more of the Federal poverty level.27

The rates of-and reasons for-unin-
tended pregnancy are notoriously difficult
to measure.28 In particular, association
and causality can be hard to disentangle,
and the studies referred to by the 2011
IOM Report speak more to association
than causality. For example, IOM 2011
references Boonstra, et al. (2006), as find-
ing that, "as the rate of contraceptive use
by unmarried women increased in the
United States between 1982 and 2002,
rates of unintended pregnancy and abortion
for unmarried women also declined,"29 and
Santelli and Melnikas as finding that "in-
creased rates of contraceptive use by ado-
lescents from the early 1990s to the early
2000s was associated with a decline in teen
pregnancies and that periodic increases in
the teen pregnancy rate are associated with
lower rates of contraceptive use". IOM 2011
at 105.30 In this respect, the report does not
show that access to contraception causes
decreased incidents of unintended preg-
nancy, because both of the assertions rely on
association rather than causation, and they
associate reduction in unintended pregnancy
with increased use of contraception, not
merely with increased access to such con-
traceptives.

Similarly, in a study involving over
8,000 women between 2012 and 2015,
conducted to determine whether contra-
ceptive coverage under the Mandate
changed contraceptive use patterns, the
Guttmacher Institute concluded that "[w]e
observed no changes in contraceptive use
patterns among sexually active women."31
With respect to teens, the Santelli and
Melnikas study cited by IOM 2011 ob-
serves that, between 1960 and 1990, as
contraceptive use increased, teen sexual
activity outside of marriage likewise in-
creased (although the study does not
assert a causal relationship).32 Another
study, which proposed an economic
model for the decision to engage in sexual
activity, stated that "[p]rograms that in-
crease access to contraception are found
to decrease teen pregnancies in the short
run but increase teen pregnancies in the
long run."33 Regarding emergency contra-
ception in particular, "[i]ncreased access
to emergency contraceptive pills enhances
use but has not been shown to reduce
unintended pregnancy rates."34 In the lon-
ger term-from 1972 through 2002-
while the percentage of sexually experi-
enced women who had ever used some
form of contraception rose to 98 per-
cent,35 unintended pregnancy rates in the
Unites States rose from 35.4 percent36 to
49 percent."37 The Departments note

26Prior to the implementation of the Affordable Care Act approximately 6 percent of employer survey respondents did not offer contraceptive coverage, with 31 percent of respondents not
knowing whether they offered such coverage Kaiser Family Foundation & Health Research & Educational Trust, "Employer Health Benefits, 2010 Annual Survey" at 196, available at
https://kaiserfamilyfoundation.files.wordpress.com/2013/04/8085.pdf. It is not clear whether the minority of employers who did not cover contraception refrained from doing so for
conscientious reasons or for other reasons. Estimates of the number of women who might be impacted by the exemptions offered in these rules, as compared to the total number of women
who will likely continue to receive contraceptive coverage, is discussed in more detail below.

27"Contraceptive Use in the United States," September 2016.

28The IOM 2011 Report reflected this when it cited the IOM's own 1995 report on unintended pregnancy, "The Best Intentions" (IOM 1995). IOM 1995 identifies various methodological
difficulties in demonstrating the interest in reducing unintended pregnancies by means of a coverage mandate in employer plans. These include: the ambiguity of intent as an evidence-based
measure (does it refer to mistimed pregnancy or unwanted pregnancy, and do studies make that distinction?); "the problem of determining parental attitudes at conception" and inaccurate
methods often used for that assessment, such as "to use the request for an abortion as a marker"; and the overarching problem of "association versus causality," that is, whether intent causes
certain negative outcomes or is merely correlated with them. IOM 1995 at 64-66. See also IOM 1995 at 222 ("the largest public sector funding efforts, Title X and Medicaid, have not
been well evaluated in terms of their net effectiveness, including their precise impact on unintended pregnancy").

29H. Boonstra, et al., "Abortion in Women's Lives" at 18, Guttmacher Inst. (2006).

30Citing John S. Santelli & Andrea J. Melnikas, "Teen Fertility in Transition: Recent and Historic Trends in the United States," 31 Ann. Rev. Pub. Health 371 (2010).

31Bearak, J.M. and Jones, R.K., "Did Contraceptive Use Patterns Change after the Affordable Care Act? A Descriptive Analysis," 27 Women's Health Issues 316 (Guttmacher Inst. May-June
2017), available at http://www.whijournal.com/article/S1049-3867(17)30029-4/fulltext.

3231 Ann. Rev. Pub. Health at 375-76.

33Peter Arcidiacono, et al., "Habit Persistence and Teen Sex: Could Increased Access to Contraception Have Unintended Consequences for Teen Pregnancies?" (2005), available at
http://public.econ.duke.edu/~psarcidi/teensex.pdf.

34G. Raymond et al., "Population effect of increased access to emergency contraceptive pills: a systematic review," 109 Obstet. Gynecol. 181 (2007).

35 William D. Mosher & Jo Jones, U.S. Dep't of HHS, CDC, National Center for Health Statistics, "Use of Contraception in the United States: 1982-2008" at 5 fig. 1, 23 Vital and Health
Statistics 29 (Aug. 2010), available at https://www.cdc.gov/nchs/data/series/sr_23/sr23_029.pdf.

36Helen M. Alvaré, "No Compelling Interest: The 'Birth Control' Mandate and Religious Freedom," 58 Vill. L. Rev. 379, 404-05 & n.128 (2013), available at http://digitalcommons.
law.villanova.edu/vlr/vol58/iss3/2 (quoting Christopher Tietze, "Unintended Pregnancies in the United States, 1970-1972," 11 Fam. Plan. Persp. 186, 186 n .* (1979) ("in 1972, 35.4 percent
percent of all U.S. pregnancies were 'unwanted' or 'wanted later")).

37 Id. (citing Lawrence B. Finer & Stanley K. Henshaw, "Disparities in Rates of Unintended Pregnancy in the United States, 1994 and 2001" 38 Persp. on Sexual Reprod. Health 90 (2006)
("In 2001, 49 percent of pregnancies in the United States were unintended")).

these and other studies38 to observe the
complexity and uncertainty in the rela-
tionship between contraceptive access,
contraceptive use, and unintended preg-
nancy.

Contraception's association with posi-
tive health effects might also be partially
offset by an association with negative
health effects. In 2013 the National Insti-
tutes of Health indicated, in funding op-
portunity announcement for the develop-
ment of new clinically useful female
contraceptive products, that "hormonal
contraceptives have the disadvantage of
having many undesirable side effects[,]
are associated with adverse events, and
obese women are at higher risk for serious
complications such as deep venous throm-
bosis."39 In addition, IOM 2011 stated
that "[I]ong-term use of oral contracep-
tives has been shown to reduce a woman's
risk of endometrial cancer, as well as pro-
tect against pelvic inflammatory disease
and some benign breast diseases (PRB,
1998). The Agency for Healthcare Re-
search and Quality (AHRQ) is currently
undertaking a systematic evidence review
to evaluate the effectiveness of oral con-
traceptives as primary prevention for
ovarian cancer (AHRQ, 2011)." (IOM
2011 at 107). However, after IOM 2011
made this statement, AHRQ (a component
of HHS) completed its systematic evi-
dence review.40 Based on its review,
AHRQ stated that: "[o]varian cancer inci-
dence was significantly reduced in OC
[oral contraceptive] users"; "[b]reast can-
cer incidence was slightly but signifi-

cantly increased in OC users"; "[t]he risk
of cervical cancer was significantly in-
creased in women with persistent human
papillomavirus infection who used OCs,
but heterogeneity prevented a formal
meta-analysis"; "[i]ncidences of both
colorectal cancer [] and endometrial can-
cer [] were significantly reduced by OC
use"; "[t]he risk of vascular events was
increased in current OC users compared
with nonusers, although the increase in
myocardial infarction was not statistically
significant"; "[t]he overall strength of ev-
idence for ovarian cancer prevention was
moderate to low"; and "[t]he simulation
model predicted that the combined in-
crease in risk of breast and cervical can-
cers and vascular events was likely to be
equivalent to or greater than the decreased
risk in ovarian cancer."41 Based on these
findings, AHRQ concluded that "[t]here is
insufficient evidence to recommend for or
against the use of OCs solely for the pri-
mary prevention of ovarian cancer. . . the
harm/benefit ratio for ovarian cancer pre-
vention alone is uncertain, particularly
when the potential quality-of-life impact
of breast cancer and vascular events are
considered."42

In addition, in relation to several stud-
ies cited above, imposing a coverage
Mandate on objecting entities whose plans
cover many enrollee families who may
share objections to contraception could,
among some populations, affect risky sex-
ual behavior in a negative way. For exam-
ple, it may not be a narrowly tailored way
to advance the Government interests iden-

tified here to mandate contraceptive ac-
cess to teenagers and young adults who
are not already sexually active and at sig-
nificant risk of unintended pregnancy.43

Finally, evidence from studies that
post-date the Mandate is not inconsistent
with the observations the Departments
make here. In 2016, HRSA awarded a
5-year cooperative agreement to the
American College of Obstetricians and
Gynecologists to develop recommenda-
tions for updated Women's Preventive
Services Guidelines. The awardee formed
an expert panel called the Women's Pre-
ventive Services Initiative that issued a
report (the WPSI report).44 After observ-
ing that "[p]rivate companies are increas-
ingly challenging the contraception provi-
sions in the Affordable Care Act," the
WPSI report cited studies through 2013
stating that application of HRSA Guide-
lines had applied preventive services cov-
erage to 55.6 million women and had led
to a 70 percent decrease in out-of-pocket
expenses for contraceptive services among
commercially insured women. Id. at 57-58.
The WPSI report relied on a 2015 report of
the HHS Office of the Assistant Secretary
for Planning and Evaluation (ASPE), "The
Affordable Care Act Is Improving Access to
Preventive Services for Millions of Ameri-
cans," which estimated that persons who
have private insurance coverage of preven-
tive services without cost sharing includes
55.6 million women.45

As discussed above and based on the
Departments' knowledge of litigation
challenging the Mandate, during the time

38See, for example, J.L Dueñas, et al., "Trends in the Use of Contraceptive Methods and Voluntary Interruption of Pregnancy in the Spanish Population during 1997-2007," 83 Contraception
82 (2011) (as use of contraceptives increased from 49 percent to 80 percent, the elective abortion rate more than doubled); D. Paton, "The economics of family planning and underage
conceptions," 21 J. Health Econ. 207 (2002) (data from the UK confirms an economic model which suggests improved family planning access for females under 16 increases underage sexual
activity and has an ambiguous impact on underage conception rates); T. Raine et al., "Emergency contraception: advance provision in a young, high-risk clinic population," 96 Obstet.
Gynecol. 1 (2000) (providing advance provision of emergency contraception at family planning clinics to women aged 16-24 was associated with the usage of less effective and less
consistently used contraception by other methods); M. Belzer et al., "Advance supply of emergency contraception: a randomized trial in adolescent mothers," 18 J. Pediatr. Adolesc. Gynecol.
347 (2005) (advance provision of emergency contraception to mothers aged 13-20 was associated with increased unprotected sex at the 12-month follow up).

39NIH, "Female Contraceptive Development Program (U01)" (Nov. 5, 2013), available at https://grants.nih.gov/grants/guide/rfa-files/RFA-HD-14-024.html. Thirty six percent of women in
the United States are obese. https://www.niddk.nih.gov/health-information/health-statistics/overweight-obesity. Also see "Does birth control raise my risk for health problems?" and "What
are the health risks for smokers who use birth control?" HHS Office on Women's Health, available at https://www.womenshealth.gov/a-z-topics/birth-control-methods; Skovlund, CW,
"Association of Hormonal Contraception with Depression," 73 JAMA Psychiatry 1154 (Nov. 1, 2016), available at https://www.ncbi.nlm.nih.gov/pubmed/27680324.

40Havrilesky, L.J, et al., "Oral Contraceptive User for the Primary Prevention of Ovarian Cancer," Agency for Healthcare Research and Quality, Report No .: 13-E002-EF (June 2013),
available at https://archive.ahrq.gov/research/findings/evidence-based-reports/ocusetp.html.

41 Id.

42 Id. Also, see Kelli Miller, "Birth Control & Cancer: Which Methods Raise, Lower Risk," The Am. Cancer Society, (Jan. 21, 2016), available at http://www.cancer.org/cancer/news/
features/birth-control-cancer-which-methods-raise-lower-risk.

43For further discussion, see Alvaré, 58 Vill. L. Rev. at 400-02 (discussing the Santelli & Melnikas study and the Arcidiacono study cited above, and other research that considers the extent
to which reduction in teen pregnancy is attributable to sexual risk avoidance rather than to contraception access).

44"WPSI 2016 Recommendations: Evidence Summaries and Appendices," at 54-64, available at https://www.womenspreventivehealth.org/wp-content/uploads/2016/12/Evidence-
Summaries-and-Appendices.pdf.

45 Available at https://aspe.hhs.gov/pdf-report/affordable-care-act-improving-access-preventive-services-millions-americans; also, see Abridged Report, available at https://www.womenspre-
ventivehealth.org/wp-content/uploads/2017/01/WPSI_2016AbridgedReport.pdf.

ASPE estimated the scope of preventive
services coverage (2011-2013), houses of
worship and integrated auxiliaries were
exempt from the Mandate, other objecting
religious nonprofit organizations were
protected by the temporary safe harbor,
and hundreds of accommodated self-
insured church plan entities were not sub-
ject to enforcement of the Mandate
through their third party administrators. In
addition, dozens of for-profit entities that
had filed lawsuits challenging the Man-
date were protected by court orders pend-
ing the Supreme Court's resolution of
Hobby Lobby in June 2014. It would
therefore appear that the benefits recorded
by the report occurred even though most
objecting entities were not in compli-
ance.46 Additional data indicates that, in
28 States where contraceptive coverage
mandates have been imposed statewide,
those mandates have not necessarily low-
ered rates of unintended pregnancy (or
abortion) overall.47

The Departments need not take a posi-
tion on these empirical questions. Our re-
view is sufficient to lead us to conclude
that significantly more uncertainty and
ambiguity exists in the record than the
Departments previously acknowledged
when we declined to extend the exemp-
tion to certain objecting organizations and
individuals as set forth herein, and that no
compelling interest exists to counsel
against us extending the exemption.

During public comment periods, some
commenters noted that some drugs in-
cluded in the preventive services contra-
ceptive Mandate can also be useful for
treating certain existing health conditions.

The IOM similarly stated that "the non-
contraceptive benefits of hormonal contra-
ception include treatment of menstrual
disorders, acne or hirsutism, and pelvic
pain." IOM 2011 at 107. Consequently,
some commenters suggested that religious
objections to the Mandate should not be
permitted in cases where such methods
are used to treat such conditions, even if
those methods can also be used for con-
traceptive purposes. Section 2713(a)(4) of
the PHS Act does not, however, apply to
non-preventive care provided solely for
treatment of an existing condition. It ap-
plies only to "such additional preventive
care and screenings .. . as provided for"
by HRSA (Section 2713(a)(4) of the PHS
Act). HRSA's Guidelines implementing
this section state repeatedly that they ap-
ply to "preventive" services or care, and
with respect to the coverage of contracep-
tion specifically, they declare that the meth-
ods covered are "contraceptive" methods as
a "Type of Preventive Service," and that
they are to be covered only "[a]s prescribed"
by a physician or other health care provider.
https://www.hrsa.gov/womensguidelines/
The contraceptive coverage requirement
in the Guidelines also only applies for
"women with reproductive capacity."
https://www.hrsa.gov/womensguidelines/;
(80 FR 40318). Therefore, the Guide-
lines' inclusion of contraceptive ser-
vices requires coverage of contraceptive
methods as a type of preventive service
only when a drug that the FDA has
approved for contraceptive use is pre-
scribed in whole or in part for such use.
The Guidelines and section 2713(a)(4)
of the PHS Act do not require coverage

of such drugs where they are prescribed
exclusively for a non-contraceptive and
non-preventive use to treat an existing
condition.48 As discussed above, the last
Administration decided to exempt
houses of worship and their integrated
auxiliaries from the Mandate, and to re-
lieve hundreds of religious nonprofit or-
ganizations of their obligations under
the Mandate and not further require con-
traceptive coverage to their employees.
In several of the lawsuits challenging
the Mandate, some religious plaintiffs
stated that they do not object and are
willing to cover drugs prescribed for the
treatment of an existing condition and
not for contraceptive purposes-even if
those drugs are also approved by the
FDA for contraceptive uses. Therefore,
the Departments conclude that the fact that
some drugs that are approved for preventive
contraceptive purposes can also be used for
exclusively non-preventive purposes to treat
existing conditions is not a sufficient reason
to refrain from expanding the exemption to
the Mandate.

An additional consideration supporting
the Departments' present view is that al-
ternative approaches can further the inter-
ests the Departments previously identified
behind the Mandate. As noted above, the
Government already engages in dozens of
programs that subsidize contraception for
the low-income women identified by the
IOM as the most at risk for unintended
pregnancy. The Departments have also ac-
knowledged in legal briefing that contra-
ception access can be provided through
means other than coverage offered by re-
ligious objectors, for example, through "a

46In addition, as in IOM 2011, the WPSI report bases its evidentiary conclusions relating to contraceptive coverage, use, unintended pregnancy, and health benefits, on conclusions that the
phenomena are "associated" with the intended outcomes, without showing there is a causal relationship. For example, the WPSI report states that "[contraceptive counseling in primary
care may increase the uptake of hormonal methods and [long-acting reversible contraceptives], although data on structured counseling in specialized reproductive health settings demonstrated
no such effect." Id. at 63. The WPSI report also acknowledges that a large-scale study evaluating the effects of providing no-cost contraception had "no randomization or control group."
Id. at 63.

The WPSI report also identifies the at-risk population as young, low-income, and/or minority women: "[u]nintended pregnancies disproportionately occur in women age 18 to 24 years,
especially among those with low incomes or from racial/ethnic minorities." Id. at 58. The WPSI report acknowledges that many in this population are already served by Title X programs,
which provide family planning services to "approximately 1 million teens each year." Id. at 58. The WPSI report observes that between 2008 and 2011-before the contraceptive coverage
requirement was implemented-unintended pregnancy decreased to the lowest rate in 30 years. Id. at 58. The WPSI report does not address how to balance contraceptive coverage interests
with religious objections, nor does it specify the extent to which applying the Mandate among commercially insured at objecting entities serves to deliver contraceptive coverage to women
most at risk of unintended pregnancy.

47See Michael J. New, "Analyzing the Impact of State Level Contraception Mandates on Public Health Outcomes," 13 Ave Maria L. Rev. 345 (2015), available at http://avemarialaw-
law-review.avemarialaw.edu/Content/articles/vXIII.i2.new.final.0809.pdf.

48The Departments previously cited the IOM's listing of existing conditions that contraceptive drugs can be used to treat (menstrual disorders, acne, and pelvic pain), and said of those uses
that "there are demonstrated preventive health benefits from contraceptives relating to conditions other than pregnancy." 77 FR 8727 & n.7. This was not, however, an assertion that PHS
Act section 2713(a)(4) or the Guidelines require coverage of "contraceptive" methods when prescribed for an exclusively non-contraceptive, non-preventive use. Instead it was an observation
that such drugs-generally referred to as "contraceptives"-also have some alternate beneficial uses to treat existing conditions. For the purposes of these interim final rules, the Departments
clarify here that our previous reference to the benefits of using contraceptive drugs exclusively for some non-contraceptive and non-preventive uses to treat existing conditions did not mean
that the Guidelines require coverage of such uses, and consequently is not a reason to refrain from offering the expanded exemptions provided here. Where a drug approved by the FDA
for contraceptive use is prescribed for both a contraceptive use and a non-contraceptive use, the Guidelines (to the extent they apply) would require its coverage. Where a drug approved
by the FDA for contraceptive use is prescribed exclusively for a non-contraceptive and non-preventive use to treat an existing condition, it would be outside the scope of the Guidelines.

family member's employer," "an Ex-
change," or "another government pro-
gram."49

Many employer plan sponsors, insti-
tutions of education arranging student
health coverage, and individuals enrolled
in plans where their employers or issuers
(as applicable) are willing to offer them a
religiously acceptable plan, hold sincerely
held religious beliefs against (respec-
tively) providing, arranging, or participat-
ing in plans that comply with the Mandate
either by providing contraceptive cover-
age or by using the accommodation. Be-
cause we have concluded that requiring
such compliance through the Mandate or
accommodation has constituted a substan-
tial burden on the religious exercise of
many such entities or individuals, and be-
cause we conclude requiring such compli-
ance did not serve a compelling interest and
was not the least restrictive means of serv-
ing a compelling interest, we now believe
that requiring such compliance led to the
violation of RFRA in many instances. We
recognize that this is a change of position on
this issue, and we make that change based
on all the matters discussed in this preamble.

###### B. Discretion to Provide Religious Exemptions

Even if RFRA does not compel the
religious exemptions provided in these
interim final rules, the Departments be-
lieve they are the most appropriate admin-
istrative response to the religious objec-
tions that have been raised. RFRA identifies
certain circumstance under which govern-
ment must accommodate religious exercise-
when a government action imposes a sub-
stantial burden on the religious exercise of
an adherent and imposition of that burden is
not the least restrictive means of achieving a
compelling government interest. RFRA
does not, however, prescribe the accommo-
dation that the government must adopt.
Rather, agencies have discretion to fashion
an appropriate and administrable response
to respect religious liberty interests impli-
cated by their own regulations. We know
from Hobby Lobby that, in the absence of
any accommodation, the contraceptive-
coverage requirement imposes a substantial
burden on certain objecting employers. We

know from other lawsuits and public com-
ments that many religious entities have ob-
jections to complying with the accommoda-
tion based on their sincerely held religious
beliefs. Previously, the Departments at-
tempted to develop an accommodation that
would either alleviate the substantial burden
imposed on religious exercise or satisfy
RFRA's requirements for imposing that
burden.

Now, however, the Departments have
reassessed the relevant interests and deter-
mined that, even if exemptions are not
required by RFRA, they would exercise
their discretion to address the substantial
burden identified in Hobby Lobby by ex-
panding the exemptions from the Mandate
instead of revising accommodations pre-
viously offered. In the Departments' view,
a broader exemption is a more direct, ef-
fective means of satisfying all bona fide
religious objectors. This view is informed
by the fact that the Departments' previous
attempt to develop an appropriate accom-
modation did not satisfy all objectors.
That previous accommodation consumed
Departmental resources not only through
the regulatory process, but in persistent
litigation and negotiations. Offering ex-
emptions as described in these interim fi-
nal rules is a more workable way to re-
spond to the substantial burden identified
in Hobby Lobby and bring years of litiga-
tion concerning the Mandate to a close.

###### C. General Scope of Expanded Religious Exemptions

###### 1. Exemption and Accommodation for Religious Employers, Plan Sponsors, and Institutions of Higher Education

For all of these reasons, and as further
explained below, the Departments now
believe it is appropriate to modify the
scope of the discretion afforded to HRSA
in the July 2015 final regulations to direct
HRSA to provide the expanded exemp-
tions and change the accommodation to an
optional process if HRSA continues to
otherwise provide for contraceptive cov-
erage in the Guidelines. As set forth be-
low, the expanded exemption encom-
passes non-governmental plan sponsors
that object based on sincerely held reli-

gious beliefs, and institutions of higher
education in their arrangement of student
health plans. The accommodation is also
maintained as an optional process for ex-
empt employers, and will provide contra-
ceptive availability for persons covered by
the plans of entities that use it (a legiti-
mate program purpose).

The Departments believe this approach
is sufficiently respectful of religious ob-
jections while still allowing the Govern-
ment to advance other interests. Even with
the expanded exemption, HRSA main-
tains the discretion to require contracep-
tive coverage for nearly all entities to
which the Mandate previously applied
(since most plan sponsors do not appear to
possess the requisite religious objections),
and to reconsider those interests in the
future where no covered objection exists.
Other Government subsidies of contracep-
tion are likewise not affected by this rule.

### 2. Exemption for Objecting Individuals Covered by Willing Employers and Issuers

As noted above, some individuals have
brought suit objecting to being covered
under an insurance policy that includes
coverage for contraceptives. See, for ex-
ample, Wieland v. HHS, 196 F. Supp. 3d
1010 (E.D. Mo. 2016); Soda v. McGetti-
gan, No. 15-cv-00898 (D. Md.). Just as
the Departments have determined that the
Government does not have a compelling
interest in applying the Mandate to em-
ployers that object to contraceptive cover-
age on religious grounds, we have also
concluded that the Government does not
have a compelling interest in requiring
individuals to be covered by policies that
include contraceptive coverage when the
individuals have sincerely held religious
objections to that coverage. The Govern-
ment does not have an interest in ensuring
the provision of contraceptive coverage to
individuals who do not wish to have such
coverage. Especially relevant to this con-
clusion is the fact that the Departments
have described their interests of health
and gender equality as being advanced
among women who "want" the coverage
so as to prevent "unintended" pregnancy.

49Brief for the Respondents at 65, Zubik v. Burwell, 136 S. Ct. 1557 (2016) (No. 14-1418).

(77 FR 8727).50 No asserted interest is
served by denying an exemption to indi-
viduals who object to it. No unintended
pregnancies will be avoided or costs re-
duced by imposing the coverage on those
individuals.

Although the Departments previously
took the position that allowing individual
religious exemptions would undermine
the workability of the insurance system,
the Departments now agree with those
district courts that have concluded that an
exemption that allows-but does not re-
quire-issuers and employers to omit con-
traceptives from coverage provided to ob-
jecting individuals does not undermine
any compelling interest. See Wieland, 196
F. Supp. 3d at 1019-20; March for Life,
128 F. Supp. 3d at 132. The individual
exemption will only apply where the em-
ployer and issuer (or, in the individual
market, the issuer) are willing to offer a
policy accommodating the objecting indi-
vidual. As a result, the Departments con-
sider it likely that where an individual
exemption is invoked, it will impose no
burdens on the insurance market because
such burdens may be factored into the
willingness of an employer or issuer to
offer such coverage. At the level of plan
offerings, the extent to which plans cover
contraception under the prior rules is al-
ready far from uniform. Congress did not
require compliance with section 2713 of
the PHS Act by all entities-in particular
by grandfathered plans. The Departments'
previous exemption for houses of worship
and integrated auxiliaries, and our lack of
authority to enforce the accommodation
with respect to self-insured church plans,
show that the importance of a uniform
health insurance system is not signifi-
cantly harmed by allowing plans to omit
contraception in many contexts.51 Fur-
thermore, granting exemptions to individ-
uals who do not wish to receive contra-
ceptive coverage where the plan and, as
applicable, issuer and plan sponsor are
willing, does not undermine the Govern-

ment's interest in ensuring the provision
of such coverage to other individuals who
wish to receive it. Nor do such exemptions
undermine the operation of the many
other programs subsidizing contraception.
Rather, such exemptions serve the Gov-
ernment's interest in accommodating
religious exercise. Accordingly, as further
explained below, the Departments have
provided an exemption to address the con-
cerns of objecting individuals.

### D. Effects on Third Parties of Exemptions

The Departments note that the exemp-
tions created here, like the exemptions
created by the last Administration, do not
burden third parties to a degree that coun-
sels against providing the exemptions.
Congress did not create a right to receive
contraceptive coverage, and Congress ex-
plicitly chose not to impose the section
2713 of the PHS Act requirements on
grandfathered plans that cover millions of
people. Individuals who are unable to ob-
tain contraceptive coverage through their
employer-sponsored health plans because
of the exemptions created in these interim
final rules, or because of other exemptions
to the Mandate, have other avenues for
obtaining contraception, including the
various governmental programs discussed
above. As the Government is under no
constitutional obligation to fund contra-
ception, cf. Harris v. McRae, 448 United
States 297 (1980), even more so may the
Government refrain from requiring pri-
vate citizens to cover contraception for
other citizens in violation of their reli-
gious beliefs. Cf. Rust v. Sullivan, 500
U.S. 173, 192-93 (1991) ("A refusal to
fund protected activity, without more,
cannot be equated with the imposition of a
'penalty' on that activity.").52

That conclusion is consistent with the
Supreme Court's observation that RFRA
may require exemptions even from laws
requiring claimants "to confer benefits on

third parties." Hobby Lobby, 134 S. Ct. at
2781 n.37. The burdens imposed on such
third parties may be relevant to the RFRA
analysis, but they cannot be dispositive.
"Otherwise, for example, the Government
could decide that all supermarkets must
sell alcohol for the convenience of cus-
tomers (and thereby exclude Muslims
with religious objections from owning su-
permarkets), or it could decide that all
restaurants must remain open on Satur-
days to give employees an opportunity to
earn tips (and thereby exclude Jews with
religious objections from owning restau-
rants)." Id. Where, as here, contraceptives
are readily accessible and, for many low
income persons, are available at reduced
cost or for free through various governmen-
tal programs, and contraceptive coverage
may be available through State sources or
family plans obtained through non-
objecting employers, the Departments have
determined that the expanded exemptions
rather than accommodations are the appro-
priate response to the substantial burden that
the Mandate has placed upon the religious
exercise of many religious employers.

### III. Provisions of the Interim Final Rules With Comment Period

The Departments are issuing these in-
terim final rules in light of the full history
of relevant rulemaking (including prior
interim final rules), public comments, and
litigation throughout the Federal court
system. The interim final rules seek to
resolve this matter and the long-running
litigation with respect to religious objec-
tions by extending the exemption under
the HRSA Guidelines to encompass enti-
ties, and individuals, with sincerely held
religious beliefs objecting to contracep-
tive or sterilization coverage, and by mak-
ing the accommodation process optional
for eligible organizations.

The Departments acknowledge that the
foregoing analysis represents a change
from the policies and interpretations we
previously adopted with respect to the

50In this respect, the Government's interest in contraceptive coverage is different than its interest in persons receiving some other kinds of health coverage or coverage in general, which
can lead to important benefits that are not necessarily conditional on the recipient's desire to use the coverage and the specific benefits that may result from their choice to use it.

51 Also, see Real Alternatives, 2017 WL 3324690 at *36 (3d Cir. Aug. 4, 2017) (Jordan, J., concurring in part and dissenting in part) ("Because insurance companies would offer such plans
as a result of market forces, doing so would not undermine the government's interest in a sustainable and functioning market .. .. Because the government has failed to demonstrate why
allowing such a system (not unlike the one that allowed wider choice before the Affordable Care Act) would be unworkable, it has not satisfied strict scrutiny." (citation and internal quotation
marks omitted)).

52Cf. also Planned Parenthood Ariz., Inc. v. Am. Ass'n of Pro-Life Obstetricians & Gynecologists, 257 P.3d 181, 196 (Ariz. Ct. App. 2011) ("a woman's right to an abortion or to
contraception does not compel a private person or entity to facilitate either.").

Mandate and the governmental interests
that underlie the Mandate. These changes
in policy are within the Departments' au-
thority. As the Supreme Court has ac-
knowledged, “[a]gencies are free to
change their existing policies as long as
they provide a reasoned explanation for
the change." Encino Motorcars, LLC v.
Navarro, 136 S. Ct. 2117, 2125 (2016).
This "reasoned analysis" requirement
does not demand that an agency "demon-
strate to a court's satisfaction that the rea-
sons for the new policy are better than the
reasons for the old one; it suffices that the
new policy is permissible under the stat-
ute, that there are good reasons for it, and
that the agency believes it to be better,
which the conscious change of course ad-
equately indicates". United Student Aid
Funds, Inc. v. King, 200 F. Supp. 3d 163,
169-70 (D.D.C. 2016) (citing FCC v. Fox
Television Stations, Inc., 556 U.S. 502,
515 (2009)); also, see New Edge Network,
Inc. v. FCC, 461 F.3d 1105, 1112-13 (9th
Cir. 2006) (rejecting an argument that “an
agency changing its course by rescinding
a rule is obligated to supply a reasoned
analysis for the change beyond that which
may be required when an agency does not
act in the first instance").

Here, for all of the reasons discussed
above, the Departments have determined
that the Government's interest in the ap-
plication of contraceptive coverage re-
quirements in this specific context to the
plans of certain entities and individuals
does not outweigh the sincerely held reli-
gious objections of those entities and in-
dividuals based on the analyses set forth
above. Thus, these interim final rules
amend the Departments' July 2015 final
regulations to expand the exemption to
include additional entities and persons
that object based on sincerely held reli-
gious beliefs. These rules leave in place
HRSA's discretion to continue to require
contraceptive and sterilization coverage
where no such objection exists, and to the
extent that section 2713 of the PHS Act
applies. These interim final rules also
maintain the existence of an accommoda-
tion process, but consistent with our ex-
pansion of the exemption, we make the
process optional for eligible organiza-
tions. HRSA is simultaneously updating

its Guidelines to reflect the requirements
of these interim final rules.53

#### A. Regulatory Restatements of section 2713(a) and (a)(4) of the PHS Act

These interim final rules modify the
restatements of the requirements of sec-
tion 2713(a) and (a)(4) of the PHS Act,
contained in 26 CFR 54.9815-2713(a)(1)
introductory text and (a)(1)(iv), 29 CFR
2590.715-2713(a)(1) introductory text
and (a)(1)(iv), and 45 CFR 147.130(a)(1)
introductory text and (a)(1)(iv), so that
they conform to the statutory text of sec-
tion 2713 of the PHS Act.

#### B. Prefatory Language of the Exemption in 45 CFR 147.132

These interim final rules move the re-
ligious exemption from 45 CFR 147.131
to a new § 147.132 and expand it as fol-
lows. In the prefatory language of
§ 147.132, these interim final rules specify
that not only are certain entities "exempt,"
but the Guidelines shall not support or
provide for an imposition of the contra-
ceptive coverage requirement to such en-
tities. This is an acknowledgement that
section 2713(a)(4) of the PHS Act re-
quires women's preventive services cov-
erage only "as provided for in comprehen-
sive guidelines supported by the Health
Resources and Services Administration."
To the extent the HRSA Guidelines do not
provide for or support the application of
such coverage to exempt entities, the Af-
fordable Care Act does not require the
coverage. Section 147.132 not only de-
scribes the exemption of certain entities
and plans, but does so by specifying that
the HRSA Guidelines do not provide for,
or support the application of, such cover-
age to exempt entities and plans.

#### C. General Scope of Exemption for Objecting Entities

In the new 45 CFR 147.132 as created by
these interim final rules, these rules expand
the exemption that was previously located in
§ 147.131(a). With respect to employers that
sponsor group health plans, the new lan-
guage of § 147.132(a)(1) introductory text

and (a)(1)(i) provides exemptions for em-
ployers that object to coverage of all or a
subset of contraceptives or sterilization and
related patient education and counseling
based on sincerely held religious beliefs.

For avoidance of doubt, the Depart-
ments wish to make clear that the ex-
panded exemption created in § 147.132(a)
applies to several distinct entities involved
in the provision of coverage to the object-
ing employer's employees. This explana-
tion is consistent with how prior rules
have worked by means of similar lan-
guage. Section 147.132(a)(1) introductory
text and (a)(1)(i), by specifying that "[a]
group health plan and health insurance
coverage provided in connection with a
group health plan" is exempt "to the ex-
tent the plan sponsor objects as specified
in paragraph (a)(2)," exempt the group
health plans the sponsors of which object,
and exempt their health insurance issuers
from providing the coverage in those
plans (whether or not the issuers have
their own objections). Consequently,
with respect to Guidelines issued under
§ 147.130(a)(1)(iv), or the parallel pro-
visions in 26 CFR 54.9815-2713(a)
(1)(iv) and 29 CFR 2590.715-2713(a)
(1)(iv), the plan sponsor, issuer, and
plan covered in the exemption of that
paragraph would face no penalty as a
result of omitting contraceptive cover-
age from the benefits of the plan partic-
ipants and beneficiaries.

53See https://www.hrsa.gov/womensguidelines/ and https://www.hrsa.gov/womensguidelines2016/index.html.

is clear in the plan document. Moreover, if
there is a reduction in a covered service or
benefit, the plan has to disclose that
change to plan participants.54 Thus, where
an exemption applies and all or a subset of
contraceptive services are omitted from a
plan's coverage, otherwise applicable
ERISA disclosures must reflect the omis-
sion of coverage in ERISA plans. These
existing disclosure requirements serve to
help provide notice to participants and
beneficiaries of what ERISA plans do and
do not cover. The Departments invite pub-
lic comment on whether exempt entities,
or others, would find value either in being
able to maintain or submit a specific form
of certification to claim their exemption,
or in otherwise receiving guidance on a
way to document their exemption.

The exemptions in § 147.132(a) apply
"to the extent" of the objecting entities"
sincerely held religious beliefs. Thus, en-
tities that hold a requisite objection to
covering some, but not all, contraceptive
items would be exempt with respect to the
items to which they object, but not with
respect to the items to which they do not
object. Likewise, the requisite objection
of a plan sponsor or institution of higher
education in § 147.132(a)(1)(i) and (ii)
exempts its group health plan, health in-
surance coverage offered by a health in-
surance issuer in connection with such
plan, and its issuer in its offering of such
coverage, but that exemption does not ex-
tend to coverage provided by that issuer to
other group health plans where the plan
sponsor has no qualifying objection. The
objection of a health insurance issuer in
§ 147.132(a)(1)(iii) similarly operates
only to the extent of its objection, and as
otherwise limited as described below.

#### D. Exemption of Employers and Institutions of Higher Education

The scope of the exemption is ex-
panded for non-governmental plan spon-

sors and certain entities that arrange
health coverage under these interim final
rules. The Departments have consistently
taken the position that section 2713(a)(4)
of the PHS Act grants HRSA authority to
issue Guidelines that provide for and sup-
port exemptions from a contraceptive cov-
erage requirement. Since the beginning of
rulemaking concerning the Mandate,
HRSA and the Departments have repeat-
edly exercised their discretion to create
and modify various exemptions within the
Guidelines.55

The Departments believe the approach
of these interim final rules better aligns
our implementation of section 2713(a)(4)
of the PHS Act with Congress' intent in
the Affordable Care Act and throughout
other Federal health care laws. As dis-
cussed above, many Federal health care
laws and regulations provide exemptions
for objections based on religious beliefs,
and RFRA applies to the Affordable Care
Act. Expanding the exemption removes
religious obstacles that entities and certain
individuals may face when they otherwise
wish to participate in the health care mar-
ket. This advances the Affordable Care
Acts goal of expanding health coverage
among entities and individuals that might
otherwise be reluctant to participate.
These rules also leave in place many Fed-
eral programs that subsidize contracep-
tives for women who are most at risk of
unintended pregnancy and who may have
more limited access to contraceptives.56
These interim final rules achieve greater
uniformity and simplicity in the regulation
of health insurance by expanding the ex-
emptions to include entities that object to
the Mandate based on their sincerely held
religious beliefs.

The Departments further conclude that
it would be inadequate to merely attempt
to amend the accommodation process in-
stead of expand the exemption. The De-
partments have stated in our regulations
and court briefings that the existing ac-

commodation with respect to self-insured
plans requires contraceptive coverage as
part of the same plan as the coverage
provided by the employer, and operates in
a way "seamless" to those plans. As a
result, in significant respects, the accom-
modation process does not actually ac-
commodate the objections of many enti-
ties. The Departments have engaged in an
effort to attempt to identify an accommo-
dation that would eliminate the plaintiffs'
religious objections, including seeking
public comment through an RFI, but we
stated in January 2017 that we were un-
able to develop such an approach at that
time.

### 1. Plan Sponsors Generally

The expanded exemptions in these in-
terim final rules cover any kind of non-
governmental employer plan sponsor with
the requisite objections but, for the sake of
clarity, they include an illustrative, non-
exhaustive list of employers whose objec-
tions qualify the plans they sponsor for an
exemption.

Under these interim final rules, the De-
partments do not limit the Guidelines ex-
emption with reference to nonprofit status
or to sections 6033(a)(3)(A)(i) or (iii) of
the Code, as previous rules have done. A
significant majority of States either im-
pose no contraceptive coverage require-
ment or offer broader exemptions than the
exemption contained in the July 2015 final
regulations.57 Although the practice of
States is by no means a limit on the dis-
cretion delegated to HRSA by the Afford-
able Care Act, nor a statement about what
the Federal Government may do consis-
tent with RFRA or other limitations in
federal law, such State practice can be
informative as to the viability of broad
protections for religious liberty. In this
case, such practice supports the Depart-
ments' decision to expand the federal ex-
emption, bringing the Federal Govern-

54See, for example, 29 U.S.C. 1022, 1024(b), 29 CFR 2520.102-2, 2520.102-3, & 2520.104b-3(d), and 29 CFR 2590.715-2715. Also, see 45 CFR 147.200 (requiring disclosure of the
"exceptions, reductions, and limitations of the coverage," including group health plans and group & individual issuers).

55"The fact that the agency has adopted different definitions in different contexts adds force to the argument that the definition itself is flexible, particularly since Congress has never indicated
any disapproval of a flexible reading of the statute." Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 863-64 (1984).

56See, for example, Family Planning grants in 42 U.S.C. 300, et seq .; the Teenage Pregnancy Prevention Program, Public Law 112-74 (125 Stat 786, 1080); the Healthy Start Program, 42
U.S.C. 254c-8; the Maternal, Infant, and Early Childhood Home Visiting Program, 42 U.S.C. 711; Maternal and Child Health Block Grants, 42 U.S.C. 703; 42 U.S.C. 247b-12; Title XIX
of the Social Security Act, 42 U.S.C. 1396, et seq .; the Indian Health Service, 25 U.S.C. 13, 42 U.S.C. 2001(a), & 25 U.S.C. 1601, et seq .; Health center grants, 42 U.S.C. 254b(e), (g),
(h), & (i); the NIH Clinical Center, 42 U.S.C. 248; and the Personal Responsibility Education Program, 42 U.S.C. 713.

57See Guttmacher Institute, "Insurance Coverage of Contraceptives" available at https://www.guttmacher.org/state-policy/explore/insurance-coverage-contraceptives.

ment's practice into greater alignment
with the practices of the majority of the
States.

### 2. Section 147.132(a)(1)(i)(A)

Despite not limiting the exemption to
certain organizations referred to in section
6033(a)(3)(A)(i) or (iii) of the Code, the
exemption in these rules includes such
organizations. Section 147.132(a)(1)(i)(A)
specifies, as under the prior exemption, that
the exemption covers "a group health plan
established or maintained by ... [a] church,
the integrated auxiliary of a church, a con-
vention or association of churches, or a re-
ligious order." In the preamble to rules
setting forth the prior exemption at
§147.132(a), the Departments interpreted
this same language used in those rules by
declaring that "[t]he final regulations con-
tinue to provide that the availability of the
exemption or accommodation be deter-
mined on an employer by employer basis,
which the Departments continue to believe
best balances the interests of religious em-
ployers and eligible organizations and those
of employees and their dependents." (78 FR
39886). Therefore, under the prior exemp-
tion, if an employer participated in a house
of worship's plan-perhaps because it was
affiliated with a house of worship-but was
not an integrated auxiliary or a house of
worship itself, that employer was not con-
sidered to be covered by the exemption,
even though it was, in the ordinary meaning
of the text of the prior regulation, participat-
ing in a "plan established or maintained by a
[house of worship]."

Under these interim final rules, how-
ever, the Departments intend that, when
this regulation text exempts a plan "estab-
lished or maintained by" a house of wor-
ship or integrated auxiliary, such exemp-
tion will no longer "be determined on an
employer by employer basis," but will be
determined on a plan basis-that is, by
whether the plan is a "plan established or
maintained by" a house of worship or
integrated auxiliary. This interpretation
better conforms to the text of the regula-
tion setting forth the exemption-in both
the prior regulation and in the text set
forth in these interim final rules. It also

offers appropriate respect to houses of
worship and their integrated auxiliaries
not only in their internal employment
practices but in their choice of organiza-
tional form and/or in their activity of es-
tablishing or maintaining health plans for
employees of associated employers that
do not meet the threshold of being inte-
grated auxiliaries. Moreover, under this
interpretation, houses of worship would
not be faced with the potential prospect of
services to which they have a religious
objection being covered for employees of
an associated employer participating in a
plan they have established and maintain.

The Departments do not believe there
is a sufficient factual basis to exclude
from this part of the exemption entities
that are so closely associated with a house
of worship or integrated auxiliary that
they are permitted participation in its
health plan, but are not themselves inte-
grated auxiliaries. Additionally, this inter-
pretation is not inconsistent with the op-
eration of the accommodation under the
prior rule, to the extent that, in practice
and as discussed elsewhere herein, it
does not force contraceptive coverage to
be provided on behalf of the plan par-
ticipants of many religious organiza-
tions in a self-insured church plan ex-
empt from ERISA-which are exempt
in part because the plans are established
and maintained by a church. (Section
3(33)(A) of ERISA) In several lawsuits
challenging the Mandate, the Depart-
ments took the position that some plans
established and maintained by houses of
worship, but that included entities that
were not integrated auxiliaries, were
church plans under section 3(33) of
ERISA and, thus, the Government "has
no authority to require the plaintiffs'
TPAs to provide contraceptive coverage
at this time." Roman Catholic Archdio-
cese of N.Y. v. Sebelius, 987 F. Supp. 2d
232, 242 (E.D.N.Y. 2013). Therefore
the Departments believe it is most ap-
propriate to use a plan basis, not an
employer by employer basis, to deter-
mine the scope of an exemption for a
group health plan established or main-
tained by a house of worship or inte-
grated auxiliary.

### 3. Section 147.132(a)(1)(i)(B)

Section 147.132(a)(1)(i)(B) of the rules
specifies that the exemption includes the
plans of plan sponsors that are nonprofit
organizations.

### 4. Section 147.132(a)(1)(i)(C)

Under § 147.132(a)(1)(i)(C), the rules
extend the exemption to the plans of
closely held for-profit entities. This is con-
sistent with the Supreme Court's ruling in
Hobby Lobby, which declared that a cor-
porate entity is capable of possessing and
pursuing non-pecuniary goals (in Hobby
Lobby, religion), regardless of whether the
entity operates as a nonprofit organization,
and rejecting the Departments' argument
to the contrary. (134 S. Ct. 2768-75)
Some reports and industry experts have
indicated that not many for-profit entities
beyond those that had originally brought
suit have sought relief from the Mandate
after Hobby Lobby.58

### 5. Section 147.132(a)(1)(i)(D)

Under § 147.132(a)(1)(i)(D), the rules
extend the exemption to the plans of for-
profit entities that are not closely held.
The July 2015 final regulations extended
the accommodation to for-profit entities
only if they are closely held, by positively
defining what constitutes a closely held
entity. The Departments implicitly recog-
nized the difficulty of providing an affir-
mative definition of closely held entities
in the July 2015 final regulations when we
adopted a definition that included entities
that are merely "substantially similar" to
certain specified parameters, and we al-
lowed entities that were not sure if they
met the definition to inquire with HHS;
HHS was permitted to decline to answer
the inquiry, at which time the entity would
be deemed to qualify as an eligible orga-
nization. The exemptions in these interim
final rules do not need to address this
difficulty because they include both for-
profit entities that are closely held and
for-profit entities that are not closely

58See Jennifer Haberkorn, "Two years later, few Hobby Lobby copycats emerge," Politico (Oct. 11, 2016), available at http://www.politico.com/story/2016/10/obamacare-birth-control-
mandate-employers-229627.

held.59 The mechanisms for determining
whether a company has adopted and holds
such principles or views is a matter of
well-established State law with respect to
corporate decision-making,60 and the De-
partments expect that application of such
laws would cabin the scope of this exemp-
tion.

In including entities in the exemption
that are not closely held, these interim
final rules provide for the possibility that
some publicly traded entities may use the
exemption. Even though the Supreme
Court did not extend its holding in Hobby
Lobby to publicly traded corporations (the
matter could be resolved without deciding
that question), the Court did instruct that
RFRA applies to corporations because
they are "persons" as that term is defined
in 1 U.S.C. 1. Given that the definition
under 1 U.S.C. 1 applies to any corpora-
tion, the Departments consider it appro-
priate to extend the exemption set forth in
these interim final rules to for-profit cor-
porations whether or not they are closely
held. The Departments are generally
aware that in a country as large as Amer-
ica comprised of a supermajority of reli-
gious persons, some publicly traded enti-
ties might claim a religious character for
their company, or that the majority of
shares (or voting shares) of some publicly
traded companies might be controlled by a
small group of religiously devout persons
so as to set forth such a religious charac-
ter.61 The fact that such a company is
religious does not mean that it will have
an objection to contraceptive coverage,
and there are many fewer publicly traded
companies than there are closely held
ones. But our experience with closely held
companies is that some, albeit a small
minority, do have religious objections to
contraceptive coverage. Thus we consider
it possible, though very unlikely, that a
religious publicly traded company might
have objections to contraceptive cover-
age. At the same time, we are not aware of
any publicly traded entities that chal-

lenged the Mandate specifically either
publicly or in court. The Departments
agree with the Supreme Court that it is
improbable that many publicly traded
companies with numerous "unrelated
shareholders-including institutional in-
vestors with their own set of stakehold-
ers-would agree to run a corporation un-
der the same religious beliefs" and
thereby qualify for the exemption. (134 S.
Ct. at 2774)

### 6. Section 147.132(a)(1)(i)(E)

Under § 147.132(a)(1)(i)(E), the rules
extend the exemption to the plans of any
other non-governmental employer. The
plans of governmental employers are not
covered by the plan sponsor exemption of
§ 147.132(a)(1)(i). The Departments are
not aware of reasons why it would be
appropriate or necessary to offer religious
exemptions to governmental employer
plan sponsors in the United States with
respect to the contraceptive Mandate. But,
as discussed below, governmental em-
ployers are permitted to respect an indi-
vidual's objection under § 147.132(b) and
thus to provide health insurance coverage
without the objected-to contraceptive cov-
erage to such individual. Where that ex-
emption is operative, the Guidelines may
not be construed to prevent a willing gov-
ernmental plan sponsor of a group health
plan from offering a separate benefit pack-
age option, or a separate policy, certificate
or contract of insurance, to any individual
who objects to coverage or payments for
some or all contraceptive services based
on sincerely held religious beliefs.

By the general extension of the exemp-
tion to the plans of plan sponsors in
§ 147.132(a)(1)(i), these interim final
rules also exempt group health plans
sponsored by an entity other than an em-
ployer (for example, a union) that objects
based on sincerely held religious beliefs to
coverage of contraceptives or sterilization.

### 7. Section 147.132(a)(1)(ii)

As in the previous rules, the plans of
institutions of higher education that ar-
range student health insurance coverage
will continue to be treated similarly to the
way in which the plans of employers are
treated, but for the purposes of such plans
being exempt or electing the optional ac-
commodation, rather than merely being
eligible for the accommodation as in the
previous rule. These interim final rules
specify, in § 147.132(a)(1)(ii), that the
exemption is extended, in the case of in-
stitutions of higher education (as defined
in 20 U.S.C. 1002), to their arrangement
of student health insurance coverage, in a
manner comparable to the applicability of
the exemption for group health insurance
coverage provided in connection with a
group health plan established or main-
tained by a plan sponsor. As mentioned
above, because the Affordable Care Act
does not require institutions of higher ed-
ucation to arrange student coverage, some
institutions of higher education that object
to the Mandate appear to have chosen to
stop arranging student plans rather than
comply with the Mandate or use the ac-
commodation. Extending the exemption
in these interim final rules may remove an
obstacle to such entities deciding to offer
student plans, thereby giving students an-
other health insurance option.

### E. Exemption for Issuers

These interim final rules extend the
exemption, in § 147.132(a)(1)(iii), to
health insurance issuers offering group or
individual health insurance coverage that
sincerely hold their own religious objec-
tions to providing coverage for contracep-
tive services.

The Departments are not currently
aware of health insurance issuers that pos-
sess their own religious objections to of-
fering contraceptive coverage. Neverthe-
less, many Federal health care conscience

59 In the companion interim final rules published elsewhere in this Federal Register, the Departments provide an exemption on an interim final basis to closely held entities by using a negative
definition: entities that do not have publicly traded ownership interests as defined by certain securities required to be registered under section 12 of the Securities Exchange Act of 1934.
Although this is a more workable definition than set forth in our previous rules, we have determined that it is appropriate to offer the expanded religious exemptions to certain entities whether
or not they have publicly traded ownership interests.

60 Although the Departments do not prescribe any form or notification, they would expect that such principles or views would have been adopted and documented in accordance with the
laws of the jurisdiction under which they are incorporated or organized.

61 See, e.g., Nasdaq.com, "4 Publicly Traded Religious Companies if You're Looking to Invest in Faith" (Feb. 7, 2014), available at http://www.nasdaq.com/article/4-publicly-traded-
religious-companies-if-youre-looking-to-invest-in-faith-cm324665.

laws and regulations protect issuers or
plans specifically. For example, 42 U.S.C.
1395w-22(j)(3)(B) and 1396u-2(b)(3)
protect plans or managed care organiza-
tions in Medicaid or Medicare Advantage.
The Weldon Amendment protects HMOs,
health insurance plans, and any other
health care organizations are protected
from being required to provide coverage
or pay for abortions. See, for example,
Consolidated Appropriations Act of 2017,
Pub. L. No. 115-31, Div. H, Title V, Sec.
507(d). Congress also declared this year
that "it is the intent of Congress" to in-
clude a "conscience clause" which pro-
vides exceptions for religious beliefs if the
District of Columbia requires "the provi-
sion of contraceptive coverage by health
insurance plans." See Id. at Div. C, Title
VIII, Sec. 808. In light of the clearly ex-
pressed intent of Congress to protect reli-
gious liberty, particularly in certain health
care contexts, along with the specific ef-
forts to protect issuers, the Departments
have concluded that an exemption for is-
suers is appropriate.

As discussed above, where the exemp-
tion for plan sponsors or institutions of
higher education applies, issuers are ex-
empt under those sections with respect to
providing coverage in those plans. The
issuer exemption in § 147.132(a)(1)(iii)
adds to that protection, but the additional
protection operates in a different way than
the plan sponsor exemption operates. As
set forth in these interim final rules, the
only plan sponsors, or in the case of indi-
vidual insurance coverage, individuals,
who are eligible to purchase or enroll in
health insurance coverage offered by an
exempt issuer that does not cover some or
all contraceptive services are plan spon-
sors or individuals who themselves object
and are otherwise exempt based on their
objection. Thus, the issuer exemption
specifies that where a health insurance
issuer providing group health insurance
coverage is exempt under paragraph
(a)(1)(iii), the plan remains subject to any
requirement to provide coverage for con-
traceptive services under Guidelines is-
sued under 42 CFR 147.130(a)(1)(iv) un-
less the plan is otherwise exempt from
that requirement. Accordingly, the only
plan sponsors, or in the case of individual
insurance coverage, individuals, who are
eligible to purchase or enroll in health

insurance coverage offered by an issuer
that is exempt under this paragraph
(a)(1)(iii) that does not include coverage
for some or all contraceptive services are
plan sponsors or individuals who them-
selves object and are exempt. Issuers that
hold religious objections should identify
to plan sponsors the lack of contraceptive
coverage in any health insurance coverage
being offered that is based on the issuer's
exemption, and communicate the group
health plan's independent obligation to
provide contraceptive coverage, unless the
group health plan itself is exempt under
regulations governing the Mandate.

In this way, the issuer exemption
serves to protect objecting issuers both
from being asked or required to issue pol-
icies that cover contraception in violation
of the issuers' sincerely held religious be-
liefs, and from being asked or required to
issue policies that omit contraceptive cov-
erage to non-exempt entities or individu-
als, thus subjecting the issuers to potential
liability if those plans are not exempt from
the Guidelines. At the same time, the is-
suer exemption will not serve to remove
contraceptive coverage obligations from
any plan or plan sponsor that is not also
exempt, nor will it prevent other issuers
from being required to provide contracep-
tive coverage in individual insurance cov-
erage. Permitting issuers to object to of-
fering contraceptive coverage based on
sincerely held religious beliefs will allow
issuers to continue to offer coverage to
plan sponsors and individuals, without
subjecting them to liability under section
2713(a)(4) of the PHS Act or related pro-
visions for their failure to provide contra-
ceptive coverage.

The issuer exemption does not specif-
ically include third party administrators,
although the optional accommodation
process provided under these interim final
rules specifies that third party administra-
tors cannot be required to contract with an
entity that invokes that process. Some re-
ligious third party administrators have
brought suit in conjunction with suits
brought by organizations enrolled in
ERISA-exempt church plans. Such plans
are now exempt under these interim final
rules, and their third party administrators,
as claims processors, are under no obliga-
tion under section 2713(a)(4) of the PHS
Act to provide benefits for contraceptive

services, as that section applies only to
plans and issuers. In the case of ERISA-
covered plans, plan administrators are ob-
ligated under ERISA to follow the plan
terms, but it is the Departments' under-
standing that third party administrators are
not typically designated as plan adminis-
trators under section 3(16) of ERISA and,
therefore, would not normally act as plan
administrators under section 3(16) of
ERISA. Therefore, to the Departments'
knowledge, it is only under the existing
accommodation process that third party
administrators are required to undertake
any obligations to provide or arrange for
contraceptive coverage to which they
might object. These interim final rules
make the accommodation process op-
tional for employers and other plan spon-
sors, and specify that third party adminis-
trators that have their own objection to
complying with the accommodation pro-
cess may decline to enter into, or con-
tinue, contracts as third party administra-
tors of such plans. For these reasons, these
interim final rules do not otherwise ex-
empt third party administrators. The
Departments solicit public comment,
however, on whether there are situations
where there may be an additional need to
provide distinct protections for third party
administrators that may have religious be-
liefs implicated by the Mandate.

### F. Scope of Objections Needed for the Objecting Entity Exemption

Exemptions for objecting entities specify
that they apply where the entities object as
specified in § 147.132(a)(2). That paragraph
specifies that exemptions for objecting enti-
ties will apply to the extent that an entity
described in §147.132(a)(1) objects to its
establishing, maintaining, providing, offer-
ing, or arranging (as applicable) coverage,
payments, or a plan that provides coverage
or payments for some or all contraceptive
services, based on its sincerely held reli-
gious beliefs.

### G. Individual Exemption

These interim final rules include a spe-
cial rule pertaining to individuals (referred
to here as the "individual exemption").
Section 147.132(b) provides that nothing
in § 147.130(a)(1)(iv), 26 CFR 54.9815-

2713(a) (1)(iv), or 29 CFR 2590.715-
2713(a)(1)(iv), may be construed to pre-
vent a willing plan sponsor of a group
health plan or a willing health insurance
issuer offering group or individual health
insurance coverage, from offering a sepa-
rate benefit package option, or a separate
policy, certificate, or contract of insur-
ance, to any individual who objects to
coverage or payments for some or all con-
traceptive services based on the individu-
al's sincerely held religious beliefs. The
individual exemption extends to the cov-
erage unit in which the plan participant, or
subscriber in the individual market, is en-
rolled (for instance, to family coverage
covering the participant and his or her
beneficiaries enrolled under the plan), but
does not relieve the plan's or issuer's ob-
ligation to comply with the Mandate with
respect to the group health plan at large or,
as applicable, to any other individual pol-
icies the issuer offers.

This individual exemption allows plan
sponsors and issuers that do not specifi-
cally object to contraceptive coverage to
offer religiously acceptable coverage to
their participants or subscribers who do
object, while offering coverage that in-
cludes contraception to participants or
subscribers who do not object. This indi-
vidual exemption can apply with respect
to individuals in plans sponsored by pri-
vate employers or governmental employ-
ers. For example, in one case brought
against the Departments, the State of Mis-
souri enacted a law under which the State
is not permitted to discriminate against
insurance issuers that offer health plans
without coverage for contraception based
on employees' religious beliefs, or against
the individual employees who accept such
offers. See Wieland, 196 F. Supp. 3d at
1015-16 (quoting Mo. Rev. Stat.
191.724). Under the individual exemption
of these interim final rules, employers
sponsoring governmental plans would be
free to honor the objections of individual
employees by offering them plans that
omit contraceptive coverage, even if those
governmental entities do not object to of-
fering contraceptive coverage in general.

This "individual exemption" cannot be
used to force a plan (or its sponsor) or an
issuer to provide coverage omitting con-
traception, or, with respect to health insur-
ance coverage, to prevent the application
of State law that requires coverage of such
contraceptives or sterilization. Nor can the
individual exemption be construed to re-
quire the guaranteed availability of cover-
age omitting contraception to a plan spon-
sor or individual who does not have a
sincerely held religious objection. This in-
dividual exemption is limited to the re-
quirement to provide contraceptive cover-
age under section 2713(a)(4) of the PHS
Act, and does not affect any other Federal
or State law governing the plan or cover-
age. Thus, if there are other applicable
laws or plan terms governing the benefits,
these interim final rules do not affect such
other laws or terms.

The Departments believe the individ-
ual exemption will help to meet the Af-
fordable Care Act's goal of increasing
health coverage because it will reduce the
incidence of certain individuals choosing
to forego health coverage because the
only coverage available would violate
their sincerely held religious beliefs.62 At
the same time, this individual exemption
"does not undermine the governmental in-
terests furthered by the contraceptive cov-
erage requirement,"63 because, when the
exemption is applicable, the individual
does not want the coverage, and therefore
would not use the objectionable items
even if they were covered.

### H. Optional Accommodation

Despite expanding the scope of the ex-
emption, these rules also keep the accom-
modation process, but revise it so as to
make it optional. In this way, objecting
employers are no longer required to
choose between direct compliance or
compliance through the accommodation.
These rules maintain the location of the
accommodation process in the Code of
Federal Regulations at 45 CFR 147.131,
26 CFR 54.9815-2713A, and 29 CFR
2590.715-2713A. These rules, by virtue
of expanding the plan sponsor exemption

beyond houses of worship and integrated
auxiliaries that were previously exempt,
and beyond religious nonprofit groups that
were previously accommodated, and by
defining eligible organizations for the ac-
commodation with reference to those cov-
ered by the exemption, likewise expand
the kinds of entities that may use the op-
tional accommodation. This includes plan
sponsors with sincerely held religious be-
liefs for the reasons described above. Con-
sequently, under these interim final rules,
objecting employers may make use of the
exemption, or may choose to pursue the
optional accommodation process. If an el-
igible organization pursues the optional
accommodation process through the
EBSA Form 700 or other specified notice
to HHS, it voluntarily shifts an obligation
to provide separate but seamless contra-
ceptive coverage to its issuer or third party
administrator.

The fees adjustment process for quali-
fying health issuers or third party admin-
istrators pursuant to 45 CFR 156.50 is not
modified, and (as specified therein) re-
quires for its applicability that an excep-
tion under OMB Circular No. A-25R be
in effect as the Secretary of the Depart-
ment of Health and Human Services re-
quests.

If an eligible organization wishes to
revoke its use of the accommodation, it
can do so under these interim final rules
and operate under its exempt status. As
part of its revocation, the issuer or third
party administrator of the eligible organi-
zation must provide participants and ben-
eficiaries written notice of such revocation
as specified in guidance issued by the Sec-
retary of the Department of Health and
Human Services. This revocation process
applies both prospectively to eligible or-
ganizations who decide at a later date to
avail themselves of the optional accom-
modation and then decide to revoke that
accommodation, as well as to organiza-
tions that were included in the accommo-
dation prior to the effective date of these
interim final rules either by their submis-
sion of an EBSA Form 700 or notification,
or by some other means under which their
third party administrator or issuer was no-

62See, for example, Wieland, 196 F. Supp. 3d at 1017, and March for Life, 128 F. Supp. 3d at 130, where the courts noted that the individual employee plaintiffs indicated that they viewed
the Mandate as pressuring them to "forgo health insurance altogether."

6378 FR 39874.

tified by DOL or HHS that the accommo-
dation applies. Consistent with other ap-
plicable laws, the issuer or third party
administrator of an eligible organization
must promptly notify plan participants
and beneficiaries of the change of status to
the extent such participants and beneficia-
ries are currently being offered contracep-
tive coverage at the time the accommo-
dated organization invokes its exemption.
If contraceptive coverage is being offered
by an issuer or third party administrator
through the accommodation process, the
revocation will be effective on the 1st day
of the 1st plan year that begins on or after
30 days after the date of the revocation (to
allow for the provision of notice to plan
participants in cases where contraceptive
benefits will no longer be provided). Al-
ternatively, an eligible organization may
give 60-days notice pursuant to section
2715(d)(4) of the PHS Act,64 if applica-
ble, to revoke its use of the accommoda-
tion process.

The Departments have eliminated the
provision in the previous accommodation
under which an issuer is deemed to have
complied with the Mandate where the is-
suer relied reasonably and in good faith on
a representation by an eligible organiza-
tion as to its eligibility for the accommo-
dation, even if that representation was
later determined to be incorrect. Because
any organization with a sincerely held re-
ligious objection to contraceptive cover-
age is now eligible for the optional ac-
commodation under these interim final
rules and is also exempt, the Departments
believe there is minimal opportunity for
mistake or misrepresentation by the orga-
nization, and the reliance provision is no
longer necessary.

#### I. Definition of Contraceptive Services for the Purpose of these Rules

The interim final rules specify that
when the rules refer to "contraceptive"
services, benefits, or coverage, such terms
include contraceptive or sterilization
items, services, or related patient educa-
tion or counseling, to the extent specified
for purposes of § 147.130(a)(1)(iv). This
was the case under the previous rules, as
expressed in the preamble text of the var-

ious iterations of the regulations, but the
Departments wish to make the scope clear
by specifying it in the regulatory text.

### J. Conclusion

The Departments believe that the
Guidelines and the exemptions expanded
herein will advance the limited purposes
for which Congress imposed section 2713
of the PHS Act, while acting consistently
with Congress' well-established record of
allowing for religious exemptions with re-
spect to especially sensitive health care
and health insurance requirements. These
interim final rules leave fully in place over
a dozen Federal programs that provide, or
subsidize, contraceptives for women, in-
cluding for low income women based on
financial need. These interim final rules
also maintain HRSA's discretion to de-
cide whether to continue to require con-
traceptive coverage under the Guidelines
(in plans where Congress applied section
2713 of the PHS Act) if no objection
exists. The Departments believe this array
of programs and requirements better
serves the interest of providing contracep-
tive coverage while protecting the con-
science rights of entities that have sin-
cerely held religious objections to some or
all contraceptive or sterilization services.

The Departments request and encour-
age public comments on all matters ad-
dressed in these interim final rules.

## V. Interim Final Rules, Request for Comments and Waiver of Delay of Effective Date

Section 9833 of the Code, section 734
of ERISA, and section 2792 of the PHS
Act authorize the Secretaries of the Trea-
sury, Labor, and HHS (collectively, the
Secretaries) to promulgate any interim fi-
nal rules that they determine are appropri-
ate to carry out the provisions of chapter
100 of the Code, part 7 of subtitle B of
title I of ERISA, and part A of title XXVII
of the PHS Act, which include sections
2701 through 2728 of the PHS Act and the
incorporation of those sections into sec-
tion 715 of ERISA and section 9815 of the
Code. These interim final rules fall under
those statutory authorized justifications,

as did previous rules on this matter (75 FR
41726; 76 FR 46621; 79 FR 51092).

Section 553(b) of the Administrative
Procedure Act (APA) requires notice and
comment rulemaking, involving a notice
of proposed rulemaking and a comment
period prior to finalization of regulatory
requirements - except when an agency,
for good cause, finds that notice and pub-
lic comment thereon are impracticable,
unnecessary, or contrary to the public in-
terest. These provisions of the APA do not
apply here because of the specific author-
ity granted to the Secretaries by section
9833 of the Code, section 734 of ERISA,
and section 2792 of the PHS Act.

Even if these provisions of the APA
applied, they would be satisfied: The De-
partments have determined that it would
be impracticable and contrary to the pub-
lic interest to delay putting these provi-
sions in place until a full public notice-
and-comment process is completed. As
discussed earlier, the Departments have
issued three interim final rules implement-
ing this section of the PHS Act because of
the immediate needs of covered entities
and the weighty matters implicated by the
HRSA Guidelines. As recently as Decem-
ber 20, 2016, HRSA updated those Guide-
lines without engaging in the regulatory
process (because doing so is not a legal
requirement), and announced that it plans
to continue to update the Guidelines.

Dozens of lawsuits over the Mandate
have been pending for nearly 5 years. The
Supreme Court remanded several of those
cases more than a year ago, stating that on
remand "[w]e anticipate that the Courts of
Appeals will allow the parties sufficient
time to resolve any outstanding issues be-
tween them". Zubik, 136 S. Ct. at 1560.
During that time, Courts of Appeals have
been asking the parties in those cases to
submit status reports every 30 through 90
days. Those status reports have informed
the courts that the parties were in discus-
sions, and about the RFI issued in late
2016 and its subsequent comment process
and the FAQ the Departments issued in-
dicating that we could not find a way at
that time to amend the accommodation
process so as to satisfy objecting eligible
organizations while pursuing the Depart-
ments' policy goals. Since then, several

64See also 26 CFR 54.9815-2715(b); 29 CFR 2590.715-2715(b); 45 CFR 147.200(b).

courts have issued orders setting more
pressing deadlines. For example, on
March 10, 2017, the United States Court
of Appeals for the Seventh Circuit ordered
that, by May 1, 2017, "the court expects to
see either a report of an agreement to
resolve the case or detailed reports on the
parties' respective positions. In the event
no agreement is reported on or before
May 1, 2017, the court will plan to sched-
ule oral argument on the merits of the case
on short notice after that date". The De-
partments submitted a status report but
were unable to set forth their specific po-
sition because this interim final rule was
not yet on public display. Instead, the De-
partments informed the Court that we "are
now considering whether further adminis-
trative action would be appropriate". In
response, the court extended the deadline
to June 1, 2017, again declaring the court
expected "to see either a report of an
agreement to resolve the case or detailed
reports on the parties' respective posi-
tions". The Departments were again un-
able to set forth their position in that status
report, but were able to state that the "De-
partments of Health and Human Services,
Labor, and the Treasury are engaged in
rulemaking to reconsider the regulations
at issue here," citing https://www.reginfo.
gov/public/do/eoDetails?rrid=127381.

As discussed above, the Departments
have concluded that, in many instances,
requiring certain objecting entities or in-
dividuals to choose between the Mandate,
the accommodation, or penalties for non-
complaince has violated RFRA. Good
cause exists to issue the expanded exemp-
tion in these interim final rules in order to
cure such violations (whether among liti-
gants or among similarly situated parties
that have not litigated), to help settle or
resolve cases, and to ensure, moving for-
ward, that our regulations are consistent
with any approach we have taken in re-
solving certain litigation matters.

The Departments have also been sub-
ject to temporary injunctions protecting
many religious nonprofit organizations
from being subject to the accommodation
process against their wishes, while many
other organizations are fully exempt, have
permanent court orders blocking the con-
traceptive coverage requirement, or are
not subject to section 2713 of the PHS Act
and its enforcement due to Congress' lim-

ited application of that requirement. Good
cause exists to change the Departments'
previous rules to direct HRSA to bring its
Guidelines in accord with the legal reali-
ties and remove the threat of a future
violation of religious beliefs, including
where such violations are contrary to Fed-
eral law.

Other objecting entities similarly have
not had the protection of court injunctions.
This includes some nonprofit entities that
have sued the Departments, but it also
includes some organizations that do not
have lawsuits pending against us. For ex-
ample, many of the closely held for-profit
companies that brought the array of law-
suits challenging the Mandate leading up
to the decision in Hobby Lobby are not
protected by injunctions from the current
rules, including the requirement that they
either fully comply with the Mandate or
subject themselves to the accommodation.
Continuing to apply the Mandate's regu-
latory burden on individuals and organi-
zations with religious beliefs against it
could serve as a deterrent for citizens who
might consider forming new entities-
nonprofit or for-profit-and to offering
health insurance in employer-sponsored
plans or plans arranged by institutions of
higher education. Delaying the protection
afforded by these interim final rules would
be contrary to the public interest because
it would serve to extend for many months
the harm caused to all entities and indi-
viduals with religious objections to the
Mandate. Good cause exists to provide
immediate resolution to this myriad of
situations rather than leaving them to con-
tinued uncertainty, inconsistency, and cost
during litigation challenging the previous
rules.

These interim final rules provide a spe-
cific policy resolution that courts have
been waiting to receive from the Depart-
ments for more than a year. If the Depart-
ments were to publish a notice of pro-
posed rulemaking instead of these interim
final rules, many more months could pass
before the current Mandate is lifted from
the entities receiving the expanded ex-
emption, during which time those entities
would be deprived of the relief clearly set
forth in these interim final rules. In re-
sponse to several of the previous rules on
this issue-including three issued as in-
terim final rules under the statutory au-

thority cited above-the Departments
received more than 100,000 public com-
ments on multiple occasions. Those com-
ments included extensive discussion about
whether and by what extent to expand the
exemption. Most recently, on July 26,
2016, the Departments issued a request for
information (81 FR 47741) and received
over 54,000 public comments about dif-
ferent possible ways to resolve these is-
sues. In connection with past regulations,
the Departments have offered or expanded
a temporary safe harbor allowing organi-
zations that were not exempt from the
HRSA Guidelines to operate out of com-
pliance with the Guidelines. The Depart-
ments will fully consider comments sub-
mitted in response to these interim final
rules, but believe that good cause exists to
issue the rules on an interim final basis
before the comments are submitted and
reviewed.

As the United States Court of Appeals
for the D.C. Circuit stated with respect to
an earlier interim final rule promulgated
with respect to this issue in Priests for Life
v. U.S. Department of Health and Human
Services, 772 F.3d 229, 276 (D.C. Cir.
2014), vacated on other grounds, Zubik v.
Burwell, 136 S. Ct. 1557 (2016), “[S]ev-
eral reasons support HHS's decision not
to engage in notice and comment here".
Among other things, the Court noted that
"the agency made a good cause finding in
the rule it issued"; that "the regulations
the interim final rule modifies were re-
cently enacted pursuant to notice and
comment rulemaking, and presented vir-
tually identical issues"; that "HHS will
expose its interim rule to notice and com-
ment before its permanent implementa-
tion"; and that "delay in implementation
of the rule would interfere with the
prompt availability of contraceptive cov-
erage and delay the implementation of the
alternative opt-out for religious objec-
tors". Id. at 277.

Delaying the availability of the ex-
panded exemption would delay the ability
of those organizations and individuals to
avail themselves of the relief afforded by
these interim final rules. Good cause is
supported by providing relief for entities
and individuals for whom the Mandate
operates in violation of their sincerely
held religious beliefs, but who would have
to experience that burden for many more

months under the prior regulations if these
rules are not issued on an interim final
basis. Good cause is also supported by the
effect of these interim final rules in bring-
ing to a close the uncertainty caused by
years of litigation and regulatory changes
made under section 2713(a)(4) of the PHS
Act. Issuing interim final rules with a
comment period provides the public with
an opportunity to comment on whether
these regulations expanding the exemp-
tion should be made permanent or subject
to modification without delaying the ef-
fective date of the regulations.

Delaying the availability of the ex-
panded exemption would also increase the
costs of health insurance. As reflected in
litigation pertaining to the Mandate, some
entities are in grandfathered health plans
that do not cover contraception. They
wish to make changes to their health plans
that will reduce the costs of insurance
coverage for their beneficiaries or policy-
holders, but which would cause the plans
to lose grandfathered status. They are re-
fraining from making those changes-and
therefore are continuing to incur and pass
on higher insurance costs-to prevent the
Mandate from applying to their plans in
violation of their consciences. Issuing
these rules on an interim final basis is
necessary in order to help reduce the costs
of health insurance for such entities and
their plan participants.

These interim final rules also set forth
an optional accommodation process, and
expand eligibility for that process to a
broader category of entities. Delaying the
availability of the optional accommoda-
tion process would delay the ability of
organizations that do not now qualify for
the accommodation, but wish to opt into
it, to be able to do so and therefore to
provide a mechanism for contraceptive
coverage to be provided to their employ-
ees while the organization's religious ob-
jections are accommodated.

For the foregoing reasons, the Depart-
ments have determined that it would be
impracticable and contrary to the public
interest to engage in full notice and com-
ment rulemaking before putting these in-
terim final rules into effect, and that it is in
the public interest to promulgate interim
final rules. For the same reasons, the De-
partments have determined, consistent
with section 553(d) of the APA (5 U.S.C.

553(d)), that there is good cause to make
these interim final rules effective immedi-
ately upon filing at the Office of the Fed-
eral Register.

## VI. Economic Impact and Paperwork Burden

We have examined the impacts of the
interim final rules as required by Execu-
tive Order 12866 on Regulatory Planning
and Review (September 30, 1993), Exec-
utive Order 13563 on Improving Regula-
tion and Regulatory Review (January 18,
2011), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96
354), section 1102(b) of the Social Secu-
rity Act, section 202 of the Unfunded
Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order
13132 on Federalism (August 4, 1999),
the Congressional Review Act (5 U.S.C.
804(2) and Executive Order 13771 on Re-
ducing Regulation and Controlling Regu-
latory Costs (January 30, 2017).

### A. Executive Orders 12866 and 13563- Department of HHS and Department of Labor

Executive Orders 12866 and 13563 di-
rect agencies to assess all costs and ben-
efits of available regulatory alternatives
and, if regulation is necessary, to select
regulatory approaches that maximize net
benefits (including potential economic,
environmental, and public health and
safety effects; distributive impacts; and
equity). Executive Order 13563 empha-
sizes the importance of quantifying both
costs and benefits, reducing costs, harmo-
nizing rules, and promoting flexibility.

Section 3(f) of Executive Order 12866
defines a "significant regulatory action" as
an action that is likely to result in a reg-
ulation: (1) having an annual effect on the
economy of $100 million or more in any
one year, or adversely and materially af-
fecting a sector of the economy, produc-
tivity, competition, jobs, the environment,
public health or safety, or State, local, or
tribal governments or communities (also
referred to as "economically significant");
(2) creating a serious inconsistency or oth-
erwise interfering with an action taken or
planned by another agency; (3) materially
altering the budgetary impacts of entitle-
ment grants, user fees, or loan programs

or the rights and obligations of recipients
thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the
President's priorities, or the principles set
forth in the Executive Order.

A regulatory impact analysis must be
prepared for major rules with economi-
cally significant effects ($100 million or
more in any one year), and an "economi-
cally significant" regulatory action is sub-
ject to review by the Office of Manage-
ment and Budget (OMB). As discussed
below regarding anticipated effects of
these rules and the Paperwork Reduction
Act, these interim final rules are not likely
to have economic impacts of $100 million
or more in any 1 year, and therefore do not
meet the definition of "economically sig-
nificant" under Executive Order 12866.
However, OMB has determined that the
actions are significant within the meaning
of section 3(f)(4) of the Executive Order.
Therefore, OMB has reviewed these final
regulations, and the Departments have
provided the following assessment of their
impact.

#### 1. Need for Regulatory Action

These interim final rules amend the
Departments' July 2015 final regulations
to expand the exemption from the require-
ment to provide coverage for contracep-
tives and sterilization, established under
the HRSA Guidelines, promulgated under
section 2713(a)(4) of the PHS Act, section
715(a)(1) of the ERISA, and section
9815(a)(1) of the Code, and to revise the
accommodation process to make it op-
tional for eligible organizations. The ex-
panded exemption would apply to individ-
uals and entities that have religious
objections to some (or all) of the contra-
ceptive and/or sterilization services that
would be covered under the Guidelines.
Such action is taken, among other reasons,
to provide for participation in the health
insurance market by certain entities or in-
dividuals free from penalties for violating
sincerely held religious beliefs opposed to
providing or receiving coverage of contra-
ceptive services, and to resolve many of
the lawsuits that have been filed against
the Departments.

#### 2. Anticipated Effects

The Departments assess this interim
final rule together with a companion in-
terim final rule concerning moral but non-
religious conscientious objections to con-
traception, published elsewhere in this
Federal Register. Regarding entities that
are extended an exemption, absent expan-
sion of the exemption the Guidelines
would require many of these entities and
individuals to either: pay for coverage of
contraceptive services that they find
religiously objectionable; submit self-
certifications that would result in their issuer
or third party administrator paying for such
services for their employees, which some
entities also believe entangles them in the
provision of such objectionable coverage;
or, pay tax penalties or be subject to other
adverse consequences for non-compliance
with these requirements. These interim final
rules remove certain associated burdens im-
posed on these entities and individuals-
that is, by recognizing their religious objec-
tions and exempting them-on the basis of
such objections-from the contraceptive
and/or sterilization coverage requirement of
the HRSA Guidelines and making the ac-
commodation process optional for eligible
organizations.

To the extent that entities choose to
revoke their accommodated status to
make use of the expanded exemption im-
mediately, a notice will need to be sent to
enrollees (either by the entity or by the
issuer or third party administrator) that
their contraceptive coverage is changing,
and guidance will reflect that such a notice
requirement is imposed no more than is
already required by preexisting rules that
require notices to be sent to enrollees of
changes to coverage during a plan year. If
the entities wait until the start of their next
plan year to change to exempt status, in-
stead of doing so during a plan year, those
entities generally will also be able to
avoid sending any supplementary notices
in addition to what they would otherwise
normally send prior to the start of a new
plan year. Additionally, these interim final
rules provide such entities with an offset-
ting regulatory benefit by the exemption
itself and its relief of burdens on their
religious beliefs. As discussed below, as-
suming that more than half of entities that
have been using the previous accommo-

dation will seek immediate revocation of
their accommodated status and notices
will be sent to all their enrollees, the total
estimated cost of sending those notices
will be $51,990.

The Departments estimate that these
interim final rules will not result in any
additional burdens or costs on issuers or
third party administrators. As discussed
below, the Departments believe that 109
of the 209 entities making use of the ac-
commodation process will instead make
use of their newly exempt status. In con-
trast, the Departments expect that a much
smaller number (which we assume to be
9) will make use of the accommodation
that were not provided access to it previ-
ously. Reduced burdens for issuers and
third party administrators due to reduc-
tions in use of the accommodation will
more than offset increased obligations on
issuers and third party administrators
serving the fewer number of entities that
will newly opt into the accommodation.
This will lead to a net decrease in burdens
and costs on issuers and third party ad-
ministrators, who will no longer have con-
tinuing obligations imposed on them by
the accommodation.

These interim final rules will result in
some persons covered in plans of newly
exempt entities not receiving coverage or
payments for contraceptive services. The
Departments do not have sufficient data to
determine the actual effect of these rules
on plan participants and beneficiaries, in-
cluding for costs they may incur for con-
traceptive coverage, nor of unintended
pregnancies that may occur. As discussed
above and for reasons explained here,
there are multiple levels of uncertainty
involved in measuring the effect of the
expanded exemption, including but not
limited to-

· how many entities will make use of
their newly exempt status.

· how many entities will opt into the
accommodation maintained by these
rules, under which their plan participants
will continue receiving contraceptive cov-
erage.

· which contraceptive methods some
newly exempt entities will continue to pro-
vide without cost-sharing despite the entity
objecting to other methods (for example, as
reflected in Hobby Lobby, several objecting
entities still provide coverage for 14 of the

18 women's contraceptive or sterilization
methods, 134 S. Ct. at 2766).

. how many women will be covered by
plans of entities using their newly exempt
status.

· which of the women covered by
those plans want and would have used
contraceptive coverage or payments for
contraceptive methods that are no longer
covered by such plans.

· whether, given the broad availability
of contraceptives and their relatively low
cost, such women will obtain and use con-
traception even if it is not covered.

· the degree to which such women are
in the category of women identified by
IOM as most at risk of unintended preg-
nancy.

· the degree to which unintended preg-
nancies may result among those women,
which would be attributable as an effect of
these rules only if the women did not
otherwise use contraception or a particular
contraceptive method due to their plan
making use of its newly exempt status.

· the degree to which such unintended
pregnancies may be associated with neg-
ative health effects, or whether such ef-
fects may be offset by other factors, such
as the fact that those women will be oth-
erwise enrolled in insurance coverage.

· the extent to which such women will
qualify for alternative sources of contra-
ceptive access, such as through a parent's
or spouse's plan, or through one of the
many governmental programs that subsi-
dize contraceptive coverage to supple-
ment their access.

The Departments have access to
sources of information discussed in the
following paragraphs that are relevant to
this issue, but those sources do not pro-
vide a full picture of the impact of these
interim final rules.

First, the prior rules already exempted
certain houses of worship and their inte-
grated auxiliaries. Further, as discussed
above, the prior accommodation process
allows hundreds of additional religious
nonprofit organizations in self-insured
church plans that are exempt from ERISA
to file a self-certification or notice that
relieves not only themselves but, in effect,
their third party administrators of any ob-
ligation to provide contraceptive coverage
or payments. Although in the latter case,
third party administrators are legally per-

mitted to provide the coverage, several
self-insured church plans themselves have
expressed an objection in litigation to al-
lowing such contraceptive coverage to be
provided, and according to information
received during litigation, it appears that
such contraceptive coverage has not been
provided. In addition, a significant portion
of the lawsuits challenging the Mandate
were brought by a single firm representing
Catholic dioceses and related entities
covered by their diocese-sponsored plans.
In that litigation, the Departments took
the position that, where those diocese-
sponsored plans are self-insured, those
plans are likely church plans exempt from
ERISA.65 For the purposes of considering
whether the expanded exemption in these
rules affects the persons covered by such
diocese-sponsored plans, the Departments
continue to assume that such plans are
similar to other objecting entities using
self-insured church plans with respect to
their third party administrators being un-
likely to provide contraceptive coverage
to plan participants and beneficiaries un-
der the previous rule. Therefore the De-
partments estimate that these interim final
rules have no significant effect on the con-
traceptive coverage of women covered by
plans of houses of worship and their inte-
grated auxiliaries, entities using a self-
insured church plan, or church dioceses
sponsoring self-insured plans.

It is possible that an even greater num-
ber of litigating or accommodated plans
might have made use of self-insured
church plan status under the previous ac-
commodation. Notably, one of the largest
nonprofit employers that had filed suit
challenging the Mandate had, under these
prior rules, shifted most of their employ-
ees into self-insured church plans, and the
Departments have taken the position that

various other employers that filed suit were
eligible to assume self-insured church plan
status.66 The Supreme Court's recent deci-
sion in Advocate Health Care Network,
while not involving this Mandate, also clar-
ifies certain circumstances under which re-
ligious hospitals may be eligible for self-
insured church plan status. See 137 S. Ct. at
1656-57, 1663 (holding that a church plan
under ERISA can be a plan not established
and maintained by a church, if it is main-
tained by a principal-purpose organization).

Second, when the Departments previ-
ously created the exemption, expanded its
application, and provided an accommoda-
tion (which, as mentioned, can lift obliga-
tions on self-insured church plans for
hundreds of nonprofit organizations), we
concluded that no significant burden or costs
would result at all. (76 FR 46625; 78 FR
39889.) We reached this conclusion despite
the impact, just described, whereby the pre-
vious rule apparently lead to women not
receiving contraceptive coverage through
hundreds of nonprofit entities using self-
insured church plans. We also reached this
conclusion without counting any significant
burden or cost to some women covered in
the plans of houses of worship or integrated
auxiliaries that might want contraceptive
coverage. This conclusion was based in part
on the assertion, set forth in previous regu-
lations, that employees of houses of worship
and integrated auxiliaries likely share their
employers' opposition to contraception.
Many other religious nonprofit entities,
however, both adopt and implement reli-
gious principles with similar fervency. For
the reasons discussed above, the Depart-
ments no longer believe we can distinguish
many of the women covered in the plans of
religious nonprofit entities from the women
covered in the plans of houses of worship
and integrated auxiliaries regarding which

the Departments assumed share their em-
ployers' objection to contraception, nor
from women covered in the plans of reli-
gious entities using self-insured church
plans regarding which we chose not to cal-
culate any anticipated effect even though we
conceded we were not requiring their third
party administrators to provide contracep-
tive coverage. In the estimates and assump-
tions below, we include the potential effect
of these interim rules on women covered by
such entities, in order to capture all of the
anticipated effects of these rules.

Third, these interim final rules extend the
exemption to for-profit entities. Among the
for-profit employers that filed suit challeng-
ing the Mandate, the one with the most
employees was Hobby Lobby.67 As noted
above, and like some similar entities, the
plaintiffs in Hobby Lobby were willing to
provide coverage with no cost sharing of
various contraceptive services: 14 of 18
FDA-approved women's contraceptive and
sterilization methods.68 (134 S. Ct. at 2766.)
The effect of expanding the exemption to
for-profit entities is therefore mitigated to
the extent many of the persons covered by
such entities' plans may receive coverage
for at least some contraceptive services. No
publicly traded for-profit entities have filed
lawsuits challenging the Mandate. The De-
partments agree with the Supreme Court's
expectation in this regard: "it seems unlikely
that the sort of corporate giants to which
HHS refers will often assert RFRA claims.
HHS has not pointed to any example of a
publicly traded corporation asserting RFRA
rights, and numerous practical restraints
would likely prevent that from occurring.
For example, the idea that unrelated share-
holders-including institutional investors
with their own set of stakeholders-would
agree to run a corporation under the same
religious beliefs seems improbable". Hobby

65See, for example, Brief in Opp. To Pls.' Mot. for Prelim. Inj., Brandt v. Burwell, No. 2:14-cv-681-AJS, doc. # 23 (W.D. Pa. filed June 10, 2014) (arguing that "plaintiffs have not
established an injury in fact to the degree plaintiffs have a self-insured church plan," based on the fact that "the same law firm representing the plaintiffs here has suggested in another similar
case that all 'Catholic entities like the Archdiocese participate in "church plans."); Roman Catholic Archdiocese of N.Y. v. Sebelius, 987 F. Supp. 2d 232, 242 (E.D.N.Y. 2013) ("because
plaintiffs' self-insured plans are church plans, their third party administrators would not be required to provide contraceptive coverage").

66See https://www.franciscanhealth.org/sites/default/files/2015%20employee%20benefit%20booklet.pdf .; see, for example, Roman Catholic Archdiocese of N.Y. v. Sebelius, 987 F. Supp. 2d
232, 242 (E.D.N.Y. 2013).

67Verified Complaint 1 34, Hobby Lobby Stores, Inc., et al. v. Sebelius, No. 5:12-cv-01000-HE (Sept. 12, 2012 W.D. Okla.) (13,240 employees).

68By reference to the FDA Birth Control Guide's list of 18 birth control methods for women and 2 for men, https://www.fda.gov/downloads/forconsumers/byaudience/forwomen/
freepublications/ucm517406.pdf, Hobby Lobby and entities with similar beliefs were not willing to cover: IUD copper; IUD with progestin; emergency contraceptive (Levonorgestrel); and
emergency contraceptive (Ulipristal Acetate). See 134 S. Ct. at 2765-66. Hobby Lobby was willing to cover: sterilization surgery for women; sterilization implant for women; implantable
rod; shot/injection; oral contraceptives ("the Pill"-combined pill); oral contraceptives ("the Pill"-extended/continuous use/combined pill); oral contraceptives ("the Mini Pill"-progestin
only); patch; vaginal contraceptive ring; diaphragm with spermicide; sponge with spermicide; cervical cap with spermicide; female condom; spermicide alone. Id. Among women using these
18 female contraceptive methods, 85 percent use the 14 methods that Hobby Lobby and entities with similar beliefs were willing to cover (22,446,000 out of 26,436,000), and "[t]he pill
and female sterilization have been the two most commonly used methods since 1982." See Guttmacher Institute, "Contraceptive Use in the United States" (Sept. 2016), available at
https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states.

Lobby, 134 S. Ct. at 2774. Therefore, al-
though publicly traded entities could make
use of exempt status under these interim
final rules, the Departments do not expect
that very many will do so, as compared to
the 87 religious closely held for-profit enti-
ties that brought litigation challenging the
Mandate (some of which might be content
with the accommodation).

Fourth, the Departments have a limited
amount of information about entities that
have made use of the accommodation pro-
cess as set forth in the previous rules.
HHS previously estimated that 209 enti-
ties would make use of the accommoda-
tion process. That estimate was based on
HHS's observation in its August 2014 in-
terim final rules and July 2015 final reg-
ulations that there were 122 eligible enti-
ties that had filed litigation challenging
the accommodation process, and 87
closely held for-profit entities that had
filed suit challenging the Mandate in gen-
eral. (79 FR 51096; 80 FR 41336). The
Departments acknowledged that entities
that had not litigated might make use of
the accommodation, but we stated we did
not have better data to estimate how many
might use the accommodation overall.

After issuing those rules, the Depart-
ments have not received complete data on
the number of entities actually using the
accommodation, because the accommoda-
tion does not require many accommodated
entities to submit information to us. Our
limited records indicate that approxi-
mately 63 entities have affirmatively sub-
mitted notices to HHS to use the accom-
modation. This includes some fully
insured and some self-insured plans, but it
does not include entities that may have
used the accommodation by submitting an
EBSA form 700 self-certification directly
to their issuer or third party administrator.
We have deemed some other entities as
being subject to the accommodation
through their litigation filings, but that
might not have led to contraceptive cov-
erage being provided to persons covered
in some of those plans, either because they
are exempt as houses of worship or inte-
grated auxiliaries, they are in self-insured
church plans, or we were not aware of
their issuers or third party administrators
so as to send them letters obligating them
to provide such coverage. Our records
also indicate that 60 plans used the con-

traceptive user fees adjustments in the
2015 plan year, the last year for which we
have data. This includes only self-insured
plans, and it includes some plans that self-
certified through submitting notices and
other plans that, presumably, self-certified
through the EBSA form 700.

These sets of data are not inconsistent
with our previous estimate that 209 entities
would use the accommodation, but they in-
dicate that some non-litigating entities used
the accommodation, and some litigating en-
tities did not, possibly amounting to a sim-
ilar number. For this reason, and because we
do not have more complete data available,
we believe the previous estimate of 209
accommodated entities is still the best esti-
mate available for how many entities have
used the accommodation under the previous
rule. This assumes that the number of liti-
gating entities that did not use the accom-
modation is approximately the same as the
number of non-litigating entities that did use
it.

In considering how many entities will
use the voluntary accommodation moving
forward-and how many will use the ex-
panded exemption-we also do not have
specific data. We expect the 122 nonprofit
entities that specifically challenged the ac-
commodation in court to use the expanded
exemption. But, as noted above, we be-
lieve a significant number of them are not
presently participating in the accommoda-
tion, and that some nonprofit entities in
self-insured church plans are not provid-
ing contraceptive coverage through their
third party administrators even if they are
using the accommodation. Among the 87
for-profit entities that filed suit challeng-
ing the Mandate in general, few if any
filed suit challenging the accommodation.
We do not know how many of those en-
tities are using the accommodation, how
many may be complying with the Man-
date fully, how many may be relying on
court injunctions to do neither, or how
many will use the expanded exemption
moving forward. Among entities that
never litigated but used the accommoda-
tion, we expect many but not all of them
to continue using the accommodation, and
we do not have data to estimate how many
such entities there are or how many will
choose either option.

Overall, therefore, without sufficient
data to estimate what the estimated 209

previously accommodated entities will do
under these interim final rules, we assume
that just over half of them will use the
expanded exemption, and just under half
will continue their accommodated status
under the voluntary process set forth in
these rules. Specifically, we assume that
109 previously accommodated entities
will make use of their exempt status, and
100 will continue using the accommoda-
tion. This estimate is based in part on our
view that most litigating nonprofit entities
would prefer the exemption to the accom-
modation, but that many of either have not
been using the accommodation or, if they
have been using it, it is not providing
contraceptive coverage for women in their
plans where they participate in self-
insured church plans. This estimate is also
consistent with our lack of knowledge of
how many for-profit entities were using
the accommodation and will choose the
exemption or the accommodation, given
that many of them did not bring legal
challenges against the accommodation af-
ter Hobby Lobby. This estimate is further
consistent with our view, explained in
more detail below, that some entities that
are using the accommodation and did not
bring litigation will use the exemption, but
many accommodated, non-litigating enti-
ties-including the ones with the largest
relative workforces among accommo-
dated entities-will continue using the ac-
commodation. The Departments recog-
nize that we do not have better data to
estimate the effects of these interim final
rules on such entities.

In addition to these factors, we recog-
nize that the expanded exemption and ac-
commodation are newly available to reli-
gious for-profit entities that are not closely
held and some other plan sponsors. As
explained above, the Departments believe
religious for-profit entities that are not
closely held may exist, or may wish to
come into being. HHS does not anticipate
that there will be significant number of
such entities, and among those, we believe
that very few if any will use the accom-
modation. All of the for-profit entities that
have challenged the Mandate have been
religious closely held entities.

It is also possible that religious non-
profit or closely held for-profit entities
that were already eligible for the accom-
modation but did not previously use it will

opt into it moving forward, but because
they could have done so under the previ-
ous rules, their opting into the accommo-
dation is not caused by these rules.

Without any data to estimate how
many of any entities newly eligible for
and interested in using the accommoda-
tion might exist, HHS assumes for the
purposes of estimating the anticipated ef-
fect of these rules that less than 10 entities
(9) will do so. Therefore, we estimate that
109 entities will use the voluntary accom-
modation moving forward, 100 of which
were already using the previous accom-
modation, and that 109 entities that have
been using the previous accommodation
will use the expanded exemption instead.

Fifth, in attempting to estimate the an-
ticipated effect of these interim final rules
on women receiving contraceptive cover-
age, the Departments have limited infor-
mation about the entities that have filed
suit challenging the Mandate. Approxi-
mately 209 entities have brought suit chal-
lenging the Mandate over more than 5
years. They have included a broad range
of nonprofit entities and closely held for-
profit entities. We discuss a number of
potentially relevant points:

First, the Departments do not believe
that out-of-pocket litigation costs have
been a significant barrier to entities choos-
ing to file suit. Based on the Departments'
knowledge of these cases through public
sources and litigation, nearly all the enti-
ties were represented pro bono and were
subject to little or no discovery during the
cases, and multiple public interest law
firms publicly provided legal services for
entities willing to challenge the Man-
date.69 (It is noteworthy, however, that
such pro bono arrangements and minimi-

zation of discovery do not eliminate 100
percent of the time costs of participating
in litigation or, as discussed in more detail
below, the potential for negative publicity.
Both concerns could have dissuaded par-
ticipation in lawsuits, and the potential for
negative publicity may also dissuade par-
ticipation in the expanded exemptions.)

Second, prior to the Affordable Care
Act, the vast majority of entities already
covered contraception, albeit not always
without cost-sharing The Departments do
not have data to indicate why entities that
did not cover contraception prior to the
Affordable Care Act chose not to cover it.
As noted above, however, the Departments
have maintained that compliance with the
contraceptive Mandate is cost-neutral to is-
suers, which indicates that no significant
financial incentive exists to omit contracep-
tive coverage. As indicated by the report by
HHS ASPE discussed above, we have as-
sumed that millions of women received pre-
ventive services after the Mandate went into
effect because nearly all entities complied
with the Guidelines. We are not aware of
expressions from most of those entities in-
dicating that they would have sincerely held
religious objections to complying with the
Mandate, and therefore that they would
make use of the expanded exemption pro-
vided here.

Third, omitting contraceptive coverage
has subjected some entities to serious pub-
lic criticism and in some cases organized
boycotts or opposition campaigns that
have been reported in various media and
online outlets regarding entities that have
filed suit. The Departments expect that
even if some entities might not receive
such criticism, many entities will be re-
luctant to use the expanded exemption

unless they are committed to their views
to a significant degree.

Overall, the Departments do not know
how many entities will use the expanded
exemption. We expect that some non-
litigating entities will use it, but given the
aforementioned considerations, we believe
it might not be very many more. Moreover,
many litigating entities are already exempt
or are not providing contraceptive coverage
to women in their plans due to their partic-
ipating in self-insured church plans, so the
effect of the expanded exemption among
litigating entities is significantly lower than
it would be if all the women in their plans
were already receiving the coverage.

To calculate the anticipated effects of
this rule on contraceptive coverage among
women covered by plans provided by liti-
gating entities, we start by examining court
documents and other public sources.70
These sources provide some information,
albeit incomplete, about how many people
are employed by these entities. As noted
above, however, contraceptive coverage
among the employees of many litigating
entities will not be affected by these rules
because some litigating entities were ex-
empt under the prior rule, while others were
or appeared to be in self-insured church
plans so that women covered in their plans
were already not receiving contraceptive
coverage.

Among litigating entities that were nei-
ther exempt nor likely using self-insured
church plans, our best estimate based on
court documents and public sources is that
such entities employed approximately
65,000 persons, male and female.71 The
average number of workers at firms offer-
ing health benefits that are actually cov-
ered by those benefits is 62 percent.72 This

69See, for example, Catholic Diocese of Pittsburgh, "Award-winning attorney 'humbled' by recognition," Pittsburgh Catholic ("Jones Day is doing the cases 'pro bono,' or voluntarily and
without payment.") (quoting Paul M. Pohl, Partner, Jones Day), available at http://diopitt.org/pittsburgh-catholic/award-winning-attorney-humbled-recognition; "Little Sisters Fight for
Religious Freedom," National Review (Oct. 2, 2013) ("the Becket Fund for Religious Liberty is representing us pro bono, as they do all their clients.") (quoting Sister Constance Veit, L.S.P.,
communications director for the Little Sisters of the Poor), available at http://www.nationalreview.com/article/360103/little-sisters-fight-religious-freedom-interview; Suzanne Cassidy,
"Meet the major legal players in the Conestoga Wood Specialties Supreme Court case," LancasterOnline (Mar. 25, 2014) ("Cortman and the other lawyers arguing on behalf of Conestoga
Wood Specialties and Hobby Lobby are offering their services pro bono."), available at http://lancasteronline.com/news/local/meet-the-major-legal-players-in-the-conestoga-wood-
specialties/article_302bc8e2-b379-11e3-b669-001a4bcf6878.html.

70Where complaints, affidavits, or other documents filed in court did not indicate the number of employees that work for an entity, and that entity was not apparently exempt as a house
of worship or integrated auxiliary, and it was not using the kind of plan that we have stated in litigation qualifies for self-insured church plan status (see, for example, Roman Catholic
Archdiocese of N.Y. v. Sebelius, 987 F. Supp. 2d 232, 242 (E.D.N.Y. 2013)), we examined employment data contained in some IRS form W-3's that are publicly available online for certain
nonprofit groups, and looked at other websites discussing the number of people employed at certain entities.

71 In a small number of lawsuits, named plaintiffs include organizations claiming to have members that seek an exemption. We have very little information about the number, size, and types
of entities those members. Based on limited information from those cases, however, their membership appears to consist mainly, although not entirely, of houses of worship, integrated
auxiliaries, and participants in self-insured plans of churches. As explained above, the contraceptive coverage of women covered by such plans is not likely to be affected by the expanded
exemption in these rules. However, to account for plans subject to contraceptive coverage obligations among those members we have added 10,000 to our estimate of the number of persons
among litigants that may be impacted by these rules.

72See Kaiser Family Foundation and Health Research and Educational Trust, "Employer Health Benefits: 2017 Annual Survey" at 57, available at http://files.kff.org/attachment/Report-
Employer-Health-Benefits-Annual-Survey-2017.

amounts to approximately 34,000 em-
ployees covered under those plans. DOL
estimates that for each employee policy-
holder, there is approximately one depen-
dent.73 This amounts to approximately
68,000 covered persons. Census data in-
dicate that women of childbearing age-
that is, women aged 15-44-compose
20.2 percent of the general population.74
In addition, approximately 44.3 percent of
women of childbearing age use women's
contraceptive methods covered by the
Guidelines.75 Therefore, we estimate that
approximately 7,221 women of childbear-
ing age that use contraception covered by
the Guidelines are covered by employer
sponsored plans of entities that have filed
lawsuits challenging the Mandate, where
those plans are neither exempt under the
prior rule nor are self-insured church
plans.

We also estimate that for the educa-
tional institutions objecting to the Man-
date as applied to student coverage that
they arranged, where the entities were nei-
ther exempt under the prior rule nor were
their student plans self-insured, such stu-
dent plans likely covered approximately
3,300 students. On average, we expect
that approximately half of those students
(1,650) are female. For the purposes of
this estimate, we also assume that female
policyholders covered by plans arranged
by institutions of higher education are
women of childbearing age. We expect
that they would have less than the average
number of dependents per policyholder
than exists in standard plans, but for the
purposes of providing an upper bound to
this estimate, we assume that they would
have an average of one dependent per

policyholder, thus bringing the number of
policyholders and dependents back up to
3,300. Many of those dependents are
likely not to be women of childbearing
age, but in order to provide an upper
bound to this estimate, we assume they
are. Therefore, for the purposes of this
estimate, we assume that the effect of
these expanded exemptions on student
plans of litigating entities includes 3,300
women. Assuming that 44.3 perecent of
such women use contraception covered by
the Guidelines,76 we estimate that 1,462
of those women would be affected by
these rules.

Together, this leads the Departments to
estimate that approximately 8,700 women
of childbearing age may have their contra-
ception costs affected by plans of litigating
entities using these expanded exemptions.
As noted above, the Departments do not
have data indicating how many of those
women agree with their employers' or edu-
cational institutions' opposition to contra-
ception (so that fewer of them than the
national average might actually use contra-
ception). Nor do we know how many would
have alternative contraceptive access from a
parent's or spouse's plan, or from Federal,
State, or local governmental programs, nor
how many of those women would fall in the
category of being most at risk of unintended
pregnancy, nor how many of those entities
would provide some contraception in their
plans while only objecting to certain contra-
ceptives.

Sixth, in a brief filed in the Zubik liti-
gation, the Departments stated that "in
2014, [HHS] provided user-fee reductions
to compensate TPAs for making contra-
ceptive coverage available to more than

600,000 employees and beneficiaries,"
and that "[t]hat figure includes both men
and women covered under the relevant
plans."77 HHS has reviewed the informa-
tion giving rise to that estimate, and has
received updated information for 2015. In
2014, 612,000 persons were covered by
plans claiming contraceptive user fees ad-
justments, and in 2015, 576,000 persons
were covered by such plans. These num-
bers include all persons in such plans, not
just women of childbearing age.

HHS's information indicates that reli-
gious nonprofit hospitals or health sys-
tems sponsored a significant minority of
the accommodated self-insured plans that
were using contraceptive user fees adjust-
ments, yet those plans covered more than
80 percent of the persons covered in all
plans using contraceptive user fees adjust-
ments. Some of those plans cover nearly
100,000 persons each, and several others
cover approximately 40,000 persons each.
In other words, these plans were propor-
tionately much larger than the plans pro-
vided by other entities using the contra-
ceptive user fees adjustments.

There are two reasons to believe that a
significant fraction of the persons covered
by previously accommodated plans pro-
vided by religious nonprofit hospitals or
health systems may not be affected by the
expanded exemption. A broad range of
religious hospitals or health systems have
publicly indicated that they do not consci-
entiously oppose participating in the ac-
commodation.78 Of course, some of these
religious hospitals or health systems may
opt for the expanded exemption under
these interim final rules, but others might
not. In addition, among plans of religious

73"Health Insurance Coverage Bulletin" Table 4, page 21. Using March 2015 Annual Social and Economic Supplement to the Current Population Survey. https://www.dol.gov/sites/default/
files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf.

74United States Census Bureau, "Age and Sex Composition: 2010" (May 2011), available at https://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf. The Guidelines' requirement of
contraceptive coverage only applies "for all women with reproductive capacity." https://www.hrsa.gov/womensguidelines/; also, see 80 FR 40318. In addition, studies commonly consider
the 15-44 age range to assess contraceptive use by women of childbearing age. See, for example, Guttmacher Institute, "Contraceptive Use in the United States" (Sept. 2016), available
at https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states.

75See https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states (reporting that of 60,877,000 women aged 15-44, 26,945,000 use women's contraceptive methods covered by
the Guidelines).

76It would appear that a smaller percentage of college-aged women use contraception-and use more expensive methods such as long acting methods or sterilization-than among other
women of childbearing age. See NCHS Data Brief, "Current Contraceptive Status Among Women Aged 15-44: United States, 2011-2013" (Dec. 2014), available at https://www.cdc.gov/
nchs/data/databriefs/db173.pdf.

77Brief of Respondents at 18-19 & n.7, Zubik v. Burwell, No. 14-1418, et al. (U.S. filed Feb. 10, 2016). The actual number is 612,487.

78See, for example, https://www.chausa.org/newsroom/women%27s-preventive-health-services-final-rule ("HHS has now established an accommodation that will allow our ministries to
continue offering health insurance plans for their employees as they have always done. . .. We are pleased that our members now have an accommodation that will not require them to contract,
provide, pay or refer for contraceptive coverage. . .. We will work with our members to implement this accommodation.") In comments submitted in previous rules concerning this Mandate,
the Catholic Health Association has stated it "is the national leadership organization for the Catholic health ministry, consisting of more than 2,000 Catholic health care sponsors, systems,
hospitals, long-term care facilities, and related organizations. Our ministry is represented in all 50 states and the District of Columbia." Comments on CMS-9968-ANPRM (dated June 15,
2012).

nonprofit hospitals or health systems,
some have indicated that they might be
eligible for status as a self-insured church
plan.79 As discussed above, some litigants
challenging the Mandate have appeared,
after their complaints were filed, to make
use of self-insured church plan status.80
(The Departments take no view on the
status of these particular plans under
ERISA, but simply make this observation
for the purpose of seeking to estimate the
impact of these interim final rules.) Nev-
ertheless, overall it seems likely that many
of the remaining religious hospital or
health systems plans previously using the
accommodation will continue to opt into
the voluntary accommodation under these
interim final rules, under which their em-
ployees will still receive contraceptive
coverage. To the extent that plans of reli-
gious hospitals or health systems are able
to make use of self-insured church plan
status, the previous accommodation rule
would already have allowed them to re-
lieve themselves and their third party ad-
ministrators of obligations to provide con-
traceptive coverage or payments.
Therefore, in such situations these interim
final rules would not have an anticipated
effect on the contraceptive coverage of
women in those plans.

Considering all these data points and
limitations, the Departments offer the fol-
lowing estimate of the number of women
who will be impacted by the expanded
exemption in these interim final rules. The
Departments begin with the 8,700 women
of childbearing age that use contraception
who we estimate will be affected by use of
the expanded exemption among litigating
entities. In addition to that number, we
calculate the following number of women
affected by accommodated entities using
the expanded exemption. As noted above,
approximately 576,000 plan participants
and beneficiaries were covered by self-
insured plans that received contraceptive
user fee adjustments in 2014. Although
additional self-insured entities may have
participated in the accommodation with-
out making use of contraceptive user fees

adjustments, we do not know what num-
ber of entities did so. We consider it likely
that self-insured entities with relatively
larger numbers of covered persons had
sufficient financial incentive to make use
of the contraceptive user fees adjustments.
Therefore, without better data available,
we assume that the number of persons
covered by self-insured plans using con-
traceptive user fees adjustments approxi-
mates the number of persons covered by
all self-insured plans using the accommo-
dation.

An additional but unknown number of
persons were likely covered in fully in-
sured plans using the accommodation.
The Departments do not have data on how
many fully insured plans have been using
the accommodation, nor on how many
persons were covered by those plans.
DOL estimates that, among persons cov-
ered by employer sponsored insurance,
56.1 percent are covered by self-insured
plans and 43.9 percent are covered by
fully insured plans.81 Therefore, corre-
sponding to the 576,000 persons covered
by self-insured plans using user fee ad-
justments, we estimate an additional
451,000 persons were covered by fully
insured plans using the accommodation.
This yields an estimate of 1,027,000 cov-
ered persons of all ages and sexes in plans
using the previous accommodation.

As discussed below, and recognizing
the limited data available for our esti-
mates, the Departments estimate that 100
of the 209 entities that were using the
accommodation under the prior rule will
continue to opt into it under these interim
final rules. Notably, however, the data
concerning accommodated self-insured
plans indicates that plans sponsored by
religious hospitals and health systems en-
compass more than 80 percent of the per-
sons covered in such plans. In other
words, plans sponsored by such entities
have a proportionately larger number of
covered persons than do plans sponsored
by other accommodated entities, which
have smaller numbers of covered persons.
As also cited above, many religious hos-

pitals and health systems have indicated
that they do not object to the accommo-
dation, and some of those entities might
also qualify as self-insured church plans,
so that these interim final rules would not
impact the contraceptive coverage their
employees receive. We do not have spe-
cific data on which plans of which sizes
will actually continue to opt into the ac-
commodation, nor how many will make
use of self-insured church plan status. We
assume that the proportions of covered
persons in self-insured plans using contra-
ceptive user fees adjustments also apply in
fully insured plans, for which we lack
representative data. Based on these as-
sumptions and without better data avail-
able, we assume that the 100 accommo-
dated entities that will remain in the
accommodation will account for 75 per-
cent of all the persons previously covered
in accommodated plans. In comparison,
we assume the 109 accommodated entities
that will make use of the expanded ex-
emption will encompass 25 percent of
persons previously covered in accommo-
dated plans.

Applying these percentages to the total
number of 1,027,000 persons we estimate
are covered in accommodated plans, we
estimate that approximately 257,000 per-
sons previously covered in accommodated
plans will be covered in the 109 plans that
use the expanded exemption, and 770,000
persons will be covered in the estimated
100 plans that continue to use the accom-
modation. According to the Census data
cited above, 20.2 percent of these persons
are women of childbearing age, which
amounts to approximately 51,900 women
of childbearing age in previously accom-
modated plans that we estimate will use
the expanded exemption. As noted above,
approximately 44.3 percent of women of
childbearing age use women's contracep-
tive methods covered by the Guidelines,
so that we expect approximately 23,000
women that use contraception covered by
the Guidelines to be affected by accom-
modated entities using the expanded ex-
emption.

79See, for example, Brief of the Catholic Health Association of the United States as Amicus Curiae in Support of Petitioners, Advocate Health Care Network, Nos. 16-74, 16-86, 16-258,
2017 WL 371934 at *1 (U.S. filed Jan. 24, 2017) ("CHA members have relied for decades that the 'church plan' exemption contained in" ERISA.).

80See supra note 66.

81"Health Insurance Coverage Bulletin" Table 3A, page 15. Using March 2015 Annual Social and Economic Supplement to the Current Population Survey. https://www.dol.gov/sites/
default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf.

It is not clear the extent to which this
number overlaps with the number esti-
mated above of 8,700 women in plans of
litigating entities that may be affected by
these rules. Based on our limited informa-
tion from the litigation and accommoda-
tion notices, we expect that the overlap is
significant. Nevertheless, in order to esti-
mate the possible effects of these rules, we
assume there is no overlap between these
two numbers, and therefore that these in-
terim final rules would affect the contra-
ceptive costs of approximately 31,700
women.

Under the assumptions just discussed,
the number of women whose contracep-
tive costs will be impacted by the ex-
panded exemption in these interim final
rules is less than 0.1 percent of the 55.6
million women in private plans that HHS
ASPE estimated82 receive preventive ser-
vices coverage under the Guidelines.

In order to estimate the cost of contra-
ception to women affected by the ex-
panded exemption, the Departments are
aware that, under the prior accommoda-
tion process, the total user fee adjustment
amount for self-insured plans for the 2015
benefit year was $33 million. These ad-
justments covered the cost of contracep-
tive coverage provided to women partici-
pants and beneficiaries in self-insured
plans where the employer objected and
made use of the accommodation, and
where an authorizing exception under

OMB Circular No. A-25R was in effect as
the Secretary of the Department of Health
and Human Services requests. Nine per-
cent of that amount was attributable to
administrative costs and margin, accord-
ing to the provisions of 45 CFR
156.50(d)(3)(ii). Thus the amount of the
adjustments attributable to the cost of con-
traceptive services was about $30 million.
As discussed above, in 2015 that amount
corresponded to 576,000 persons covered
by such plans. Among those persons, as
cited above, approximately 20.2 percent
on average were women of childbearing
age-that is, approximately 116,000
women. As noted above, approximately
44.3 percent of women of childbearing
age use women's contraceptive methods
covered by the Guidelines, which includes
51,400 women in those plans. Therefore,
entities using contraceptive user fees ad-
justments received approximately $584
per year per woman of childbearing age
that use contraception covered by the
Guidelines and are covered in their plans.

As discussed above, the Departments
estimate that the expanded exemptions
will impact the contraceptive costs of ap-
proximately 31,700 women of childbear-
ing age that use contraception covered by
the Guidelines. At an average of $584 per
year, the financial transfer effects attribut-
able to the interim final rules on those
women would be approximately $18.5
million, 8384

To account for uncertainty in the esti-
mate, we conducted a second analysis us-
ing an alternative framework, in order to
thoroughly consider the possible upper
bound economic impact of these interim
final rules.

As noted above, the HHS ASPE report
estimated that 55.6 million women aged
15 to 64 and covered by private insurance
had preventive services coverage under
the Affordable Care Act. Approximately
16.2 percent of those women were en-
rolled in plans on exchanges or were oth-
erwise not covered by employer spon-
sored insurance, so only 46.6 million
women aged 15 to 64 received the cover-
age through employer sponsored private
insurance plans.85 In addition, some of
those private insurance plans were offered
by government employers, encompassing
approximately 10.5 million of those
women aged 15 to 64.86 The expanded
exemption in these interim final rules does
not apply to government plan sponsors.
Thus we estimate that the number of
women aged 15 to 64 covered by private
sector employer sponsored insurance who
receive preventive services coverage un-
der the Affordable Care Act is approxi-
mately 36 million.

Prior to the implementation of the Af-
fordable Care Act, approximately 6 per-
cent of employer survey respondents did
not offer contraceptive coverage, with 31
percent of respondents not knowing

82 Available at https://aspe.hhs.gov/pdf-report/affordable-care-act-improving-access-preventive-services-millions-americans; also, see Abridged Report, available at https://www.womenspre-
ventivehealth.org/wp-content/uploads/2017/01/WPSI_2016AbridgedReport.pdf.

83 As noted above, the Departments have taken the position that providing contraceptive coverage is cost neutral to issuers. (78 FR 39877). At the same time, because of the up-front costs
of some contraceptive or sterilization methods, and because some entities did not cover contraception prior to the Affordable Care Act, premiums may be expected to adjust to reflect changes
in coverage, thus partially offsetting the transfer experienced by women who use the affected contraceptives. As discussed elsewhere in this analysis, such women may make up approximately
8.9 percent (= 20.2 percent x 44.3 percent) of the covered population, in which case the offset would also be approximately 8.9 percent.

84Describing this impact as a transfer reflects an implicit assumption that the same products and services would be used with or without the rule. Such an assumption is somewhat
oversimplified because the interim final rules shift cost burden to consumption decision-makers (that is, the women who choose whether or not to use the relevant contraceptives) and thus
can be expected to lead to some decrease in use of the affected drugs and devices and a potential increase in pregnancy-thus leading to a decrease and an increase, respectively, in medical
expenditures.

85 Available at https://aspe.hhs.gov/system/files/pdf/139221/The%20Affordable%20Care%20Act%20is%20Improving%20Access%20to%20Preventive%20Services%20for%20
Millions%20of%20Americans.pdf.

86The ASPE study relied on Census data of private health insurance plans, which included plans sponsored by either private or public sector employers. See Table 2, notes 2 & 3 (explaining
the scope of private plans and government plans for purposes of Table 2), available at https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-250.pdf.

According to data tables from the Medical Expenditure Panel Survey (MEPS) of the Agency for Healthcare Research and Quality of HHS (https://meps.ahrq.gov/mepsweb/), State and local
governments employ 19,297,960 persons; 99.2 percent of those employers offer health insurance; and 67.4 percent of employees that work at such entities where insurance is offered are
enrolled in those plans, amounting to 12.9 million persons enrolled. DOL estimates that in the public sector, for each policyholder there is an average of slightly less than one dependent.
"Health Insurance Coverage Bulletin" Table 4, page 21. https://www.dol.gov/sites/default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf. There-
fore, State and local government employer plans cover approximately 24.8 million persons of all ages. Census data indicates that on average, 12 percent of persons covered by private
insurance plans are aged 65 and older. Using these numbers, we estimate that State and local government employer plans cover approximately 21.9 million persons under age 65.

The Federal Government has approximately 8.2 million persons covered in its employee health plans. According to information we received from the Office of Personnel Management, this
includes 2.1 million employees having 3.2 million dependents, and 1.9 million retirees (annuitants) having 1 million dependents. We do not have information about the ages of these
policyholders and dependents, but for the purposes of this estimate we assume the annuitants and their dependents are aged 65 or older and the employees and their dependents are under
age 65, so that the Federal Government's employee health plans cover 5.3 million persons under age 65.

Thus, overall we estimate there are 27.2 million persons under age 65 enrolled in private health insurance sponsored by government employers. Of those, 38.3 percent are women aged 15-64,
that is, 10.5 million.

whether they offered such coverage.87
The 6 percent may have included approx-
imately 2.16 million of the women aged
15-64 covered by employer sponsored in-
surance plans in the private sector. Ac-
cording to Census data, 59.9 percent of
women aged 15 to 64 are of childbearing
age (aged 15 to 44), in this case, 1.3
million. And as noted above, approxi-
mately 44.3 percent of women of child-
bearing age use women's contraceptive
methods covered by the Guidelines.
Therefore we estimate that 574,000
women of childbearing age that use con-
traceptives covered by the Guidelines
were covered by plans that omitted con-
traceptive coverage prior to the Afford-
able Care Act.88

It is unknown what motivated those
employers to omit contraceptive cover-
age-whether they did so for conscien-
tious reasons, or for other reasons. Despite
our lack of information about their mo-
tives, we attempt to make a reasonable
estimate of the upper bound of the number
of those employers that omitted contra-
ception before the Affordable Care Act
and that would make use of these ex-
panded exemptions based on sincerely
held religious beliefs.

To begin, we estimate that publicly
traded companies would not likely make
use of these expanded exemptions. Even
though the rule does not preclude publicly
traded companies from dropping coverage
based on a sincerely held religious belief,
it is likely that attempts to object on reli-
gious grounds by publicly traded compa-
nies would be rare. The Departments take
note of the Supreme Court's decision in

Hobby Lobby, where the Court observed
that "HHS has not pointed to any example
of a publicly traded corporation asserting
RFRA rights, and numerous practical re-
straints would likely prevent that from
occurring. For example, the idea that un-
related shareholders-including institu-
tional investors with their own set of
stakeholders-would agree to run a cor-
poration under the same religious beliefs
seems improbable". 134 S. Ct. at 2774.
The Departments are aware of several
Federal health care conscience laws89 that
in some cases have existed for decades
and that protect companies, including
publicly traded companies, from discrim-
ination if, for example, they decline to
facilitate abortion, but we are not aware of
examples where publicly traded compa-
nies have made use of these exemptions.
Thus, while we consider it important to
include publicly traded companies in the
scope of these expanded exemptions for
reasons similar to those used by the Con-
gress in RFRA and some health care con-
science laws, in estimating the anticipated
effects of the expanded exemptions we
agree with the Supreme Court that it is
improbable any will do so.

This assumption is significant because
31.3 percent of employees in the private
sector work for publicly traded compa-
nies.90 That means that only approxi-
mately 394,000 women aged 15 to 44 that
use contraceptives covered by the Guide-
lines were covered by plans of non-publicly
traded companies that did not provide con-
traceptive coverage pre-Affordable Care
Act.

Moreover, these interim final rules
build on existing rules that already exempt
houses of worship and integrated auxilia-
ries and, as explained above, effectively
remove obligations to provide contracep-
tive coverage within objecting self-
insured church plans. These rules will
therefore not effect transfers to women in
the plans of such employers. In attempting
to estimate the number of such employers,
we consider the following information.
Many Catholic dioceses have litigated or
filed public comments opposing the Man-
date, representing to the Departments and
to courts around the country that official
Catholic Church teaching opposes contra-
ception. There are 17,651 Catholic par-
ishes in the United States91, 197 Catholic
dioceses,92 5,224 Catholic elementary
schools, and 1,205 Catholic secondary
schools.93 Not all Catholic schools
are integrated auxiliaries of Catholic
churches, but there are other Catholic
entities that are integrated auxiliaries
that are not schools, so we use the num-
ber of schools to estimate of the number
of integrated auxiliaries. Among self-
insured church plans that oppose the
Mandate, the Department has been sued
by two-Guidestone and Christian
Brothers. Guidestone is a plan organized
by the Southern Baptist convention. It
covers 38,000 employers, some of
which are exempt as churches or inte-
grated auxiliaries, and some of which
are not.94 Christian Brothers is a plan
that covers Catholic organizations. It
covers Catholic churches and integrated
auxiliaries, which are estimated above,
but also it has said in litigation that it

87Kaiser Family Foundation & Health Research & Educational Trust, "Employer Health Benefits, 2010 Annual Survey" at 196, available at https://kaiserfamilyfoundation.files.wordpress-
.com/2013/04/8085.pdf.

88Some of the 31 percent of survey respondents that did not know about contraceptive coverage may not have offered such coverage. If it were possible to account for this non-coverage,
the estimate of potentially affected covered women could increase. On the other hand, these employers' lack of knowledge about contraceptive coverage suggests that they lacked sincerely
held religious beliefs specifically objecting to such coverage-beliefs without which they would not qualify for the expanded exemptions offered by these rules. In that case, omission of
such employers and covered women from this estimation approach would be appropriate. Correspondingly, the 6 percent of employers that had direct knowledge about the absence of
coverage may be more likely to have omitted such coverage on the basis of religious beliefs than were the 31 percent of survey respondents who did not know whether the coverage was
offered. Yet an entity's mere knowledge about its coverage status does not itself reflect its motive for omitting coverage. In responding to the survey, the entity may have simply examined
its plan document to determine whether or not contraceptive coverage was offered. As will be relevant in a later portion of the analysis, we have no data indicating what portion of the entities
that omitted contraceptive coverage pre-Affordable Care Act did so on the basis of sincerely held religious beliefs, as opposed to doing so for other reasons that would not qualify them
for the expanded exemption offered in these interim final rules.

89For example, 42 U.S.C. 300a-7(b), 42 U.S.C. 238n, and Consolidated Appropriations Act of 2017, Div. H, Title V, Sec. 507(d), Pub. L. No. 115-31.

90John Asker, et al., "Corporate Investment and Stock Market Listing: A Puzzle?" 28 Review of Financial Studies Issue 2, at 342-390 (Oct. 7, 2014), available at https://doi.org/10.1093/
rfs/hhu077. This is true even though there are only about 4,300 publicly traded companies in the U.S. See Rayhanul Ibrahim, "The number of publicly-traded US companies is down 46%
in the past two decades," Yahoo! Finance (Aug. 8, 2016), available at https://finance.yahoo.com/news/jp-startup-public-companies-fewer-000000709.html.

91Roman Catholic Diocese of Reno, "Diocese of Reno Directory: 2016-2017," available at http://www.renodiocese.org/documents/2016/9/2016%202017%20directory.pdf.

92Wikipedia, "List of Catholic dioceses in the United States," available at https://en.wikipedia.org/wiki/List_of_Catholic_dioceses_in_the_United_States.

93National Catholic Educational Association, "Catholic School Data," available at http://www.ncea.org/NCEA/Proclaim/Catholic_School_Data/Catholic_School_Data.aspx.

94Guidestone Financial Resources, "Who We Serve," available at https://www.guidestone.org/AboutUs/WhoWeServe.

also covers about 500 additional entities
that are not exempt as churches. In total,
therefore, we estimate that approxi-
mately 62,000 employers among houses
of worship, integrated auxiliaries, and
church plans, were exempt or relieved
of contraceptive coverage obligations
under the previous rules. We do not
know how many persons are covered in
the plans of those employers. Guide-
stone reports that among its 38,000 em-
ployers, its plan covers approximately
220,000 persons, and its employers include
"churches, mission-sending agencies, hospi-
tals, educational institutions and other re-
lated ministries." Using that ratio, we esti-
mate that the 62,000 church and church plan
employers among Guidestone, Christian
Brothers, and Catholic churches would in-
clude 359,000 persons. Among them, as ref-
erenced above, 72,500 would be of child-
bearing age, and 32,100 would use
contraceptives covered by the Guidelines.
Therefore, we estimate that the private, non-
publicly traded employers that did not cover
contraception pre-Affordable Care Act, and
that were not exempt by the previous rules
nor were participants in self-insured church
plans that oppose contraceptive coverage,
covered 362,100 women aged 15 to 44 that
use contraceptives covered by the Guide-
lines. As noted above, we estimate an aver-
age annual expenditure on contraceptive
products and services of $584 per user. That
would amount to $211.5 million in potential
transfer impact among entities that did not
cover contraception pre-Affordable Care
Act for any reason.

We do not have data indicating how
many of the entities that omitted coverage
of contraception pre-Affordable Care Act
did so on the basis of sincerely held reli-
gious beliefs that might qualify them for
exempt status under these interim final
rules, as opposed to having done so for
other reasons. Besides the entities that
filed lawsuits or submitted public com-
ments concerning previous rules on this
matter, we are not aware of entities that
omitted contraception pre-Affordable

Care Act and then opposed the contracep-
tive coverage requirement after it was im-
posed by the Guidelines. For the follow-
ing reasons, however, we believe that a
reasonable estimate is that no more than
approximately one third of the persons
covered by relevant entities-that is, no
more than approximately 120,000 af-
fected women-would likely be subject to
potential transfer impacts under the ex-
panded religious exemptions offered in
these interim final rules. Consequently, as
explained below, we believe that the po-
tential impact of these interim final rules
falls substantially below the $100 million
threshold for economically significant and
major rules.

First, as mentioned, we are not aware
of information that would lead us to esti-
mate that all or most entities that omitted
coverage of contraception pre-Affordable
Care Act did so on the basis of sincerely
held conscientious objections in general
or religious beliefs specifically, as op-
posed to having done so for other reasons.
Moreover, as suggested by the Guidestone
data mentioned previously, employers
with conscientious objections may tend to
have relatively few employees. Also,
avoiding negative publicity, the difficulty
of taking away a fringe benefit that em-
ployees have become accustomed to hav-
ing, and avoiding the administrative cost
of renegotiating insurance contracts, all
provide reasons for some employers not to
return to pre-Affordable Care Act lack of
contraceptive coverage. Additionally, as
discussed above, many employers with
objections to contraception, including
several of the largest litigants, only object
to some contraceptives and cover as many
as 14 of 18 of the contraceptive methods
included in the Guidelines. This will re-
duce, and potentially eliminate, the con-
traceptive cost transfer for women cov-
ered in their plans.95 Furthermore, among
nonprofit entities that object to the Man-
date, it is possible that a greater share of
their employees oppose contraception
than among the general population, which

should lead to a reduction in the estimate
of how many women in those plans actu-
ally use contraception.

In addition, not all sincerely held con-
scientious objections to contraceptive
coverage are likely to be held by persons
with religious beliefs as distinct from per-
sons with sincerely held non-religious
moral convictions, whose objections
would not be encompassed by these in-
terim final rules.96 We do not have data to
indicate, among entities that did not cover
contraception pre-Affordable Care Act
based on sincerely held conscientious ob-
jections as opposed to other reasons,
which ones did so based on religious be-
liefs and which ones did so instead based
on non-religious moral convictions.
Among the general public, polls vary
about religious beliefs but one prominent
poll shows that 89 percent of Americans
say they believe in God, while 11 percent
say they do not or are agnostic.97 There-
fore, we estimate that for every ten entities
that omitted contraception pre-Affordable
Care Act based on sincerely held consci-
entious objections as opposed to other rea-
sons, one did so based on sincerely held
non-religious moral convictions, and
therefore are not affected by the expanded
exemption provided by these interim final
rules for religious beliefs.

Based on our estimate of an average
annual expenditure on contraceptive prod-
ucts and services of $584 per user, the
effect of the expanded exemptions on
120,000 women would give rise to ap-
proximately $70.1 million in potential
transfer impact. This falls substantially
below the $100 million threshold for ec-
onomically significant and major rules. In
addition, as noted above, premiums may
be expected to adjust to reflect changes in
coverage, thus partially offsetting the
transfer experienced by women who use
the affected contraceptives. As discussed
elsewhere in this analysis, such women
may make up approximately 8.9 percent
(= 20.2 percent x 44.3 percent) of the
covered population, in which case the off-

95On the other hand, a key input in the approach that generated the one third threshold estimate was a survey indicating that six percent of employers did not provide contraceptive coverage
pre-Affordable Care Act. Employers that covered some contraceptives pre-Affordable Care Act may have answered "yes" or "don't know" to the survey. In such cases, the potential transfer
estimate has a tendency toward underestimation because the rule's effects on such women-causing their contraceptive coverage to be reduced from all 18 methods to some smaller
subset-have been omitted from the calculation.

96Such objections may be encompassed by companion interim final rules published elsewhere in this Federal Register. Those rules, however, as an interim final matter, are more narrow
in scope than these rules. For example, in providing expanded exemptions for plan sponsors, they do not encompass companies with certain publicly traded ownership interests.

97Gallup, "Most Americans Still Believe in God" (June 14-23, 2016), available at http://www.gallup.com/poll/193271/americans-believe-god.aspx.

set would also be approximately 8.9 per-
cent, yielding a potential transfer of $63.8
million.

We request comment on all aspects of
the preceding regulatory impact analysis,
as well as on how to attribute impacts to
this interim final rule and the companion
interim final rule concerning exemptions
provided based on sincerely held (non-
religious) moral convictions published
elsewhere in this Federal Register.

### B. Special Analyses-Department of the Treasury

For purposes of the Department of the
Treasury, certain Internal Revenue Ser-
vice (IRS) regulations, including this one,
are exempt from the requirements in Ex-
ecutive Order 12866, as supplemented by
Executive Order 13563. The Departments
anticipate that there will be more entities
reluctantly using the existing accommoda-
tion that will choose to operate under the
newly expanded exemption, than entities
that are not currently eligible to use the
accommodation that will opt into it. The
effect of this rule will therefore be that
fewer overall adjustments are made to the
Federally facilitated Exchange user fees
for entities using the accommodation pro-
cess, as long as the Secretary of the De-
partment of Health and Human Services
requests and an authorizing exception un-
der OMB Circular No. A-25R is in effect,
than would have occurred under the pre-
vious rule if this rule were not finalized.
Therefore, a regulatory assessment is not
required.

### C. Regulatory Flexibility Act

The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) (RFA) imposes certain
requirements with respect to Federal rules
that are subject to the notice and comment
requirements of section 553(b) of the
APA (5 U.S.C. 551 et seq.) and that are
likely to have a significant economic im-
pact on a substantial number of small en-
tities. Under Section 553(b) of the APA, a
general notice of proposed rulemaking is
not required when an agency, for good
cause, finds that notice and public com-
ment thereon are impracticable, unneces-
sary, or contrary to the public interest. The
interim final rules are exempt from the

APA, both because the PHS Act, ERISA,
and the Code contain specific provisions
under which the Secretaries may adopt
regulations by interim final rule and be-
cause the Departments have made a good
cause finding that a general notice of pro-
posed rulemaking is not necessary earlier
in this preamble. Therefore, the RFA does
not apply and the Departments are not
required to either certify that the regula-
tions or this amendment would not have a
significant economic impact on a substan-
tial number of small entities or conduct a
regulatory flexibility analysis.

Nevertheless, the Departments care-
fully considered the likely impact of the
rule on small entities in connection with
their assessment under Executive Order
12866. The Departments do not expect
that these interim final rules will have a
significant economic effect on a substan-
tial number of small entities, because they
will not result in any additional costs to
affected entities, and in many cases will
relieve burdens and costs from such enti-
ties. By exempting from the Mandate
small businesses and nonprofit organiza-
tions with religious objections to some (or
all) contraceptives and/or sterilization, the
Departments have reduced regulatory bur-
den on such small entities. Pursuant to
section 7805(f) of the Code, these regula-
tions have been submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on their
impact on small business.

### D. Paperwork Reduction Act-Department of Health and Human Services

Under the Paperwork Reduction Act of
1995 (the PRA), Federal agencies are re-
quired to publish notice in the Federal
Register concerning each proposed col-
lection of information. Interested persons
are invited to send comments regarding
our burden estimates or any other aspect
of this collection of information, includ-
ing any of the following subjects: (1) the
necessity and utility of the proposed in-
formation collection for the proper perfor-
mance of the agency's functions; (2) the
accuracy of the estimated burden; (3)
ways to enhance the quality, utility, and
clarity of the information to be collected;
and (4) the use of automated collection

techniques or other forms of information
technology to minimize the information
collection burden.

However, we are requesting an emer-
gency review of the information collec-
tion referenced later in this section. In
compliance with the requirement of sec-
tion 3506(c)(2)(A) of the PRA, we have
submitted the following for emergency re-
view to the Office of Management and
Budget (OMB). We are requesting an
emergency review and approval under
both 5 CFR 1320.13(a)(2)(i) and (iii) of
the implementing regulations of the PRA
in order to implement provisions regard-
ing self-certification or notices to HHS
from eligible organizations (§147.131(c)
(3)), notice of availability of separate
payments for contraceptive services
(§147.131(f)), and notice of revocation
of accommodation (§147.131(c)(4)). In
accordance with 5 CFR 1320.13(a)
(2)(i), we believe public harm is reason-
ably likely to ensue if the normal clear-
ance procedures are followed. The use
of normal clearance procedures is rea-
sonably likely to prevent or disrupt the
collection of information. Similarly, in
accordance with 5 CFR 1320.13(a)
(2)(iii), we believe the use of normal
clearance procedures is reasonably
likely to cause a statutory or court or-
dered deadline to be missed. Many cases
have been on remand for over a year from
the Supreme Court, asking the Depart-
ments and the parties to resolve this mat-
ter. These interim final rules extend ex-
emptions to entities, which involves no
collection of information and which the
Departments have statutory authority to
do by the use of interim final rules. If the
information collection involved in the
amended accommodation process is not
approved on an emergency basis, newly
exempt entities that wish to opt into the
amended accommodation process might
not be able to do so until normal clearance
procedures are completed.

A description of the information col-
lection provisions implicated in these in-
terim final rules is given in the following
section with an estimate of the annual
burden. Average labor costs (including
100 percent fringe benefits) used to esti-
mate the costs are calculated using data

available from the Bureau of Labor Sta-
tistics.98

### a. ICRs Regarding Self-Certification or Notices to HHS (§147.131(c)(3))

Each organization seeking to be treated
as an eligible organization that wishes to
use the optional accommodation process
offered under these interim final rules
must either use the EBSA Form 700
method of self-certification or provide no-
tice to HHS of its religious objection to
coverage of all or a subset of contracep-
tive services. Specifically, these interim
final rules continue to allow eligible orga-
nizations to notify an issuer or third party
administrator using EBSA Form 700, or to
notify HHS, of their religious objection to
coverage of all or a subset of contracep-
tive services, as set forth in the July 2015
final regulations. The burden related to the
notice to HHS is currently approved under
OMB Control Number 0938-1248 and the
burden related to the self-certification
(EBSA Form 700) is currently approved
under OMB control number 0938-1292.

Notably, however, entities that are par-
ticipating in the previous accommodation
process, where a self-certification or no-
tice has already been submitted, and
where the entities choose to continue their
accommodated status under these interim
final rules, generally do not need to file a
new self-certification or notice (unless
they change their issuer or third party ad-
ministrator). As explained above, HHS as-
sumes that, among the 209 entities we
estimated are using the previous accom-
modation, 109 will use the expanded ex-
emption and 100 will continue under the
voluntary accommodation. Those 100 en-
tities will not need to file additional self-
certifications or notices. HHS also as-
sumes that an additional 9 entities that
were not using the previous accommoda-
tion will opt into it. Those entities will be
subject to the self-certification or notice
requirement.

In order to estimate the cost for an
entity that chooses to opt into the accom-
modation process, HHS assumes, as it did
in its August 2014 interim final rules, that
clerical staff for each eligible organization
will gather and enter the necessary infor-
mation and send the self-certification to
the issuer or third party administrator as
appropriate, or send the notice to HHS.99
HHS assumes that a compensation and
benefits manager and inside legal counsel
will review the self-certification or notice
to HHS and a senior executive would ex-
ecute it. HHS estimates that an eligible
organization would spend approximately
50 minutes (30 minutes of clerical labor at
a cost of $55.68 per hour,100 10 minutes
for a compensation and benefits manager
at a cost of $122.02 per hour,101 5 minutes
for legal counsel at a cost of $134.50 per
hour, 102 and 5 minutes by a senior executive
at a cost of $186.88 per hour103) preparing
and sending the self-certification or notice to
HHS and filing it to meet the recordkeeping
requirement. Therefore, the total annual bur-
den for preparing and providing the infor-
mation in the self-certification or notice to
HHS will require approximately 50 minutes
for each eligible organization with an equiv-
alent cost burden of approximately $74.96
for a total hour burden of approximately 7.5
hours with an equivalent cost of approxi-
mately $675 for 9 entities. As DOL and
HHS share jurisdiction, they are splitting the
hour burden so each will account for ap-
proximately 3.75 burden hours with an
equivalent cost of approximately $337.

HHS estimates that each self-
certification or notice to HHS will re-
quire $0.49 in postage and $0.05 in ma-
terials cost (paper and ink) and the total
postage and materials cost for each self-
certification or notice sent via mail will
be $0.54. For purposes of this analysis,
HHS assumes that 50 percent of self-
certifications or notices to HHS will be
mailed. The total cost for sending the
self-certifications or notices to HHS by
mail is approximately $2.70 for 5 enti-

ties. As DOL and HHS share jurisdic-
tion they are splitting the cost burden so
each will account for $1.35 of the cost
burden.

b. ICRs Regarding Notice of
Availability of Separate Payments for
Contraceptive Services (§147.131(e))

As required by the July 2015 final reg-
ulations, a health insurance issuer or third
party administrator providing or arranging
separate payments for contraceptive ser-
vices for participants and beneficiaries in
insured or self-insured group health plans
(or student enrollees and covered depen-
dents in student health insurance cover-
age) of eligible organizations is required
to provide a written notice to plan partic-
ipants and beneficiaries (or student enroll-
ees and covered dependents) informing
them of the availability of such payments.
The notice must be separate from, but
contemporaneous with (to the extent pos-
sible), any application materials distrib-
uted in connection with enrollment (or
re-enrollment) in group or student cover-
age of the eligible organization in any
plan year to which the accommodation is
to apply and will be provided annually. To
satisfy the notice requirement, issuers and
third party administrators may, but are not
required to, use the model language set
forth previously by HHS or substantially
similar language. The burden for this ICR
is currently approved under OMB control
number 0938-1292.

As mentioned, HHS is anticipating that
approximately 109 entities will use the
optional accommodation (100 that used it
previously, and 9 that will newly opt into
it). It is unknown how many issuers or
third party administrators provide health
insurance coverage or services in connec-
tion with health plans of eligible organi-
zations, but HHS will assume at least 109.
It is estimated that each issuer or third
party administrator will need approxi-
mately 1 hour of clerical labor (at $55.68

98May 2016 National Occupational Employment and Wage Estimates United States found at https://www.bls.gov/oes/current/oes_nat.htm.

99For purposes of this analysis, the Department assumes that the same amount of time will be required to prepare the self-certification and the notice to HHS.

100Occupation code 43-6011 for Executive Secretaries and Executive Administrative Assistants with mean hourly wage $27.84, https://www.bls.gov/oes/current/oes436011.htm.

101Occupation code 11-3111 for Compensation and Benefits Managers with mean hourly wage $61.01, https://www.bls.gov/oes/current/oes113111.htm.

102Occupation code 23-1011 for Lawyers with mean hourly wage $67.25, https://www.bls.gov/oes/current/oes231011.htm.

103Occupation code11-1011 for Chief Executives with mean hourly wage $93.44, https://www.bls.gov/oes/current/oes111011.htm.

per hour) 104 and 15 minutes of manage-
ment review (at $117.40 per hour)105 to
prepare the notices. The total burden for
each issuer or third party administrator to
prepare notices will be 1.25 hours with an
equivalent cost of approximately $85.03.
The total burden for all issuers or third
party administrators will be 136 hours,
with an equivalent cost of $9,268. As
DOL and HHS share jurisdiction, they are
splitting the hour burden so each will ac-
count for 68 burden hours with an equiv-
alent cost of $4,634, with approximately
55 respondents.

As discussed above, the Departments
estimate that 770,000 persons will be cov-
ered in the plans of the 100 entities that
previously used the accommodation and
will continue doing so, and that an addi-
tional 9 entities will newly opt into the
accommodation. It is not known how
many persons will be covered in the plans
of the 9 entities newly using the accom-
modation. Assuming that those 9 entities
will have a similar number of covered
persons per entity, we estimate that all 109
accommodated entities will encompass
839,300 covered persons. We assume that
sending one notice to each participant will
satisfy the need to send the notices to all
participants and dependents. Among per-
sons covered by plans, approximately
50.1 percent are participants and 49.9 per-
cent are dependents.106 For 109 entities,
the total number of notices will be
420,490. For purposes of this analysis, the
Departments also assume that 53.7 per-
cent of notices will be sent electronically,
and 46.3 percent will be mailed.107 There-
fore, approximately 194,687 notices will

be mailed. HHS estimates that each notice
will require $0.49 in postage and $0.05 in
materials cost (paper and ink) and the total
postage and materials cost for each notice
sent via mail will be $0.54. The total cost
for sending approximately 194,687 no-
tices by mail is approximately $105,131.
As DOL and HHS share jurisdiction, they
are splitting the cost burden so each will
account for $52,565 of the cost burden.

### c. ICRs Regarding Notice of Revocation of Accommodation (§147.131(c)(4))

An eligible organization may revoke
its use of the accommodation process;
its issuer or third party administrator
must provide written notice of such re-
vocation to participants and beneficia-
ries as soon as practicable. As discussed
above, HHS estimates that 109 entities
that are using the accommodation pro-
cess will revoke their use of the accom-
modation, and will therefore be required
to cause the notification to be sent (the
issuer or third party administrator can
send the notice on behalf of the entity).
For the purpose of calculating ICRs as-
sociated with revocations of the accom-
modation, and for various reasons dis-
cussed above, HHS assumes that
litigating entities that were previously
using the accommodation and that will
revoke it fall within the estimated 109
entities that will revoke the accommo-
dation overall.

As before, HHS assumes that, for each
issuer or third party administrator, a man-
ager and inside legal counsel and clerical
staff will need approximately 2 hours to

prepare and send the notification to par-
ticipants and beneficiaries and maintain
records (30 minutes for a manager at a
cost of $117.40 per hour,108 30 minutes
for legal counsel at a cost of $134.50 per
hour 109, 1 hour for clerical labor at a cost
of $55.68 per hour110). The burden per
respondent will be 2 hours with an
equivalent cost of $181.63; for 109 en-
tities, the total burden will be 218 hours
with an equivalent cost of approxi-
mately $19,798. As DOL and HHS
share jurisdiction, they are splitting the
hour burden so each will account for
109 burden hours with an equivalent
cost of approximately $9,899.

As discussed above, HHS estimates
that there are 257,000 covered persons
in accommodated plans that will revoke
their accommodated status and use the
expanded exemption.111 As before, we
use the average of 50.1 percent of cov-
ered persons who are policyholders, and
estimate that an average of 53.7 percent
of notices will be sent electronically and
46.3 percent by mail. Therefore, approx-
imately 128,757 notices will be sent, of
which 59,615 notices will be mailed.
HHS estimates that each notice will re-
quire $0.49 in postage and $0.05 in ma-
terials cost (paper and ink) and the total
postage and materials cost for each no-
tice sent via mail will be $0.54. The
total cost for sending approximately
59,615 notices by mail is approximately
$32,192. As DOL and HHS share juris-
diction, they are splitting the hour bur-
den so each will account for 64,379
notices, with an equivalent cost of ap-
proximately $16,096.

104Occupation code 43-6011 for Executive Secretaries and Executive Administrative Assistants with mean hourly wage $27.84.

105Occupation code 11-1021 General and Operations Managers with mean hourly wage $58.70.

106"Health Insurance Coverage Bulletin" Table 4, page 21. Using March 2015 Annual Social and Economic Supplement to the Current Population Survey. https://www.dol.gov/sites/
default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf.

107 According to data from the National Telecommunications and Information Agency (NTIA), 36.0 percent of individuals age 25 and over have access to the internet at work. According
to a Greenwald & Associates survey, 84 percent of plan participants find it acceptable to make electronic delivery the default option, which is used as the proxy for the number of participants
who will not opt out that are automatically enrolled (for a total of 30.2 percent receiving electronic disclosure at work). Additionally, the NTIA reports that 38.5 percent of individuals
age 25 and over have access to the internet outside of work. According to a Pew Research Center survey, 61 percent of internet users use online banking, which is used as the proxy
for the number of internet users who will opt in for electronic disclosure (for a total of 23.5 percent receiving electronic disclosure outside of work). Combining the 30.2 percent
who receive electronic disclosure at work with the 23.5 percent who receive electronic disclosure outside of work produces a total of 53.7 percent who will receive electronic
disclosure overall.

108Occupation code 11-1021 for General and Operations Managers with mean hourly wage $58.70, https://www.bls.gov/oes/current/oes111021.htm.

109Occupation code 23-1011 for Lawyers with mean hourly wage $67.25, https://www.bls.gov/oes/current/oes231011.htm.

110Occupation code 43-6011 for Executive Secretaries and Executive Administrative Assistants with mean hourly wage $27.84, https://www.bls.gov/oes/current/oes436011.htm.

111In estimating the number of women that might have their contraceptive coverage affected by the expanded exemption, we indicated that we do not know the extent to which the number
of women in accommodated plans affected by these rules overlap with the number of women in plans offered by litigating entities that will be affected by these rules, though we assume
there is significant overlap. That uncertainty should not affect the calculation of the ICRs for revocation notices, however. If the two numbers overlap, the estimates of plans revoking the
accommodation and policyholders covered in those plans would already include plans and policyholders of litigating entities. If the numbers do not overlap, those litigating entity plans would
not presently be enrolled in the accommodation, and therefore would not need to send notices concerning revocation of accommodated status.

Table 1: Summary of Information Collection Burdens

Regulation Section

OMB Control Number

Number of respondents

Responses

Burden per Respondent (hours)

Total Annual Burden (hours)

Hourly Labor Cost of Reporting ($)

Total Labor Cost of Reporting ($)

Total Cost ($)

Self-Certification or Notices to HHS

0938-NEW

0.83

3.75

$89.95

$337.31

$338.66

Notice of Availability of Separate Payments for Contraceptive Services

0938-NEW

55*

210,245

1.25

68.13

$68.02

$4,634.14

$57,199.59

Notice of Revocation of Accommodation

0938-NEW

55*

64,379

2.00

109

$90.82

$9,898.84

$25,994.75

Total

115*

274,629

4.08

180.88

$14,870.29

$83,533.00

*The total number of respondents is 227 (= 9+109+109) for both HHS and DOL, but the summaries here and below exceed
that total because of rounding up that occurs when sharing the burden between HHS and DOL.

Note: There are no capital/maintenance costs associated with the ICRs contained in this rule; therefore, we have removed the
associated column from Table 1. Postage and material costs are included in Total Cost.

We are soliciting comments on all of
the information collection requirements
contained in these interim final rules. In
addition, we are also soliciting comments
on all of the related information collection
requirements currently approved under
0938-1292 and 0938-1248. HHS is re-
questing a new OMB control number that
will ultimately contain the approval for
the new information collection require-
ments contained in these interim final
rules as well as the related requirements
currently approved under 0938-1292 and
0938-1248. In an effort to consolidate the
number of information collection re-
quests, we will formally discontinue the
control numbers 0938-1292 and 0938-
1248 once the new information collection
request associated with these interim final
rules is approved.

To obtain copies of a supporting state-
ment and any related forms for the pro-
posed collection(s) summarized in this no-
tice, you may make your request using
one of following:

1\. Access CMS' Web Site address at
https://www.cms.gov/Regulations-and-
Guidance/Legislation/PaperworkReduction
Actof1995/PRA-Listing.html.

2\. E-mail your request, including your
address, phone number, OMB number,
and CMS document identifier, to
Paperwork@cms.hhs.gov.

3\. Call the Reports Clearance Office at
(410) 786-1326.

If you comment on these information
collections, that is, reporting, recordkeep-
ing or third-party disclosure requirements,
please submit your comments electroni-
cally as specified in the ADDRESSES
section of these interim final rules with
comment period.

### E. Paperwork Reduction Act-Department of Labor

Under the Paperwork Reduction Act,
an agency may not conduct or sponsor,
and an individual is not required to re-
spond to, a collection of information un-
less it displays a valid OMB control num-
ber. In accordance with the requirements
of the PRA, the ICR for the EBSA Form
700 and alternative notice have previously
been approved by OMB under control
numbers 1210-0150 and 1210-0152. A
copy of the ICR may be obtained by con-
tacting the PRA addressee shown below
or at http://www.RegInfo.gov. PRA AD-
DRESSEE: G. Christopher Cosby, Office
of Policy and Research, U.S. Department
of Labor, Employee Benefits Security Ad-
ministration, 200 Constitution Avenue
NW., Room N-5718, Washington, DC
20210. Telephone: 202-693-8410; Fax:
202-219-4745. These are not toll-free
numbers.

These interim final rules amend the
ICR by changing the accommodation pro-
cess to an optional process for exempt
organizations and requiring a notice of

revocation to be sent by the issuer or third
party administrator to participants and
beneficiaries in plans whose employer
who revokes their accommodation. DOL
submitted the ICRs in order to obtain
OMB approval under the PRA for the
regulatory revision. The request was made
under emergency clearance procedures
specified in regulations at 5 CFR 1320.13.
In an effort to consolidate the number of
information collection requests, DOL will
combine the ICR related to the OMB con-
trol number 1210-0152 with the ICR re-
lated to the OMB control number 1210-
0150. Once the ICR is approved DOL will
discontinue 1210-0152. A copy of the in-
formation collection request may be ob-
tained free of charge on the RegInfo.gov
Web site at http://www.reginfo.gov/public/
do/PRAViewICR?ref_nbr=201705-1210-
001\. This approval will allow respondents
to temporarily utilize the additional flexi-
bility these interim final regulations pro-
vide, while DOL seeks public comment
on the collection methods-including
their utility and burden.

Consistent with the analysis in the
HHS PRA section above, the Departments
expect that each of the estimated 9 eligible
organizations newly opting into the ac-
commodation will spend approximately
50 minutes in preparation time and incur
$0.54 mailing cost to self-certify or notify
HHS. Each of the 109 issuers or third
party administrators for the 109 eligible
organizations that make use of the accom-

modation overall will distribute Notices of
Availability of Separate Payments for
Contraceptive Services. These issuers and
third party administrators will spend ap-
proximately 1.25 hours in preparation
time and incur $0.54 cost per mailed no-
tice. Notices of Availability of Separate
Payments for Contraceptive Services will
need to be sent to 420,489 policyholders,
and 53.7 percent of the notices will be sent
electronically, while 46.3 percent will be
mailed. Finally, 109 entities using the pre-
vious accommodation process will revoke
its use and will therefore be required to
cause the Notice of Revocation of Accom-
modation to be sent (the issuer or third
party administrator can send the notice on
behalf of the entity). These entities will
spend approximately two hours in prepa-
ration time and incur $0.54 cost per
mailed notice. Notice of Revocation of
Accommodation will need to be sent to an
average of 128,757 policyholders and
53.7 percent of the notices will be sent
electronically. The DOL information col-
lections in this rule are found in 29 CFR
2510.3-16 and 2590.715-2713A and are
summarized as follows:

Type of Review: Revised Collection.
Agency: DOL-EBSA.

Title: Coverage of Certain Preventive
Services under the Affordable Care Act-
Private Sector.

OMB Numbers: 1210-0150.

Affected Public: Private Sector-Not
for profit and religious organizations;
businesses or other for-profits.

Total Respondents: 114112 (combined
with HHS total is 227).

Total Responses: 274,628 (combined
with HHS total is 549,255).

Frequency of Response: On occasion.
Estimated Total Annual Burden Hours:
181 (combined with HHS total is 362
hours). Estimated Total Annual Burden
Cost: $68,662 (combined with HHS total
is $137,325).

Type of Review: Revised Collection.
Agency: DOL-EBSA.

F. Regulatory Reform Executive Orders
13765, 13771 and 13777

Executive Order 13765 (January 20,
2017) directs that, "[t]o the maximum ex-
tent permitted by law, the Secretary of the
Department of Health and Human Ser-
vices and the heads of all other executive
departments and agencies (agencies) with
authorities and responsibilities under the
Act shall exercise all authority and discre-
tion available to them to waive, defer,
grant exemptions from, or delay the im-
plementation of any provision or require-
ment of the Act that would impose a fiscal
burden on any State or a cost, fee, tax,
penalty, or regulatory burden on individ-
uals, families, healthcare providers, health
insurers, patients, recipients of healthcare
services, purchasers of health insurance,
or makers of medical devices, products, or
medications." In addition, agencies are di-
rected to "take all actions consistent with
law to minimize the unwarranted eco-
nomic and regulatory burdens of the [Af-
fordable Care Act], and prepare to afford
the States more flexibility and control to
create a more free and open healthcare
market." These interim final rules exercise
the discretion provided to the Depart-
ments under the Affordable Care Act,
RFRA, and other laws to grant exemp-
tions and thereby minimize regulatory
burdens of the Affordable Care Act on the
affected entities and recipients of health
care services.

Consistent with Executive Order 13771
(82 FR 9339, February 3, 2017), we have
estimated the costs and cost savings attrib-
utable to this interim final rule. As discussed
in more detail in the preceding analysis, this
interim final rule lessens incremental report-
ing costs.113 Therefore, this interim final
rule is considered an Executive Order 13771
deregulatory action.

F. Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act
of 1995 (section 202(a) of Pub. L. 104-

4), requires the Departments to prepare a
written statement, which includes an as-
sessment of anticipated costs and benefits,
before issuing "any rule that includes any
Federal mandate that may result in the
expenditure by State, local, and tribal gov-
ernments, in the aggregate, or by the pri-
vate sector, of $100,000,000 or more (ad-
justed annually for inflation) in any one
year." The current threshold after adjust-
ment for inflation is $148 million, using
the most current (2016) Implicit Price
Deflater for the Gross Domestic Prod-
uct. For purposes of the Unfunded Man-
dates Reform Act, these interim final
rules do not include any Federal man-
date that may result in expenditures by
State, local, or tribal governments, nor
do they include any Federal mandates
that may impose an annual burden of
$100 million, adjusted for inflation, or
more on the private sector.

### G. Federalism

Executive Order 13132 outlines funda-
mental principles of federalism, and re-
quires the adherence to specific criteria by
Federal agencies in the process of their
formulation and implementation of poli-
cies that have "substantial direct effects"
on States, the relationship between the
Federal Government and States, or the
distribution of power and responsibilities
among the various levels of Government.
Federal agencies promulgating regula-
tions that have these federalism implica-
tions must consult with State and local
officials, and describe the extent of their
consultation and the nature of the con-
cerns of State and local officials in the
preamble to the regulation.

These interim final rules do not have
any Federalism implications, since they
only provide exemptions from the contra-
ceptive and sterilization coverage require-
ment in HRSA Guidelines supplied under
section 2713 of the PHS Act.

112Denotes that there is an overlap between jurisdiction shared by HHS and DOL over these respondents and therefore they are included only once in the total.

113Other noteworthy potential impacts encompass potential changes in medical expenditures, including potential decreased expenditures on contraceptive devices and drugs and potential
increased expenditures on pregnancy-related medical services. OMB's guidance on EO 13771 implementation (https://www.whitehouse.gov/the-press-office/2017/04/05/memorandum-
implementing-executive-order-13771-titled-reducing-regulation) states that impacts should be categorized as consistently as possible within Departments. The Food and Drug Administration,
within HHS, and the Occupational Safety and Health Administration (OSHA) and Mine Safety and Health Administration (MSHA), within DOL, regularly estimate medical expenditure
impacts in the analyses that accompany their regulations, with the results being categorized as benefits (positive benefits if expenditures are reduced, negative benefits if expenditures are
raised). Following the FDA, OSHA and MSHA accounting convention leads to this interim final rule's medical expenditure impacts being categorized as (positive or negative) benefits, rather
than as costs, thus placing them outside of consideration for EO 13771 designation purposes.

## VII. Statutory Authority

The Department of the Treasury tem-
porary regulations are adopted pursuant to
the authority contained in sections 7805
and 9833 of the Code.

The Department of Labor regulations
are adopted pursuant to the authority con-
tained in 29 U.S.C. 1002(16), 1027, 1059,
1135, 1161-1168, 1169, 1181-1183, 1181
note, 1185, 1185a, 1185b, 1185d, 1191,
1191a, 1191b, and 1191c; sec. 101(g),
Public Law 104-191, 110 Stat. 1936; sec.
401(b), Public Law 105-200, 112 Stat.
645 (42 U.S.C. 651 note); sec. 512(d),
Public Law 110-343, 122 Stat. 3881; sec.
1001, 1201, and 1562(e), Public Law
111-148, 124 Stat. 119, as amended by
Public Law 111-152, 124 Stat. 1029; Sec-
retary of Labor's Order 1-2011, 77 FR
1088 (Jan. 9, 2012).

The Department of Health and Human
Services regulations are adopted pursuant
to the authority contained in sections 2701
through 2763, 2791, and 2792 of the PHS
Act (42 U.S.C. 300gg through 300gg-63,
300gg-91, and 300gg-92), as amended;
and Title I of the Affordable Care Act,
sections 1301-1304, 1311-1312, 1321-
1322, 1324, 1334, 1342-1343, 1401-
1402, and 1412, Pub. L. 111-148, 124
Stat. 119 (42 U.S.C. 18021-18024,
18031-18032, 18041-18042, 18044,
18054, 18061, 18063, 18071, 18082, 26
U.S.C. 36B, and 31 U.S.C. 9701).
* * * * *

Kirsten B. Wielobob,
Deputy Commissioner for Services and
Enforcement.
Approved: October 2, 2017.

David J. Kautter,
Assistant Secretary for Tax Policy.

(Filed by the Office of the Federal Register on October 6,
2017, 11:45 a.m., and published in the issue of the Federal
Register for October 13, 2017, 82 F.R. 47792)
Signed this 4th day of October, 2017.

Timothy D. Hauser,
Deputy Assistant Secretary for Program
Operations, Employee Benefits Security
Administration, Department of Labor.
Dated: October 4, 2017.

Seema Verma,
Administrator,
Centers for Medicare & Medicaid
Services.

Approved: October 4, 2017.

Donald Wright,
Acting Secretary,
Department of Health and Human
Services.

DEPARTMENT OF THE
TREASURY

Internal Revenue Service

For the reasons set forth in this pream-
ble, 26 CFR part 54 is amended as fol-
lows:

PART 54-PENSION EXCISE
TAXES

1\. The authority citation for part 54
continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

2\. Section 54.9815-2713 is amended
by revising paragraphs (a)(1) introductory
text and (a)(1)(iv) to read as follows:

### § 54.9815-2713 Coverage of preventive health services.

(a) * * *

(1) In general. [Reserved]. For further
guidance, see § 54.9815-2713T(a)(1) in-
troductory text.

* * * * *

(iv) [Reserved]. For further guidance,
see § 54.9815-2713T(a)(1)(iv).

* * * * *

3\. Section 54.9815-2713T is added to
read as follows:

### § 54.9815-2713T Coverage of preventive health services (temporary).

(a) Services-(1) In general. Beginning
at the time described in paragraph (b) of
§ 54.9815-2713 and subject to § 54.9815-
2713A, a group health plan, or a health
insurance issuer offering group health insur-
ance coverage, must provide coverage for
and must not impose any cost-sharing re-

quirements (such as a copayment, coinsur-
ance, or a deductible) for-

(i) - (iii) [Reserved]. For further guid-
ance, see § 54.9815-2713(a)(1)(i) through
(iii).

(iv) With respect to women, such ad-
ditional preventive care and screenings
not described in paragraph (a)(1)(i) of
§ 54.9815-2713 as provided for in com-
prehensive guidelines supported by the
Health Resources and Services Adminis-
tration for purposes of section 2713(a)(4)
of the Public Health Service Act, subject
to 45 CFR 147.131 and 147.132.

(2) - (c) [Reserved]. For further guid-
ance, see § 54.9815-2713(a)(2) through
(c).

(d) Effective/Applicability date. (1)
Paragraphs (a) through (c) of this section
are applicable beginning on April 16,
2012, except -

(2) Paragraphs (a)(1) introductory text
and (a)(1)(iv) of this section are effective
on [Insert date of dispay at the Office of
Federal Register].

(e) Expiration date. This section ex-
pires on [Insert date 3 years after date of
display at the Office of Federal Regis-
ter].

4\. Section 54.9815-2713A is revised to
read as follows:

### § 54.9815-2713A Accommodations in connection with coverage of preventive health services.

(a) through (f) [Reserved]. For further
guidance, see § 54.9815-2713AT.

5\. Section 54.9815-2713AT is added
to read as follows:

§ 54.9815-2713AT Accommodations in
connection with coverage of
preventive health services
(temporary).

(a) Eligible organizations for optional
accommodation. An eligible organization
is an organization that meets the criteria of
paragraphs (a)(1) through (4) of this sec-
tion.

(1) The organization is an objecting
entity described in 45 CFR 147.132(a)
(1)(i) or (ii);

(2) Notwithstanding its status under
paragraph (a)(1) of this section and under
45 CFR 147.132(a), the organization vol-
untarily seeks to be considered an eligible

organization to invoke the optional ac-
commodation under paragraph (b) or (c)
of this section as applicable; and

(3) [Reserved]

(4) The organization self-certifies in
the form and manner specified by the Sec-
retary of Labor or provides notice to the
Secretary of the Department of Health and
Human Services as described in paragraph
(b) or (c) of this section. To qualify as an
eligible organization, the organization must
make such self-certification or notice avail-
able for examination upon request by the
first day of the first plan year to which the
accommodation in paragraph (b) or (c) of
this section applies. The self-certification or
notice must be executed by a person autho-
rized to make the certification or provide the
notice on behalf of the organization, and
must be maintained in a manner consistent
with the record retention requirements under
section 107 of ERISA.

(5) An eligible organization may re-
voke its use of the accommodation pro-
cess, and its issuer or third party admin-
istrator must provide participants and
beneficiaries written notice of such revo-
cation as specified in guidance issued by
the Secretary of the Department of Health
and Human Services. If contraceptive
coverage is currently being offered by an
issuer or third party administrator through
the accommodation process, the revoca-
tion will be effective on the first day of the
first plan year that begins on or after 30
days after the date of the revocation (to
allow for the provision of notice to plan
participants in cases where contraceptive
benefits will no longer be provided). Al-
ternatively, an eligible organization may
give sixty-days notice pursuant to section
2715(d)(4) of the PHS Act and § 54.9815-
2715(b), if applicable, to revoke its use of
the accommodation process.

(b) Optional accommodation - self-
insured group health plans. (1) A group
health plan established or maintained by
an eligible organization that provides ben-
efits on a self-insured basis may volun-
tarily elect an optional accommodation
under which its third party administra-
tor(s) will provide or arrange payments
for all or a subset of contraceptive ser-
vices for one or more plan years. To in-
voke the optional accommodation pro-
cess:

(i) The eligible organization or its plan
must contract with one or more third party
administrators.

(ii) The eligible organization must pro-
vide either a copy of the self-certification
to each third party administrator or a no-
tice to the Secretary of the Department of
Health and Human Services that it is an
eligible organization and of its objection
as described in 45 CFR 147.132 to cover-
age of all or a subset of contraceptive
services.

(A) When a copy of the self-certification
is provided directly to a third party admin-
istrator, such self-certification must include
notice that obligations of the third party
administrator are set forth in 29 CFR
2510.3-16 and this section.

(B) When a notice is provided to the
Secretary of Health and Human Services,
the notice must include the name of the
eligible organization; a statement that it
objects as described in 45 CFR 147.132 to
coverage of some or all contraceptive ser-
vices (including an identification of the
subset of contraceptive services to which
coverage the eligible organization objects,
if applicable), but that it would like to
elect the optional accommodation pro-
cess; the plan name and type (that is,
whether it is a student health insurance
plan within the meaning of 45 CFR
147.145(a) or a church plan within the
meaning of section 3(33) of ERISA); and
the name and contact information for any
of the plan's third party administrators. If
there is a change in any of the information
required to be included in the notice, the
eligible organization must provide up-
dated information to the Secretary of the
Department of Health and Human Ser-
vices for the optional accommodation pro-
cess to remain in effect. The Department
of Labor (working with the Department of
Health and Human Services), will send a
separate notification to each of the plan's
third party administrators informing the
third party administrator that the Secretary
of the Department of Health and Human
Services has received a notice under para-
graph (b)(1)(ii) of this section and de-
scribing the obligations of the third party
administrator under 29 CFR 2510.3-16
and this section.

(2) If a third party administrator re-
ceives a copy of the self-certification from
an eligible organization or a notification

from the Department of Labor, as de-
scribed in paragraph (b)(1)(ii) of this sec-
tion, and is willing to enter into or remain
in a contractual relationship with the eli-
gible organization or its plan to provide
administrative services for the plan, then
the third party administrator will provide
or arrange payments for contraceptive ser-
vices, using one of the following meth-
ods-

(i) Provide payments for the contracep-
tive services for plan participants and bene-
ficiaries without imposing any cost-sharing
requirements (such as a copayment, coinsur-
ance, or a deductible), premium, fee, or
other charge, or any portion thereof, directly
or indirectly, on the eligible organization,
the group health plan, or plan participants or
beneficiaries; or

(ii) Arrange for an issuer or other entity
to provide payments for the contraceptive
services for plan participants and benefi-
ciaries without imposing any cost-sharing
requirements (such as a copayment, coin-
surance, or a deductible), premium, fee, or
other charge, or any portion thereof, di-
rectly or indirectly, on the eligible orga-
nization, the group health plan, or plan
participants or beneficiaries.

(3) If a third party administrator pro-
vides or arranges payments for contracep-
tive services in accordance with either
paragraph (b)(2)(i) or (ii) of this section,
the costs of providing or arranging such
payments may be reimbursed through an
adjustment to the Federally facilitated Ex-
change user fee for a participating issuer
pursuant to 45 CFR 156.50(d).

(4) A third party administrator may not
require any documentation other than a
copy of the self-certification from the el-
igible organization or notification from
the Department of Labor described in
paragraph (b)(1)(ii) of this section.

(5) Where an otherwise eligible orga-
nization does not contract with a third
party administrator and files a self-
certification or notice under paragraph
(b)(1)(ii) of this section, the obligations
under paragraph (b)(2) of this section do
not apply, and the otherwise eligible or-
ganization is under no requirement to pro-
vide coverage or payments for contracep-
tive services to which it objects. The plan
administrator for that otherwise eligible
organization may, if it and the otherwise
eligible organization choose, arrange for

payments for contraceptive services from
an issuer or other entity in accordance
with paragraph (b)(2)(ii) of this section,
and such issuer or other entity may re-
ceive reimbursements in accordance with
paragraph (b)(3) of this section.

(6) Where an otherwise eligible orga-
nization is an ERISA-exempt church plan
within the meaning of section 3(33) of
ERISA and it files a self-certification or
notice under paragraph (b)(1)(ii) of this
section, the obligations under paragraph
(b)(2) of this section do not apply, and the
otherwise eligible organization is under
no requirement to provide coverage or
payments for contraceptive services to
which it objects. The third party adminis-
trator for that otherwise eligible organiza-
tion may, if it and the otherwise eligible
organization choose, provide or arrange
payments for contraceptive services in ac-
cordance with paragraphs (b)(2)(i) or (ii)
of this section, and receive reimburse-
ments in accordance with paragraph (b)(3)
of this section.

(c) Optional accommodation - insured
group health plans-(1) General rule. A
group health plan established or main-
tained by an eligible organization that pro-
vides benefits through one or more group
health insurance issuers may voluntarily
elect an optional accommodation under
which its health insurance issuer(s) will
provide payments for all or a subset of
contraceptive services for one or more
plan years. To invoke the optional accom-
modation process-

(i) The eligible organization or its plan
must contract with one or more health
insurance issuers.

(ii) The eligible organization must pro-
vide either a copy of the self-certification
to each issuer providing coverage in con-
nection with the plan or a notice to the
Secretary of the Department of Health and
Human Services that it is an eligible or-
ganization and of its objection as de-
scribed in 45 CFR 147.132 to coverage for
all or a subset of contraceptive services.

(A) When a self-certification is pro-
vided directly to an issuer, the issuer has
sole responsibility for providing such cov-
erage in accordance with § 54.9815-2713.

(B) When a notice is provided to the
Secretary of the Department Health and
Human Services, the notice must include
the name of the eligible organization; a

statement that it objects as described in 45
CFR 147.132 to coverage of some or all
contraceptive services (including an iden-
tification of the subset of contraceptive
services to which coverage the eligible
organization objects, if applicable) but
that it would like to elect the optional
accommodation process; the plan name
and type (that is, whether it is a student
health insurance plan within the meaning
of 45 CFR 147.145(a) or a church plan
within the meaning of section 3(33) of
ERISA); and the name and contact infor-
mation for any of the plan's health insur-
ance issuers. If there is a change in any of
the information required to be included in
the notice, the eligible organization must
provide updated information to the Secre-
tary of Department of Health and Human
Services for the optional accommodation
process to remain in effect. The Depart-
ment of Health and Human Services will
send a separate notification to each of the
plan's health insurance issuers informing
the issuer that the Secretary of the Depart-
ment Health and Human Services has re-
ceived a notice under paragraph (c)(2)(ii)
of this section and describing the obliga-
tions of the issuer under this section.

(2) If an issuer receives a copy of the
self-certification from an eligible organi-
zation or the notification from the Depart-
ment of Health and Human Services as
described in paragraph (c)(2)(ii) of this
section and does not have its own objec-
tion as described in 45 CFR 147.132 to
providing the contraceptive services to
which the eligible organization objects,
then the issuer will provide payments for
contraceptive services as follows-

(i) The issuer must expressly exclude
contraceptive coverage from the group
health insurance coverage provided in
connection with the group health plan and
provide separate payments for any contra-
ceptive services required to be covered
under § 54.9815-2713(a)(1)(iv) for plan
participants and beneficiaries for so long
as they remain enrolled in the plan.

participants or beneficiaries. The issuer
must segregate premium revenue col-
lected from the eligible organization from
the monies used to provide payments for
contraceptive services. The issuer must
provide payments for contraceptive ser-
vices in a manner that is consistent with
the requirements under sections 2706,
2709, 2711, 2713, 2719, and 2719A of the
PHS Act, as incorporated into section
9815 of the PHS Act. If the group health
plan of the eligible organization provides
coverage for some but not all of any con-
traceptive services required to be covered
under § 54.9815-2713(a)(1)(iv), the is-
suer is required to provide payments only
for those contraceptive services for which
the group health plan does not provide
coverage. However, the issuer may pro-
vide payments for all contraceptive ser-
vices, at the issuer's option.

(3) A health insurance issuer may not
require any documentation other than a
copy of the self-certification from the el-
igible organization or the notification
from the Department of Health and Hu-
man Services described in paragraph
(c)(1)(ii) of this section.

(d) Notice of availability of separate
payments for contraceptive services - self-
insured and insured group health plans.
For each plan year to which the optional
accommodation in paragraph (b) or (c) of
this section is to apply, a third party ad-
ministrator required to provide or arrange
payments for contraceptive services pur-
suant to paragraph (b) of this section, and
an issuer required to provide payments for
contraceptive services pursuant to para-
graph (c) of this section, must provide to
plan participants and beneficiaries written
notice of the availability of separate pay-
ments for contraceptive services contem-
poraneous with (to the extent possible),
but separate from, any application materi-
als distributed in connection with enroll-
ment (or re-enrollment) in group health
coverage that is effective beginning on the
first day of each applicable plan year. The
notice must specify that the eligible orga-
nization does not administer or fund con-
traceptive benefits, but that the third party
administrator or issuer, as applicable, pro-
vides or arranges separate payments for
contraceptive services, and must provide
contact information for questions and
complaints. The following model lan-

guage, or substantially similar language,
may be used to satisfy the notice require-
ment of this paragraph (d): "Your em-
ployer has certified that your group health
plan qualifies for an accommodation with
respect to the Federal requirement to cover
all Food and Drug Administration-approved
contraceptive services for women, as pre-
scribed by a health care provider, without
cost sharing. This means that your employer
will not contract, arrange, pay, or refer for
contraceptive coverage. Instead, [name of
third party administrator/health insurance is-
suer] will provide or arrange separate pay-
ments for contraceptive services that you
use, without cost sharing and at no other
cost, for so long as you are enrolled in your
group health plan. Your employer will not
administer or fund these payments. If you
have any questions about this notice, contact
[contact information for third party admin-
istrator/health insurance issuer]."

(e) Definition. For the purposes of this
section, reference to "contraceptive" ser-
vices, benefits, or coverage includes contra-
ceptive or sterilization items, procedures, or
services, or related patient education or
counseling, to the extent specified for pur-
poses of § 54.9815-2713(a)(1)(iv).

(f) Severability. Any provision of this
section held to be invalid or unenforceable
by its terms, or as applied to any person or
circumstance, shall be construed so as to
continue to give maximum effect to the
provision permitted by law, unless such
holding shall be one of utter invalidity or
unenforceability, in which event the pro-
vision shall be severable from this section
and shall not affect the remainder thereof
or the application of the provision to per-
sons not similarly situated or to dissimilar
circumstances.

(g) Expiration date. This section ex-
pires on [Insert date 3 years after the date
of display at the Office of Federal Reg-
ister].

## DEPARTMENT OF LABOR

### Employee Benefits Security Administration

For the reasons set forth in the pream-
ble, the Department of Labor amends 29
CFR part 2590 as follows:

## PART 2590-RULES AND REGULATIONS FOR GROUP HEALTH PLANS

6\. The authority citation for part 2590
continues to read as follows:

AUTHORITY: 29 U.S.C. 1027, 1059,
1135, 1161-1168, 1169, 1181-1183, 1181
note, 1185, 1185a, 1185b, 1191, 1191a,
1191b, and 1191c; sec. 101(g), Pub. L.
104-191, 110 Stat. 1936; sec. 401(b),
Pub. L. 105-200, 112 Stat. 645 (42 U.S.C.
651 note); sec. 512(d), Pub. L. 110-343,
122 Stat. 3881; sec. 1001, 1201, and
1562(e), Pub. L. 111-148, 124 Stat. 119,
as amended by Pub. L. 111-152, 124 Stat.
1029; Division M, Pub. L. 113-235, 128
Stat. 2130; Secretary of Labor's Order
1-2011, 77 FR 1088 (Jan. 9, 2012).

7\. Section 2590.715-2713 is amended
by revising paragraphs (a)(1) introductory
text and (a)(1)(iv) to read as follows:

### § 2590.715-2713 Coverage of preventive health services.

(a) Services-(1) In general. Begin-
ning at the time described in paragraph (b)
of this section and subject to § 2590.715-
2713A, a group health plan, or a health
insurance issuer offering group health in-
surance coverage, must provide coverage
for and must not impose any cost-sharing
requirements (such as a copayment, coin-
surance, or a deductible) for-
* * * * *

(iv) With respect to women, such ad-
ditional preventive care and screenings
not described in paragraph (a)(1)(i) of this
section as provided for in comprehensive
guidelines supported by the Health Re-
sources and Services Administration for
purposes of section 2713(a)(4) of the Pub-
lic Health Service Act, subject to 45 CFR
147.131 and 147.132.

* * * * *

8\. Section 2590.715-2713A is revised
to read as follows:

## § 2590.715-2713A Accommodations in connection with coverage of preventive health services.

(a) Eligible organizations for optional
accommodation. An eligible organization
is an organization that meets the criteria of
paragraphs (a)(1) through (4) of this sec-
tion.

(1) The organization is an objecting
entity described in 45 CFR 147.132(a)
(1)(i) or (ii);

(2) Notwithstanding its exempt status
under 45 CFR 147.132(a), the organiza-
tion voluntarily seeks to be considered an
eligible organization to invoke the op-
tional accommodation under paragraph
(b) or (c) of this section as applicable; and

(3) [Reserved]

(4) The organization self-certifies in
the form and manner specified by the Sec-
retary or provides notice to the Secretary
of the Department of Health and Human
Services as described in paragraph (b) or
(c) of this section. To qualify as an eligible
organization, the organization must make
such self-certification or notice available for
examination upon request by the first day of
the first plan year to which the accommo-
dation in paragraph (b) or (c) of this section
applies. The self-certification or notice must
be executed by a person authorized to make
the certification or provide the notice on
behalf of the organization, and must be
maintained in a manner consistent with the
record retention requirements under section
107 of ERISA.

(5) An eligible organization may re-
voke its use of the accommodation pro-
cess, and its issuer or third party admin-
istrator must provide participants and
beneficiaries written notice of such revo-
cation as specified in guidance issued by
the Secretary of the Department of Health
and Human Services. If contraceptive
coverage is currently being offered by an
issuer or third party administrator through
the accommodation process, the revoca-
tion will be effective on the first day of the
first plan year that begins on or after 30
days after the date of the revocation (to
allow for the provision of notice to plan
participants in cases where contraceptive
benefits will no longer be provided). Al-
ternatively, an eligible organization may
give 60-days notice pursuant to PHS Act
section 2715(d)(4) and § 2590.715-
2715(b), if applicable, to revoke its use of
the accommodation process.

tor(s) will provide or arrange payments
for all or a subset of contraceptive ser-
vices for one or more plan years. To in-
voke the optional accommodation pro-
cess:

(i) The eligible organization or its plan
must contract with one or more third party
administrators.

(A) When a copy of the self-
certification is provided directly to a third
party administrator, such self-certification
must include notice that obligations of the
third party administrator are set forth in
§ 2510.3-16 of this chapter and this sec-
tion.

scribing the obligations of the third party
administrator under § 2510.3-16 of this
chapter and this section.

(2) If a third party administrator re-
ceives a copy of the self-certification from
an eligible organization or a notification
from the Department of Labor, as de-
scribed in paragraph (b)(1)(ii) of this sec-
tion, and is willing to enter into or remain
in a contractual relationship with the eli-
gible organization or its plan to provide
administrative services for the plan, then
the third party administrator will provide
or arrange payments for contraceptive ser-
vices, using one of the following meth-
ods-

(i) Provide payments for the contracep-
tive services for plan participants and ben-
eficiaries without imposing any cost-sharing
requirements (such as a copayment, coinsur-
ance, or a deductible), premium, fee, or
other charge, or any portion thereof, directly
or indirectly, on the eligible organization,
the group health plan, or plan participants or
beneficiaries; or

(ii) Arrange for an issuer or other entity
to provide payments for contraceptive ser-
vices for plan participants and beneficiaries
without imposing any cost-sharing require-
ments (such as a copayment, coinsurance, or
a deductible), premium, fee, or other charge,
or any portion thereof, directly or indirectly,
on the eligible organization, the group
health plan, or plan participants or benefi-
ciaries.

(5) Where an otherwise eligible orga-
nization does not contract with a third
party administrator and it files a self-
certification or notice under paragraph
(b)(1)(ii) of this section, the obligations
under paragraph (b)(2) of this section do
not apply, and the otherwise eligible or-

ganization is under no requirement to pro-
vide coverage or payments for contracep-
tive services to which it objects. The plan
administrator for that otherwise eligible
organization may, if it and the otherwise
eligible organization choose, arrange for
payments for contraceptive services from
an issuer or other entity in accordance
with paragraph (b)(2)(ii) of this section,
and such issuer or other entity may re-
ceive reimbursements in accordance with
paragraph (b)(3) of this section.

(i) The eligible organization or its plan
must contract with one or more health
insurance issuers.

(A) When a self-certification is pro-
vided directly to an issuer, the issuer has
sole responsibility for providing such cov-
erage in accordance with § 2590.715-
2713.

ERISA); and the name and contact infor-
mation for any of the plan's health insur-
ance issuers. If there is a change in any of
the information required to be included in
the notice, the eligible organization must
provide updated information to the Secre-
tary of Department Health and Human
Services for the optional accommodation
process to remain in effect. The Depart-
ment of Health and Human Services will
send a separate notification to each of the
plan's health insurance issuers informing
the issuer that the Secretary of Health and
Human Services has received a notice un-
der paragraph (c)(2)(ii) of this section and
describing the obligations of the issuer
under this section.

(i) The issuer must expressly exclude
contraceptive coverage from the group
health insurance coverage provided in
connection with the group health plan and
provide separate payments for any contra-
ceptive services required to be covered
under § 2590.715-2713(a)(1)(iv) for plan
participants and beneficiaries for so long
as they remain enrolled in the plan.

(ii) With respect to payments for con-
traceptive services, the issuer may not im-
pose any cost-sharing requirements (such
as a copayment, coinsurance, or a deduct-
ible), or impose any premium, fee, or
other charge, or any portion thereof, di-
rectly or indirectly, on the eligible orga-
nization, the group health plan, or plan
participants or beneficiaries. The issuer
must segregate premium revenue col-
lected from the eligible organization from
the monies used to provide payments for
contraceptive services. The issuer must
provide payments for contraceptive ser-
vices in a manner that is consistent with
the requirements under sections 2706,
2709, 2711, 2713, 2719, and 2719A of the
PHS Act, as incorporated into section 715
of ERISA. If the group health plan of the
eligible organization provides coverage

for some but not all of any contraceptive
services required to be covered under
§ 2590.715-2713(a)(1)(iv), the issuer is
required to provide payments only for
those contraceptive services for which the
group health plan does not provide cover-
age. However, the issuer may provide
payments for all contraceptive services, at
the issuer's option.

tive coverage. Instead, [name of third
party administrator/health insurance is-
suer] will provide or arrange separate pay-
ments for contraceptive services that you
use, without cost sharing and at no other
cost, for so long as you are enrolled in
your group health plan. Your employer
will not administer or fund these pay-
ments. If you have any questions about
this notice, contact [contact information
for third party administrator/health insur-
ance issuer]."

(e) Definition. For the purposes of this
section, reference to "contraceptive" ser-
vices, benefits, or coverage includes con-
traceptive or sterilization items, proce-
dures, or services, or related patient
education or counseling, to the extent
specified for purposes of § 2590.715-
2713(a)(1)(iv).

## DEPARTMENT OF HEALTH AND HUMAN SERVICES

For the reasons set forth in the pream-
ble, the Department of Health and Human
Services amends 45 CFR part 147 as fol-
lows:

## PART 147-HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND INDIVIDUAL HEALTH INSURANCE MARKETS

9\. The authority citation for part 147
continues to read as follows:

Authority: Secs 2701 through 2763,
2791, and 2792 of the Public Health Service
Act (42 USC 300gg through 300gg-63,
300gg-91, and 300gg-92), as amended.

10\. Section 147.130 is amended by re-
vising paragraphs (a)(1) introductory text
and (a)(1)(iv) to read as follows:

## § 147.130 Coverage of preventive health services.

(a) * * *

(1) In general. Beginning at the time
described in paragraph (b) of this section
and subject to §§ 147.131 and 147.132, a
group health plan, or a health insurance
issuer offering group or individual health
insurance coverage, must provide cover-
age for and must not impose any cost-
sharing requirements (such as a copay-
ment, coinsurance, or a deductible) for-
* * * * *

(iv) With respect to women, such ad-
ditional preventive care and screenings
not described in paragraph (a)(1)(i) of this
section as provided for in comprehensive
guidelines supported by the Health Re-
sources and Services Administration for
purposes of section 2713(a)(4) of the
Public Health Service Act, subject to
§§ 147.131 and 147.132.

* * * * *

11\. Section 147.131 is revised to read
as follows:

### § 147.131 Accommodations in connection with coverage of certain preventive health services.

(a) - (b) [Reserved]

(c) Eligible organizations for optional
accommodation. An eligible organization
is an organization that meets the criteria of
paragraphs (c)(1) through (3) of this sec-
tion.

(1) The organization is an objecting
entity described in § 147.132(a)(1)(i) or
(ii).

(2) Notwithstanding its exempt status
under § 147.132(a), the organization vol-
untarily seeks to be considered an eligible
organization to invoke the optional ac-
commodation under paragraph (d) of this
section; and

(3) The organization self-certifies in
the form and manner specified by the Sec-
retary or provides notice to the Secretary
as described in paragraph (d) of this sec-
tion. To qualify as an eligible organiza-
tion, the organization must make such
self-certification or notice available for
examination upon request by the first day
of the first plan year to which the ac-
commodation in paragraph (d) of this
section applies. The self-certification or
notice must be executed by a person

authorized to make the certification or
provide the notice on behalf of the or-
ganization, and must be maintained in a
manner consistent with the record reten-
tion requirements under section 107 of
ERISA.

(4) An eligible organization may re-
voke its use of the accommodation pro-
cess, and its issuer must provide partici-
pants and beneficiaries written notice of
such revocation as specified in guidance
issued by the Secretary of the Department
of Health and Human Services. If contra-
ceptive coverage is currently being of-
fered by an issuer through the accommo-
dation process, the revocation will be
effective on the first day of the first plan
year that begins on or after 30 days after
the date of the revocation (to allow for the
provision of notice to plan participants in
cases where contraceptive benefits will no
longer be provided). Alternatively, an el-
igible organization may give 60-days no-
tice pursuant to section 2715(d)(4) of the
PHS Act and § 147.200(b), if applicable,
to revoke its use of the accommodation
process.

(d) Optional accommodation-insured
group health plans-(1) General rule. A
group health plan established or main-
tained by an eligible organization that pro-
vides benefits through one or more group
health insurance issuers may voluntarily
elect an optional accommodation under
which its health insurance issuer(s) will
provide payments for all or a subset of
contraceptive services for one or more
plan years. To invoke the optional accom-
modation process:

(i) The eligible organization or its plan
must contract with one or more health
insurance issuers.

(ii) The eligible organization must
provide either a copy of the self-
certification to each issuer providing
coverage in connection with the plan or
a notice to the Secretary of the Depart-
ment of Health and Human Services that
it is an eligible organization and of its
objection as described in § 147.132 to
coverage for all or a subset of contra-
ceptive services.

(A) When a self-certification is pro-
vided directly to an issuer, the issuer has
sole responsibility for providing such cov-
erage in accordance with § 147.130(a)(iv).

(B) When a notice is provided to the
Secretary of the Department of Health and
Human Services, the notice must include
the name of the eligible organization; a
statement that it objects as described in
§ 147.132 to coverage of some or all con-
traceptive services (including an identifi-
cation of the subset of contraceptive ser-
vices to which coverage the eligible
organization objects, if applicable) but
that it would like to elect the optional
accommodation process; the plan name
and type (that is, whether it is a student
health insurance plan within the meaning
of § 147.145(a) or a church plan within
the meaning of section 3(33) of ERISA);
and the name and contact information for
any of the plan's health insurance issuers.
If there is a change in any of the informa-
tion required to be included in the notice,
the eligible organization must provide
updated information to the Secretary of
the Department of Health and Human
Services for the optional accommoda-
tion to remain in effect. The Department
of Health and Human Services will send
a separate notification to each of the
plan's health insurance issuers inform-
ing the issuer that the Secretary of the
Deparement of Health and Human Ser-
vices has received a notice under para-
graph (d)(1)(ii) of this section and de-
scribing the obligations of the issuer
under this section.

(2) If an issuer receives a copy of the
self-certification from an eligible organi-
zation or the notification from the Depart-
ment of Health and Human Services as
described in paragraph (d)(1)(ii) of this
section and does not have an objection as
described in § 147.132 to providing the
contraceptive services identified in the
self-certification or the notification from
the Department of Health and Human Ser-
vices, then the issuer will provide pay-
ments for contraceptive services as fol-
lows-

(i) The issuer must expressly exclude
contraceptive coverage from the group
health insurance coverage provided in
connection with the group health plan and
provide separate payments for any contra-
ceptive services required to be covered
under § 141.130(a)(1)(iv) for plan partic-
ipants and beneficiaries for so long as they
remain enrolled in the plan.

(ii) With respect to payments for con-
traceptive services, the issuer may not im-
pose any cost-sharing requirements (such
as a copayment, coinsurance, or a deduct-
ible), premium, fee, or other charge, or
any portion thereof, directly or indirectly,
on the eligible organization, the group
health plan, or plan participants or bene-
ficiaries. The issuer must segregate pre-
mium revenue collected from the eligi-
ble organization from the monies used
to provide payments for contraceptive
services. The issuer must provide pay-
ments for contraceptive services in a
manner that is consistent with the re-
quirements under sections 2706, 2709,
2711, 2713, 2719, and 2719A of the
PHS Act. If the group health plan of
the eligible organization provides cov-
erage for some but not all of any
contraceptive services required to be
covered under § 147.130(a)(1)(iv), the is-
suer is required to provide payments only
for those contraceptive services for which
the group health plan does not provide
coverage. However, the issuer may pro-
vide payments for all contraceptive ser-
vices, at the issuer's option.

(e) Notice of availability of separate
payments for contraceptive services -
insured group health plans and student
health insurance coverage. For each
plan year to which the optional accom-
modation in paragraph (d) of this sec-
tion is to apply, an issuer required to
provide payments for contraceptive ser-
vices pursuant to paragraph (d) of this
section must provide to plan participants
and beneficiaries written notice of the
availability of separate payments for
contraceptive services contemporaneous
with (to the extent possible), but sepa-
rate from, any application materials dis-
tributed in connection with enrollment
(or re-enrollment) in group health cov-
erage that is effective beginning on the
first day of each applicable plan year.
The notice must specify that the eligible
organization does not administer or fund
contraceptive benefits, but that the is-

suer provides separate payments for
contraceptive services, and must pro-
vide contact information for questions
and complaints. The following model
language, or substantially similar lan-
guage, may be used to satisfy the notice
requirement of this paragraph (e) "Your
[employer/institution of higher educa-
tion] has certified that your [group
health plan/student health insurance
coverage] qualifies for an accommoda-
tion with respect to the Federal require-
ment to cover all Food and Drug
Administration-approved contraceptive ser-
vices for women, as prescribed by a health
care provider, without cost sharing. This
means that your [employer/institution of
higher education] will not contract, arrange,
pay, or refer for contraceptive coverage. In-
stead, [name of health insurance issuer] will
provide separate payments for contraceptive
services that you use, without cost sharing
and at no other cost, for so long as you are
enrolled in your [group health plan/student
health insurance coverage]. Your [employ-
er/institution of higher education] will not
administer or fund these payments . If you
have any questions about this notice, contact
[contact information for health insurance is-
suer]."

(f) Definition. For the purposes of this
section, reference to "contraceptive" ser-
vices, benefits, or coverage includes contra-
ceptive or sterilization items, procedures, or
services, or related patient education or
counseling, to the extent specified for pur-
poses of § 147.130(a)(1)(iv).

(g) Severability. Any provision of this
section held to be invalid or unenforceable
by its terms, or as applied to any person or
circumstance, shall be construed so as to
continue to give maximum effect to the
provision permitted by law, unless such
holding shall be one of utter invalidity or
unenforceability, in which event the pro-
vision shall be severable from this section
and shall not affect the remainder thereof
or the application of the provision to per-
sons not similarly situated or to dissimilar
circumstances.

12\. Add § 147.132 to read as follows:

§ 147.132 Religious exemptions in
connection with coverage of certain
preventive health services.

(a) Objecting entities. (1) Guidelines
issued under § 147.130(a)(1)(iv) by the

Health Resources and Services Admin-
istration must not provide for or support
the requirement of coverage or pay-
ments for contraceptive services with
respect to a group health plan estab-
lished or maintained by an objecting
organization, or health insurance cover-
age offered or arranged by an objecting
organization, and thus the Health Re-
sources and Service Administration will
exempt from any guidelines' require-
ments that relate to the provision of
contraceptive services:

(i) A group health plan and health in-
surance coverage provided in connection
with a group health plan to the extent the
non-governmental plan sponsor objects as
specified in paragraph (a)(2) of this sec-
tion. Such non-governmental plan spon-
sors include, but are not limited to, the
following entities-

(A) A church, an integrated auxiliary of
a church, a convention or association of
churches, or a religious order.

(B) A nonprofit organization.

(D) A for-profit entity that is not closely
held.

(E) Any other non-governmental em-
ployer.

(ii) An institution of higher education
as defined in 20 U.S.C. 1002 in its ar-
rangement of student health insurance
coverage, to the extent that institution ob-
jects as specified in paragraph (a)(2) of
this section. In the case of student health
insurance coverage, this section is appli-
cable in a manner comparable to its appli-
cability to group health insurance cover-
age provided in connection with a group
health plan established or maintained by a
plan sponsor that is an employer, and ref-
erences to "plan participants and benefi-
ciaries" will be interpreted as references
to student enrollees and their covered de-
pendents; and

(iii) A health insurance issuer offering
group or individual insurance coverage to
the extent the issuer objects as specified in
paragraph (a)(2) of this section. Where a
health insurance issuer providing group
health insurance coverage is exempt under
this paragraph (a)(1)(iii), the plan remains
subject to any requirement to provide cov-
erage for contraceptive services under
Guidelines issued under § 147.130(a)(1)(iv)

unless it is also exempt from that require-
ment.

(2) The exemption of this paragraph
(a) will apply to the extent that an entity
described in paragraph (a)(1) of this sec-
tion objects to its establishing, maintain-
ing, providing, offering, or arranging (as
applicable) coverage, payments, or a
plan that provides coverage or payments
for some or all contraceptive services,
based on its sincerely held religious be-
liefs.

(b) Objecting individuals. Guidelines
issued under § 147.130(a)(1)(iv) by the
Health Resources and Services Admin-
istration must not provide for or support
the requirement of coverage or pay-
ments for contraceptive services with
respect to individuals who object as
specified in this paragraph (b), and noth-
ing in § 147.130(a)(1)(iv), 26 CFR
54.9815-2713(a)(1)(iv), or 29 CFR
2590.715-2713(a)(1)(iv) may be con-
strued to prevent a willing health insur-
ance issuer offering group or individual
health insurance coverage, and as appli-
cable, a willing plan sponsor of a group
health plan, from offering a separate
benefit package option, or a separate
policy, certificate or contract of insur-
ance, to any individual who objects to
coverage or payments for some or all
contraceptive services based on sin-
cerely held religious beliefs.

(c) Definition. For the purposes of this
section, reference to "contraceptive"
services, benefits, or coverage includes
contraceptive or sterilization items, pro-
cedures, or services, or related patient
education or counseling, to the extent
specified for purposes of § 147.130(a)
(1)(iv).

(d) Severability. Any provision of this
section held to be invalid or unenforce-
able by its terms, or as applied to any
person or circumstance, shall be con-
strued so as to continue to give maxi-
mum effect to the provision permitted
by law, unless such holding shall be one
of utter invalidity or unenforceability, in
which event the provision shall be sev-
erable from this section and shall not
affect the remainder thereof or the ap-
plication of the provision to persons not
similarly situated or to dissimilar cir-
cumstances.

[Billing Codes: 4830-01-P; 4510-
029-P; 4120-01-P; 6325-64]

#### T.D. 9828

DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 54

DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2590

DEPARTMENT OF HEALTH
AND HUMAN SERVICES
45 CFR Part 147

##### Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act

ACTION: Interim final rules with request
for comments.

SUMMARY: The United States has a
long history of providing conscience pro-
tections in the regulation of health care for
entities and individuals with objections
based on religious beliefs or moral con-
victions. These interim final rules expand
exemptions to protect moral convictions
for certain entities and individuals whose
health plans are subject to a mandate of
contraceptive coverage through guidance
issued pursuant to the Patient Protection
and Affordable Care Act. These rules do
not alter the discretion of the Health Re-
sources and Services Administration, a
component of the United States Depart-
ment of Health and Human Services, to
maintain the guidelines requiring contra-
ceptive coverage where no regulatorily
recognized objection exists. These rules
also provide certain morally objecting en-
tities access to the voluntary "accommo-

dation" process regarding such coverage.
These rules do not alter multiple other
Federal programs that provide free or sub-
sidized contraceptives for women at risk
of unintended pregnancy.

DATES: Effective date: These interim fi-
nal rules are effective on October 6, 2017.

Comment date: Written comments on
these interim final rules are invited and
must be received by December 5, 2017.

ADDRESSES: Written comments may be
submitted to the Department of Health
and Human Services as specified below.
Any comment that is submitted will be
shared with the Department of Labor and
the Department of the Treasury, and will
also be made available to the public.

Comments, identified by "Preventive
Services," may be submitted one of four
ways (please choose only one of the ways
listed)

1\. Electronically. You may submit
electronic comments on this regulation to
http://www.regulations.gov. Follow the
"Submit a comment" instructions.

2\. By regular mail. You may mail writ-
ten comments to the following address
ONLY:

Centers for Medicare & Medicaid Ser-
vices,

Department of Health and Human Ser-
vices,

Attention: CMS-9925-IFC,
P.O. Box 8016,
Baltimore, MD 21244-8016.

Please allow sufficient time for mailed
comments to be received before the close
of the comment period.

3\. By express or overnight mail. You
may send written comments to the follow-
ing address ONLY:

Centers for Medicare & Medicaid Ser-
vices,

Department of Health and Human Ser-
vices,

Attention: CMS-9925-IFC,
Mail Stop C4-26-05,
7500 Security Boulevard,
Baltimore, MD 21244-1850

4\. By hand or courier. Alternatively,
you may deliver (by hand or courier) your
written comments ONLY to the following
addresses prior to the close of the com-
ment period:

a. For delivery in Washington, DC-
Centers for Medicare & Medicaid Services,
Department of Health and Human Services,
Room 445-G, Hubert H. Humphrey
Building,

200 Independence Avenue, SW.,
Washington, DC 20201

b. For delivery in Baltimore, MD-
Centers for Medicare & Medicaid Services,
Department of Health and Human Services,
7500 Security Boulevard,
Baltimore, MD 21244-1850.

If you intend to deliver your comments
to the Baltimore address, call telephone
number (410) 786-9994 in advance to
schedule your arrival with one of our staff
members.

Comments erroneously mailed to the
addresses indicated as appropriate for

hand or courier delivery may be delayed
and received after the comment period.

Comments received will be posted
without change to www.regulations.gov.

## FOR FURTHER INFORMATION

CONTACT: Jeff Wu (310) 492-4305 or
marketreform@cms.hhs.gov for Centers
for Medicare & Medicaid Services
(CMS), Department of Health and Human
Services (HHS), Amber Rivers or Mat-
thew Litton, Employee Benefits Security
Administration (EBSA), Department of
Labor, at (202) 693-8335; Karen Levin,
Internal Revenue Service, Department of
the Treasury, at (202) 317-5500 (not toll-
free numbers).

Customer Service Information: Individu-
als interested in obtaining information from
the Department of Labor concerning
employment-based health coverage laws
may call the EBSA Toll-Free Hotline at
1-866-444-EBSA (3272) or visit the Depart-
ment of Labor's website (www.dol.gov/
ebsa). Information from HHS on private
health insurance coverage can be found on
CMS's website (www.cms.gov/cciio), and
information on health care reform can be
found at www.HealthCare.gov.

## SUPPLEMENTARY INFORMATION:

### I. Background

In the context of legal requirements
touching on certain sensitive health care
issues-including health coverage of con-
traceptives-Congress has a consistent
history of supporting conscience protec-
tions for moral convictions alongside pro-
tections for religious beliefs, including as

part of its efforts to promote access to
health services.114 Against that backdrop,
Congress granted the Health Resources
and Services Administration (HRSA), a
component of the United States Depart-
ment of Health and Human Services
(HHS), discretion under the Patient Pro-
tection and Affordable Care Act to specify
that certain group health plans and health
insurance issuers shall cover, "with re-
spect to women, such additional preven-
tive care and screenings . . . as provided
for in comprehensive guidelines sup-
ported by" HRSA (the "Guidelines").
Public Health Service Act section
2713(a)(4). HRSA exercised that discre-
tion under the last Administration to re-
quire health coverage for, among other
things, certain contraceptive services,115
while the administering agencies-the
Departments of Health and Human Ser-
vices, Labor, and the Treasury (collec-
tively, "the Departments"116), exercised
both the discretion granted to HHS
through HRSA, its component, in PHS
Act section 2713(a)(4), and the authority
granted to the Departments as administer-
ing agencies ( 26 U.S.C. 9833; 29 U.S.C.
1191c; 42 U.S.C. 300gg-92) to issue reg-
ulations to guide HRSA in carrying out
that provision. Through rulemaking, in-
cluding three interim final rules, the De-
partments exempted and accommodated
certain religious objectors, but did not of-
fer an exemption or accommodation to
any group possessing non-religious moral
objections to providing coverage for some
or all contraceptives. Many individuals
and entities challenged the contraceptive
coverage requirement and regulations
(hereinafter, the "contraceptive Mandate,"

114See, for example, 42 U.S.C. 300a-7 (protecting individuals and health care entities from being required to provide or assist sterilizations, abortions, or other lawful health services if it
would violate their "religious beliefs or moral convictions"); 42 U.S.C. 238n (protecting individuals and entities that object to abortion); Consolidated Appropriations Act of 2017, Div. H,
Title V, Sec. 507(d) (Departments of Labor, HHS, and Education, and Related Agencies Appropriations Act), Pub. L. No. 115-31 (protecting any "health care professional, a hospital, a
provider-sponsored organization, a health maintenance organization, a health insurance plan, or any other kind of health care facility, organization, or plan" in objecting to abortion for any
reason); Id. at Div. C, Title VIII, Sec. 808 (regarding any requirement of "the provision of contraceptive coverage by health insurance plans" in the District of Columbia, "it is the intent
of Congress that any legislation enacted on such issue should include a 'conscience clause' which provides exceptions for religious beliefs and moral convictions."); Id. at Div. C, Title VII,
Sec. 726(c) (Financial Services and General Government Appropriations Act) (protecting individuals who object to prescribing or providing contraceptives contrary to their "religious beliefs
or moral convictions"); Id. at Div. I, Title III (Department of State, Foreign Operations, and Related Programs Appropriations Act) (protecting applicants for family planning funds based
on their "religious or conscientious commitment to offer only natural family planning"); 42 U.S.C. 290bb-36 (prohibiting the statutory section from being construed to require suicide related
treatment services for youth where the parents or legal guardians object based on "religious beliefs or moral objections"); 42 U.S.C. 1395w-22(j)(3)(B) (protecting against forced counseling
or referrals in Medicare Choice, now Medicare Advantage, managed care plans with respect to objections based on "moral or religious grounds"); 42 U.S.C. 1396a(w)(3) (ensuring particular
Federal law does not infringe on "conscience" as protected in State law concerning advance directives); 42 U.S.C. 1396u-2(b)(3) (protecting against forced counseling or referrals in Medicaid
managed care plans with respect to objections based on "moral or religious grounds"); 42 U.S.C. 2996f(b) (protecting objection to abortion funding in legal services assistance grants based
on "religious beliefs or moral convictions"); 42 U.S.C. 14406 (protecting organizations and health providers from being required to inform or counsel persons pertaining to assisted suicide);
42 U.S.C. 18023 (blocking any requirement that issuers or exchanges must cover abortion); 42 U.S.C. 18113 (protecting health plans or health providers from being required to provide an
item or service that helps cause assisted suicide); see also 8 U.S.C. 1182(g) (protecting vaccination objections by "aliens" due to "religious beliefs or moral convictions"); 18 U.S.C. 3597
(protecting objectors to participation in Federal executions based on "moral or religious convictions"); 20 U.S.C. 1688 (prohibiting sex discrimination law to be used to require assistance
in abortion for any reason); 22 U.S.C. 7631(d) (protecting entities from being required to use HIV/AIDS funds contrary to their "religious or moral objection").

115This document's references to "contraception," "contraceptive," "contraceptive coverage," or "contraceptive services" generally includes contraceptives, sterilization, and related patient
education and counseling, unless otherwise indicated.

116Note, however, that in sections under headings listing only two of the three Departments, the term "Departments" generally refers only to the two Departments listed in the heading.

or the "Mandate") as being inconsistent
with various legal protections. These chal-
lenges included lawsuits brought by some
non-religious organizations with sincerely
held moral convictions inconsistent with
providing coverage for some or all con-
traceptive services, and those cases con-
tinue to this day. Various public com-
ments were also submitted asking the
Departments to protect objections based
on moral convictions.

The Departments have recently exer-
cised our discretion to reevaluate these
exemptions and accommodations. This
evaluation includes consideration of vari-
ous factors, such as: the interests served
by the existing Guidelines, regulations,
and accommodation process117; the exten-
sive litigation; Executive Order 13798,
"Promoting Free Speech and Religious
Liberty" (May 4, 2017); Congress' history
of providing protections for moral convic-
tions alongside religious beliefs regarding
certain health services (including contra-
ception, sterilization, and items or ser-
vices believed to involve abortion); the
discretion afforded under PHS Act section
2713(a)(4); the structure and intent of that
provision in the broader context of section
2713 and the Patient Protection and Af-
fordable Care Act; and the history of the
regulatory process and comments sub-
mitted in various requests for public
comments (including in the Depart-
ments' 2016 Request for Information).
Elsewhere in this issue of the Bulletin,
the Departments published, contempora-
neously with these interim final rules,
companion interim final rules expanding
exemptions to protect sincerely held re-
ligious beliefs in the context of the con-
traceptive Mandate.

In light of these considerations, the De-
partments issue these interim final rules to
better balance the Government's interest
in promoting coverage for contraceptive
and sterilization services with the Govern-
ment's interests in providing conscience
protections for individuals and entities
with sincerely held moral convictions in
certain health care contexts, and in mini-
mizing burdens imposed by our regulation
of the health insurance market.

#### A. The Affordable Care Act

Collectively, the Patient Protection and
Affordable Care Act (Pub. L. 111-148),
enacted on March 23, 2010, and the
Health Care and Education Reconciliation
Act of 2010 (Pub. L. 111-152), enacted
on March 30, 2010, are known as the
Affordable Care Act. In signing the Af-
fordable Care Act, President Obama is-
sued Executive Order 13535 (March 24,
2010), which declared that, "[u]nder the
Act, longstanding Federal laws to protect
conscience (such as the Church Amend-
ment, 42 U.S.C. 300a-7, and the Weldon
Amendment, section 508(d)(1) of Public
Law 111-8) remain intact" and that "[n]u-
merous executive agencies have a role in
ensuring that these restrictions are en-
forced, including the Department of
Health and Human Services (HHS)."
Those laws protect objections based on
moral convictions in addition to religious
beliefs.

The Affordable Care Act reorganizes,
amends, and adds to the provisions of part
A of title XXVII of the Public Health
Service Act (PHS Act) relating to group
health plans and health insurance issuers
in the group and individual markets. In
addition, the Affordable Care Act adds
section 715(a)(1) to the Employee Retire-
ment Income Security Act of 1974
(ERISA) and section 9815(a)(1) to the
Internal Revenue Code (Code) to incorpo-
rate the provisions of part A of title
XXVII of the PHS Act into ERISA and
the Code, and thereby make them appli-
cable to certain group health plans regu-
lated under ERISA or the Code. The sec-
tions of the PHS Act incorporated into
ERISA and the Code are sections 2701
through 2728 of the PHS Act.

These interim final rules concern sec-
tion 2713 of the PHS Act. Where it ap-
plies, section 2713(a)(4) of the PHS Act
requires coverage without cost sharing for
"such additional" women's preventive
care and screenings "as provided for" and
"supported by" guidelines developed by
HRSA/HHS. The Congress did not spec-
ify any particular additional preventive
care and screenings with respect to
women that HRSA could or should in-
clude in its Guidelines, nor did Congress

indicate whether the Guidelines should in-
clude contraception and sterilization.

The Departments have consistently in-
terpreted section 2713(a)(4)'s of the PHS
Act grant of authority to include broad
discretion to decide the extent to which
HRSA will provide for and support the
coverage of additional women's preven-
tive care and screenings in the Guidelines.
In turn, the Departments have interpreted
that discretion to include the ability to
exempt entities from coverage require-
ments announced in HRSA's Guidelines.
That interpretation is rooted in the text of
section 2713(a)(4) of the PHS Act, which
allows HRSA to decide the extent to
which the Guidelines will provide for and
support the coverage of additional wom-
en's preventive care and screenings.

Accordingly, the Departments have
consistently interpreted section 2713(a)(4)
of the PHS Act reference to "comprehen-
sive guidelines supported by the Health
Resources and Services Administration
for purposes of this paragraph" to grant
HRSA authority to develop such Guide-
lines. And because the text refers to
Guidelines "supported by the Health Re-
sources and Services Administration for
purposes of this paragraph," the Depart-
ments have consistently interpreted that
authority to afford HRSA broad discretion
to consider the requirements of coverage
and cost-sharing in determining the nature
and extent of preventive care and screen-
ings recommended in the guidelines. (76
FR 46623). As the Departments have
noted, these Guidelines are different from
"the other guidelines referenced in section
2713(a), which pre-dated the Affordable
Care Act and were originally issued for
purposes of identifying the non-binding
recommended care that providers should
provide to patients." Id. Guidelines devel-
oped as nonbinding recommendations for
care implicate significantly different legal
and policy concerns than guidelines de-
veloped for a mandatory coverage re-
quirement. To guide HRSA in exercising
the discretion afforded to it in section
2713(a)(4), the Departments have previ-
ously promulgated regulations defining
the scope of permissible religious exemp-
tions and accommodations for such guide-
lines. (45 CFR 147.131). The interim final

117In this IFR, we generally use "accommodation" and "accommodation process" interchangeably.

rules set forth herein are a necessary and
appropriate exercise of the authority del-
egated to the Departments as administra-
tors of the statutes. (26 U.S.C. 9833; 29
U.S.C. 1191c; 42 U.S.C. 300gg-92).

Our interpretation of section 2713(a)
(4) of the PHS Act is confirmed by the
Affordable Care Act's statutory structure.
The Congress did not intend to require
entirely uniform coverage of preventive
services. (76 FR 46623). To the contrary,
Congress carved out an exemption from
section 2713 for grandfathered plans. This
exemption is not applicable to many of the
other provisions in Title I of the Afford-
able Care Act-provisions previously re-
ferred to by the Departments as providing
"particularly significant protections." (75
FR 34540). Those provisions include: sec-
tion 2704, which prohibits preexisting
condition exclusions or other discrimina-
tion based on health status in group health
coverage; section 2708, which prohibits
excessive waiting periods (as of January
1, 2014); section 2711, which relates to
lifetime limits; section 2712, which pro-
hibits rescissions of health insurance cov-
erage; section 2714, which extends depen-
dent coverage until age 26; and section
2718, which imposes a medical loss ratio
on health insurance issuers in the individ-
ual and group markets (for insured cover-
age), or requires them to provide rebates
to policyholders. (75 FR 34538, 34540,
34542). Consequently, of the 150 million
nonelderly people in America with
employer-sponsored health coverage, ap-
proximately 25.5 million are estimated to
be enrolled in grandfathered plans not
subject to section 2713 of the PHS Act.118
As the Supreme Court observed, "there is
no legal requirement that grandfathered
plans ever be phased out." Burwell v.
Hobby Lobby Stores, Inc., 134 S. Ct.
2751, 2764 n.10 (2014).

The Departments' interpretation of
section 2713(a)(4) of the PHS Act to per-
mit HRSA to establish exemptions from
the Guidelines, and of the Departments'
own authority as administering agencies

to guide HRSA in establishing such ex-
emptions, is also consistent with Execu-
tive Order 13535. That order, issued upon
the signing of the Affordable Care Act,
specified that "longstanding Federal laws
to protect conscience . . . remain intact,"
including laws that protect religious be-
liefs and moral convictions from certain
requirements in the health care context.
Although the text of Executive Order
13535 does not require the expanded ex-
emptions issued in these interim final
rules, the expanded exemptions are, as
explained below, consistent with long-
standing Federal laws to protect con-
science regarding certain health matters,
and are consistent with the intent that the
Affordable Care Act would be imple-
mented in consideration of the protections
set forth in those laws.

### B. The Regulations Concerning Women's Preventive Services

#### 1. The Institute of Medicine Report

In developing the Guidelines, HRSA
relied on an independent report from the
Institute of Medicine (IOM, now known
as the National Academy of Medicine) on
women's preventive services, issued on
July 19, 2011, "Clinical Preventive Ser-
vices for Women, Closing the Gaps"
(IOM 2011). The IOM's report was
funded by the HHS Office of the Assistant
Secretary for Planning and Evaluation,
pursuant to a funding opportunity that
charged the IOM to conduct a review of
effective preventive services to ensure
women's health and well-being. 119

The IOM made a number of recom-
mendations with respect to women's pre-
ventive services. As relevant here, the

IOM recommended that the Guidelines
cover the full range of Food and Drug
Administration (FDA)-approved contra-
ceptive methods, sterilization procedures,
and patient education and counseling for
women with reproductive capacity. Be-
cause FDA includes in the category of
"contraceptives" certain drugs and de-
vices that may not only prevent concep-
tion (fertilization), but may also prevent
implantation of an embryo,120 the
IOM's recommendation included sev-
eral contraceptive methods that many
persons and organizations believe are
abortifacient-that is, as causing early
abortion-and which they conscien-
tiously oppose for that reason distinct
from whether they also oppose contra-
ception or sterilization.

118Kaiser Family Foundation & Health Research & Educational Trust, "Employer Health Benefits, 2017 Annual Survey," available at http://files.kff.org/attachment/Report-Employer-
Health-Benefits-Annual-Survey-2017.

119Because section 2713(a)(4) of the PHS Act specifies that the HRSA Guidelines shall include preventive care and screenings "with respect to women," the Guidelines exclude services
relating to a man's reproductive capacity, such as vasectomies and condoms.

120FDA's guide "Birth Control: Medicines To Help You," specifies that various approved contraceptives, including Levonorgestrel, Ulipristal Acetate, and IUDs, work mainly by preventing
fertilization and "may also work . . . by preventing attachment (implantation) to the womb (uterus)" of a human embryo after fertilization. Available at https://www.fda.gov/forconsumers/
byaudience/forwomen/freepublications/ucm313215.htm.

a reduction in healthcare expenditure.121
IOM 2011 at 231-32. In its response to
Dr. LoSasso, the other 15 committee
members stated in part that "At the first
committee meeting, it was agreed that
cost considerations were outside the
scope of the charge, and that the com-
mittee should not attempt to duplicate
the disparate review processes used by
other bodies, such as the USPSTF,
ACIP, and Bright Futures. HHS, with
input from this committee, may consider
other factors including cost in its devel-
opment of coverage decisions."

#### 2. HRSA's 2011 Guidelines and the Departments' Second Interim Final Rules

On August 1, 2011, HRSA released onto
its website its Guidelines for women's pre-
ventive services, adopting the recommenda-
tions of the IOM. https://www.hrsa.gov/
womensguidelines/ The Guidelines in-
cluded coverage for all FDA-approved con-
traceptives, sterilization procedures, and re-
lated patient education and counseling for
women with reproductive capacity, as pre-
scribed by a health care provider (hereinaf-
ter "the Mandate").

adopting that limited definition of religious
employer, the 2011 interim final rules stated
that they relied on the laws of some "States
that exempt certain religious employers
from having to comply with State law re-
quirements to cover contraceptive services."
(76 FR 46623). Several comments were
submitted asking that the exemption include
those who object to contraceptive coverage
based on non-religious moral convictions,
including pro-life, non-profit advocacy or-
ganizations.123

#### 3. The Departments' Subsequent Rulemaking on the Accommodation and Third Interim Final Rules

Final regulations issued on February
10, 2012, adopted the definition of "reli-
gious employer" in the 2011 interim final
rules without modification (2012 final reg-
ulations). 124 (77 FR 8725). The exemption
did not require exempt employers to file
any certification form or comply with any
other information collection process.

Contemporaneously with the issuance
of the 2012 final regulations, HHS-with
the agreement of the Department of Labor
(DOL) and the Department of the Trea-
sury-issued guidance establishing a tem-
porary safe harbor from enforcement of
the contraceptive coverage requirement
by the Departments with respect to group
health plans established or maintained by
certain nonprofit organizations with reli-
gious objections to contraceptive cover-
age (and the group health insurance cov-
erage provided in connection with such
plans).125 The temporary safe harbor did
not include nonprofit organizations that
had an objection to contraceptives based
on moral convictions but not religious be-
liefs, nor did it include for-profit entities
of any kind. The Departments stated that,
during the temporary safe harbor, the De-

partments would engage in rulemaking to
achieve "two goals-providing contracep-
tive coverage without cost-sharing to in-
dividuals who want it and accommodating
non-exempted, nonprofit organizations'
religious objections to covering contra-
ceptive services." (77 FR 8727).

The 2013 NPRM proposed to expand
the definition of "religious employer" for
purposes of the religious employer ex-
emption. Specifically, it proposed to re-
quire only that the religious employer be
organized and operate as a nonprofit entity
and be referred to in section 6033(a)(3)
(A)(i) or (iii) of the Code, eliminating the
requirements that a religious employer-
(1) have the inculcation of religious val-
ues as its purpose; (2) primarily employ
persons who share its religious tenets; and
(3) primarily serve persons who share its
religious tenets. The proposed expanded
definition still encompassed only religious
entities.

The 2013 NPRM also proposed to cre-
ate a compliance process, which it called
an accommodation, for group health plans
established, maintained, or arranged by
certain eligible nonprofit organizations
that fell outside the houses of worship and
integrated auxiliaries covered by section
6033(a)(3)(A)(i) or (iii) of the Code (and,
thus, outside of the religious employer
exemption). The 2013 NPRM proposed to
define such eligible organizations as non-

121The Departments do not relay these dissenting remarks as an endorsement of the remarks, but to describe the history of the Guidelines, which includes this part of the report that IOM
provided to HRSA.

122The 2011 amended interim final rules were issued and effective on August 1, 2011, and published in the Federal Register on August 3, 2011. (76 FR 46621).

123 See, for example, Americans United for Life ("AUL") Comment on CMA-9992-IFC2 at 10 (Nov. 1, 2011), available at http://www.regulations.gov/#!documentDetail;D=HHS-OS-
2011-0023-59496.

124The 2012 final regulations were published on February 15, 2012 (77 FR 8725).

125Guidance on the Temporary Enforcement Safe Harbor for Certain Employers, Group Health Plans, and Group Health Insurance Issuers with Respect to the Requirement to Cover
Contraceptive Services Without Cost Sharing Under section 2713 of the Public Health Service Act, Section 715(a)(1) of the Employee Retirement Income Security Act, and Section
9815(a)(1) of the Internal Revenue Code, issued on February 10, 2012, and reissued on August 15, 2012. Available at: http://www.lb7.uscourts.gov/documents/12cv3932.pdf. The guidance,
as reissued on August 15, 2012, clarified, among other things, that plans that took some action before February 10, 2012, to try, without success, to exclude or limit contraceptive coverage
were not precluded from eligibility for the safe harbor. The temporary enforcement safe harbor was also available to insured student health insurance coverage arranged by nonprofit
institutions of higher education with religious objections to contraceptive coverage that met the conditions set forth in the guidance. See final rule entitled "Student Health Insurance
Coverage" published March 21, 2012 (77 FR 16457).

profit entities that hold themselves out as
religious, oppose providing coverage for
certain contraceptive items on account of
religious objections, and maintain a certi-
fication to this effect in their records. The
2013 NPRM stated, without citing a sup-
porting source, that employees of eligible
organizations "may be less likely than"
employees of exempt houses of worship
and integrated auxiliaries to share their
employer's faith and opposition to contra-
ception on religious grounds. (78 FR
8461). The 2013 NPRM therefore pro-
posed that, in the case of an insured group
health plan established or maintained by
an eligible organization, the health insur-
ance issuer providing group health insur-
ance coverage in connection with the plan
would provide contraceptive coverage to
plan participants and beneficiaries without
cost sharing, premium, fee, or other
charge to plan participants or beneficiaries
enrolled in the eligible organization's
plan-and without any cost to the eligible
organization.126 In the case of a self-
insured group health plan established or
maintained by an eligible organization,
the 2013 NPRM presented potential ap-
proaches under which the third party ad-
ministrator of the plan would provide or
arrange for contraceptive coverage to plan
participants and beneficiaries. The pro-
posed accommodation process was not to
be offered to non-religious nonprofit or-
ganizations, nor to any for-profit entities.
Public comments again included the re-
quest that exemptions encompass objec-
tions to contraceptive coverage based on
moral convictions and not just based on
religious beliefs.127 On August 15, 2012,
the Departments extended our temporary
safe harbor until the first plan year begin-
ning on or after August 1, 2013.

The Departments published final regu-
lations on July 2, 2013 (July 2013 final
regulations) (78 FR 39869). The July
2013 final regulations finalized the expan-
sion of the exemption for houses of wor-
ship and their integrated auxiliaries. Al-
though some commenters had suggested

that the exemption be further expanded,
the Departments declined to adopt that
approach. The July 2013 regulations
stated that, because employees of object-
ing houses of worship and integrated aux-
iliaries are relatively likely to oppose con-
traception, exempting those organizations
"does not undermine the governmental in-
terests furthered by the contraceptive cov-
erage requirement." (78 FR 39874). How-
ever; like the 2013 NPRM, the July 2013
regulations assumed that "[h]ouses of
worship and their integrated auxiliaries
that object to contraceptive coverage on
religious grounds are more likely than
other employers to employ people of the
same faith who share the same objection"
to contraceptives. Id.

The July 2013 regulation also finalized
an accommodation for eligible organiza-
tions, which were then defined to include
solely organizations that are religious. Un-
der the accommodation, an eligible orga-
nization was required to submit a self-
certification to its group health insurance
issuer or third party administrator, as ap-
plicable. Upon receiving that self-
certification, the issuer or third party ad-
ministrator would provide or arrange for
payments for the contraceptive services to
the plan participants and beneficiaries en-
rolled in the eligible organization's plan,
without requiring any cost sharing on the
part of plan participants and beneficiaries
and without cost to the eligible organiza-
tion. With respect to self-insured plans,
the third party administrators (or issuers
they contracted with) could receive reim-
bursements by reducing user fee payments
(to Federally facilitated Exchanges) by the
amounts paid out for contraceptive ser-
vices under the accommodation, plus an
allowance for certain administrative costs,
as long as the HHS Secretary requests and
an authorizing exception under OMB Cir-
cular No. A-25R is in effect.128 With re-
spect to fully insured group health plans,
the issuer was expected to bear the cost of
such payments,129 and HHS intended to
clarify in guidance that the issuer could

treat those payments as an adjustment to
claims costs for purposes of medical loss
ratio and risk corridor program calcula-
tions. The Departments extended the tem-
porary safe harbor again on June 20, 2013,
to encompass plan years beginning on or
after August 1, 2013, and before January
1, 2014.

### 4. Litigation Over the Mandate and the Accommodation Process

During the period when the Depart-
ments were publishing and modifying our
regulations, organizations and individuals
filed dozens of lawsuits challenging the
Mandate. Plaintiffs included religious
nonprofit organizations, businesses run by
religious families, individuals, and others,
including several non-religious organiza-
tions that opposed coverage of certain
contraceptives under the Mandate on the
basis of non-religious moral convictions.
Religious for-profit entities won various
court decisions leading to the Supreme
Court's ruling in Burwell v. Hobby Lobby
Stores, Inc. 134 S. Ct. 2751 (2014). The
Supreme Court ruled against the Depart-
ments and held that, under the Religious
Freedom Restoration Act of 1993
(RFRA), the Mandate could not be ap-
plied to the closely held for-profit corpo-
rations before the Court because their
owners had religious objections to provid-
ing such coverage.130

On August 27, 2014, the Departments
simultaneously issued a third set of in-
terim final rules (August 2014 interim fi-
nal rules) (79 FR 51092), and a notice of
proposed rulemaking (August 2014 pro-
posed rules) (79 FR 51118). The August
2014 interim final rules changed the ac-
commodation process so that it could be
initiated either by self-certification using
EBSA Form 700 or through a notice in-
forming the Secretary of HHS that an el-
igible organization had religious objec-
tions to coverage of all or a subset of
contraceptive services. (79 FR 51092). In
response to Hobby Lobby, the August

126The NPRM proposed to treat student health insurance coverage arranged by eligible organizations that are institutions of higher education in a similar manner.

127 See for example, AUL Comment on CMS-9968-P at 5 (Apr. 8, 2013), available at http://www.regulations.gov/#!documentDetail;D=CMS-2012-0031-79115.

128See also 45 CFR 156.50. Under the regulations, if the third party administrator does not participate in a Federally-facilitated Exchange as an issuer, it is permitted to contract with an
insurer which does so participate, in order to obtain such reimbursement. The total contraceptive user fee adjustment for the 2015 benefit year was $33 million.

129"[P]roviding payments for contraceptive services is cost neutral for issuers." (78 FR 39877).

130The Supreme Court did not decide whether RFRA would apply to publicly traded for-profit corporations. See 134 S. Ct. at 2774.

2014 proposed rules extended the accom-
modation process to closely held for-profit
entities with religious objections to con-
traceptive coverage, by including them in
the definition of eligible organizations.
(79 FR 51118). Neither the August 2014
interim final rules nor the August 2014
proposed rules extended the exemption;
neither added a certification requirement
for exempt entities; and neither encom-
passed objections based on non-religious
moral convictions.

On July 14, 2015, the Departments fi-
nalized both the August 2014 interim final
rules and the August 2014 proposed rules
in a set of final regulations (the July 2015
final regulations) (80 FR 41318). (The
July 2015 final regulations also encom-
passed issues related to other preventive
services coverage.) The July 2015 final
regulations allowed eligible organizations
to submit a notice to HHS as an alterna-
tive to submitting the EBSA Form 700,
but specified that such notice must include
the eligible organization's name and an
expression of its religious objection, along
with the plan name, plan type, and name
and contact information for any of the
plan's third party administrators or health
insurance issuers. The Departments indi-
cated that such information represents the
minimum information necessary for us to
administer the accommodation process.

Meanwhile, a second series of legal chal-
lenges were filed by religious nonprofit or-
ganizations that stated the accommodation
impermissibly burdened their religious be-
liefs because it utilized their health plans to
provide services to which they objected on
religious grounds, and it required them to
submit a self-certification or notice. On No-
vember 6, 2015, the U.S. Supreme Court
granted certiorari in seven similar cases un-
der the title of a filing from the Third Cir-
cuit, Zubik v. Burwell. On May 16, 2016, the
Supreme Court issued a per curiam opinion
in Zubik, vacating the judgments of the
Courts of Appeals-most of which had
ruled in the Departments' favor-and re-
manding the cases "in light of the substan-
tial clarification and refinement in the posi-
tions of the parties" that had been filed in
supplemental briefs. 136 S. Ct. 1557, 1560
(2016). The Court stated that it anticipated

that, on remand, the Courts of Appeals
would "allow the parties sufficient time to
resolve any outstanding issues between
them." Id. The Court also specified that "the
Government may not impose taxes or pen-
alties on petitioners for failure to provide the
relevant notice" while the cases remained
pending. Id. at 1561.

After remand, as indicated by the De-
partments in court filings, meetings were
held between attorneys for the Govern-
ment and for the plaintiffs in those cases.
The Departments also issued a Request
for Information ("RFI") on July 26, 2016,
seeking public comment on options for
modifying the accommodation process in
light of the supplemental briefing in Zubik
and the Supreme Court's remand order.
(81 FR 47741). Public comments were
submitted in response to the RFI, during a
comment period that closed on September
20, 2016. Those comments included the
request that the exemption be expanded to
include those who oppose the Mandate for
either religious "or moral" reasons, con-
sistent with various state laws (such as in
Connecticut or Missouri) that protect ob-
jections to contraceptive coverage based
on moral convictions.131

Beginning in 2015, lawsuits challeng-
ing the Mandate were also filed by various
non-religious organizations with moral
objections to contraceptive coverage.
These organizations asserted that they be-
lieve some methods classified by FDA as
contraceptives may have an abortifacient
effect and therefore, in their view, are
morally equivalent to abortion. These or-
ganizations have neither received an ex-
emption from the Mandate nor do they
qualify for the accommodation. For exam-
ple, the organization that since 1974 has
sponsored the annual March for Life in
Washington, D.C. (March for Life), filed a
complaint claiming that the Mandate vio-
lated the equal protection component of
the Due Process Clause of the Fifth
Amendment, and was arbitrary and capri-
cious under the Administrative Procedure
Act (APA). Citing, for example, (77 FR
8727), March for Life argued that the
Departments' stated interests behind the
Mandate were only advanced among
women who "want" the coverage so as to

prevent "unintended" pregnancy. March
for Life contended that because it only
hires employees who publicly advocate
against abortion, including what they re-
gard as abortifacient contraceptive items,
the Departments' interests were not ratio-
nally advanced by imposing the Mandate
upon it and its employees. Accordingly,
March for Life contended that applying
the Mandate to it (and other similarly sit-
uated organizations) lacked a rational ba-
sis and therefore doing so was arbitrary
and capricious in violation of the APA.
March for Life further contended that be-
cause the Departments concluded the gov-
ernment's interests were not undermined
by exempting houses of worship and in-
tegrated auxiliaries (based on our assump-
tion that such entities are relatively more
likely than other religious nonprofits to
have employees that share their views
against contraception), applying the Man-
date to March for Life or similar organi-
zations that definitively hire only employ-
ees who oppose certain contraceptives
lacked a rational basis and therefore vio-
lated their right of equal protection under
the Due Process Clause.

March for Life's employees, who
stated they were personally religious (al-
though personal religiosity was not a con-
dition of their employment), also sued as
co-plaintiffs. They contended that the
Mandate violates their rights under RFRA
by making it impossible for them to obtain
health insurance consistent with their re-
ligious beliefs, either from the plan March
for Life wanted to offer them, or in the
individual market, because the Departments
offered no exemptions in either circum-
stance. Another non-religious nonprofit or-
ganization that opposed the Mandate's re-
quirement to provide certain contraceptive
coverage on moral grounds also filed a law-
suit challenging the Mandate. Real Alterna-
tives, Inc. v. Burwell, 150 F. Supp. 3d 419
(M.D. Pa. 2015).

Challenges by non-religious nonprofit
organizations led to conflicting opinions
among the Federal courts. A district court
agreed with the March for Life plaintiffs
on the organization's equal protection
claim and the employees' RFRA claims
(not specifically ruling on the APA claim),

131See, for example, https://www.regulations.gov/document?D=CMS-2016-0123-54142; see also https://www.regulations.gov/document?D=CMS-2016-0123-54218 and https://
www.regulations.gov/document?D=CMS-2016-0123-46220.

and issued a permanent injunction against
the Departments that is still in place.
March for Life v. Burwell, 128 F. Supp. 3d
116 (D.D.C. 2015). The appeal in March
for Life is pending and has been stayed
since early 2016. In another case, Federal
district and appellate courts in Pennsylva-
nia disagreed with the reasoning from
March for Life and ruled against claims
brought by a similarly non-religious non-
profit employer and its religious employ-
ees. Real Alternatives, 150 F. Supp. 3d
419, affirmed by 867 F.3d 338 (3d Cir.
2017). One member of the appeals court
panel in Real Alternatives dissented in
part, stating he would have ruled in favor
of the individual employee plaintiffs un-
der RFRA. Id. at *18.

On December 20, 2016, HRSA up-
dated the Guidelines via its website,
https://www.hrsa.gov/womensguidelines
2016/index.html. HRSA announced that,
for plans subject to the Guidelines, the up-
dated Guidelines would apply to the first
plan year beginning after December 20,
2017. Among other changes, the updated
Guidelines specified that the required con-
traceptive coverage includes follow-up care
(for example, management and evaluation,
as well as changes to, and removal or dis-
continuation of, the contraceptive method).
They also specified, for the first time, that
coverage should include instruction in fer-
tility awareness-based methods for women
desiring an alternative method of family
planning. HRSA stated that, with the input
of a committee operating under a coopera-
tive agreement, HRSA would review and
periodically update the Women's Preven-
tive Services' Guidelines. The updated
Guidelines did not alter the religious em-
ployer exemption or accommodation pro-
cess, nor did they extend the exemption or
accommodation process to organizations or
individuals that oppose certain forms of
contraception (and coverage thereof) on
moral grounds.

On January 9, 2017, the Departments
issued a document entitled, "FAQs About
Affordable Care Act Implementation Part
36."132 The FAQ stated that, after review-
ing comments submitted in response to
the 2016 RFI and considering various op-
tions, the Departments could not find a

way at that time to amend the accommo-
dation so as to satisfy objecting eligible
organizations while pursuing the Depart-
ments' policy goals. The Departments did
not adopt the approach requested by cer-
tain commenters, cited above, to expand
the exemption to include those who op-
pose the Mandate for moral reasons.

On May 4, 2017, the President issued
Executive Order 13798, "Promoting Free
Speech and Religious Liberty." Section 3
of that order declares, "Conscience Pro-
tections with Respect to Preventive-Care
Mandate. The Secretary of the Treasury,
the Secretary of Labor, and the Secretary
of Health and Human Services shall
consider issuing amended regulations,
consistent with applicable law, to ad-
dress conscience-based objections to the
preventive-care mandate promulgated
under section 300gg-13(a)(4) of title 42,
United States Code."

### II. Expanded Exemptions and Accommodations for Moral Convictions

These interim final rules incorporate
conscience protections into the contracep-
tive Mandate. They do so in part to bring
the Mandate into conformity with Con-
gress's long history of providing or sup-
porting conscience protections in the reg-
ulation of sensitive health-care issues,
cognizant that Congress neither required
the Departments to impose the Mandate
nor prohibited them from providing con-
science protections if they did so. Specif-
ically, these interim final rules expand ex-
emptions to the contraceptive Mandate to
protect certain entities and individuals that
object to coverage of some or all contra-
ceptives based on sincerely held moral
convictions but not religious beliefs, and
these rules make those exempt entities
eligible for accommodations concerning
the same Mandate.

A. Discretion to Provide Exemptions
under Section 2713(a)(4) of the PHS Act
and the Affordable Care Act

The Departments have consistently in-
terpreted HRSA's authority under section
2713(a)(4) of the PHS Act to allow for

exemptions and accommodations to the
contraceptive Mandate for certain object-
ing organizations. Section 2713(a)(4) of
the PHS Act gives HRSA discretion to
decide whether and in what circumstances
it will support Guidelines providing for
additional women's preventive services
coverage. That authority includes HR-
SA's discretion to include contraceptive
coverage in those Guidelines, but the Con-
gress did not specify whether or to what
extent HRSA should do so. Therefore,
section 2713(a)(4) of the PHS Act allows
HRSA to not apply the Guidelines to cer-
tain plans of entities or individuals with
religious or moral objections to contracep-
tive coverage, and by not applying the
Guidelines to them, to exempt those enti-
ties from the Mandate. These rules are a
necessary and appropriate exercise of the
authority of HHS, of which HRSA is a
component, and of the authority delegated
to the Departments collectively as admin-
istrators of the statutes. (26 U.S.C. 9833;
29 U.S.C. 1191c; 42 U.S.C. 300gg-92).

Our protection of conscience in these
interim final rules is consistent with the
structure and intent of the Affordable Care
Act. The Affordable Care Act refrains
from applying section 2713(a)(4) of the
PHS Act to millions of women in grand-
fathered plans. In contrast, we anticipate
that conscientious exemptions to the Man-
date will impact a much smaller number
of women. President Obama emphasized
in signing the Affordable Care Act that
"longstanding Federal law to protect con-
science"-laws with conscience protec-
tions encompassing moral (as well as reli-
gious) objections-specifically including
(but not limited to) the Church Amendments
(42 U.S.C. 300a-7), "remain intact." Exec-
utive Order 13535. Nothing in the Afford-
able Care Act suggests Congress' intent to
deviate from its long history, discussed be-
low, of protecting moral convictions in par-
ticular health care contexts. The Depart-
ments' implementation of section 2713(a)
(4) of the PHS Act with respect to contra-
ceptive coverage is a context similar to
those encompassed by many other health
care conscience protections provided or sup-
ported by Congress. This Mandate concerns
contraception and sterilization services, in-

132Available at: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-36.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-
FAQs/Downloads/ACA-FAQs-Part36_1-9-17-Final.pdf.

cluding items believed by some citizens to
have an abortifacient effect-that is, to
cause the destruction of a human life at an
early stage of embryonic development.
These are highly sensitive issues in the his-
tory of health care regulation and have long
been shielded by conscience protections in
the laws of the United States.

### B. Congress' History of Providing Exemptions for Moral Convictions

In deciding the most appropriate way
to exercise our discretion in this context,
the Departments draw on nearly 50 years
of statutory law and Supreme Court prec-
edent discussing the protection of moral
convictions in certain circumstances-
particularly in the context of health care
and health insurance coverage. Congress
very recently expressed its intent on the
matter of Government-mandated contra-
ceptive coverage when it declared, with
respect to the possibility that the District
of Columbia would require contraceptive
coverage, that "it is the intent of Congress
that any legislation enacted on such issue
should include a 'conscience clause'
which provides exceptions for religious
beliefs and moral convictions." Consoli-
dated Appropriations Act of 2017, Divi-
sion C, Title VIII, Sec. 808, Pub. L. No.
115-31 (May 5, 2017). In support of these
interim final rules, we consider it signifi-
cant that Congress' most recent statement
on the prospect of Government mandated
contraceptive coverage specifically in-
tends that a conscience clause be included
to protect moral convictions.

The many statutes listed in Section
I-Background under footnote 1, which
show Congress' consistent protection of
moral convictions alongside religious be-
liefs in the Federal regulation of health
care, includes laws such as the 1973
Church Amendments, which we discuss at
length below, all the way to the 2017
Consolidated Appropriations Act dis-
cussed above. Notably among those laws,
the Congress has enacted protections for
health plans or health care organizations
in Medicaid or Medicare Advantage to
object "on moral or religious grounds" to
providing coverage of certain counseling
or referral services. 42 U.S.C. 1395w-
22(j)(3)(B) (protecting against forced
counseling or referrals in Medicare

Choice, now Medicare Advantage, man-
aged care plans with respect to objections
based on "moral or religious grounds");
42 U.S.C. 1396u-2(b)(3) (protecting
against forced counseling or referrals in
Medicaid managed care plans with respect
to objections based on "moral or religious
grounds"). The Congress has also pro-
tected individuals who object to prescrib-
ing or providing contraceptives contrary
to their "religious beliefs or moral convic-
tions." Consolidated Appropriations Act
of 2017, Division C, Title VII, Sec. 726(c)
(Financial Services and General Govern-
ment Appropriations Act), Pub. L. No.
115-31.

### C. The Church Amendments' Protection of Moral Convictions

One of the most important and well-
established federal statutes respecting
conscientious objections in specific health
care contexts was enacted over the course
of several years beginning in 1973, ini-
tially as a response to court decisions rais-
ing the prospect that entities or individuals
might be required to facilitate abortions or
sterilizations. These sections of the United
States Code are known as the Church
Amendments, named after their primary
sponsor Senator Frank Church (D-Idaho).
The Church Amendments specifically
provide conscience protections based on
sincerely held moral convictions. Among
other things, the amendments protect the
recipients of certain Federal health funds
from being required to perform, assist, or
make their facilities available for abor-
tions or sterilizations if they object "on the
basis of religious beliefs or moral convic-
tions," and they prohibit recipients of cer-
tain Federal health funds from discrimi-
nating against any personnel "because he
refused to perform or assist in the perfor-
mance of such a procedure or abortion on
the grounds that his performance or assis-
tance in the performance of the procedure
or abortion would be contrary to his reli-
gious beliefs or moral convictions" (42
U.S.C. 300a-7(b), (c)(1)). Later additions
to the Church Amendments protect other
conscientious objections, including some
objections on the basis of moral convic-
tion to "any lawful health service," or to
"any part of a health service program."
(42 U.S.C. 300a-7(c)(2), (d)). In contexts

covered by those sections of the Church
Amendments, the provision or coverage
of certain contraceptives, depending on
the circumstances, could constitute "any
lawful health service" or a "part of a
health service program." As such, the pro-
tections provided by those provisions of
the Church Amendments would encom-
pass moral objections to contraceptive
services or coverage.

The Church Amendments were en-
acted in the wake of the Supreme Court's
decision in Roe v. Wade, 410 U.S. 113
(1973). Even though the Court in Roe
required abortion to be legal in certain
circumstances, Roe did not include, within
that right, the requirement that other citi-
zens must facilitate its exercise. Thus, Roe
favorably quoted the proceedings of the
American Medical Association House of
Delegates 220 (June 1970), which de-
clared "Neither physician, hospital, nor
hospital personnel shall be required to
perform any act violative of personally-
held moral principles." 410 U.S. at 144 &
n.38 (1973). Likewise in Roe's compan-
ion case, Doe v. Bolton, the Court ob-
served that, under State law, "a physician
or any other employee has the right to
refrain, for moral or religious reasons,
from participating in the abortion proce-
dure." 410 U.S. 179, 197-98 (1973). The
Court said that these conscience provi-
sions "obviously . .. afford appropriate
protection." Id. at 198. As an Arizona
court later put it, "a woman's right to an
abortion or to contraception does not com-
pel a private person or entity to facilitate
either." Planned Parenthood Ariz., Inc. v.
Am. Ass'n of Pro-Life Obstetricians &
Gynecologists, 257 P.3d 181, 196 (Ariz.
Ct. App. 2011).

The Congressional Record contains
relevant discussions that occurred when
the protection for moral convictions was
first proposed in the Church Amendments.
When Senator Church introduced the first
of those amendments in 1973, he cited not
only Roe v. Wade but also an instance
where a Federal court had ordered a Cath-
olic hospital to perform sterilizations. 119
Congr. Rec. S5717-18 (Mar. 27, 1973).
After his opening remarks, Senator Adlai
Stevenson III (D-IL) rose to ask that the
amendment be changed to specify that it
also protects objections to abortion and
sterilization based on moral convictions

on the same terms as it protects objections
based on religious beliefs. The following
excerpt of the Congressional Record is
particularly relevant to this discussion:

Mr. STEVENSON. Mr. President, first
of all I commend the Senator from Idaho
for bringing this matter to the attention of
the Senate. I ask the Senator a question.

One need not be of the Catholic faith or
any other religious faith to feel deeply
about the worth of human life. The pro-
tections afforded by this amendment run
only to those whose religious beliefs
would be offended by the necessity of
performing or participating in the perfor-
mance of certain medical procedures; oth-
ers, for moral reasons, not necessarily for
any religious belief, can feel equally as
strong about human life. They too can
revere human life.

As mortals, we cannot with confidence
say, when life begins. But whether it is life,
or the potentiality of life, our moral convic-
tions as well as our religious beliefs, warrant
protection from this intrusion by the Gov-
ernment. Would, therefore, the Senator in-
clude moral convictions?

Would the Senator consider an amend-
ment on page 2, line 18 which would add
to religious beliefs, the words "or moral"?

Mr. CHURCH. I would suggest to the
Senator that perhaps his objective could
be more clearly stated if the words "or
moral conviction" were added after "reli-
gious belief." I think that the Supreme
Court in considering the protection we
give religious beliefs has given compara-
ble treatment to deeply held moral convic-
tions. I would not be averse to amending
the language of the amendment in such a
manner. It is consistent with the general
purpose. I see no reason why a deeply
held moral conviction ought not be given
the same treatment as a religious belief.

Mr. STEVENSON. The Senator's sug-
gestion is well taken. I thank him.

119 Congr. Rec. S5717-18.

As the debate proceeded, Senator
Church went on to quote Doe v. Bolton's
reliance on a Georgia statute that stated "a
physician or any other employee has the
right to refrain, for moral or religious rea-

sons, from participating in the abortion
procedure." 119 Congr. Rec. at S5722
(quoting 410 U.S. at 197-98). Senator
Church added, "I see no reason why the
amendment ought not also to cover doc-
tors and nurses who have strong moral
convictions against these particular oper-
ations." Id. Considering the scope of the
protections, Senator Gaylord Nelson (D-
WI) asked whether, "if a hospital board,
or whatever the ruling agency for the hos-
pital was, a governing agency or other-
wise, just capriciously-and not upon the
religious or moral questions at all-sim-
ply said, 'We are not going to bother with
this kind of procedure in this hospital,'
would the pending amendment permit
that?" 119 Congr. Rec. at S5723. Senator
Church responded that the amendment
would not encompass such an objection.
Id.

Senator James L. Buckley (C-NY),
speaking in support of the amendment,
added the following perspective:

Mr. BUCKLEY. Mr. President, I com-
pliment the Senator from Idaho for pro-
posing this most important and timely
amendment. It is timely in the first in-
stance because the attempt has already
been made to compel the performance of
abortion and sterilization operations on
the part of those who are fundamentally
opposed to such procedures. And it is
timely also because the recent Supreme
Court decisions will likely unleash a se-
ries of court actions across the United
States to try to impose the personal pref-
erences of the majority of the Supreme
Court on the totality of the Nation.

I believe it is ironic that we should
have this debate at all. Who would have
predicted a year or two ago that we would
have to guard against even the possibility
that someone might be free [sic]133 to
participate in an abortion or sterilization
against his will? Such an idea is repugnant
to our political tradition. This is a Nation
which has always been concerned with the
right of conscience. It is the right of con-
science which is protected in our draft
laws. It is the right of conscience which
the Supreme Court has quite properly ex-
panded not only to embrace those young
men who, because of the tenets of a par-

ticular faith, believe they cannot kill an-
other man, but also those who because of
their own deepest moral convictions are
so persuaded.

I am delighted that the Senator from
Idaho has amended his language to in-
clude the words "moral conviction," be-
cause, of course, we know that this is not
a matter of concern to any one religious
body to the exclusion of all others, or even
to men who believe in a God to the ex-
clusion of all others. It has been a tradi-
tional concept in our society from the ear-
liest times that the right of conscience,
like the paramount right to life from
which it is derived, is sacred.

119 Congr. Rec. at S5723.

In support of the same protections
when they were debated in the U.S.
House, Representative Margaret Heckler
(R-MA)134 likewise observed that "the
right of conscience has long been recog-
nized in the parallel situation in which the
individual's right to conscientious objec-
tor status in our selective service system
has been protected" and "expanded by the
Supreme Court to include moral convic-
tion as well as formal religious belief."
119 Congr. Rec. H4148-49 (May 31,
1973). Rep. Heckler added, "We are con-
cerned here only with the right of moral
conscience, which has always been a part
of our national tradition." Id. at 4149.

These first of the Church Amendments,
codified at 42 U.S.C. 300a-7(b) and
(c)(1), passed the House 372-1, and were
approved by the Senate 94-0. 119 Congr.
Rec. at H4149; 119 Congr. Rec. S10405
(June 5, 1973). The subsequently adopted
provisions that comprise the Church
Amendments similarly extend protection
to those organizations and individuals
who object to the provision of certain ser-
vices on the basis of their moral convic-
tions. And, as noted above, subsequent
statutes add protections for moral objec-
tions in many other situations. These in-
clude, for example:

· Protections for individuals and entities
that object to abortion: see 42 U.S.C.
238n; 42 U.S.C. 18023; 42 U.S.C.
2996f(b); and Consolidated Appropri-

133The Senator might have meant "[forced] . .. against his will."

134Rep. Heckler later served as the 15th Secretary of HHS, from March 1983 to December 1985.

ations Act of 2017, Div. H, Title V,
Sec. 507(d), Pub. L. No. 115-31;

· Protections for entities and individuals
that object to providing or covering
contraceptives: see id. at Div. C, Title
VIII, Sec. 808; id. at Div. C, Title VII,
Sec. 726(c) (Financial Services and
General Government Appropriations
Act); and id.at Div. I, Title III; and

· Protections for entities and individuals
that object to performing, assisting,
counseling, or referring as pertains to
suicide, assisted suicide, or advance
directives: see 42 U.S.C. 290bb-36;
42 U.S.C. 14406; 42 U.S.C. 18113;
and 42 U.S.C. 1396a(w)(3).

The Departments believe that the intent
behind Congress' protection of moral con-
victions in certain health care contexts,
especially to protect entities and individ-
uals from governmental coercion, sup-
ports our decision in these interim final
rules to protect sincerely held moral con-
victions from governmental compulsion
threatened by the contraceptive Mandate.

### D. Court Precedents Relevant to These Expanded Exemptions

The legislative history of the protection
of moral convictions in the first Church
Amendments shows that Members of
Congress saw the protection as being con-
sistent with Supreme Court decisions. Not
only did Senator Church cite the abortion
case Doe v. Bolton as a parallel instance of
conscience protection, but he also spoke
of the Supreme Court generally giving
"comparable treatment to deeply held
moral convictions." Both Senator Buckley
and Rep. Heckler specifically cited the
Supreme Court's protection of moral con-
victions in laws governing military ser-
vice. Those legislators appear to have
been referencing cases such as Welsh v.
United States, 398 U.S. 333 (1970), which
the Supreme Court decided just 3 years
earlier.

Welsh involved what is perhaps the
Government's paradigmatic compelling
interest-the need to defend the nation by
military force. The Court stated that,

where the Government protects objections
to military service based on "religious
training and belief," that protection would
also extend to avowedly non-religious ob-
jections to war held with the same moral
strength. Id. at 343. The Court declared,
"[i]f an individual deeply and sincerely
holds beliefs that are purely ethical or
moral in source and content but that nev-
ertheless impose upon him a duty of con-
science to refrain from participating in
any war at any time, those beliefs cer-
tainly occupy in the life of that individual
'a place parallel to that filled by .. . God'
in traditionally religious persons. Because
his beliefs function as a religion in his life,
such an individual is as much entitled to a
'religious' conscientious objector exemp-
tion ... as is someone who derives his
conscientious opposition to war from tra-
ditional religious convictions."

The Departments look to the descrip-
tion of moral convictions in Welsh to help
explain the scope of the protection pro-
vided in these interim final rules. Neither
these interim final rules, nor the Church
Amendments or other Federal health care
conscience statutes, define "moral convic-
tions" (nor do they define "religious be-
liefs"). But in issuing these interim final
rules, we seek to use the same background
understanding of that term that is reflected
in the Congressional Record in 1973, in
which legislators referenced cases such as
Welsh to support the addition of language
protecting moral convictions. In protect-
ing moral convictions parallel to religious
beliefs, Welsh describes moral convic-
tions warranting such protection as ones:
(1) that the "individual deeply and sin-
cerely holds"; (2) "that are purely ethical
or moral in source and content; (3) "but
that nevertheless impose upon him a du-
ty"; (4) and that "certainly occupy in the
life of that individual a place parallel to
that filled by . .. God' in traditionally
religious persons," such that one could say
"his beliefs function as a religion in his
life." (398 U.S. at 339-40). As recited
above, Senators Church and Nelson
agreed that protections for such moral
convictions would not encompass an ob-

jection that an individual or entity raises
"capriciously." Instead, along with the re-
quirement that protected moral convic-
tions must be "sincerely held," this under-
standing cabins the protection of moral
convictions in contexts where they occupy
a place parallel to that filled by sincerely
held religious beliefs in religious persons
and organizations.

In the context of this particular Man-
date, it is also worth noting that, in Hobby
Lobby, Justice Ginsburg (joined, in this
part of the opinion, by Justices Breyer,
Kagan, and Sotomayor), cited Justice Har-
lan's opinion in Welsh, 398 U.S. at 357-
58, in support of her statement that "[s]ep-
arating moral convictions from religious
beliefs would be of questionable legiti-
macy." 134 S. Ct. at 2789 n.6. In quoting
this passage, the Departments do not mean
to suggest that all laws protecting only
religious beliefs constitute an illegitimate
"separat[ion]" of moral convictions, nor
do we assert that moral convictions must
always be protected alongside religious
beliefs; we also do not agree with Justice
Harlan that distinguishing between reli-
gious and moral objections would violate
the Establishment Clause. Instead, the De-
partments believe that, in the specific
health care context implicated here, pro-
viding respect for moral convictions par-
allel to the respect afforded to religious
beliefs is appropriate, draws from long-
standing Federal Government practice,
and shares common ground with Con-
gress' intent in the Church Amendments
and in later Federal conscience statutes
that provide protections for moral convic-
tions alongside religious beliefs in other
health care contexts.

E. Conscience Protections in Regulations
and Among the States

The tradition of protecting moral con-
victions in certain health contexts is not
limited to Congress. Multiple federal reg-
ulations protect objections based on moral
convictions in such contexts.135 Other
federal regulations have also applied the
principle of respecting moral convictions

135 See, for example, 42 CFR 422.206 (declaring that the general Medicare Advantage rule "does not require the MA plan to cover, furnish, or pay for a particular counseling or referral service
if the MA organization that offers the plan-(1) Objects to the provision of that service on moral or religious grounds."); 42 CFR 438.102 (declaring that information requirements do not
apply "if the MCO, PIHP, or PAHP objects to the service on moral or religious grounds"); 48 CFR 1609.7001 ("health plan sponsoring organizations are not required to discuss treatment
options that they would not ordinarily discuss in their customary course of practice because such options are inconsistent with their professional judgment or ethical, moral or religious
beliefs."); 48 CFR 352.270-9 ("Non-Discrimination for Conscience" clause for organizations receiving HIV or Malaria relief funds).

alongside religious beliefs when they have
determined that it is appropriate to do so
in particular circumstances. The Equal
Employment Opportunity Commission
has consistently protected "moral or ethi-
cal beliefs as to what is right and wrong
which are sincerely held with the strength
of traditional religious views" alongside
religious views under the "standard [] de-
veloped in United States v. Seeger, 380
U.S. 163 (1965) and [Welsh]." (29 CFR
1605.1). The Department of Justice has
declared that, in cases of capital punish-
ment, no officer or employee may be re-
quired to attend or participate if doing so
"is contrary to the moral or religious con-
victions of the officer or employee, or if
the employee is a medical professional
who considers such participation or atten-
dance contrary to medical ethics." (28
CFR 26.5).136

Forty-five States have health care
conscience protections covering objec-
tions to abortion, and several of those
also cover sterilization or contracep-
tion.137 Most of those State laws protect
objections based on "moral," "ethical,"
or "conscientious" grounds in addition
to "religious" grounds. Particularly in
the case of abortion, some Federal and
State conscience laws do not require any
specified motive for the objection. (42
U.S.C. 238n). These various statutes and
regulations reflect an important govern-
mental interest in protecting moral con-
victions in appropriate health contexts.

The contraceptive Mandate implicates
that governmental interest. Many persons
and entities object to this Mandate in part
because they consider some forms of
FDA-approved contraceptives to be abor-
tifacients and morally equivalent to abor-
tion due to the possibility that some of the
items may have the effect of preventing
the implantation of a human embryo after
fertilization. Based on our knowledge

from the litigation, all of the current liti-
gants asserting purely non-religious ob-
jections share this view, and most of the
religious litigants do as well. The Su-
preme Court, in describing family busi-
ness owners with religious objections,
explained that "[t]he owners of the busi-
nesses have religious objections to abor-
tion, and according to their religious be-
liefs the four contraceptive methods at
issue are abortifacients. If the owners
comply with the HHS mandate, they be-
lieve they will be facilitating abortions."
Hobby Lobby, 134 S. Ct. at 2751. Outside
of the context of abortion, as cited above,
Congress has also provided health care
conscience protections pertaining to ster-
ilization, contraception, and other health
care services and practices.

### F. Founding Principles

The Departments also look to guidance
from the broader history of respect for
conscience in the laws and founding prin-
ciples of the United States. Members of
Congress specifically relied on the Amer-
ican tradition of respect for conscience
when they decided to protect moral con-
victions in health care. As quoted above,
in supporting protecting conscience based
on non-religious moral convictions, Sen-
ator Buckley declared "[i]t has been a
traditional concept in our society from the
earliest times that the right of conscience,
like the paramount right to life from
which it is derived, is sacred." Rep. Heck-
ler similarly stated that "the right of moral
conscience . .. has always been a part of
our national tradition." This tradition is
reflected, for example, in a letter President
George Washington wrote saying that
"[t]he Citizens of the United States of
America have a right to applaud them-
selves for having given to mankind exam-
ples of an enlarged and liberal policy: a

policy worthy of imitation. All possess
alike liberty of conscience and immunities
of citizenship."138 Thomas Jefferson sim-
ilarly declared that "[n]o provision in our
Constitution ought to be dearer to man
than that which protects the rights of con-
science against the enterprises of the civil
authority."139 Although these statements
by Presidents Washington and Jefferson
were spoken to religious congregations,
and although religious and moral con-
science were tightly intertwined for the
Founders, they both reflect a broad prin-
ciple of respect for conscience against
government coercion. James Madison
likewise called conscience "the most sa-
cred of all property," and proposed that
the Bill of Rights should guarantee, in
addition to protecting religious belief and
worship, that "the full and equal rights of
conscience [shall not] be in any manner,
or on any pretext infringed."140

These Founding Era statements of gen-
eral principle do not specify how they
would be applied in a particular health
care context. We do not suggest that the
specific protections offered in this rule
would also be required or necessarily ap-
propriate in any other context that does
not raise the specific concerns implicated
by this Mandate. These interim final rules
do not address in any way how the Gov-
ernment would balance its interests with
respect to other health services not en-
compassed by the contraceptive Man-
date.141 Instead we highlight this tradition
of respect for conscience from our Found-
ing Era to provide background support for
the Departments' decision to implement
section 2713(a)(4) of the PHS Act, while
protecting conscience in the exercise of
moral convictions. We believe that these
interim final rules are consistent both with
the American tradition of respect for con-
science and with Congress' history of pro-
viding conscience protections in the kinds

136See also 18 CFR 214.11 (where a law enforcement agency (LEA) seeks assistance in the investigation or prosecution of trafficking of persons, the reasonableness of the LEA's request
will depend in part on "[c]ultural, religious, or moral objections to the request").

137 According to the Guttmacher Institute, 45 states have conscience statutes pertaining to abortion (43 of which cover institutions), 18 have conscience statutes pertaining to sterilization
(16 of which cover institutions), and 12 have conscience statutes pertaining to contraception (8 of which cover institutions). "Refusing to Provide Health Services" (June 1, 2017), available
at https://www.guttmacher.org/state-policy/explore/refusing-provide-health-services.

138From George Washington to the Hebrew Congregation in Newport, Rhode Island (Aug. 18, 1790), available at https://founders.archives.gov/documents/Washington/05-06-02-0135.

139Letter to the Society of the Methodist Episcopal Church at New London, Connecticut (February 4, 1809), available at https://founders.archives.gov/documents/Jefferson/99-01-02-9714.
140James Madison, "Essay on Property" (March 29, 1792); First draft of the First Amendment, 1 Annals of Congress 434 (June 8, 1789).

141 As the Supreme Court stated in Hobby Lobby, the Court's decision concerns only the contraceptive Mandate, and should not be understood to hold that all insurance-coverage mandates,
for example, for vaccinations or blood transfusions, must necessarily fail if they conflict with an employer's religious beliefs. Nor does the Court's opinion provide a shield for employers
who might cloak illegal discrimination as a religious (or moral) practice. 134 S. Ct. at 2783.

of health care matters involved in this
Mandate.

### G. Executive Orders Relevant to These Expanded Exemptions

Protecting moral convictions, as set
forth in the expanded exemptions and ac-
commodations of these rules, is consistent
with recent executive orders. President
Trump's Executive Order concerning this
Mandate directed the Departments to con-
sider providing protections, not specifi-
cally for "religious" beliefs, but for "con-
science." We interpret that term to include
moral convictions and not just religious
beliefs. Likewise, President Trump's first
Executive Order, EO 13765, declared that
"the Secretary of Health and Human
Services (Secretary) and the heads of all
other executive departments and agencies
(agencies) with authorities and responsi-
bilities under the [ACA] shall exercise all
authority and discretion available to them
to waive, defer, grant exemptions from, or
delay the implementation of any provision
or requirement of the Act that would im-
pose a fiscal burden on any State or a cost,
fee, tax, penalty, or regulatory burden on
individuals, families, healthcare provid-
ers, health insurers, patients, recipients of
healthcare services, purchasers of health
insurance, or makers of medical devices,
products, or medications." This Mandate
imposes both a cost, fee, tax, or penalty,
and a regulatory burden, on individuals
and purchasers of health insurance that
have moral convictions opposed to pro-
viding contraceptive coverage. These in-
terim final rules exercise the Departments'
discretion to grant exemptions from the
Mandate to reduce and relieve regulatory
burdens and promote freedom in the
health care market.

### H. Litigation Concerning the Mandate

The sensitivity of certain health care
matters makes it particularly important for
the Government to tread carefully when
engaging in regulation concerning those
areas, and to respect individuals and orga-
nizations whose moral convictions are
burdened by Government regulations.
Providing conscience protections ad-
vances the Affordable Care Act's goal of
expanding health coverage among entities

and individuals that might otherwise be
reluctant to participate in the market. For
example, the Supreme Court in Hobby
Lobby declared that, if HHS requires own-
ers of businesses to cover procedures that
the owners "could not in good con-
science" cover, such as abortion, "HHS
would effectively exclude these people
from full participation in the economic
life of the Nation." 134 S. Ct. at 2783.
That would be a serious outcome. As
demonstrated by litigation and public
comments, various citizens sincerely hold
moral convictions, which are not neces-
sarily religious, against providing or par-
ticipating in coverage of contraceptive
items included in the Mandate, and some
believe that some of those items may
cause early abortions. The Departments
wish to implement the contraceptive cov-
erage Guidelines issued under section
2713(a)(4) of the PHS Act in a way that
respects the moral convictions of our cit-
izens so that they are more free to engage
in "full participation in the economic life
of the Nation." These expanded exemp-
tions do so by removing an obstacle that
might otherwise lead entities or individu-
als with moral objections to contraceptive
coverage to choose not to sponsor or par-
ticipate in health plans if they include
such coverage.

Among the lawsuits challenging the
Mandate, two have been filed based in
part on non-religious moral convictions.
In one case, the Departments are subject
to a permanent injunction requiring us to
respect the non-religious moral objections
of an employer. See March for Life v.
Burwell, 128 F. Supp. 3d 116 (D.D.C.
2015). In the other case, an appeals court
recently affirmed a district court ruling
that allows the previous regulations to be
imposed in a way that violates the moral
convictions of a small nonprofit pro-life
organization and its employees. See Real
Alternatives, 2017 WL 3324690. Our lit-
igation of these cases has led to inconsis-
tent court rulings, consumed substantial
governmental resources, and created un-
certainty for objecting organizations, issu-
ers, third party administrators, and employ-
ees and beneficiaries. The organizations that
have sued seeking a moral exemption have
all adopted moral tenets opposed to contra-
ception and hire only employees who share
this view. It is reasonable to conclude that

employees of these organizations would
therefore not benefit from the Mandate. As a
result, subjecting this subset of organiza-
tions to the Mandate does not advance any
governmental interest. The need to resolve
this litigation and the potential concerns of
similar entities, and our requirement to com-
ply with permanent injunctive relief cur-
rently imposed in March for Life, provide
substantial reasons for the Departments to
protect moral convictions through these in-
terim final rules. Even though, as discussed
below, we assume the number of entities
and individuals that may seek exemption
from the Mandate on the basis of moral
convictions, as these two sets of litigants
did, will be small, we know from the litiga-
tion that it will not be zero. As a result, the
Departments have taken these types of ob-
jections into consideration in reviewing our
regulations. Having done so, we consider it
appropriate to issue the protections set forth
in these interim final rules. Just as Congress,
in adopting the early provisions of the
Church Amendments, viewed it as neces-
sary and appropriate to protect those orga-
nizations and individuals with objections to
certain health care services on the basis of
moral convictions, so we, too, believe that
"our moral convictions as well as our reli-
gious beliefs, warrant protection from this
intrusion by the Government" in this situa-
tion.

### I. The Departments' Rebalancing of Government Interests

For additional discussion of the Gov-
ernment's balance of interests concerning
religious beliefs issued contemporane-
ously with these interim final rules, see the
related document published by the De-
partment elsewhere in this issue of the
Federal Register. There, we acknowl-
edge that the Departments have changed
the policies and interpretations we previ-
ously adopted with respect to the Mandate
and the governmental interests that under-
lying it, and we assert that we now believe
the Government's legitimate interests in
providing for contraceptive coverage do
not require us to violate sincerely held
religious beliefs while implementing the
Guidelines. For parallel reasons, the De-
partments believe Congress did not set
forth-and we do not possess-interests
that require us to violate sincerely held

moral convictions in the course of gener-
ally requiring contraceptive coverage.
These changes in policy are within the
Departments' authority. As the Supreme
Court has acknowledged, "[a]gencies are
free to change their existing policies as
long as they provide a reasoned explana-
tion for the change." Encino Motorcars,
LLC v. Navarro, 136 S. Ct. 2117, 2125
(2016). This "reasoned analysis" require-
ment does not demand that an agency
"demonstrate to a court's satisfaction
that the reasons for the new policy are
better than the reasons for the old one; it
suffices that the new policy is permissible
under the statute, that there are good rea-
sons for it, and that the agency believes it
to be better, which the conscious change
of course adequately indicates." United
Student Aid Funds, Inc. v. King, 200 F.
Supp. 3d 163, 169-70 (D.D.C. 2016) (cit-
ing FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 515 (2009)); see also New
Edge Network, Inc. v. FCC, 461 F.3d
1105, 1112-13 (9th Cir. 2006) (rejecting
an argument that "an agency changing its
course by rescinding a rule is obligated to
supply a reasoned analysis for the change
beyond that which may be required when
an agency does not act in the first in-
stance"). 142

The Departments note that the exemp-
tions created here, like the exemptions
created by the last Administration, do not
burden third parties to a degree that coun-
sels against providing the exemptions. In
addition to the apparent fact that many
entities with non-religious moral objec-
tions to the Mandate appear to only hire
persons that share those objections, Con-
gress did not create a right to receive con-
traceptive coverage, and Congress explicitly
chose not to impose the section 2713 re-
quirements on grandfathered plans benefit-
ting millions of people. Individuals who are
unable to obtain contraceptive coverage
through their employer-sponsored health
plans because of the exemptions created in
these interim final rules, or because of other
exemptions to the Mandate, have other av-
enues for obtaining contraception, including

through various other mechanisms by which
the Government advances contraceptive
coverage, particularly for low-income
women, and which these interim final rules
leave unchanged.143 As the Government is
under no constitutional obligation to fund
contraception, cf. Harris v. McRae, 448 U.S.
297 (1980), even more so may the Govern-
ment refrain from requiring private citizens
to cover contraception for other citizens in
violation of their moral convictions. Cf. Rust
v. Sullivan, 500 U.S. 173, 192-93 (1991)
("A refusal to fund protected activity, with-
out more, cannot be equated with the impo-
sition of a 'penalty' on that activity.").

The Departments acknowledge that
coverage of contraception is an important
and highly controversial issue, implicat-
ing many different views, as reflected for
example in the public comments received
on multiple rulemakings over the course
of implementation of section 2713(a)(4)
of the PHS Act. Our expansion of con-
science protections for moral convictions,
similar to protections contained in numer-
ous statutes governing health care regula-
tion, is not taken lightly. However, after
reconsidering the interests served by the
Mandate in this particular context, the ob-
jections raised, and the relevant Federal
law, the Departments have determined
that expanding the exemptions to include
protections for moral convictions is a
more appropriate administrative response
than continuing to refuse to extend the
exemptions and accommodations to cer-
tain entities and individuals for whom
the Mandate violates their sincerely held
moral convictions. Although the number
of organizations and individuals that may
seek to take advantage of these exemp-
tions and accommodations may be small,
we believe that it is important formally to
codify such protections for objections
based on moral conviction, given the
long-standing recognition of such protec-
tions in health care and health insurance
context in law and regulation and the par-
ticularly sensitive nature of these issues in
the health care context. These interim final
rules leave unchanged HRSA's authority

to decide whether to include contraceptives
in the women's preventive services Guide-
lines for entities that are not exempted by
law, regulation, or the Guidelines. These
rules also do not change the many other
mechanisms by which the Government ad-
vances contraceptive coverage, particularly
for low-income women.

### III. Provisions of the Interim Final Rules With Comment Period

The Departments are issuing these in-
terim final rules in light of the full history
of relevant rulemaking (including 3 previ-
ous interim final rules), public comments,
and the long-running litigation from non-
religious moral objectors to the Mandate,
as well as the information contained in the
companion interim final rules issued else-
where in this issue of the Federal Regis-
ter. These interim final rules seek to re-
solve these matters by directing HRSA, to
the extent it requires coverage for certain
contraceptive services in its Guidelines, to
afford an exemption to certain entities and
individuals with sincerely held moral con-
victions by which they object to contra-
ceptive or sterilization coverage, and by
making the accommodation process avail-
able for certain organizations with such
convictions.

For all of the reasons discussed and
referenced above, the Departments have
determined that the Government's interest
in applying contraceptive coverage re-
quirements to the plans of certain entities
and individuals does not outweigh the sin-
cerely held moral objections of those en-
tities and individuals. Thus, these interim
final rules amend the regulations amended
in both the Departments' July 2015 final
regulations and in the companion interim
final rules concerning religious beliefs is-
sued contemporaneously with these in-
terim final rules and published elsewhere
in this issue of the Bulletin.

These interim final rules expand those
exemptions to include additional entities
and persons that object based on sincerely
held moral convictions. These rules leave
in place HRSA's discretion to continue to

142See also Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 863-64 (1984) ("The fact that the agency has adopted different definitions in different contexts
adds force to the argument that the definition itself is flexible, particularly since Congress has never indicated any disapproval of a flexible reading of the statute.")

143 See, for example, Family Planning grants in 42 U.S.C. 300, et seq .; the Teenage Pregnancy Prevention Program, Public Law 112-74 (125 Stat 786, 1080); the Healthy Start Program,
42 U.S.C. 254c-8; the Maternal, Infant, and Early Childhood Home Visiting Program, 42 U.S.C. 711; Maternal and Child Health Block Grants, 42 U.S.C. 703; 42 U.S.C. 247b-12; Title
XIX of the Social Security Act, 42 U.S.C. 1396, et seq .; the Indian Health Service, 25 U.S.C. 13, 42 U.S.C. 2001(a), & 25 U.S.C. 1601, et seq .; Health center grants, 42 U.S.C. 254b(e),
(g), (h), & (i); the NIH Clinical Center, 42 U.S.C. 248; and the Personal Responsibility Education Program, 42 U.S.C. 713.

require contraceptive and sterilization
coverage where no objection specified in
the regulations exists, and if section 2713
of the PHS Act otherwise applies. These
interim final rules also maintain the exis-
tence of an accommodation process as a
voluntary option for organizations with
moral objections to contraceptive cover-
age, but consistent with our expansion
of the exemption, we expand eligibility
for the accommodation to include organi-
zations with sincerely held moral convic-
tions concerning contraceptive coverage.
HRSA is simultaneously updating its
Guidelines to reflect the requirements of
these interim final rules.144

#### 1. Exemption for Objecting Entities Based on Moral Convictions

In the new 45 CFR 147.133 as created
by these interim final rules, we expand the
exemption that was previously located in
§ 147.131(a), and that was expanded in
§ 147.132 by the companion interim final
rules concerning religious beliefs issued
contemporaneously with these interim fi-
nal rules and published elsewhere in this
issue of the Bulletin.

With respect to employers that sponsor
group health plans, §147.133(a)(1) and
(a)(1)(i) provide exemptions for certain
employers that object to coverage of all or
a subset of contraceptives or sterilization
and related patient education and counsel-
ing based on sincerely held moral convic-
tions.

For avoidance of doubt, the Depart-
ments wish to make clear that the ex-
panded exemption in § 147.133(a) applies
to several distinct entities involved in the
provision of coverage to the objecting em-
ployer's employees. This explanation is
consistent with how prior rules have
worked by means of similar language.
Section 147.133(a)(1) and (a)(1)(i), by
specifying that "[a] group health plan and
health insurance coverage provided in
connection with a group health plan" is
exempt "to the extent the plan sponsor
objects as specified in paragraph (a)(2),"
exempt the group health plans the spon-

sors of which object, and exempt their
health insurance issuers in providing the
coverage in those plans (whether or not
the issuers have their own objections).
Consequently, with respect to Guidelines
issued under § 147.130(a)(1)(iv), or the
parallel provisions in 26 CFR 54.9815-
2713T(a)(1)(iv) and 29 CFR 2590.715-
2713(a)(1)(iv), the plan sponsor, issuer,
and plan covered in the exemption of that
paragraph would face no penalty as a re-
sult of omitting contraceptive coverage
from the benefits of the plan participants
and beneficiaries.

Consistent with the restated exemption,
exempt entities will not be required to
comply with a self-certification process.
Although exempt entities do not need to
file notices or certifications of their ex-
emption, and these interim final rules do
not impose any new notice requirements
on them, existing ERISA rules governing
group health plans require that, with re-
spect to plans subject to ERISA, a plan
document must include a comprehensive
summary of the benefits covered by the
plan and a statement of the conditions for
eligibility to receive benefits. Under
ERISA, the plan document provides what
benefits are provided to participants and
beneficiaries under the plan and, there-
fore, if an objecting employer would like
to exclude all or a subset of contraceptive
services, it must ensure that the exclusion
is clear in the plan document. Moreover, if
there is a reduction in a covered service or
benefit, the plan has to disclose that
change to plan participants.145 Thus,
where an exemption applies and all or a
subset of contraceptive services are omit-
ted from a plan's coverage, otherwise ap-
plicable ERISA disclosures should reflect
the omission of coverage in ERISA plans.
These existing disclosure requirements
serve to help provide notice to participants
and beneficiaries of what ERISA plans do
and do not cover. The Departments invite
public comment on whether exempt enti-
ties, or others, would find value either in
being able to maintain or submit a specific
form of certification to claim their exemp-

tion, or in otherwise receiving guidance
on a way to document their exemption.

The exemptions in § 147.133(a) apply
"to the extent" of the objecting entities'
sincerely held moral convictions. Thus,
entities that hold a requisite objection to
covering some, but not all, contraceptive
items would be exempt with respect to the
items to which they object, but not with
respect to the items to which they do not
object. Likewise, the requisite objection
of a plan sponsor or institution of higher
education in § 147.133(a)(1)(i) and (ii)
exempts its group health plan, health in-
surance coverage offered by a health in-
surance issuer in connection with such
plan, and its issuer in its offering of such
coverage, but that exemption does not ex-
tend to coverage provided by that issuer to
other group health plans where the plan
sponsors have no qualifying objection.
The objection of a health insurance issuer
in § 147.133(a)(1)(iii) similarly operates
only to the extent of its objection, and as
otherwise limited as described below.

#### 2. Exemption of Certain Plan Sponsors

The rules cover certain kinds of non-
governmental employer plan sponsors
with the requisite objections, and the rules
specify which kinds of entities qualify for
the exemption.

Under these interim final rules, the De-
partments do not limit the exemption with
reference to nonprofit status as previous
rules have done. Many of the federal
health care conscience statutes cited
above offer protections for the moral con-
victions of entities without regard to
whether they operate as nonprofits or for-
profit entities. In addition, a significant
majority of states either impose no con-
traceptive coverage requirement, or offer
broader exemptions than the exemption
contained in the July 2015 final regula-
tions.146 States also generally protect
moral convictions in health care con-
science laws, and they often offer those
protections whether or not an entity oper-

144See https://www.hrsa.gov/womensguidelines/ and https://www.hrsa.gov/womensguidelines2016/index.html.

145 See, for example, 29 USC 1022, 1024(b), 29 CFR 2520.102-2, 2520.102-3, & 2520.104b-3(d), and 29 CFR 2590.715-2715. See also 45 CFR 147.200 (requiring disclosure of the
"exceptions, reductions, and limitations of the coverage," including group health plans and group & individual issuers).

146See Guttmacher Institute, "Insurance Coverage of Contraceptives" (Aug. 1, 2017), available at https://www.guttmacher.org/state-policy/explore/insurance-coverage-contraceptives.

ates as a nonprofit.147 Although the prac-
tice of states is by no means a limit on the
discretion delegated to HRSA by the Af-
fordbable Care Act, nor is it a statement
about what the Federal Government may
do consistent with other protections or
limitations in federal law, such state prac-
tice can be informative as to the viability
of offering protections for conscientious
objections in particularly sensitive health
care contexts. In this case, the existence of
many instances where conscience protec-
tions are offered, or no underlying man-
date of this kind exists that could violate
moral convictions, supports the Depart-
ments' decision to expand the Federal ex-
emption concerning this Mandate as set
forth in these interim final rules.

Section 147.133(a)(1)(i)(A) of the
rules specifies that the exemption includes
the plans of a plan sponsor that is a non-
profit organization with sincerely held
moral convictions.

Section 147.133(a)(1)(i)(B) of the rules
specifies that the exemption includes the
plans of a plan sponsor that is a for-profit
entity that has no publicly traded owner-
ship interests (for this purpose, a publicly
traded ownership interest is any class of
common equity securities required to be
registered under section 12 of the Securi-
ties Exchange Act of 1934).

Extending the exemption to certain for-
profit entities is consistent with the Su-
preme Court's ruling in Hobby Lobby,
which declared that a corporate entity is
capable of possessing and pursuing non-
pecuniary goals (in Hobby Lobby, reli-
gion), regardless of whether the entity op-
erates as a nonprofit organization, and
rejecting the Departments' argument to
the contrary. 134 S. Ct. 2768-75. Some
reports and industry experts have indi-
cated that not many for-profit entities be-
yond those that had originally brought suit
have sought relief from the Mandate after
Hobby Lobby.148 The mechanisms for de-
termining whether a company has adopted
and holds certain principles or views, such
as sincerely held moral convictions, is a

matter of well-established State law with
respect to corporate decision-making, 149
and the Departments expect that applica-
tion of such laws would cabin the scope of
this exemption.

The July 2015 final regulations ex-
tended the accommodation to for-profit
entities only if they are closely held, by
positively defining what constitutes a
closely held entity. Any such positive def-
inition runs up against the myriad state
differences in defining such entities, and
potentially intrudes into a traditional area
of state regulation of business organiza-
tions. The Departments implicitly recog-
nized the difficulty of defining closely
held entities in the July 2015 final regula-
tions when we adopted a definition that
included entities that are merely "substan-
tially similar" to certain specified param-
eters, and we allowed entities that were
not sure if they met the definition to in-
quire with HHS; HHS was permitted to
decline to answer the inquiry, at which
time the entity would be deemed to qual-
ify as an eligible organization. Instead of
attempting to positively define closely
held businesses for the purpose of this
rule, the Departments consider it much
more clear, effective, and preferable to
define the category negatively by refer-
ence to one element of our previous def-
inition, namely, that the entity has no pub-
licly traded ownership interest (that is, any
class of common equity securities re-
quired to be registered under section 12 of
the Securities Exchange Act of 1934).

In this way, these interim final rules
differ from the exemption provided to
plan sponsors with objections based on
sincerely held religious beliefs set forth in
§ 147.132(a)(1)-those extend to for-
profit entities whether or not they are
closely held or publicly traded. The
Departments seek public comment on
whether the exemption in § 147.133(a)
(1)(i) for plan sponsors with moral objec-
tions to the Mandate should be finalized to
encompass all of the types of plan spon-
sors covered by § 147.132(a)(1)(i), in-

cluding publicly traded corporations with
objections based on sincerely held moral
convictions, and also non-federal govern-
mental plan sponsors that may have ob-
jections based on sincerely held moral
convictions.

In the case of particularly sensitive
health care matters, several significant
federal health care conscience statutes
protect entities' moral objections without
precluding publicly traded and govern-
mental entities from using those protec-
tions. For example, the first paragraph of
the Church Amendments provides certain
protections for entities that object based
on moral convictions to making their fa-
cilities or personnel available to assist in
the performance of abortions or steriliza-
tions, and the statute does not limit those
protections based on whether the entities
are publicly traded or governmental. (42
U.S.C. 300a-7(b)). Thus, under section
300a-7(b), a hospital in a publicly traded
health system, or a local governmental
hospital, could adopt sincerely held moral
convictions by which it objects to provid-
ing facilities or personnel for abortions or
sterilizations, and if the entity receives
relevant funds from HHS specified by sec-
tion 300a-7(b), the protections of that
section would apply. The Coats-Snowe
Amendment likewise provides certain
protections for health care entities and
postgraduate physician training programs
that choose not to perform, refer for, or
provide training for abortions, and the
statute does not limit those protections
based on whether the entities are publicly
traded or governmental. (42 U.S.C. 238n).

The Weldon Amendment150 provides
certain protections for health care entities,
hospitals, provider-sponsored organiza-
tions, health maintenance organizations,
and health insurance plans that do not
provide, pay for, provide coverage of, or
refer for abortions, and the statute does
not limit those protections based on
whether the entity is publicly traded or
governmental. The Affordable Care Act
provides certain protections for any insti-

147 See, for example, Guttmacher Institute, "Refusing to Provide Health Services" (Aug. 1, 2017), available at https://www.guttmacher.org/state-policy/explore/refusing-provide-health-
services.

148See Jennifer Haberkorn, "Two years later, few Hobby Lobby copycats emerge," Politico (Oct. 11, 2016), available at http://www.politico.com/story/2016/10/obamacare-birth-control-
mandate-employers-229627.

149 Although the Departments do not prescribe any form or notification, they would expect that such principles or views would have been adopted and documented in accordance with the
laws of the jurisdiction under which they are incorporated or organized.

150Consolidated Appropriations Act of 2017, Div. H, Title V, Sec. 507(d), Pub. L. No. 115-31.

tutional health care entity, hospital,
provider-sponsored organization, health
maintenance organization, health insur-
ance plan, or any other kind of health care
facility, that does not provide any health
care item or service furnished for the pur-
pose of causing or assisting in causing
assisted suicide, euthanasia, or mercy kill-
ing, and the statute similarly does not limit
those protections based on whether the
entity is publicly traded or governmental.
(42 U.S.C. 18113).151

Sections 1395w-22(j)(3)(B) and 1396u-
2(b)(3) of 42 U.S.C. protect organizations
that offer Medicaid and Medicare Advan-
tage managed care plans from being re-
quired to provide, reimburse for, or provide
coverage of a counseling or referral service
if they object to doing so on moral grounds,
and those paragraphs do not further specify
that publicly traded entities do not qualify
for the protections. Congress' most recent
statement on Government requirements of
contraceptive coverage specified that, if the
District of Columbia requires "the provision
of contraceptive coverage by health insur-
ance plans," "it is the intent of Congress that
any legislation enacted on such issue should
include a 'conscience clause' which pro-
vides exceptions for religious beliefs and
moral convictions." Consolidated Appropri-
ations Act of 2017, Division C, Title VIII,
Sec. 808. Congress expressed no intent that
such a conscience should be limited based
on whether the entity is publicly traded.

At the same time, the Departments lack
significant information about the need to
extend the expanded exemption further.
We have been subjected to litigation by
nonprofit entities expressing objections to
the Mandate based on non-religious moral
convictions, and we have been sued by
closely held for-profit entities expressing
religious objections. This combination of
different types of plaintiffs leads us to
believe that there may be a small number
of closely held for-profit entities that
would seek to use an exemption to the
contraceptive Mandate based on moral
convictions. The fact that many closely
held for-profit entities brought challenges
to the Mandate has led us to offer protec-
tions that would include publicly traded
entities with religious objections to the

Mandate if such entities exist. But the
combined lack of any lawsuits challeng-
ing the Mandate by for-profit entities with
non-religious moral convictions, and of
any lawsuits by any kind of publicly
traded entity, leads us to not extend the
expanded exemption in these interim final
rules to publicly traded entities, but rather
to invite public comment on whether to do
so in a way parallel to the protections set
forth in § 147.132(a)(1)(i). We agree with
the Supreme Court that it is improbable
that many publicly traded companies with
numerous "unrelated shareholders-in-
cluding institutional investors with their
own set of stakeholders-would agree to
run a corporation under the same religious
beliefs" (or moral convictions) and
thereby qualify for the exemption. Hobby
Lobby, 134 S. Ct. at 2774. We are also not
aware of other types of plan sponsors (such
as non-Federal governmental entities) that
might possess moral objections to compli-
ance with the Mandate, including whether
some might consider certain contraceptive
methods as having a possible abortifacient
effect. Nevertheless, we would welcome
any comments on whether such corpora-
tions or other plan sponsors exist and would
benefit from such an exemption.

Despite our a lack of complete infor-
mation, the Departments know that non-
profit entities have challenged the Man-
date, and we assume that a closely held
business might wish to assert non-religious
moral convictions in objecting to the Man-
date (although we anticipate very few if any
will do so). Thus we have chosen in these
interim final rules to include them in the
expanded exemption and thereby remove an
obstacle preventing such entities from
claiming an exemption based on non-
religious moral convictions. But we are less
certain that we need to use these interim
final rules to extend the expanded exemp-
tion for moral convictions to encompass
other kinds of plan sponsors not included in
the protections of these interim final rules.
Therefore, with respect to plan sponsors not
included in the expanded exemptions of
§ 147.133(a)(1)(i), and non-federal govern-
mental plan sponsors that might have moral
objections to the Mandate, we invite public
comment on whether to include such enti-

ties when we finalize these rules at a later
date.

The Departments further conclude that
it would be inadequate to merely provide
entities access to the accommodation pro-
cess instead of to the exemption where
those entities object to the Mandate based
on sincerely held moral convictions. The
Departments have stated in our regula-
tions and court briefings that the existing
accommodation with respect to self-
insured plans requires contraceptive cov-
erage as part of the same plan as the
coverage provided by the employer, and
operates in a way "seamless" to those
plans. As a result, in significant respects,
the accommodation process does not ac-
tually accommodate the objections of
many entities. This has led many religious
groups to challenge the accommodation in
court, and we expect similar challenges
would come from organizations objecting
to the accommodation based on moral
convictions if we offered them the accom-
modation but not an exemption. When we
took that narrow approach with religious
nonprofit entities it led to multiple cases in
many courts that we needed to litigate to
the Supreme Court various times. Although
objections to the accommodation were not
specifically litigated in the two cases
brought by nonprofit non-religious organi-
zations (because we have not even made
them eligible for the accommodation), those
organizations made it clear that they and
their employees strongly oppose coverage
of certain contraceptives in their plans and
in connection with their plans.

##### 3. Exemption for Institutions of Higher Education

The plans of institutions of higher ed-
ucation that arrange student health insur-
ance coverage will be treated similarly to
the way that plans of employers are
treated for the purposes of such plans be-
ing exempt or accommodated based on
moral convictions. These interim final
rules specify, in § 147.133(a)(1)(ii), that
the exemption is extended, in the case of
institutions of higher education (as de-
fined in 20 U.S.C. 1002), to their arrange-
ment of student health insurance cover-

151The lack of the limitation in this provision may be particularly relevant since it is contained in the same statute, the ACA, as the provision under which the Mandate-and these exemptions
to the Mandate-are promulgated.

age, in a manner comparable to the
applicability of the exemption for group
health insurance coverage provided in
connection with a group health plan estab-
lished or maintained by a plan sponsor.

The Departments are not aware of
institutions of higher education that ar-
range student coverage and object to the
Mandate based on non-religious moral
convictions. We have been sued by sev-
eral institutions of higher education that
arrange student coverage and object to
the Mandate based on religious beliefs.
We believe the existence of such entities
with non-religious moral objections, or
the possible formation of such entities in
the future, is sufficiently possible so that
we should provide protections for them
in these interim final rules. But based on
a lack of information about such enti-
ties, we assume that none will use the
exemption concerning student coverage
at this time.

### 4. Exemption for Issuers

These interim final rules extend the
exemption, in § 147.133(a)(1)(iii), to
health insurance issuers offering group or
individual health insurance coverage that
sincerely hold their own moral convic-
tions opposed to providing coverage for
contraceptive services.

terim final rules published elsewhere in
this issue of the Bulletin). Thus, the issuer
exemption specifies that where a health
insurance issuer providing group health
insurance coverage is exempt under para-
graph (a)(1)(iii), the plan remains subject
to any requirement to provide coverage
for contraceptive services under Guide-
lines issued under § 147.130(a)(1)(iv) un-
less the plan is otherwise exempt from
that requirement. Accordingly, the only
plan sponsors, or in the case of individual
insurance coverage, individuals, who are
eligible to purchase or enroll in health
insurance coverage offered by an issuer
that is exempt under this paragraph
(a)(1)(iii) that does not include some or all
contraceptive services are plan sponsors
or individuals who themselves object and
are exempt.

Under the rules as amended, issuers
with objections based on sincerely held
moral convictions could issue policies
that omit contraception to plan sponsors
or individuals that are otherwise exempt
based on either their religious beliefs or their
moral convictions, and issuers with sin-
cerely held religious beliefs could likewise
issue policies that omit contraception to plan
sponsors or individuals that are otherwise
exempt based on either their religious be-
liefs or their moral convictions.

Issuers that hold moral objections should
identify to plan sponsors the lack of contra-
ceptive coverage in any health insurance
coverage being offered that is based on the
issuer's exemption, and communicate the
group health plan's independent obligation
to provide contraceptive coverage, unless
the group health plan itself is exempt under
regulations governing the Mandate.

to remove contraceptive coverage obli-
gations from any plan or plan sponsor
that is not also exempt, nor will it pre-
vent other issuers from being required to
provide contraceptive coverage in indi-
vidual insurance coverage. Protecting
issuers that object to offering contracep-
tive coverage based on sincerely held
moral convictions will help preserve
space in the health insurance market for
certain issuers so that exempt plan spon-
sors and individuals will be able to ob-
tain coverage.

The Departments are not currently
aware of health insurance issuers that pos-
sess their own religious or moral objec-
tions to offering contraceptive coverage.
Nevertheless, many Federal health care
conscience laws and regulations protect
issuers or plans specifically. For example,
as discussed above, 42 U.S.C. 1395w-
22(j)(3)(B) and 1396u-2(b)(3) protect
plans or managed care organizations in
Medicaid or Medicare Advantage. The
Weldon Amendment protects HMOs,
health insurance plans, and any other
health care organizations from being re-
quired to provide coverage or pay for
abortions. See, for example, Consolidated
Appropriations Act of 2017, Div. H, Title
V, Sec. 507(d), Pub. L. No. 115-31. The
most recently enacted Consolidated Ap-
propriations Act declares that Congress
supports a "conscience clause" to protect
moral convictions concerning "the provi-
sion of contraceptive coverage by health
insurance plans." See id. at Div. C, Title
VIII, Sec. 808.

The issuer exemption does not specif-
ically include third party administrators,
for the reasons discussed in the compan-
ion interim final rules concerning reli-
gious beliefs issued contemporaneously
with these interim final rules and pub-
lished elsewhere in this issue of the Bul-
letin. The Departments solicit public com-
ment; however, on whether there are
situations where there may be an addi-
tional need to provide distinct protections
for third party administrators that may
have moral convictions implicated by the
Mandate.152

152The exemption for issuers, as outlined here, does not make a distinction among issuers based on whether they are publicly traded, unlike the plan sponsor exemption for business entities.
Because the issuer exemption operates more narrowly than the exemption for business plan sponsors operates, in the ways described here, and exists in part to help preserve market options
for objecting plan sponsors, the Departments consider it appropriate to not draw such a distinction among issuers.

### 5. Scope of Objections Needed for the Objecting Entity Exemption

Exemptions for objecting entities spec-
ify that they apply where the entities ob-
ject as specified in § 147.133(a)(2). That
section specifies that exemptions for ob-
jecting entities will apply to the extent that
an entity described in § 147.133(a)(1) ob-
jects to its establishing, maintaining, pro-
viding, offering, or arranging (as applica-
ble) for coverage, payments, or a plan that
provides coverage or payments for some
or all contraceptive services, based on its
sincerely held moral convictions.

### 6. Individual Exemption

These interim final rules include a spe-
cial rule pertaining to individuals (referred
to here as the "individual exemption").
Section 147.133(b) provides that nothing
in §147.130(a)(1)(iv), 26 CFR 54.9815-
2713T(a)(1)(iv) and 29 CFR 2590.715-
2713(a)(1)(iv), may be construed to pre-
vent a willing plan sponsor of a group
health plan and/or a willing health insur-
ance issuer offering group or individual
health insurance coverage, from offering a
separate benefit package option, or a sep-
arate policy, certificate, or contract of in-
surance, to any individual who objects to
coverage or payments for some or all con-
traceptive services based on the individu-
al's sincerely held moral convictions. The
individual exemption extends to the cov-
erage unit in which the plan participant, or
subscriber in the individual market, is en-
rolled (for instance, to family coverage
covering the participant and his or her
beneficiaries enrolled under the plan), but
does not relieve the plan's or issuer's ob-
ligation to comply with the Mandate with
respect to the group health plan at large or,
as applicable, to any other individual pol-
icies the issuer offers.

This individual exemption allows plan
sponsors and issuers that do not specifi-
cally object to contraceptive coverage to
offer morally acceptable coverage to their

participants or subscribers who do object,
while offering coverage that includes con-
traception to participants or subscribers
who do not object. This individual exemp-
tion can apply with respect to individuals
in plans sponsored by private employers
or governmental employers. For example,
in one case brought against the Depart-
ments, the State of Missouri enacted a law
under which the State is not permitted to
discriminate against insurance issuers
that offer health plans without coverage
for contraception based on employees'
moral convictions, or against the indi-
vidual employees who accept such of-
fers. See Wieland, 196 F. Supp. 3d at
1015-16 (quoting Mo. Rev. Stat.
191.724). Under the individual exemp-
tion of these interim final rules, employ-
ers sponsoring governmental plans
would be free to honor the sincerely
held moral objections of individual em-
ployees by offering them plans that omit
contraception, even if those governmen-
tal entities do not object to offering con-
traceptive coverage in general.

This "individual exemption" cannot be
used to force a plan (or its sponsor) or an
issuer to provide coverage omitting con-
traception, or, with respect to health insur-
ance coverage, to prevent the application
of state law that requires coverage of such
contraceptives or sterilization. Nor can the
individual exemption be construed to re-
quire the guaranteed availability of cover-
age omitting contraception to a plan spon-
sor or individual who does not have a
sincerely held moral objection. This indi-
vidual exemption is limited to the require-
ment to provide contraceptive coverage
under section 2713(a)(4) of the PHS Act,
and does not affect any other federal or
state law governing the plan or coverage.
Thus, if there are other applicable laws or
plan terms governing the benefits, these
interim final rules do not affect such other
laws or terms.

The Departments believe the individ-
ual exemption will help to meet the Af-
fordable Care Act's goal of increasing

health coverage because it will reduce the
incidence of certain individuals choosing
to forego health coverage because the
only coverage available would violate
their sincerely held moral convictions.153
At the same time, this individual exemp-
tion "does not undermine the governmen-
tal interests furthered by the contraceptive
coverage requirement,"154 because, when
the exemption is applicable, the individual
does not want the coverage, and therefore
would not use the objectionable items
even if they were covered. In addition,
because the individual exemption only op-
erates when the employer and/or issuer, as
applicable, are willing, the exemption will
not undermine any governmental interest
in the workability of the insurance market,
because we expect that any workability
concerns will be taken into account in the
decision of whether to be willing to offer
the individual morally acceptable cover-
age.

For similar reasons, we have changed
our position and now believe the individ-
ual exemption will not undermine any
Government interest in uniformity in the
health insurance market. At the level of
plan offerings, the extent to which plans
cover contraception under the prior rules
is already far from uniform. The Congress
did not require compliance with section
2713 of the PHS Act by all entities-in
particular by grandfathered plans. The
Departments' previous exemption for
houses of worship and integrated auxil-
iaries, and our accommodation of self-
insured church plans, show that the im-
portance of a uniform health insurance
system is not significantly harmed by
allowing plans to omit contraception in
many contexts. 155

With respect to operationalizing this
provision of these rules, as well as the
similar provision protecting individuals
with religious objections to purchasing in-
surance that covers some or all contracep-
tives, in the interim final rules published
elsewhere in this issue of the Bulletin, the
Departments note that a plan sponsor or

153This prospect has been raised in cases of religious individuals-see, for example, Wieland, 196 F. Supp. 3d at 1017, and March for Life, 128 F. Supp. 3d at 130-where the courts noted
that the individual employee plaintiffs indicated that they viewed the Mandate as pressuring them to "forgo health insurance altogether."

15478 FR 39874.

155 See also Real Alternatives, 2017 WL 3324690 at *36 (3d Cir. Aug. 4, 2017) (Jordan, J., concurring in part and dissenting in part) ("Because insurance companies would offer such plans
as a result of market forces, doing so would not undermine the government's interest in a sustainable and functioning market . .. Because the government has failed to demonstrate why
allowing such a system (not unlike the one that allowed wider choice before the ACA) would be unworkable, it has not satisfied strict scrutiny." (citation and internal quotation marks
omitted)).

health insurance issuer is not required to
offer separate and different benefit pack-
age options, or separate and different
forms of policy, certificate, or contract of
insurance with respect to those individuals
who object on moral bases from those
who object on religious bases. That is, a
willing employer or issuer may offer the
same benefit package option or policy,
certificate, or contract of insurance-
which excludes the same scope of some or
all contraceptive coverage-to individuals
who are exempt from the Mandate be-
cause of their moral convictions (under
these rules) or their religious beliefs (un-
der the regulations as amended by the
interim final rules pertaining to religious
beliefs).

### 7. Optional Accommodation

In addition to expanding the exemption
to those with sincerely held moral convic-
tions, these rules also expand eligibility
for the optional accommodation process
to include employers with objections
based on sincerely held moral convictions.
This is accomplished by inserting refer-
ences to the newly added exemption for
moral convictions, 45 CFR 147.133, into
the regulatory sections where the accom-
modation process is codified, 45 CFR
147.131, 26 CFR 54.9815-2713AT, and
29 CFR 2590.715-2713A. In all other re-
spects the accommodation process works
the same as it does for entities with ob-
jections based on sincerely held religious
beliefs, as described in the companion in-
terim final rules concerning religious be-
liefs issued contemporaneously with these
interim final rules and published else-
where in this issue of the Bulletin.

The Departments are not aware of en-
tities with objections to the Mandate
based on sincerely held moral convictions
that wish to make use of the optional
accommodation, and our present assump-
tion is that no such entities will seek to use
the accommodation rather than the ex-
emption. But if such entities do wish to
use the accommodation, making it avail-
able to them will both provide contracep-
tive coverage to their plan participants and
respect those entities' objections. Because
entities with objections to the Mandate
based on sincerely held non-religious
moral convictions have not previously had

access to the accommodation, they would
not be in a position to revoke their use of
the accommodation at the time these in-
terim final rules are issued, but could do
so in the future under the same parameters
set forth in the accommodation regula-
tions.

### 8. Regulatory Restatements of section 2713(a) and (a)(4) of the PHS Act

These interim final rules insert refer-
ences to 45 CFR 147.133 into the restate-
ments of the requirements of section
2713(a) and (a)(4) of the PHS Act, con-
tained in 26 CFR 54.9815-2713T(a)(1)
introductory text and (a)(1)(iv), 29 CFR
2590.715-2713(a)(1) introductory text
and (a)(1)(iv), and 45 CFR 147.130(a)(1)
and (a)(1)(iv).

### 9. Conclusion

The Departments believe that the
Guidelines, and the expanded exemptions
and accommodations set forth in these
interim final rules, will advance the legit-
imate but limited purposes for which Con-
gress imposed section 2713 of the PHS
Act, while acting consistently with Con-
gress' well-established record of allow-
ing for moral exemptions with respect to
various health care matters. These in-
terim final rules maintain HRSA's dis-
cretion to decide whether to continue to
require contraceptive coverage under
the Guidelines if no regulatorily recog-
nized exemption exists (and in plans
where Congress applied section 2713 of
the PHS Act). As cited above, these
interim final rules also leave fully in
place over a dozen Federal programs
that provide, or subsidize, contracep-
tives for women, including for low in-
come women based on financial need.
The Departments believe this array of
programs and requirements better serves
the interests of providing contraceptive
coverage while protecting the moral
convictions of entities and individuals
concerning coverage of some or all con-
traceptive or sterilization services.

The Departments request and encour-
age public comments on all matters ad-
dressed in these interim final rules.

## IV. Interim Final Rules, Request for Comments and Waiver of Delay of Effective Date

Section 553(b) of the APA requires
notice and comment rulemaking, involv-
ing a notice of proposed rulemaking and a
comment period prior to finalization of
regulatory requirements - except when an
agency, for good cause, finds that notice
and public comment thereon are imprac-
ticable, unnecessary, or contrary to the
public interest. These provisions of
the APA do not apply here because of
the specific authority granted to the Sec-
retaries by section 9833 of the Code,
section 734 of ERISA, and section 2792
of the PHS Act.

Even if these provisions of the APA
applied, they would be satisfied: The
Departments have determined that it
would be impracticable and contrary to
the public interest to delay putting these
provisions in place until a full public
notice-and-comment process is com-
pleted. As discussed earlier, the Depart-
ments have issued three interim final
rules implementing this section of the
PHS Act because of the immediate
needs of covered entities and the
weighty matters implicated by the
HRSA Guidelines. As recently as De-
cember 20, 2016, HRSA updated those
Guidelines without engaging in the reg-
ulatory process (because doing so is not
a legal requirement), and announced
that it plans to so continue to update the
Guidelines.

Two lawsuits have been pending for
several years by entities raising non-

religious moral objections to the Man-
date.156 In one of those cases, the De-
partments are subject to a permanent
injunction and the appeal of that case
has been stayed since February 2016. In
the other case, Federal district and ap-
peals courts ruled in favor of the Depart-
ments, denying injunctive relief to the
plaintiffs, and that case is also still
pending. Based on the public comments
the Departments have received, we have
reason to believe that some similar non-
profit entities might exist, even if it is
likely a small number.157

For entities and individuals facing a
burden on their sincerely held moral con-
victions, providing them relief from Gov-
ernment regulations that impose such a
burden is an important and urgent matter,
and delay in doing so injures those entities
in ways that cannot be repaired retroac-
tively. The burdens of the existing rules
undermine these entities' and individuals'
participation in the health care market be-
cause they provide them with a serious
disincentive-indeed a crisis of con-
science-between participating in or pro-
viding quality and affordable health insur-
ance coverage and being forced to violate
their sincerely held moral convictions.
The existence of inconsistent court rulings
in multiple proceedings has also caused
confusion and uncertainty that has ex-
tended for several years, with different
federal courts taking different positions on
whether entities with moral objections are
entitled to relief from the Mandate. De-
laying the availability of the expanded
exemption would require entities to bear
these burdens for many more months.
Continuing to apply the Mandate's regu-
latory burden on individuals and organi-
zations with moral convictions objecting
to compliance with the Mandate also
serves as a deterrent for citizens who
might consider forming new entities con-
sistent with their moral convictions and
offering health insurance through those
entities.

Moreover, we separately expanded ex-
emptions to protect religious beliefs in the

companion interim final rules issued con-
temporaneously with these interim final
rules and published elsewhere in this issue
of the Bulletin. Because Congress has
provided many statutes that protect reli-
gious beliefs and moral convictions simi-
larly in certain health care contexts, it is
important not to delay the expansion of
exemptions for moral convictions set forth
in these rules, since the companion rules
provide protections for religious beliefs
on an interim final basis. Otherwise, our
regulations would simultaneously provide
and deny relief to entities and individuals
that are, in the Departments' view, simi-
larly deserving of exemptions and accom-
modations consistent, with similar protec-
tions in other federal laws. This could
cause similarly situated entities and indi-
viduals to be burdened unequally.

In response to several of the previous
rules on this issue-including three issued
as interim final rules under the statutory
authority cited above-the Departments
received more than 100,000 public com-
ments on multiple occasions. Those com-
ments included extensive discussion about
whether and to what extent to expand the
exemption. Most recently, on July 26,
2016, the Departments issued a request for
information (81 FR 47741) and received
over 54,000 public comments about dif-
ferent possible ways to resolve these is-
sues. As noted above, the public com-
ments in response to both the RFI and
various prior rulemaking proceedings in-
cluded specific requests that the exemp-
tions be expanded to include those who
oppose the Mandate for either religious or
"moral" reasons.158 In connection with
past regulations, the Departments have of-
fered or expanded a temporary safe harbor
allowing organizations that were not ex-
empt from the HRSA Guidelines to oper-
ate out of compliance with the Guidelines.
The Departments will fully consider com-
ments submitted in response to these in-
terim final rules, but believe that good
cause exists to issue the rules on an in-
terim final basis before the comments are
submitted and reviewed. Issuing interim

final rules with a comment period pro-
vides the public with an opportunity to
comment on whether these regulations ex-
panding the exemption should be made
permanent or subject to modification
without delaying the effective date of the
regulations.

As the U.S. Court of Appeals for the
D.C. Circuit stated with respect to an ear-
lier IFR promulgated with respect to this
issue in Priests for Life v. U.S. Depart-
ment of Health and Human Services, 772
F.3d 229, 276 (D.C. Cir. 2014), vacated
on other grounds, Zubik v. Burwell, 136 S.
Ct. 1557 (2016), "[S]everal reasons sup-
port HHS's decision not to engage in no-
tice and comment here." Among other
things, the Court noted that "the agency
made a good cause finding in the rule it
issued"; that "the regulations the interim
final rule modifies were recently enacted
pursuant to notice and comment rulemak-
ing, and presented virtually identical is-
sues"; that "HHS will expose its interim
rule to notice and comment before its per-
manent implementation"; and that not
proceeding under interim final rules
would "delay the implementation of the
alternative opt-out for religious objec-
tors." Id. at 277. Similarly, not proceeding
with exemptions and accommodations for
moral objectors here would delay the im-
plementation of those alternative opt-outs
for moral objectors.

Delaying the availability of the ex-
panded exemption could also increase the
costs of health insurance for some entities.
As reflected in litigation pertaining to the
Mandate, some entities are in grandfa-
thered health plans that do not cover con-
traception. As such, they may wish to
make changes to their health plans that
will reduce the costs of insurance cover-
age for their beneficiaries or policyhold-
ers, but which would cause the plans to
lose grandfathered status. To the extent
that entities with objections to the Man-
date based on moral convictions but not
religious beliefs fall into this category,
they may be refraining from making those
changes-and therefore may be continu-

156March for Life, 128 F. Supp. 3d 116; Real Alternatives, 867 F.3d 338.

157See, for example, Americans United for Life ("AUL") Comment on CMA-9992-IFC2 at 10 (Nov. 1, 2011), available at http://www.regulations.gov/#!documentDetail;D=HHS-OS-
2011-0023-59496, and AUL Comment on CMS-9968-P at 5 (Apr. 8, 2013), available at http://www.regulations.gov/#!documentDetail;D=CMS-2012-0031-79115.

158See, for example, http://www.regulations.gov/#!documentDetail;D=HHS-OS-2011-0023-59496, http://www.regulations.gov/#!documentDetail;D=CMS-2012-0031-79115, https://
www.regulations.gov/document?D=CMS-2016-0123-54142, https://www.regulations.gov/document?D=CMS-2016-0123-54218, and https://www.regulations.gov/document?D=CMS-
2016-0123-46220.

ing to incur and pass on higher insurance
costs-to prevent the Mandate from ap-
plying to their plans in violation of their
consciences. We are not aware of the ex-
tent to which such entities exist, but 17
percent of all covered workers are in
grandfathered health plans, encompassing
tens of millions of people.159 Issuing these
rules on an interim final basis reduces the
costs of health insurance and regulatory
burdens for such entities and their plan
participants.

These interim final rules also expand
access to the optional accommodation
process for certain entities with objections
to the Mandate based on moral convic-
tions. If entities exist that wish to use that
process, the Departments believe they
should be able to do so without the delay
that would be involved by not offering
them the optional accommodation process
by use of interim final rules. Proceeding
otherwise could delay the provision of
contraceptive coverage to those entities'
employees.

For the foregoing reasons, the De-
partments have determined that it would
be impracticable and contrary to the
public interest to engage in full notice
and comment rulemaking before putting
these interim final rules into effect, and
that it is in the public interest to promul-
gate interim final rules. For the same
reasons, the Departments have deter-
mined, consistent with section 553(d) of
the APA (5 U.S.C. 553(d)), that there is
good cause to make these interim final
rules effective immediately upon filing
for public inspection at the Office of the
Federal Register.

## V. Economic Impact and Paperwork Burden

1995; Pub. L. 104-4), Executive Order
13132 on Federalism (August 4, 1999),
the Congressional Review Act (5 U.S.C.
804(2)and Executive Order 13771 on Re-
ducing Regulation and Controlling Regu-
latory Costs (January 30, 2017).

### A. Executive Orders 12866 and 13563- Department of HHS and Department of Labor

Section 3(f) of Executive Order 12866
defines a "significant regulatory action" as
an action that is likely to result in a reg-
ulation: (1) having an annual effect on the
economy of $100 million or more in any 1
year, or adversely and materially affecting
a sector of the economy, productivity,
competition, jobs, the environment, public
health or safety, or State, local, or tribal
governments or communities (also re-
ferred to as "economically significant");
(2) creating a serious inconsistency or oth-
erwise interfering with an action taken or
planned by another agency; (3) materially
altering the budgetary impacts of entitle-
ment grants, user fees, or loan programs
or the rights and obligations of recipients
thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the
President's priorities, or the principles set
forth in the Executive Order.

Act, these interim final rules are not likely
to have economic impacts of $100 million
or more in any one year, and therefore do
not meet the definition of "economically
significant" under Executive Order 12866.
However, OMB has determined that the
actions are significant within the meaning
of section 3(f)(4) of the Executive Order.
Therefore, OMB has reviewed these final
regulations and the Departments have pro-
vided the following assessment of their
impact. .

#### 1. Need for Regulatory Action

These interim final rules amend the
Departments' July 2015 final regulations
and do so in conjunction with the amend-
ments made in the companion interim fi-
nal rules concerning religious beliefs
issued contemporaneously with these in-
terim final rules and published elsewhere
in this issue of the Bulletin. These interim
final rules expand the exemption from the
requirement to provide coverage for con-
traceptives and sterilization, established
under the HRSA Guidelines, promulgated
under section 2713(a)(4) of the PHS Act,
section 715(a)(1) of the ERISA, and sec-
tion 9815(a)(1) of the Code, to include
certain entities and individuals with objec-
tions to compliance with the Mandate
based on sincerely held moral convictions,
and they revise the accommodation pro-
cess to make entities with such convic-
tions eligible to use it. The expanded
exemption would apply to certain individ-
uals, nonprofit entities, institutions of
higher education, issuers, and for-profit
entities that do not have publicly traded
ownership interests, that have a moral ob-
jection to providing coverage for some (or
all) of the contraceptive and/or steriliza-
tion services covered by the Guidelines.
Such action is taken, among other reasons,
to provide for conscientious participation
in the health insurance market free from
penalties for violating sincerely held
moral convictions opposed to providing or
receiving coverage of contraceptive ser-
vices, to resolve lawsuits that have been
filed against the Departments by some
such entities, and to avoid similar legal
challenges.

159Kaiser Family Foundation & Health Research & Educational Trust, "Employer Health Benefits, 2017 Annual Survey," available at http://files.kff.org/attachment/Report-Employer-
Health-Benefits-Annual-Survey-2017.

##### 2. Anticipated Effects

The Departments acknowledge that ex-
panding the exemption to include objec-
tions based on moral convictions might
result in less insurance coverage of con-
traception for some women who may
want the coverage. Although the Depart-
ments do not know the exact scope of that
effect attributable to the moral exemption
in these interim final rules, they believe it
to be small.

With respect to the expanded exemp-
tion for nonprofit organizations, as noted
above the Departments are aware of two
small nonprofit organizations that have
filed lawsuits raising non-religious moral
objections to coverage of some contracep-
tives. Both of those entities have fewer
than five employees enrolled in health
coverage, and both require all of their
employees to agree with their opposition
to the coverage.160 Based on comments
submitted in response to prior rulemak-
ings on this subject, we believe that at
least one other similar entity exists. How-
ever, we do not know how many similar
entities exist. Lacking other information
we assume that the number is small. With-
out data to estimate the number of such
entities, we believe it to be less than 10,
and assume the exemption will be used by
nine nonprofit entities.

We also assume that those nine entities
will operate in a fashion similar to the two
similar entities of which we are aware, so
that their employees will likely share their
views against coverage of certain contra-
ceptives. This is consistent with our con-
clusion in previous rules that no signifi-
cant burden or costs would result from
exempting houses of worship and inte-
grated auxiliaries. (See 76 FR 46625 and
78 FR 39889). We reached that conclu-
sion without ultimately requiring that
houses of worship and integrated auxilia-
ries only hire persons who agree with their
views against contraception, and without
even requiring that such entities actually
oppose contraception in order to be ex-
empt (in contrast, the expanded exemption
here requires the exempt entity to actually

possess sincerely held moral convictions
objecting to the coverage). In concluding
that the exemption for houses of worship
and integrated auxiliaries would result in
no significant burden or costs, we relied
on our assumption that the employees of
exempt houses of worship and integrated
auxiliaries likely share their employers'
opposition to contraceptive coverage.

A similar assumption is supported with
respect to the expanded exemption for
nonprofit organizations. To our knowl-
edge, the vast majority of organizations
objecting to the Mandate assert religious
beliefs. The only nonprofit organizations
of which we are aware that possess non-
religious moral convictions against some
or all contraceptive methods only hire per-
sons who share their convictions. It is
possible that the exemption for nonprofit
organizations with moral convictions in
these interim final rules could be used by
a nonprofit organization that employs per-
sons who do not share the organization's
views on contraception, but it was also
possible under our previous rules that a
house of worship or integrated auxiliary
could employ persons who do not share
their views on contraception.161 Although
we are unable to find sufficient data on
this issue, we believe that there are far
fewer non-religious moral nonprofit orga-
nizations opposed to contraceptive cover-
age than there are churches with religious
objections to such coverage. Based on our
limited data, we believe the most likely
effect of the expanded exemption for non-
profit entities is that it will be used by
entities similar to the two entities that
have sought an exemption through litiga-
tion, and whose employees also oppose
the coverage. Therefore, we expect that
the expanded exemption for nonprofit
entities will have no effect of reducing
contraceptive coverage to employees who
want that coverage.

These interim final rules expand the
exemption to include institutions of higher
education that arrange student coverage
and have non-religious moral objections
to the Mandate, and they make exempt
entities with moral objections eligible to

use the accommodation. The Departments
are not aware of either kind of entity. We
believe the number of entities that object
to the Mandate based on non-religious
moral convictions is already very small.
The only entities of which we are aware
that have raised such objections are not
institutions of higher education, and ap-
pear to hold objections that we assume
would likely lead them to reject the ac-
commodation process. Therefore, for the
purposes of estimating the anticipated ef-
fect of these interim final rules on contra-
ceptive coverage of women who wish
to receive such coverage, we assume
that-at this time-no entities with non-
religious moral objections to the Mandate
will be institutions of higher education
that arrange student coverage, and no en-
tities with non-religious moral objections
will opt into the accommodation. We wish
to make the expanded exemption and ac-
commodation available to such entities in
case they do exist or might come into
existence, based on similar reasons to
those given above for why the exemptions
and accommodations are extended to
other entities. We invite public comment
on whether and how many such entities
will make use of these interim final rules.

The expanded exemption for issuers
will not result in a distinct effect on con-
traceptive coverage for women who wish
to receive it because that exemption only
applies in cases where plan sponsors or
individuals are also otherwise exempt, and
the effect of those exemptions is discussed
elsewhere herein. The expanded exemp-
tion for individuals that oppose contracep-
tive coverage based on sincerely held
moral convictions will provide coverage
that omits contraception for individuals
that object to contraceptive coverage.

The expanded moral exemption would
also cover for-profit entities that do not
have publicly traded ownership interests,
and that have non-religious moral objec-
tions to the Mandate. The Departments are
not aware of any for-profit entities that
possess non-religious moral objections to
the Mandate. However, scores of for-
profit entities have filed suit challenging

160Non-religious nonprofit organizations that engage in expressive activity generally have a First Amendment right to hire only people who share their moral convictions or will be respectful
of them-including their convictions on whether the organization or others provide health coverage of contraception, or of certain items they view as being abortifacient.

161Cf., for example, Gallup, "Americans, Including Catholics, Say Birth Control Is Morally OK," (May 22, 2012) ("Eighty-two percent of U.S. Catholics say birth control is morally
acceptable"), available at http://www.gallup.com/poll/154799/americans-including-catholics-say-birth-control-morally.aspx.

the Mandate. Among the over 200 entities
that brought legal challenges, only two
entities (less than 1 percent) raised non-
religious moral objections-both were
nonprofit. Among the general public polls
vary about religious beliefs, but one prom-
inent poll shows that 89 percent of Amer-
icans say they believe in God.162 Among
non-religious persons, only a very small
percentage appears to hold moral objec-
tions to contraception. A recent study
found that only 2 percent of religiously
unaffiliated persons believed using contra-
ceptives is morally wrong.163 Combined,
this suggests that 0.2 percent of Ameri-
cans at most164 might believe contracep-
tives are morally wrong based on moral
convictions but not religious beliefs. We
have no information about how many of
those persons run closely held businesses,
offer employer sponsored health insur-
ance, and would make use of the ex-
panded exemption for moral convictions
set forth in these interim final rules. Given
the large number of closely held entities
that challenged the Mandate based on
religious objections, we assume that
some similar for-profit entities with non-
religious moral objections exist. But we
expect that it will be a comparatively
small number of entities, since among the
nonprofit litigants, only two were non-
religious. Without data available to esti-
mate the actual number of entities that
will make use of the expanded exemption
for for-profit entities that do not have pub-
licly traded ownership interests and that
have objections to the Mandate based on
sincerely held moral convictions, we ex-

pect that fewer than 10 entities, if any,
will do so-we assume nine for-profit en-
tities will use the exemption in these in-
terim final rules.

The expanded exemption encompass-
ing certain for-profit entities could result
in the removal of contraceptive coverage
from women who do not share their em-
ployers' views. The Departments used
data from the Current Population Survey
(CPS) and the Medical Expenditure Panel
Survey-Insurance Component (MEPS-IC)
to obtain an estimate of the number of
policyholders that will be covered by the
plans of the nine for-profit entities we
assume may make use of these expanded
exemptions.165 The average number of
policyholders (9) in plans with under 100
employees was obtained. It is not known
what size the for-profit employers will be
that might claim this exemption, but as
discussed above these interim final rules
do not include publicly traded companies
(and we invite public comments on
whether to do so in the final rules), and
both of the two nonprofit entities that
challenged the Mandate included fewer
than five policyholders in each entity.
Therefore we assume the for-profit enti-
ties that may claim this expanded exemp-
tion will have fewer than 100 employees
and an average of 9 policyholders. For
nine entities, the total number of policy-
holders would be 81. DOL estimates that
for each policyholder, there is approxi-
mately one dependent.166 This amounts to
162 covered persons. Census data indicate
that women of childbearing age-that is,
women aged 15-44-comprise 20.2 per-

cent of the general population.167 This
amounts to approximately 33 women of
childbearing age for this group of individ-
uals covered by group plans sponsored by
for-profit moral objectors. Approximately
44.3 percent of women currently use con-
traceptives covered by the Guidelines.168
Thus we estimate that 15 women may
incur contraceptive costs due to for-profit
entities using the expanded exemption
provided in these interim final rules.169 In
the companion interim final rules concern-
ing religious beliefs issued contemporane-
ously with these interim final rules and
published elsewhere in this issue of the
Bulletin, we estimate that the average cost
of contraception per year per woman of
childbearing age that use contraception
covered by the Guidelines, within health
plans that cover contraception, is $584.
Consequently, we estimate that the antic-
ipated effects attributable to the cost of
contraception from for-profit entities us-
ing the expanded exemption in these in-
terim final rules is approximately $8,760.

The Departments estimate that these
interim final rules will not result in any
additional burden or costs on issuers or
third party administrators. As discussed
above, we assume that no entities with
non-religious moral convictions will use
the accommodation, although we wish to
make it available in case an entity volun-
tarily opts into it in order to allow contra-
ceptive coverage to be provided to its plan
participants and beneficiaries. Finally, be-
cause the accommodation process was not
previously available to entities that pos-
sess non-religious moral objections to the

162Gallup, "Most Americans Still Believe in God" (June 14-23, 2016), available at http://www.gallup.com/poll/193271/americans-believe-god.aspx.

163Pew Research Center, "Where the Public Stands on Religious Liberty vs. Nondiscrimination" at page 26 (Sept. 28, 2016), available at http://assets.pewresearch.org/wp-content/uploads/
sites/11/2016/09/Religious-Liberty-full-for-web.pdf.

164The study defined religiously "unaffiliated" as agnostic, atheist or "nothing in particular" (id. at 8), as distinct from several versions of Protestants, or Catholics. "Nothing in particular"
might have included some theists.

165"Health Insurance Coverage Bulletin" Table 4, page 21. Using March 2015 Annual Social and Economic Supplement to the Current Population Survey. https://www.dol.gov/sites/
default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf.

Estimates of the number of ERISA Plans based on 2015 Medical Expenditure Survey - Insurance.

166"Health Insurance Coverage Bulletin" Table 4, page 21. Using March 2015 Annual Social and Economic Supplement to the Current Population Survey. https://www.dol.gov/sites/
default/files/ebsa/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2015.pdf.

167U.S. Census Bureau, "Age and Sex Composition: 2010" (May 2011), available at https://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf. The Guidelines' requirement of
contraceptive coverage only applies "for all women with reproductive capacity." https://www.hrsa.gov/womensguidelines/; see also 80 FR 40318. In addition, studies commonly consider
the 15-44 age range to assess contraceptive use by women of childbearing age. See,., Guttmacher Institute, "Contraceptive Use in the United States" (Sept. 2016), available at
https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states.

168See https://www.guttmacher.org/fact-sheet/contraceptive-use-united-states.

169We note that many non-religious for-profit entities which sued the Departments challenging the Mandate, including some of the largest employers, only objected to coverage of 4 of the
18 types of contraceptives required to be covered by the Mandate-namely, those contraceptives which they viewed as abortifacients, and akin to abortion -and they were willing to provide
coverage for other types of contraception. It is reasonable to assume that this would also be the case with respect to some for-profits that object to the Mandate on the basis of sincerely
held moral convictions. Accordingly, it is possible that even fewer women beneficiaries under such plans would bear out-of-pocket expenses in order to obtain contraceptives, and that those
who might do so would bear lower costs due to many contraceptive items being covered.

Mandate, we do not anticipate that these
interim final rules will result in any bur-
den from such entities revoking their ac-
commodated status.

The Departments believe the foregoing
analysis represents a reasonable estimate
of the likely impact under the rules ex-
panded exemptions. The Departments ac-
knowledge uncertainty in the estimate and
therefore conducted a second analysis us-
ing an alternative framework, which is set
forth in the companion interim final rule
concerning religious beliefs issued con-
temporaneously with this interim final
rule and published elsewhere in this issue
of the Bulletin. Under either estimate, this
interim final rule is not economically sig-
nificant.

We reiterate the rareness of instances
in which we are aware that employers
assert non-religious objections to contra-
ceptive coverage based on sincerely held
moral convictions, as discussed above,
and also that in the few instances where
such an objection has been raised, em-
ployees of such employers also opposed
contraception.

We request comment on all aspects of
the preceding regulatory impact analysis.

### B. Special Analyses-Department of the Treasury

### C. Regulatory Flexibility Act

not required when an agency, for good
cause, finds that notice and public com-
ment thereon are impracticable, unneces-
sary, or contrary to the public interest. The
interim final rules are exempt from the
APA, both because the PHS Act, ERISA,
and the Code contain specific provisions
under which the Secretaries may adopt
regulations by interim final rule and be-
cause the Departments have made a good
cause finding that a general notice of pro-
posed rulemaking is not necessary earlier
in this preamble. Therefore, the RFA does
not apply and the Departments are not
required to either certify that the regula-
tions or this amendment would not have a
significant economic impact on a substan-
tial number of small entities or conduct a
regulatory flexibility analysis.

Nevertheless, the Departments care-
fully considered the likely impact of the
rule on small entities in connection with
their assessment under Executive Order
12866. The Departments do not expect
that these interim final rules will have a
significant economic effect on a substan-
tial number of small entities, because they
will not result in any additional costs to
affected entities. Instead, by exempting
from the Mandate small businesses and
nonprofit organizations with moral objec-
tions to some or all contraceptives and/or
sterilization, the Departments have re-
duced regulatory burden on small entities.
Pursuant to section 7805(f) of the Code,
these regulations have been submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on their impact on small business.

### D. Paperwork Reduction Act-Department of Health and Human Services

Under the Paperwork Reduction Act of
1995 (the PRA), federal agencies are re-
quired to publish notice in the Federal
Register concerning each proposed col-
lection of information. Interested persons
are invited to send comments regarding
our burden estimates or any other aspect
of this collection of information, includ-
ing any of the following subjects: (1) the
necessity and utility of the proposed in-
formation collection for the proper perfor-
mance of the agency's functions; (2) the
accuracy of the estimated burden; (3)
ways to enhance the quality, utility, and

clarity of the information to be collected;
and (4) the use of automated collection
techniques or other forms of information
technology to minimize the information
collection burden.

We estimate that these interim final
rules will not result in additional burdens
not accounted for as set forth in the com-
panion interim final rules concerning reli-
gious beliefs issued contemporaneously
with these interim final rules and pub-
lished elsewhere in this issue of the
Bulletin. As discussed there, regulations
covering the accommodation include pro-
visions regarding self-certification or no-
tices to HHS from eligible organizations
(§ 147.131(c)(3)), notice of availability of
separate payments for contraceptive ser-
vices (§ 147.131(f)), and notice of revo-
cation of accommodation (§ 147.131(c)
(4)). The burdens related to those ICRs are
currently approved under OMB Control
Numbers 0938-1248 and 0938-1292.
These interim final rules amend the ac-
commodation regulations to make entities
with moral objections to the Mandate el-
igible to use the same accommodation
processes. The Departments will update
the forms and model notices regarding
these processes to reflect that entities with
sincerely held moral convictions are eligi-
ble organizations.

As discussed above, however, we as-
sume that no entities with non-religious
moral objections to the Mandate will use
the accommodation, and we know that no
such entities were eligible for it until now,
so that they do not possess accommodated
status to revoke. Therefore we believe that
the burden for these ICRs is accounted for
in the collection approved under OMB
Control Numbers 0938-1248 and 0938-
1292, as described in the interim final
rules concerning religious beliefs issued
contemporaneously with these interim fi-
nal rules.

We are soliciting comments on all of
the possible information collection re-
quirements contained in these interim fi-
nal rules, including those discussed in the
companion interim final rules concerning
religious beliefs issued contemporane-
ously with these interim final rules and
published elsewhere in this issue of the
Bulletin, for which these interim final
rules provide eligibility to entities with
objections based on moral convictions. In

addition, we are also soliciting comments
on all of the related information collection
requirements currently approved under
0938-1292 and 0938-1248.

To obtain copies of a supporting state-
ment and any related forms for the pro-
posed collection(s) summarized in this no-
tice, you may make your request using
one of following:

1\. Access CMS' website address at
https://www.cms.gov/Regulations-
and-Guidance/Legislation/Paperwork
ReductionActof1995/PRA-Listing.html.

2\. E-mail your request, including your
address, phone number, OMB num-
ber, and CMS document identifier, to
Paperwork@cms.hhs.gov.

3\. Call the Reports Clearance Office at
(410) 786-1326.

### E. Paperwork Reduction Act-Department of Labor

Consistent with the analysis in the
HHS PRA section above, although these
interim final rules make entities with cer-
tain moral convictions eligible for the ac-
commodation, we assume that no entities
will use it rather than the exemption, and
such entities were not previously eligible
for the accommodation so as to revoke it.
Therefore we believe these interim final
rules do not involve additional burden not
accounted for under OMB control number
1210-0150.

Regarding the ICRs discussed in the
companion interim final rules concerning
religious beliefs issued contemporane-
ously with these interim final rules and
published elsewhere in this issue of the
Bulletin, the forms for which would be
used if any entities with moral objections
used the accommodation process in the
future, DOL submitted those ICRs in or-
der to obtain OMB approval under the
PRA for the regulatory revision. The re-
quest was made under emergency clear-
ance procedures specified in regulations at
5 CFR 1320.13. OMB approved the ICRs
under the emergency clearance process. In
an effort to consolidate the number of
information collection requests, DOL in-
dicated it will combine the ICR related to
the OMB control number 1210-0152 with
the ICR related to the OMB control num-
ber 1210-0150. Once the ICR is approved,
DOL indicated it will discontinue 1210-
0152. OMB approved the ICR under con-
trol number 1210-0150 through [DATE].
A copy of the information collection re-
quest may be obtained free of charge on
the RegInfo.gov website at http://www.
reginfo.gov/public/do/PRAViewICR?ref_nbr
=201705-1210-001. This approval al-
lows respondents temporarily to utilize
the additional flexibility these interim
final regulations provide, while DOL
seeks public comment on the collection
methods-including their utility and
burden. Contemporaneously with the
publication of these interim final rules,
DOL will publish a notice in the Fed-
eral Register informing the public of

its intention to extend the OMB ap-
proval.

### F. Regulatory Reform Executive Orders 13765, 13771 and 13777

Executive Order 13765 (January 20,
2017) directs that, "[t]o the maximum
extent permitted by law, the Secretary of
Health and Human Services (Secretary)
and the heads of all other executive de-
partments and agencies (agencies) with
authorities and responsibilities under the
Act shall exercise all authority and dis-
cretion available to them to waive, de-
fer, grant exemptions from, or delay the
implementation of any provision or re-
quirement of the Act that would impose
a fiscal burden on any State or a cost,
fee, tax, penalty, or regulatory burden
on individuals, families, healthcare pro-
viders, health insurers, patients, recipi-
ents of healthcare services, purchasers
of health insurance, or makers of medi-
cal devices, products, or medications."
In addition, agencies are directed to
"take all actions consistent with law to
minimize the unwarranted economic and
regulatory burdens of the [Affordable Care
Act], and prepare to afford the States more
flexibility and control to create a more free
and open healthcare market." These interim
final rules exercise the discretion provided
to the Departments under the Affordable
Care Act and other laws to grant exemptions
and thereby minimize regulatory burdens of
the Affordable Care Act on the affected
entities and recipients of health care ser-
vices.

Consistent with Executive Order
13771 (82 FR 9339, February 3, 2017),
we have estimated the costs and cost sav-
ings attributable to this interim final rule.
As discussed in more detail in the preced-
ing analysis, this interim final rule lessens
incremental reporting costs.170 Therefore,
this interim final rule is considered an EO
13771 deregulatory action.

170Other noteworthy potential impacts encompass potential changes in medical expenditures, including potential decreased expenditures on contraceptive devices and drugs and potential
increased expenditures on pregnancy-related medical services. OMB's guidance on EO 13771 implementation (https://www.whitehouse.gov/the-press-office/2017/04/05/memorandum-
implementing-executive-order-13771-titled-reducing-regulation) states that impacts should be categorized as consistently as possible within Departments. The Food and Drug Administration,
within HHS, and the Occupational Safety and Health Administration (OSHA) and Mine Safety and Health Administration (MSHA), within DOL, regularly estimate medical expenditure
impacts in the analyses that accompany their regulations, with the results being categorized as benefits (positive benefits if expenditures are reduced, negative benefits if expenditures are
raised). Following the FDA, OSHA and MSHA accounting convention leads to this interim final rule's medical expenditure impacts being categorized as (positive or negative) benefits, rather
than as costs, thus placing them outside of consideration for EO 13771 designation purposes.

### G. Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act
of 1995 (section 202(a) of Pub. L. 104-
4), requires the Departments to prepare a
written statement, which includes an as-
sessment of anticipated costs and benefits,
before issuing "any rule that includes any
Federal mandate that may result in the
expenditure by State, local, and tribal gov-
ernments, in the aggregate, or by the pri-
vate sector, of $100,000,000 or more (ad-
justed annually for inflation) in any one
year." The current threshold after adjust-
ment for inflation is $148 million, using
the most current (2016) Implicit Price De-
flator for the Gross Domestic Product. For
purposes of the Unfunded Mandates Re-
form Act, these interim final rules do not
include any Federal mandate that may re-
sult in expenditures by State, local, or
tribal governments, nor do they include
any Federal mandates that may impose an
annual burden of $100 million, adjusted
for inflation, or more on the private sector.

### H. Federalism

Executive Order 13132 outlines funda-
mental principles of federalism, and re-
quires the adherence to specific criteria by
Federal agencies in the process of their
formulation and implementation of poli-
cies that have "substantial direct effects"
on States, the relationship between the
Federal Government and States, or the
distribution of power and responsibilities
among the various levels of Government.
Federal agencies promulgating regula-
tions that have these federalism implica-
tions must consult with state and local
officials, and describe the extent of their
consultation and the nature of the con-
cerns of state and local officials in the
preamble to the regulation.

## VI. Statutory Authority

The Department of the Treasury tem-
porary regulations are adopted pursuant to
the authority contained in sections 7805
and 9833 of the Code.

* * * * *

Kirsten B. Wielobob,
Deputy Commissioner for Services and
Enforcement.

Approved: October 2, 2017

David J. Kautter,
Assistant Secretary for Tax Policy.

(Filed by the Office of the Federal Register on October 6,
2017, 11:45 a.m., and published in the issue of the Federal
Register for October 13, 2017, 82 F.R. 47838)

Signed this 4th day of October, 2017.

Timothy D. Hauser
Deputy Assistant Secretary for Program
Operations, Employee Benefits Security
Administration, Department of Labor.
Dated: October 4, 2017

Seema Verma
Administrator,

Centers for Medicare & Medicaid
Services.

Approved: October 4, 2017

Donald Wright,
Acting Secretary, Department of Health
and Human Services.

DEPARTMENT OF THE
TREASURY

Internal Revenue Service

For the reasons set forth in this pream-
ble, 26 CFR part 54 is amended as fol-
lows:

# PART 54-PENSION EXCISE TAXES

1\. The authority citation for part 54
continues to read, in part, as follows:
Authority: 26 U.S.C. 7805. * * *

## § 54.9815-2713T [Amended]

2\. Section 54.9815-2713T, as added
elsewhere in this issue of the Bulletin, is
amended in paragraph (a)(1)(iv) by re-
moving the reference "147.131 and
147.132" and adding in its place the ref-
erence "147.131, 147.132, and 147.133".

## § 54.9815-2713AT [Amended]

3\. Section 54.9815-2713AT, as added
elsewhere in this issue of the Bulletin], is
amended-

a. In paragraph (a)(1) by removing “ or
(ii)" and adding in its place "or (ii), or 45
CFR 147.133(a)(1)(i) or (ii)";

b. In paragraph (a)(2) by removing
the reference "147.132(a)" and adding in
its place the reference "147.132(a) or
147.133(a)";

c. In paragraph (b)(1)(ii) introductory
text by removing the reference "147.132"
and adding in its place the reference
"147.132 or 147.133";

d. In paragraph (b)(1)(ii)(B) by remov-
ing the reference "147.132" and adding in
its place the reference "147.132 or
147.133";

e. In paragraph (c)(1)(ii) introductory
text by removing the reference "147.132"
and adding in its place the reference
"147.132 or 147.133";

f. In paragraph (c)(1)(ii)(B) by remov-
ing the reference "147.132" and adding in
its place the reference "147.132 or
147.133"; and

g. In paragraph (c)(2) introductory text
by removing the reference "147.132" and
adding in its place the reference "147.132
or 147.133".

## DEPARTMENT OF LABOR

### Employee Benefits Security Administration

For the reasons set forth in the pream-
ble, the Department of Labor amends 29
CFR part 2590 as follows:

### PART 2590-RULES AND REGULATIONS FOR GROUP HEALTH PLANS

3\. The authority citation for part 2590
continues to read as follows:

## § 2590.715-2713 [Amended]

4\. Section 2590.715-2713, as amended
elsewhere in this issue of the Bulletin], is
further amended in paragraph (a)(1)(iv)
by removing the reference "147.131 and
147.132" and adding in its place the ref-
erence "147.131, 147.132, and 147.133".

### § 2590.715-2713A [Amended]

5\. Section 2590.715-2713A, as revised
elsewhere in this issue of the Bulletin], is
further amended-

a. In paragraph (a)(1) by removing
"(ii)" and adding in its place "(ii), or 45
CFR 147.133(a)(1)(i) or (ii)";

b. In paragraph (a)(2) by removing the
reference "147.132(a)" and adding in its
place the reference "147.132(a) or
147.133(a)";

c. In paragraph (b)(1)(ii) introductory
text by removing the reference "147.132"
and adding in its place the reference
"147.132 or 147.133";

d. In paragraph (b)(1)(ii)(B) by remov-
ing the reference "147.132" and adding in
its place the reference "147.132 or
147.133";

e. In paragraph (c)(1)(ii) introductory
text by removing the reference "147.132"
and adding in its place the reference
"147.132 or 147.133";

f. In paragraph (c)(1)(ii)(B) by remov-
ing the reference "147.132" and adding in
its place the reference "147.132 or
147.133"; and

g. In paragraph (c)(2) introductory text
by removing the reference "147.132" and
adding in its place the reference "147.132
or 147.133".

# DEPARTMENT OF HEALTH AND HUMAN SERVICES

For the reasons set forth in the pream-
ble, the Department of Health and Human
Services amends 45 CFR part 147 as fol-
lows:

# PART 147-HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND INDIVIDUAL HEALTH INSURANCE MARKETS

6\. The authority citation for part 147
continues to read as follows:

Authority: Secs 2701 through 2763,
2791, and 2792 of the Public Health
Service Act (42 USC 300gg through
300gg-63, 300gg-91, and 300gg-92),
as amended.

## § 147.130 [Amended]

7\. Section 147.130, as amended else-
where in this issue of the Bulletin, is
further amended in paragraphs (a)(1) in-
troductory text and (a)(1)(iv) by removing
the reference "§§ 147.131 and 147.132"
and adding in its place the reference
"§§ 147.131, 147.132, and 147.133".

## § 147.131 [Amended]

8\. Section 147.131, as revised else-
where in this issue of the Bulletin, is
further amended-

a. In paragraph (c)(1) by removing the
reference "(ii)" and adding in its place the

reference "(ii), or 45 CFR 147.133(a)
(1)(i) or (ii)".

b. In paragraph (c)(2) by removing the
reference "§147.132(a)" and adding in its
place the reference "§147.132(a) or
147.133"; and

c. In paragraphs (d)(1)(ii) introductory
text, (d)(1)(ii)(B) and (d)(2) by removing
the reference "§147.132" and to adding in
its place the reference "§ 147.132 or
147.133".

9\. Add §147.133 to read as follows:

## § 147.133 Moral exemptions in connection with coverage of certain preventive health services.

(a) Objecting entities. (1) Guidelines
issued under §147.130(a)(1)(iv) by the
Health Resources and Services Adminis-
tration must not provide for or support the
requirement of coverage or payments for
contraceptive services with respect to a
group health plan established or main-
tained by an objecting organization, or
health insurance coverage offered or ar-
ranged by an objecting organization, and
thus the Health Resources and Service
Administration will exempt from any
guidelines' requirements that relate to the
provision of contraceptive services:

(i) A group health plan and health in-
surance coverage provided in connection
with a group health plan to the extent one
of the following non-governmental plan
sponsors object as specified in paragraph
(a)(2) of this section:

(A) A nonprofit organization; or

(B) A for-profit entity that has no pub-
licly traded ownership interests (for this
purpose, a publicly traded ownership in-
terest is any class of common equity se-
curities required to be registered under
section 12 of the Securities Exchange Act
of 1934);

ciaries" will be interpreted as references
to student enrollees and their covered de-
pendents; and

(iii) A health insurance issuer offering
group or individual insurance coverage to
the extent the issuer objects as specified in
paragraph (a)(2) of this section. Where a
health insurance issuer providing group
health insurance coverage is exempt under
paragraph (a)(1)(iii) of this section, the
group health plan established or maintained
by the plan sponsor with which the health
insurance issuer contracts remains subject to
any requirement to provide coverage for
contraceptive services under Guidelines is-
sued under §147.130(a)(1)(iv) unless it is
also exempt from that requirement.

(2) The exemption of this paragraph (a)
will apply to the extent that an entity
described in paragraph (a)(1) of this sec-
tion objects to its establishing, maintain-
ing, providing, offering, or arranging (as
applicable) coverage or payments for
some or all contraceptive services, or for a
plan, issuer, or third party administrator

that provides or arranges such coverage or
payments, based on its sincerely held
moral convictions.

(b) Objecting individuals. Guidelines
issued under §147.130(a)(1)(iv) by the
Health Resources and Services Adminis-
tration must not provide for or support the
requirement of coverage or payments for
contraceptive services with respect to indi-
viduals who object as specified in this para-
graph (b), and nothing in §147.130(a)
(1)(iv), 26 CFR 54.9815-2713(a)(1)(iv), or
29 CFR 2590.715-2713(a)(1)(iv) may be
construed to prevent a willing health insur-
ance issuer offering group or individual
health insurance coverage, and as applica-
ble, a willing plan sponsor of a group health
plan, from offering a separate policy, certif-
icate or contract of insurance or a separate
group health plan or benefit package option,
to any individual who objects to coverage or
payments for some or all contraceptive ser-
vices based on sincerely held moral convic-
tions.

(c) Definition. For the purposes of this
section, reference to "contraceptive" ser-
vices, benefits, or coverage includes con-
traceptive or sterilization items, proce-
dures, or services, or related patient
education or counseling, to the extent
specified for purposes of § 147.130(a)
(1)(iv).

[Billing Codes: 4830-01-P; 4510-
029-P; 4120-01-P; 6325-64]

# Part III. Administrative, Procedural, and Miscellaneous

Treatment of Amounts Paid
to Section 170(c)
Organizations under
Employer Leave- Based
Donation Programs to Aid
Victims of Hurricane and
Tropical Storm Maria

## Notice 2017-62

This notice provides guidance on the
treatment of leave-based donation pro-
grams to aid victims of Hurricane and
Tropical Storm Maria.

## TREATMENT OF LEAVE-BASED DONATION PAYMENTS

In response to the extreme need for
charitable relief for victims of Hurricane
and Tropical Storm Maria, employers may
have adopted or may be considering
adopting leave-based donation programs.
Under leave-based donation programs,
employees can elect to forgo vacation,
sick, or personal leave in exchange for
cash payments that the employer makes to
charitable organizations described in
§ 170(c) of the Internal Revenue Code
(§ 170(c) organizations). This notice pro-
vides guidance for income and employ-
ment tax purposes on the treatment of
cash payments made by employers under
leave-based donation programs for the re-
lief of victims of Hurricane and Tropical
Storm Maria.

The Internal Revenue Service (the Ser-
vice) will not assert that cash payments an
employer makes to § 170(c) organizations
in exchange for vacation, sick, or personal
leave that its employees elect to forgo
constitute gross income or wages of the
employees if the payments are: (1) made
to the § 170(c) organizations for the relief
of victims of Hurricane and Tropical
Storm Maria; and (2) paid to the § 170(c)
organizations before January 1, 2019.

Similarly, the Service will not assert
that the opportunity to make such an elec-
tion results in constructive receipt of gross
income or wages for employees. Electing

employees may not claim a charitable
contribution deduction under § 170 with
respect to the value of forgone leave ex-
cluded from compensation and wages.

The Service will not assert that an em-
ployer is permitted to deduct these cash
payments exclusively under the rules of
§ 170 rather than the rules of § 162. Cash
payments to which this guidance applies
need not be included in Box 1, 3 (if ap-
plicable), or 5 of the Form W-2.

## DRAFTING INFORMATION

For further information, please contact
Sheldon Iskow of the Office of Associate
Chief Counsel (Income Tax and Account-
ing) at (202) 317-4718 (not a toll-free
number).

## Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

## Notice 2017-63

This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used un-
der § 417(e)(3), and the 24-month average
segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008 and the 30-
year Treasury weighted average rate un-
der § 431(c)(6)(E)(ii)(I).

### YIELD CURVE AND SEGMENT RATES

Generally, except for certain plans un-
der section 104 of the Pension Protection
Act of 2006 and CSEC plans under
§ 414(y), § 430 of the Code specifies the
minimum funding requirements that apply
to single-employer plans pursuant to
§ 412. Section 430(h)(2) specifies the in-
terest rates that must be used to determine
a plan's target normal cost and funding

target. Under this provision, present value
is generally determined using three 24-
month average interest rates (“segment
rates"), each of which applies to cash
flows during specified periods. To the ex-
tent provided under § 430(h)(2)(C)(iv),
these segment rates are adjusted by the
applicable percentage of the 25-year aver-
age segment rates for the period ending
September 30 of the year preceding the
calendar year in which the plan year be-
gins.171 However, an election may be
made under § 430(h)(2)(D)(ii) to use the
monthly yield curve in place of the seg-
ment rates.

Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond seg-
ment rates used to compute the target nor-
mal cost and the funding target. Consis-
tent with the methodology specified in
Notice 2007-81, the monthly corporate
bond yield curve derived from September
2017 data is in Table I at the end of this
notice. The spot first, second, and third
segment rates for the month of September
2017 are, respectively, 1.96, 3.58, and
4.35.

The 24-month average segment rates
determined under § 430(h)(2)(C)(i)
through (iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the appli-
cable minimum and maximum percent-
ages of the corresponding 25-year average
segment rates. For plan years beginning
before 2021, the applicable minimum per-
centage is 90% and the applicable maxi-
mum percentage is 110%. The 25-year
average segment rates for plan years be-
ginning in 2016, 2017, and 2018 were
published in Notice 2015-61, 2015-39
I.R.B. 408, Notice 2016-64, 2016-40
I.R.B. 429, and Notice 2017-50, 2017-41
I.R.B. 280, respectively.

# 24-MONTH AVERAGE CORPORATE BOND SEGMENT RATES

The three 24-month average corporate
bond segment rates applicable for October
2017 without adjustment for the 25-year
average segment rate limits are as follows:

171Pursuant to § 433(h)(3)(A), the 3rd segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).

Applicable Month

First Segment

Second Segment

Third Segment

October 2017

1.76

3.74

4.63

month averages applicable for October

Based on § 430(h)(2)(C)(iv), the 24-
2017 adjusted to be within the applicable
minimum and maximum percentages of

the corresponding 25-year average seg-
ment rates, are as follows:

For Plan Years Beginning In

Adjusted 24-Month Average Segment Rates

Applicable Month

First Segment

Second Segment

Third Segment

2016

October

2017

4.43

5.91

6.65

2017

October

2017

4.16

5.72

6.48

2018

October

2017

3.92

5.52

6.29

30-YEAR TREASURY SECURITIES
INTEREST RATES

Generally for plan years beginning af-
ter 2007, § 431 specifies the minimum
funding requirements that apply to mul-
tiemployer plans pursuant to § 412. Sec-
tion 431(c)(6)(B) specifies a minimum
amount for the full-funding limitation de-
scribed in § 431(c)(6)(A), based on the
plan's current liability. Section

431(c)(6)(E)(ii)(I) provides that the inter-
est rate used to calculate current liability
for this purpose must be no more than 5
percent above and no more than 10 per-
cent below the weighted average of the
rates of interest on 30-year Treasury se-
curities during the four-year period ending
on the last day before the beginning of the
plan year. Notice 88-73, 1988-2 C.B.
383, provides guidelines for determining
the weighted average interest rate. The

rate of interest on 30-year Treasury secu-
rities for September 2017 is 2.78 percent.
The Service determined this rate as the
average of the daily determinations of
yield on the 30-year Treasury bond ma-
turing in August 2047. For plan years
beginning in the month shown below, the
weighted average of the rates of interest
on 30-year Treasury securities and the
permissible range of rates used to calcu-
late current liability are as follows:

For Plan Years Beginning in

30-Year Treasury Weighted Average

Permissible Range 90% to 105%

Month

Year

October

2017

2.87

2.58

3.01

MINIMUM PRESENT VALUE
SEGMENT RATES

In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates

computed without regard to a 24-month
average. Notice 2007-81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-

ment rates determined for September
2017 are as follows:

First Segment

Second Segment

Third Segment

1.96

3.58

4.35

# DRAFTING INFORMATION

The principal author of this notice is
Tom Morgan of the Office of the Associate

Chief Counsel (Tax Exempt and Govern-
ment Entities). However, other personnel
from the IRS participated in the develop-
ment of this guidance. For further informa-

tion regarding this notice, contact Mr. Mor-
gan at 202-317-6700 or Tony Montanaro at
202-317-8698 (not toll-free numbers).

Table I Monthly Yield Curve for September 2017 Derived from September 2017 Data

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

0.5

1.46

20.5

4.12

40.5

4.38

60.5

4.47

80.5

4.51

1.0

1.59

21.0

4.13

41.0

4.38

61.0

4.47

81.0

4.51

1.5

1.72

21.5

4.14

41.5

4.38

61.5

4.47

81.5

4.51

2.0

1.83

22.0

4.15

42.0

4.39

62.0

4.47

82.0

4.51

2.5

1.93

22.5

4.16

42.5

4.39

62.5

4.47

82.5

4.52

3.0

2.03

23.0

4.17

43.0

4.39

63.0

4.47

83.0

4.52

3.5

2.12

23.5

4.18

43.5

4.39

63.5

4.48

83.5

4.52

4.0

2.22

24.0

4.19

44.0

4.40

64.0

4.48

84.0

4.52

4.5

2.32

24.5

4.20

44.5

4.40

64.5

4.48

84.5

4.52

5.0

2.42

25.0

4.21

45.0

4.40

65.0

4.48

85.0

4.52

5.5

2.53

25.5

4.22

45.5

4.41

65.5

4.48

85.5

4.52

6.0

2.63

26.0

4.22

46.0

4.41

66.0

4.48

86.0

4.52

6.5

2.74

26.5

4.23

46.5

4.41

66.5

4.48

86.5

4.52

7.0

2.85

27.0

4.24

47.0

4.41

67.0

4.48

87.0

4.52

7.5

2.95

27.5

4.25

47.5

4.42

67.5

4.49

87.5

4.52

8.0

3.05

28.0

4.25

48.0

4.42

68.0

4.49

88.0

4.52

8.5

3.14

28.5

4.26

48.5

4.42

68.5

4.49

88.5

4.52

9.0

3.24

29.0

4.27

49.0

4.42

69.0

4.49

89.0

4.53

9.5

3.32

29.5

4.27

49.5

4.43

69.5

4.49

89.5

4.53

10.0

3.40

30.0

4.28

50.0

4.43

70.0

4.49

90.0

4.53

10.5

3.47

30.5

4.29

50.5

4.43

70.5

4.49

90.5

4.53

11.0

3.54

31.0

4.29

51.0

4.43

71.0

4.49

91.0

4.53

11.5

3.60

31.5

4.30

51.5

4.43

71.5

4.49

91.5

4.53

12.0

3.66

32.0

4.30

52.0

4.44

72.0

4.50

92.0

4.53

12.5

3.71

32.5

4.31

52.5

4.44

72.5

4.50

92.5

4.53

13.0

3.76

33.0

4.31

53.0

4.44

73.0

4.50

93.0

4.53

13.5

3.80

33.5

4.32

53.5

4.44

73.5

4.50

93.5

4.53

14.0

3.84

34.0

4.32

54.0

4.44

74.0

4.50

94.0

4.53

14.5

3.88

34.5

4.33

54.5

4.45

74.5

4.50

94.5

4.53

15.0

3.91

35.0

4.33

55.0

4.45

75.0

4.50

95.0

4.53

15.5

3.94

35.5

4.34

55.5

4.45

75.5

4.50

95.5

4.53

16.0

3.96

36.0

4.34

56.0

4.45

76.0

4.50

96.0

4.53

16.5

3.99

36.5

4.35

56.5

4.45

76.5

4.51

96.5

4.54

17.0

4.01

37.0

4.35

57.0

4.46

77.0

4.51

97.0

4.54

17.5

4.03

37.5

4.35

57.5

4.46

77.5

4.51

97.5

4.54

18.0

4.05

38.0

4.36

58.0

4.46

78.0

4.51

98.0

4.54

18.5

4.06

38.5

4.36

58.5

4.46

78.5

4.51

98.5

4.54

19.0

4.08

39.0

4.36

59.0

4.46

79.0

4.51

99.0

4.54

19.5

4.09

39.5

4.37

59.5

4.46

79.5

4.51

99.5

4.54

20.0

4.11

40.0

4.37

60.0

4.47

80.0

4.51

100.0

4.54

# Part IV. Items of General Interest

Religious Exemptions and
Accommodations for
Coverage of Certain
Preventive Services Under
the Affordable Care Act;
Proposed Rulemaking

## REG-115615-17

AGENCY: Internal Revenue Service
(IRS), Treasury.

ACTION: Notice of proposed rulemaking by
cross-reference to temporary regulations.

SUMMARY: In this issue of the Bulletin,
the Department of Treasury and the IRS
are issuing two sets of temporary regula-
tions related to section 9815 of the Inter-
nal Revenue Code. The first set of tempo-
rary regulations, as published in TD 9827,
amends final regulations published under
the provisions of the Patient Protection
and Affordable Care Act (the Affordable
Care Act) and relates to expanded exemp-
tions to protect religious beliefs for enti-
ties and individuals with objections based
on religious beliefs whose health plans are
subject to a mandate of contraceptive cov-
erage through guidance issued pursuant to
the Affordable Care Act. These proposed
regulations refer to that first set of tempo-
rary regulations. The second set of tem-
porary regulations, as published in TD
9828, amends the first set of temporary
regulations, as published in TD 9827, to
add an exemption to protect moral convic-
tions for entities and individuals with ob-
jections based on those beliefs whose
health plans are subject to the mandate of
contraceptive coverage.

DATES: Written or electronic comments
and requests for a public hearing must be
received by December 5, 2017.

ADDRESSES: Send submissions to: CC:
PA:LPD:PR (REG-115615-17), room
5205, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand-
delivered to: CC:PA:LPD:PR (REG-
115615-17), Courier's Desk, Internal
Revenue Service, 1111 Constitution Ave-
nue, NW., Washington DC 20224. Alter-

natively, taxpayers may submit comments
electronically via the Federal eRulemak-
ing Portal at http://www.regulations.gov
(IRS REG-115615-17).

FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Karen Levin at 202-317-5500; concerning
submissions of comments, Regina John-
son at 202-317-6901 (not toll-free
numbers).

## SUPPLEMENTARY INFORMATION:

### Background and Explanation of Provisions

The temporary regulations published
elsewhere in this issue of the Bulletin
amend §§ 54.9815-2713 and 54.9815-
2713A of the Miscellaneous Excise Tax
Regulations. The temporary regulations
provide guidance to certain entities and
individuals whose health plans are subject
to a mandate of contraceptive coverage
and do not alter the discretion of the
Health Resources and Services Adminis-
tration, a component of the U.S. Depart-
ment of Health and Human Services, to
maintain the guidelines requiring contra-
ceptive coverage where no regulatorily
recognized objection exists. The tempo-
rary regulations also leave in place the
accommodation process as an optional
process for certain exempt entities that
wish to use it voluntarily and do not alter
other Federal programs that provide free
or subsidized contraception for women at
risk of unintended pregnancy. The pro-
posed and temporary regulations are being
published as part of a joint rulemaking
with the Department of Labor and the
Department of Health and Human Ser-
vices (the joint rulemaking). The text of
those temporary regulations also serves as
the text of these proposed regulations. The
preamble to the temporary regulations fur-
ther explains the temporary regulations
and these proposed regulations.

### Special Analyses

Certain IRS regulations, including this
one, are exempt from the requirements of
Executive Order 12866, as supplemented
by Executive Order 13563. Therefore, a
regulatory assessment is not required.

For the applicability of the Regulatory
Flexibility Act (5 U.S.C. Chapter 6),
please see section VI.C. of the temporary
regulations.

Pursuant to section 7805(f) of the In-
ternal Revenue Code, this notice of pro-
posed rulemaking has been submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on the regulations' impact on small
businesses.

### Comments and Requests for a Public Hearing

Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written comments (a
signed original and eight (8) copies) or
electronic comments that are submitted
timely to the IRS. Comments are specifi-
cally requested on the clarity of the pro-
posed regulations and how they may be
made easier to understand. All comments
will be available for public inspection and
copying. A public hearing may be sched-
uled if requested in writing by a person
that timely submits written comments. If a
public hearing is scheduled, notice of the
date, time, and place for the hearing will
be published in the Federal Register.

### Drafting Information

The principal author of these proposed
regulations is Karen Levin, Office of the
Division Counsel/Associate Chief Coun-
sel (Tax Exempt and Government Enti-
ties), IRS. The proposed regulations, as
well as the temporary regulations, have
been developed in coordination with per-
sonnel from the U.S. Department of Labor
and the U.S. Department of Health and
Human Services.
* * * * *

### Proposed Amendments to the Regulations

Accordingly, 26 CFR part 54 is pro-
posed to be amended as follows:

#### PART 54-PENSION EXCISE TAXES

Paragraph 1. The authority citation for
part 54 continues to read in part as fol-
lows:

Authority: 26 U.S.C. 7805
Par. 2. Section 54.9815-2713 is re-
vised to read as follows:

§54.9815-2713 Coverage of preventive
health services.

[The text of proposed §54.9815-
2713 is the same as the text of §54.9815-
2713T(a) through (d) published elsewhere
in this issue of the Bulletin].

Par. 3. Section 54.9815-2713A is re-
vised to read as follows:

§54.9815-2713A Accommodations in
connection with coverage of preventive
health services.

[The text of proposed §54.9815-
2713A is the same as the text of
§54.9815-2713AT(a) through (f) pub-
lished elsewhere in this issue of the Bul-
letin].

Kirsten Wielobob,
Deputy Commissioner for Services and
Enforcement.

(Filed by the Office of the Federal Register on October 6,
2017, 11:15 a.m., and published in the issue of the Federal
Register for October 13, 2017, 82 F.R. 47658)

Moral Exemptions and
Accommodations for
Coverage of Certain
Preventive Services Under
the Affordable Care Act;
Proposed Rulemaking
REG-129631-17

AGENCY: Internal Revenue Service
(IRS), Treasury.

ACTION: Notice of proposed rulemaking by
cross-reference to temporary regulations.

tions to protect religious beliefs for enti-
ties and individuals with objections based
on religious beliefs whose health plans are
subject to a mandate of contraceptive cov-
erage through guidance issued pursuant to
the Affordable Care Act. These proposed
regulations refer to the second set of tem-
porary regulations, as published in TD
9828, which amends the first set of tem-
porary regulations, as published in TD
9827, to add an exemption to protect
moral convictions for entities and individ-
uals with objections based on those beliefs
whose health plans are subject to the man-
date of contraceptive coverage.

DATES: Written or electronic comments
and requests for a public hearing must be
received by December 5, 2017.

ADDRESSES: Send submissions to: CC:
PA:LPD:PR (REG-129631-17), room
5205, Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand-
delivered to: CC:PA:LPD:PR (REG-
129631-17), Courier's Desk, Internal
Revenue Service, 1111 Constitution Ave-
nue, NW., Washington DC 20224. Alter-
natively, taxpayers may submit comments
electronically via the Federal eRulemak-
ing Portal at http://www.regulations.gov
(IRS REG-129631-17).

FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Karen Levin at 202-317-5500; concerning
submissions of comments, Regina John-
son at 202-317-6901 (not toll-free
numbers).

## SUPPLEMENTARY INFORMATION:

### Background and Explanation of Provisions

The temporary regulations published
elsewhere in this issue of the Bulletin add
§§ 54.9815-2713T and 54.9815-2713AT
to the Miscellaneous Excise Tax Regula-
tions, as published in TD 9827 in the
Rules section of this issue of the Bulletin.
The proposed and temporary regulations
are being published as part of a joint rule-
making with the Department of Labor and
the Department of Health and Human Ser-
vices (the joint rulemaking). The tempo-
rary regulations provide guidance to cer-
tain entities and individuals whose health

plans are subject to a mandate of contra-
ceptive coverage and does not alter the
discretion of the Health Resources and
Services Administration, a component of
the U.S. Department of Health and Hu-
man Services, to maintain the guidelines
requiring contraceptive coverage where
no regulatorily recognized objection ex-
ists. The temporary regulations also leave
in place the accommodation process as an
optional process for certain exempt enti-
ties that wish to use it voluntarily and does
not alter other Federal programs that pro-
vide free or subsidized contraception for
women at risk of unintended pregnancy.
The preamble to the temporary regula-
tions explains the temporary regulations
and these proposed regulations.

### Special Analyses

Certain IRS regulations, including this
one, are exempt from the requirements of
Executive Order 12866, as supplemented
by Executive Order 13563. Therefore, a
regulatory assessment is not required.

For the applicability of the Regulatory
Flexibility Act (5 U.S.C. Chapter 6),
please see section VI.C. of the temporary
regulations.

### Comments and Requests for a Public Hearing

### Drafting Information

* * * * *

### Proposed Amendments to the Regulations

Accordingly, 26 CFR part 54 is pro-
posed to be amended as follows:

PART 54-PENSION EXCISE TAXES

Paragraph 1. The authority citation for
part 54 continues to read in part as fol-
lows:

Authority: 26 U.S.C. 7805 * * *

§54.9815-2713T [Amended]

Par 2. Section 54.9815-2713T, as
added elsewhere in this issue of the Bul-
letin, is amended in paragraph (a)(1)(iv)
by removing the language "147.131 and
147.132" adding in its place "147.131,
147.132, and 147.133".

§54.9815-2713AT [Amended]

Par. 3. Section 54.9815-2713AT, as
added elsewhere in this issue of the Bul-
letin, is amended:

a. In paragraph (a)(1) by removing the
language "(ii)" and adding in its place
"(ii), or 45 CFR 147.133(a)(1)(i) or (ii)".

b. In paragraph (a)(2) by adding the lan-
guage "or 147.133(a)" after "147.132(a)".

c. In paragraph (b)(1)(ii) introductory
text by removing the language "147.132"

and adding in its place "147.132(ii) or
147.133".

d. In paragraph (b)(1)(ii)(B) by adding
the language "or 147.133" after "147.132".

e. In paragraph (c)(1)(ii) introductory
text by adding the language "or 147.133"
after "147.132".

f. In paragraph (c)(1)(ii)(B) by adding
the language "or 147.133" after
"147.132".

g. In paragraph (c)(2) introductory text
by adding the language "or 147.133" after
"147.132".

Kirsten Wielobob,
Deputy Commissioner for Services and
Enforcement.

(Filed by the Office of the Federal Register on October 6,
2017, 11:15 a.m., and published in the issue of the Federal
Register for October 13, 2017, 82 F.R. 47656)

# Automatic approval for certain funding method changes for single-employer defined benefit pension plans subject to the minimum funding requirements of § 430

Rev. Proc. 2017-56

26 CFR § 601.201 Rulings and determination letters.

TABLE OF CONTENTS

SECTION 1. PURPOSE AND SCOPE

466

SECTION 2. BACKGROUND

466

SECTION 3. APPROVAL FOR SPECIFIED CHANGES IN FUNDING METHOD

467

.01 Approval for changes in asset valuation method

467

.02 Approval for changes in valuation date

467

.03 Approval for change in treatment of benefits funded through insurance contracts

467

SECTION 4. APPROVAL FOR CHANGES IN FUNDING METHOD IN SPECIAL SITUATIONS

467

.01 Approval for change in funding method for takeover plans

467

.02 Approval for change in funding method due to change in valuation software

468

.03 Approval for change in funding method due to change in selection of data elements

468

.04 Approval for change in funding method for fully funded terminated plans

468

SECTION 5. APPROVAL FOR CHANGES IN FUNDING METHOD IN CONNECTION WITH PLAN MERGERS

469

.01 Approval for change in funding method in connection with de minimis merger

469

.02 Approval for change in funding method in connection with a merger of plans with same

plan year and merger date of first or last day of plan year

469

.03 Approval for change in funding method in connection with a merger of plans with a transition period not exceeding 12 months

470

SECTION 6. RESTRICTIONS ON USE OF AUTOMATIC APPROVAL UNDER THIS

REVENUE PROCEDURE

473

SECTION 7. EFFECTIVE DATE

474

SECTION 8. EFFECT ON OTHER DOCUMENTS

474

SECTION 9. DRAFTING INFORMATION

474

# SECTION 1. PURPOSE AND SCOPE

.01 The purpose of this revenue proce-
dure is to update Rev. Proc. 2000-40,
2000-2 C.B. 357, to take into account the
provisions of § 430 of the Internal Reve-
nue Code (Code), which was enacted as
part of the Pension Protection Act of
2006, Pub. L. 109-280. This revenue pro-
cedure provides automatic approval for
certain changes in funding method used
for single-employer defined benefit plans
for calculations described under § 430. A
funding method is a recognized actuarial
technique utilized for establishing the
amount and incidence of the annual actu-
arial cost of pension plan benefits and
expenses. The approvals under this reve-
nue procedure are granted in accordance
with § 412(d)(1) of the Code and section
302(d)(1) of the Employee Retirement In-
come Security Act of 1974, Pub. L. 93-
406, as amended (ERISA).

.02 Section 3 of this revenue procedure
provides automatic approval for three as-
set valuation method changes, automatic
approval for two valuation date changes,
and automatic approval for one type of
change in the treatment of benefits funded
through insurance contracts. Section 4 of
this revenue procedure provides automatic
approval for a change in funding method
in special situations in which there is a
change in the plan's actuary, actuarial
software, or the data elements used in the
actuarial valuation, and for fully funded
terminating plans. Section 5 of this reve-
nue procedure provides automatic ap-
proval for a change in funding method in
connection with a plan merger.

.03 Taxpayers, plan administrators, and
enrolled actuaries are cautioned to con-
sider the overall restrictions on use of
automatic approval under this revenue
procedure (see section 6 of this revenue
procedure), and the specific restrictions
with respect to each of the approvals.

.04 The application of a funding method
approved under this revenue procedure must
conform to all of the requirements of the
regulations under § 430. Thus, for example,
the funding method must comply with the
requirements for the determination of target
normal cost and funding target, as required
under § 1.430(d)-1. Similarly, in accor-

dance with § 1.430(a)-1(c)(2), the differ-
ence in the funding shortfall attributable to
the change in funding method is used, in
conjunction with the present value of exist-
ing amortization installments, to determine
the shortfall amortization base for the year
of the change.

# SECTION 2. BACKGROUND

.01 Sections 412 and 430 set forth the
minimum funding standards that apply
generally with respect to single-employer
defined benefit pension plans.172 Under
§ 412(d)(1), a change of funding method
may take effect for a plan year only if the
change is approved by the Internal Reve-
nue Service (IRS).

.02 A funding method is used for a plan
year if it is used to determine the mini-
mum required contribution for that year.
Section 1.430(d)-1(f)(1)(iii) provides the
procedure for establishing the funding
method for a plan. In the case of a plan for
which an actuarial report under § 6059
(Schedule SB of Form 5500, “Annual Re-
turn/Report of Employee Benefit Plan") is
required to be filed, the funding method is
established by the filing of the Schedule
SB, if it is filed no later than the due date
(with extensions) for that filing. In the
case of a plan for which Schedule SB is
not required to be filed, the funding
method is established by the delivery of
the completed Schedule SB to the em-
ployer, if it is delivered no later than what
would have been the due date (with ex-
tensions) for filing the Schedule SB, were
such a filing required.

.03 Section 1.430(d)-1(f)(1)(iv) pro-
vides that the funding method of a plan
includes not only the overall funding
method used by the plan but also each
specific method of computation used in
applying the overall method. However,
the choice of which actuarial assumptions
are used is not a part of the funding
method. See Section 3.02 of Rev. Proc.
2017-57, 2017-44 I.R.B. xx, for exam-
ples of changes in funding method and
changes in actuarial assumptions.

.04 Regulations under § 430 provide
for a number of changes in funding
method that are treated as approved by the
IRS and may be implemented without any

further action by the IRS. For example,
§ 1.430(d)-1(g)(3)(iii) provides that any
change in a plan's funding method for the
first plan year to which § 430 applies to
determine the plan's minimum required
contribution is automatically approved by
the IRS. In addition, under § 1.430(g)-
1(b)(2)(iv), if a plan ceases to be eligible
for the small plan exception for a plan
year because the number of participants
exceeded 100 in the prior plan year, then
any required change in the valuation date
to the first day of the plan year is auto-
matically approved by the IRS.

.05 Rev. Proc. 2000-40 grants auto-
matic approval for certain changes in fund-
ing method, but does not take into account
the provisions of § 430. This revenue pro-
cedure modifies Rev. Proc. 2000-40 for
plans subject to the requirements of § 430.
Rev. Proc. 2000-40 continues to provide
automatic approval for certain changes in
funding method for defined benefit plans
that are not subject to the required minimum
funding rules of § 430. Rev. Proc. 2017-57
provides the procedure for obtaining the
IRS's approval for a change in funding
method if that change is not eligible for
automatic approval.

.06 Announcement 2010-3, 2010-4
I.R.B. 333, provides for automatic ap-
proval of changes in funding method for
takeover plans (plans for which there has
been a change in both the plan's enrolled
actuary and the business organization pro-
viding actuarial services to the plan) and
changes in pension valuation software
with respect to single-employer defined
benefit plans subject to § 430, provided
certain conditions are satisfied. An-
nouncement 2010-3 was effective for
plan years beginning on or after January 1,
2009. Announcement 2015-3 amplified
Announcement 2010-3 and provided for
additional circumstances under which au-
tomatic approval for a change in funding
method for takeover plans is available.
Announcement 2015-3 was effective for
plan years beginning on or after January 1,
2013. These two announcements provided
interim automatic approval for changes in
funding method prior to the issuance of
the more comprehensive guidance regard-
ing changes in funding method under
§ 430 set forth in this revenue procedure.

172Sections 302 and 303 of ERISA contain funding rules which apply generally to single-employer defined benefit plans and are parallel to the rules of §§ 412 and 430 of the Code.

Section 8 of this revenue procedure spec-
ifies a time after which the automatic ap-
provals set forth in those two announce-
ments may no longer be used.

## SECTION 3. APPROVAL FOR SPECIFIED CHANGES IN FUNDING METHOD

Subject to the restrictions of section 6
of this revenue procedure and to the con-
ditions under the applicable change in
funding method described in section 3.01,
3.02, or 3.03 of this revenue procedure,
approval is granted for a change in fund-
ing method described in this section 3.

.01 Approval for changes in asset val-
uation method. Approval is granted for the
following changes in asset valuation
method, provided that the asset valuation
method was not changed in any of the four
preceding plan years.

(1) A change in asset valuation method
to a method that determines the value of
plan assets as fair market value, as defined
in § 1.430(g)-1(c)(1)(ii).

(2) A change in asset valuation method
to a method that determines the value of
plan assets as the average of the fair mar-
ket value on the valuation date and the
adjusted fair market value of assets deter-
mined for one or more earlier determina-
tion dates, as described in § 430(g)(3)(B)
and the regulations and other published
guidance thereunder. (See § 1.430(g)-
1(c)(2) and Notice 2009-22, 2009-14
I.R.B. 741.) The asset value determined
under the method must be restricted so
that it is not greater than 110% and not
less than 90% of the fair market value, as
described in § 1.430(g)-1(c)(2)(iii).

(3) A change in asset valuation method
to a method that applies a phase-in for the
determination of the value of plan assets.
Under this method, the value of plan as-
sets is determined as the average of the
fair market value on the valuation date
and the adjusted fair market value of as-
sets determined for one or more earlier
determination dates, as described below.
The asset value determined under this
method must be restricted so that it is not
greater than 110% and not less than 90%
of the fair market value, as described in
§ 1.430(g)-1(c)(2)(iii).

In the first plan year this asset valuation
method is used, the value of plan assets is
the fair market value. In the second plan

year this asset valuation method is used,
the value of plan assets is the average of
the fair market value of assets on the
valuation date and the adjusted fair market
value of assets from the immediately pre-
ceding valuation date. In the third plan
year this asset valuation method is used,
the value of plan assets is the average of
the fair market value of assets on the
valuation date and the adjusted fair market
value of assets from the two immediately
preceding valuation dates.

The phase-in that applies under this
method is not a change in funding method
in years two and three. The first plan year
of the four-year limitation on changes re-
ceiving automatic approval as described
in this section 3.01 starts in the first year
of this phase-in method. Failure to apply
this method for the second or third plan
year would be considered a change in
funding method for the year for which the
failure occurred, which would require ap-
proval for that year.

This approval is available only if the
determination dates used for the adjusted
fair market values after the phase-in of the
new asset valuation method are not the
same as the determination dates used for
this purpose prior to the change in asset
valuation method. Accordingly, this auto-
matic approval may not be used merely to
restart the asset valuation method in use
prior to the change in funding method.

.02 Approval for changes in valuation
date. Approval is granted for the follow-
ing changes in valuation date, provided
that the valuation date was not changed in
any of the four preceding plan years.

(1) A change in the valuation date to
the day that is the first day of the plan
year.

(2) A change in the valuation date to
the last day of the plan year, if there was
a change in the plan year and the valuation
date for the prior plan year was the last
day of that plan year.

.03 Approval for change in treatment
of benefits funded through insurance con-
tracts. Approval is granted for a change in
the treatment of benefits funded through
insurance contracts if, as of the prior plan
year's valuation date, none of the plan
benefits were funded through insurance
contracts.

# SECTION 4. APPROVAL FOR CHANGES IN FUNDING METHOD IN SPECIAL SITUATIONS

Subject to the restrictions of section 6
of this revenue procedure and to the con-
ditions under the applicable change in
funding method described in section 4.01,
4.02, 4.03 or 4.04 of this revenue proce-
dure, approval is granted for a change in
funding method described in this section 4.

.01 Approval for change in funding
method for takeover plans. Approval is
granted for a change in funding method,
including a change in the valuation date to
the last day of the plan year (without
regard to whether there is also a change in
plan year) or a change in software, if all
the conditions set forth in paragraphs (1)
through (4) of this section 4.01 are satis-
fied.

(1) Both the enrolled actuary for the
plan and the business organization provid-
ing actuarial services to the plan have
changed.

(2) The new method is substantially the
same as the method used by the prior
enrolled actuary and is consistent with the
description of the method contained in the
prior actuarial report or prior Schedule SB
(disregarding any difference attributable
to a change in funding method for which
automatic approval is provided without
regard to this section 4.01).

(3) The funding target and target nor-
mal cost (without regard to any adjust-
ments for employee contributions and
plan-related expenses), as determined by
the new enrolled actuary as of the valua-
tion date for the prior plan year (using the
actuarial assumptions of the prior enrolled
actuary and using the data elements and
valuation software of the new enrolled
actuary), are both within 3% of those val-
ues as determined for that prior plan year
by the prior enrolled actuary.

(4) The actuarial value of plan assets,
as determined by the new enrolled actuary
as of the valuation date for the prior plan
year (using the actuarial assumptions of
the prior enrolled actuary), is within 2% of
the value for that prior plan year as deter-
mined by the prior enrolled actuary.

Alternatively, the comparisons de-
scribed in paragraphs (3) and (4) of this
section 4.01 may be made on the basis of
the current plan year, provided that the

prior enrolled actuary has issued an actu-
arial report that includes the results for the
current plan year (or has provided a
signed Schedule SB to the new enrolled
actuary for the current plan year, to the
extent guidance issued by the IRS would
permit the new enrolled actuary to revise
those entries on that Schedule SB).

For purposes of this revenue proce-
dure, an actuarial report must be signed by
the enrolled actuary for the plan and must
meet the applicable standards of perfor-
mance under regulations issued by the
Joint Board for the Enrollment of Actuar-
ies. See 20 CFR 901.20. In addition, for
purposes of this section 4.01, the current
plan year means the first plan year for
which a Schedule SB is signed by the new
enrolled actuary, and the prior plan year
means the plan year that immediately pre-
cedes the current plan year.

.02 Approval for change in funding
method due to change in valuation soft-
ware. Approval is granted for a change in
funding method that results from a change
in valuation software if all the conditions
set forth in paragraphs (1) through (5) of
this section 4.02 are satisfied. Note that
certain changes in valuation software may
not constitute changes in funding method.
For example, the update of the valuation
software to incorporate the actual social
security taxable wage base for the current
year is not a change in funding method.
Also, if all of the results of each specific
computation are the same after the change
in valuation software, there is no change
in funding method.

(1) The enrolled actuary for the plan is
the same as the enrolled actuary for the
plan for the prior plan year or the business
organization providing actuarial services
to the plan is the same as the business
organization that provided actuarial ser-
vices to the plan for the prior plan year.
(Accordingly, the approval under section
4.01 of this revenue procedure is not
available.)

(2) The new method is substantially the
same as the method used for the prior plan
year (disregarding any difference attribut-
able to a change in funding method for
which automatic approval is provided
without regard to this section 4.02).

(3) The new valuation software gener-
ally will be used by the enrolled actuary
for the single-employer plans to which the
enrolled actuary provides actuarial ser-
vices.

(4) For either the prior plan year or the
current plan year, the funding target, tar-
get normal cost (without regard to any
adjustments for employee contributions
and plan-related expenses), and actuarial
value of assets determined under the new
valuation software are each within 1% of
the respective values determined under
the valuation software used for the prior
plan year (all other factors being held con-
stant). However, the 1% threshold is in-
creased to 2% of the respective values if
the approval under this section 4.02 was
not used in the prior year.

(5) The modifications to the computa-
tions in the valuation software or the use
of a different valuation software system
are designed to produce results that are no
less accurate than the results produced
prior to the modifications or change.

.03 Approval for change in funding
method due to change in selection of data
elements. Approval is granted for a
change in funding method used in valuing
liabilities due to a change in the selection
of data elements 173 that are used in the
actuarial valuation if all of the conditions
set forth in paragraphs (1) through (4) of
this section 4.03 are satisfied. For exam-
ple, a change from using the prior years'
actual compensation with an adjustment
to the current valuation date to using the
current annual rate of pay is approved, if
the applicable conditions are satisfied.

(2) Other than the change in data ele-
ments described in this section 4.03, the
new method is the same (disregarding any
difference attributable to a change in
funding method for which automatic ap-
proval is provided without regard to this
section 4.03).

(3) The funding target and target nor-
mal cost (without regard to any adjust-
ments for employee contributions and
plan-related expenses) determined using
the all of the new data elements (for either
the current plan year or the prior plan
year) are each within 1% of the respective
values determined using the prior data el-
ements (with all other factors being held
constant).

(4) The use of any new data element is
designed to produce results that are no
less accurate than the results produced
prior to the modifications or change.

.04 Approval for change in funding
method for fully funded terminated plans.
Approval is granted for a change in fund-
ing method described in paragraph (1) of
this section 4.04 for the plan year in which
the plan is terminated, if all the conditions
set forth in paragraph (2) of this section
4.04 are satisfied.

(1) Any or all of the following changes
in funding method may be made:

(a) The asset valuation method may be
changed to a method that determines the
value of plan assets as the fair market
value of assets, even if that change does
not otherwise satisfy the conditions of
section 3.01 of this revenue procedure.

(b) For a plan that is eligible to desig-
nate any day during the plan year as its
valuation date pursuant to § 430(g)(2)(B),
the valuation date may be changed to the
date of termination or the first day of the
plan year, even if the change does not
otherwise satisfy the conditions of section
3.02 of this revenue procedure.

(c) The funding method may be
changed as a result of a change in both the
enrolled actuary for the plan and the busi-
ness organization providing actuarial ser-
vices to the plan, even if the change does
not otherwise satisfy the conditions of
section 4.01 of this revenue procedure.

(d) The funding method may be changed
as a result of a change in the valuation
software, even if the change does not other-
wise satisfy the conditions of section 4.02 of
this revenue procedure.

(e) The funding method may be
changed as a result of a change in the data
elements, even if the change does not oth-

173Data elements are types of data, such as compensation, dates of birth or hire, or gender, used to value the plan liabilities. See section 3.02 of Rev. Proc. 2017-57 for examples of changes
in the selection of data elements.

erwise satisfy the conditions of section
4.03 of this revenue procedure.

(2) The conditions which must be sat-
isfied to receive automatic approval under
this section 4.04 are:

(a) As of the date of termination, the
assets of the plan (exclusive of contribu-
tions receivable) are sufficient to satisfy
all benefit liabilities (whether or not the
corresponding benefits are vested).

(b) If applicable, a timely notice of
intention to terminate was filed with the
Pension Benefit Guaranty Corporation
pursuant to section 4041(b)(2)(A) of
ERISA.

# SECTION 5. APPROVAL FOR CHANGES IN FUNDING METHOD IN CONNECTION WITH PLAN MERGERS

Subject to the restrictions of section 6
of this revenue procedure and to the con-
ditions under the applicable change in
funding method described in section 5.01,
5.02, or 5.03 of this revenue procedure,
approval is granted for a change in fund-
ing method described in this section 5.

Any contribution that is made to the
trust after the date of the merger may be
credited on the Schedule SB for either
plan, provided that the contribution is
made within the period described in
§ 430(j) for the plan year for which the
contribution is credited. Alternatively, a
contribution made after the date of the
merger may be treated as a contribution to
the merged plan.

.01 Approval for change in funding
method in connection with de minimis
merger. Approval is granted for a change
in funding method in connection with a de
minimis merger if the condition set forth
in paragraph (1) of this section 5.01 is
satisfied, and the procedures set forth in
paragraphs (2) through (5) of this section
5.01 are followed. A de minimis merger is a
merger of a smaller plan (within the mean-
ing of § 1.414(1)-1(h)(1)) and a larger plan
(within the meaning of § 1.414(1)-1(h)(1).
The rules of §§ 1.414(1)-1(h)(2), 1.414(1)-
1(h)(3), and 1.414(1)-1(h)(4) apply in deter-
mining whether a merger is de minimis.

(1) The smaller plan is treated as ter-
minated on the date of the merger for

purposes of § 430, and by 81/2 months after
the date of the merger, sufficient contri-
butions have been made for the smaller
plan to eliminate any unpaid minimum
required contribution for any plan year
ending before the date of the merger and
to satisfy the minimum required contribu-
tion for the short plan year that ends on
the date of the merger.174

(2) If the valuation date for the larger
plan for the plan year in which the merger
occurs precedes the date of the merger, the
minimum required contribution for the
ongoing plan for that plan year is deter-
mined without regard to the merger.

(3) For the actuarial valuation of the
ongoing plan as of the valuation date co-
incident with or next following the date of
the merger, except to the extent automatic
approval has been provided for a change
in funding method without regard to this
section 5.01, the funding method used (in-
cluding asset valuation method) is that for
the larger plan. The funding method used
for the smaller plan is disregarded.

(4) For the actuarial valuation of the
ongoing plan as of the valuation date co-
incident with or next following the date of
the merger, the interest rates used are
those that would have been used for the
larger plan unless the plan sponsor of the
ongoing plan elects an alternative interest
rate available under § 1.430(h)(2)-1(e) or
requests approval under the procedures set
forth in Rev. Proc. 2017-57 to revoke an
interest rate election that was in effect for
the larger plan. The interest rates used for
the smaller plan are disregarded.

(5) Any amortization installments,
funding standard carryover balance, and
prefunding balance existing prior to the
valuation date of the larger plan coinci-
dent with or next following the date of the
merger continue for the ongoing plan as if
the merger had never occurred. These
amounts with respect to the smaller plan
are disregarded for purposes of applying
§ 430 with respect to the ongoing plan.

For purposes of this section 5, refer-
ences to the ongoing plan mean the plan
as designated by the plan administrator
(within the meaning of § 414(g)), whose
name and plan number will be reported on

Schedule SB for the first plan year that
begins on or after the merger.

.02 Approval for change in funding
method in connection with a merger of
plans with same plan year and merger
date of first or last day of plan year.
Approval is granted for a change in fund-
ing method in connection with a merger of
one plan with another plan in a given plan
year if all the conditions set forth in para-
graphs (1) through (3) of this section 5.02
are satisfied, and the procedures set forth
in paragraphs (4) through (6) of this sec-
tion 5.02 are followed.

(1) Both plans have the same plan year
and each plan has a valuation date that is
either the first or last day of the plan year.

(2) The date of the merger is either the
first day of the plan year or the last day of
the plan year of the two plans.

(3) In a case in which the date of the
merger is the first day of the plan year, by
81/2 months after the date of the merger,
sufficient contributions have been made
for each plan to eliminate any unpaid min-
imum required contribution and to satisfy
the minimum required contribution for
any plan year that ends before the date of
the merger. In a case in which the date of
the merger is the last day of the plan year,
by 81/2 months after the date of the merger,
sufficient contributions have been made
for each plan to eliminate any unpaid min-
imum required contribution for the plan
for any plan year ending before the date of
the merger, and to satisfy the minimum
required contribution for the plan year that
ends on the date of the merger.

(4) If the date of the merger is the first
day of the plan year, the minimum re-
quired contribution under § 430 is deter-
mined for the ongoing plan for the entire
plan year in which the merger occurs in
the manner provided in paragraph (5) of
this section 5.02. Consequently, for the
plan year in which the merger occurs, only
one Schedule SB is required for the
merged plan.

(5) For the plan year of the ongoing
plan following the plan year in which the
merger occurs, the minimum funding re-
quirements under § 430 for the ongoing
plan are determined in accordance with

174If the plan year that ends on the date of the merger is less than a 12-month plan year, the minimum required contribution for the smaller plan for this period is determined in accordance

with § 1.430(a)-1(b)(2)(ii). The smaller plan is subject to the generally applicable reporting requirements, including filing Schedule SB, for that plan year.

the rules set forth in paragraphs (a)
through (d) of this paragraph 5.02(5).

(a) If the asset valuation method that
was used for each of the two plans was
identical in all respects (including with
respect to the determination dates used if
the asset valuation method is the averag-
ing method under § 430(g)(3)(B)), the as-
set valuation method used for the ongoing
plan is that method (disregarding any dif-
ference attributable to a change in funding
method for which automatic approval is
provided without regard to this section
5.02). If the same asset valuation method
was not used for each of the two plans (for
example, a method that determines the
value of plan assets as the fair market
value was used for one of the plans, and a
method that determines the value of plan
assets as the average of fair market value
on the valuation date and adjusted fair
market value determined for the two prior
determination dates was used for the other
plan), the asset valuation method used for
the ongoing plan must be the asset valua-
tion method that was used for one of the
two plans (disregarding any difference at-
tributable to a change in funding method
for which automatic approval is provided
without regard to this section 5.02). If an
averaging method is the method chosen
for the ongoing plan, that asset valuation
method must reflect the historical cash
flows for both plans, even if this requires
the reconstruction of historical cash flows
and expected earnings for a plan that was
not valued using the method chosen for
the ongoing plan.

(b) If all components of the funding
method (other than the asset valuation
method) used for each of the two plans
were the same, then the funding method
(other than the asset valuation method) for
the ongoing plan must be that method
(disregarding any difference attributable
to a change in funding method for which
automatic approval is provided without
regard to this section 5.02). If all compo-
nents of the funding method (other than
the asset valuation method) used for each
of the two plans were not the same, then
the funding method (other than the asset
valuation method) for the ongoing plan
must be one of the funding methods for
one of the two plans (disregarding any
difference attributable to a change in
funding method for which automatic ap-

proval is provided without regard to this
section 5.02).

(c) The interest rates used for the plan
after the merger are those that would have
been used for one of the two plans. How-
ever, the interest rates may be changed if
the plan sponsor of the ongoing plan
elects an alternative interest rate available
under § 1.430(h)(2)-1(e) or requests ap-
proval under the procedures set forth in
Rev. Proc. 2017-57 to revoke an interest
rate election that was in effect for one of
the two plans.

(d) All amortization installments that
were maintained for the two plans continue
to be maintained for the ongoing plan, ex-
cept as provided under § 430(c)(6).

(6) If the date of the merger is the last
day of the plan year, the minimum re-
quired contribution under § 430 for each
of the plans for the plan year in which the
merger occurs is determined without re-
gard to the merger. Consequently, sepa-
rate Schedules SB are required for
the plans for the plan year in which the
merger occurs without regard to the
merger in such a case. For the plan year
following the plan year in which the
merger occurs, the minimum required
contribution is determined for the plan
after the merger by following the proce-
dures set forth in paragraph (5) of this
section 5.02 as if the merger occurred on
the first day of the following plan year.

.03 Approval for change in funding
method in connection with certain merg-
ers with transition period not exceeding
12 months. Approval is granted for a
change in funding method that results
from a merger of one plan with another
plan if all the conditions set forth in para-
graphs (1) through (4) of this section 5.03
are satisfied, and the procedures set forth
in paragraphs (5) through (8) of this sec-
tion 5.03 are followed.

(1) Each of the plans, prior to the
merger, had a valuation date that was the
first day of the plan year.

(2) The plans do not have the same
plan year, or if both plans have the same
plan year, the date of the merger is not the
first day or the last day of the plan year.

(3) The period from the first day of the
plan year of the plan that is not the ongo-
ing plan during which the merger takes
place to the end of the plan year of the
ongoing plan during which the merger

takes place (the "transition period") does
not exceed 12 months.

(4) The plan that is not the ongoing
plan is treated as terminated on the date of
the merger for purposes of § 430, and by
81/2 months after the date of the merger,
sufficient contributions have been made
for that plan to eliminate any unpaid min-
imum required contribution for any plan
year that ends before the date of the
merger, and to satisfy the minimum re-
quired contribution for the short plan year
that ends on the date of the merger. For
the ongoing plan, by 81/2 months after the
end of the last plan year that ends on or
before the date of the merger, sufficient
contributions have been made for that
plan to eliminate any unpaid minimum
required contribution and to satisfy the
minimum required contribution for that
prior plan year.

(5) The period from the date of merger
to the end of the plan year of the ongoing
plan is designated as the interim period.
The target normal cost attributable to the
plan that is not the ongoing plan for the
interim period is the target normal cost
determined for the period from the begin-
ning of the plan year of that plan to the
end of the interim period, reduced by the
target normal cost for the short plan year
described in paragraph (4) of this section
5.03. The amortization installments attrib-
utable to the plan that is not the ongoing
plan for the interim period are the
amounts that would otherwise be deter-
mined for that plan for the plan year that
includes the date of the merger, prorated
to reflect the duration of the interim pe-
riod.

(6) Unless the date of the merger is the
first day of the plan year of the ongoing
plan, the funding requirement for the on-
going plan for the plan year in which the
merger occurs is determined in accor-
dance with the steps described in para-
graphs (a) through (c) of this paragraph
5.03(6).

(a) In the first step, the target normal
cost and amortization installments for the
ongoing plan are the full year amounts
determined without regard to the merger.

(b) In the second step, the target nor-
mal cost and amortization installments at-
tributable to the plan that is not the ongo-
ing plan are determined for the interim

period as described in paragraph (5) of
this section 5.03.

(c) In the third step, the target normal
cost and amortization installments from
the first two steps are combined in a man-
ner similar to the treatment for separate
plans under § 413(c)(4)(A).

A Schedule SB is required for the on-
going plan for the plan year in which the
merger occurs with the combined target
normal cost and amortization installments
described in paragraph (c) of this para-
graph 5.03(6).

(7) For the plan year of the ongoing
plan following the plan year in which the
merger occurs, the minimum funding re-
quirements under § 430 for the ongoing
plan are determined in accordance with
the rules set forth in paragraphs (a)
through (d) of this paragraph 5.03(7).

(a) If the asset valuation method that
was used for each of the two plans was
identical in all respects (including, if the
asset valuation method is the averaging
method under § 430(g)(3)(B), the deter-
mination dates), the asset valuation
method used for the ongoing plan is that
method (disregarding any difference at-
tributable to a change in funding method
for which automatic approval is provided
without regard to this section 5.03). If the
same asset valuation method was not used
for each of the two plans (for example, a
method that determines the value of plan
assets as the fair market value was used
for one of the plans, and a method that
determines the value of plan assets as the
average of fair market value on the valu-
ation date and adjusted fair market value
determined for the two prior determina-
tion dates was used for the other plan), the
asset valuation method used for the ongo-
ing plan must be the asset valuation
method that was used for one of the two
plans (disregarding any difference attrib-
utable to a change in funding method for
which automatic approval for the change
is provided without regard to this section
5.03). If an averaging method is the
method chosen for the ongoing plan, that
asset valuation method must reflect the
historical cash flows for both plans, even
if this requires the reconstruction of his-
torical cash flows and expected earnings
for the plan that was not valued using the
method chosen for the ongoing plan.

(b) If all components of the funding
method (other than the asset valuation
method) used for each of the two plans
were the same, then the funding method
(other than the asset valuation method) for
the ongoing plan must be that method
(disregarding any difference attributable
to a change in funding method for which
automatic approval is provided without
regard to this section 5.03). If all compo-
nents of the funding method (other than
the asset valuation method) used for each
of the two plans were not the same, then
the funding method (other than the asset
valuation method) for the ongoing plan
must be one of the funding methods for
one of the two plans (disregarding any
difference attributable to a change in
funding method for which automatic ap-
proval is provided without regard to this
section 5.03).

(c) The interest rates used for the plan
after the merger must be the interest rates
that would have been used for one of the
two plans. However, the interest rates may
be changed if the plan sponsor of the
ongoing plan elects an alternative interest
rate available under § 1.430(h)(2)-1(e) or
requests approval under the procedures set
forth in Rev. Proc. 2017-57 to revoke an
interest rate election that was in effect for
one of the two plans.

(d) All amortization installments that
were maintained for the two plans continue
to be maintained for the ongoing plan, ex-
cept as provided under § 430(c)(6).

(8) If the date of the merger is the first
day of the plan year of the ongoing plan,
the following calculations are made as
if the merger had occurred on the last day
of the preceding plan year of that plan:

(a) The minimum required contribution
for the plan that is not the ongoing plan is
determined for the short plan year as de-
scribed in paragraph (4) of this section
5.03.

(b) The minimum required contribu-
tion for the ongoing plan for the plan year
of the merger fully reflects the merger in
the manner described in paragraph (7) of
this section 5.03. However, as there is no
interim period, the calculations described
in paragraph (5) of this section 5.03 are
not made.

(9) The following examples illustrate
the application of this section 5.03.

Example 1. Mid-year merger of two
plans with same plan year

(a) Plan A has a plan year that begins
on January 1 and ends on the following
December 31. The valuation date for Plan
A is January 1, the first day of the plan
year.

(b) Plan B has a plan year that begins
on January 1 and ends on the following
December 31. The valuation date for Plan
B is January 1, the first day of the plan
year.

(c) Plan B is merged into Plan A (so
that Plan A is the ongoing plan) on April
1, 2018. Thus, the interim period runs
from April 1, 2018, to December 31,
2018, and for Plan B, there is a short plan
year that runs from January 1, 2018, to
March 31, 2018.

(d) The actuarial valuation for Plan A
as of January 1, 2018, based on a 12-
month plan year, results in a target normal
cost of $200,000 and a shortfall amortiza-
tion installment for 2018 of $116,852, at-
tributable to a shortfall amortization base
established January 1, 2018. There are no
other shortfall or waiver amortization
bases for Plan A as of January 1, 2018.

(e) The actuarial valuation for Plan B
as of January 1, 2018, based on a 12-
month plan year, results in a target normal
cost of $110,000 and a shortfall amortiza-
tion installment for 2018 of $185,000, at-
tributable to a shortfall amortization base
established January 1, 2018. There are no
other shortfall or waiver amortization
bases for Plan B as of January 1, 2018.

(f) The minimum required contribution
for Plan B for the short plan year de-
scribed in paragraph (4) of this section
5.03 (January 1, 2018, to March 31, 2018)
is determined as follows:

(i) The target normal cost for the short
plan year is redetermined to reflect that
there is a short plan year. The new calcu-
lation shows that the target normal cost
for the short plan year (based on the ac-
cruals for that short plan year) is $25,000.

(ii) In accordance with § 1.430(a)-
1(b)(2)(ii)(A), the shortfall amortization
installment is prorated to reflect the three
months covered by the short plan year.
Accordingly, the shortfall amortization in-
stallment for the short plan year is
$46,250 (that is, $185,000 multiplied by
3/12).

(iii) The total minimum required con-
tribution for the short plan year is $71,250
(that is, the sum of the target normal cost
of $25,000 plus the shortfall amortization
installment of $46,250). A final Schedule
SB is filed for Plan B for this short plan
year based on these results. Pursuant to
paragraph (4) of this section 5.03, to be
eligible for the automatic approval in this
section 5.03, by 81/2 months after the date
of the merger of March 31, 2018 (that is,
December 15, 2018), sufficient contribu-
tions must have been made to Plan B to
eliminate any unpaid minimum required
contribution for any plan year that ended
prior to January 1, 2018, and to satisfy the
minimum required contribution for the
short plan year that ended on March 31,
2018.

(g) The target normal cost and amorti-
zation installment attributable to Plan B
for the interim period (April 1, 2018, to
December 31, 2018, which is the period
from the date of the merger to the end of
the plan year of the ongoing plan) are
determined as follows:

(i) The target normal cost attributable
to Plan B for the interim period is $85,000
(that is, $110,000 for the 12-month plan
year minus $25,000 for the short plan
year).

(ii) The shortfall amortization install-
ment attributable to Plan B for the interim
period is $138,750 (that is, $185,000 for
the 12-month plan year multiplied by
9/12).

(h) Following the rules of paragraph
(6) of this section 5.03, the total minimum
required contribution for Plan A for the
plan year from January 1, 2018, to De-
cember 31, 2018, is $540,602. This is the
total of the target normal cost of $285,000
(the total of the target normal cost for Plan
A disregarding the merger of $200,000
and the target normal cost attributable to
Plan B for the interim period of $85,000)
plus the total amortization installment of
$255,602 (the total of the amortization
installment for Plan A disregarding the
merger of $116,852 plus the amortization
installment attributable to Plan B for the
interim period of $138,750). A Schedule
SB is filed for Plan A reflecting the
merger. Pursuant to paragraph (4) of this
section 5.03, to be eligible for the auto-
matic approval under this section 5.03,
Plan A must not have any unpaid mini-

mum required contribution and must sat-
isfy the minimum required contribution
for the 2017 plan year as of the contribu-
tion deadline of September 15, 2018 (81/2
months after the close of the 2017 plan
year).

Example 2. Mid-year plan merger of
two plans with different plan years.

(a) Plan C has a plan year that begins
on July 1 and ends on the following June
30. The valuation date for Plan C is July 1,
the first day of the plan year.

(b) Plan D has a plan year that begins
on January 1 and ends on the following
December 31. The valuation date for Plan
D is January 1, the first day of the plan
year.

(c) Plan D is merged into Plan C (so
that Plan C is the ongoing plan) on Feb-
ruary 28, 2018. Thus, the interim period
runs from March 1, 2018, to June 30,
2018, and for Plan D, there is a short plan
year that runs from January 1, 2018, to
February 28, 2018.

(d) The actuarial valuation for Plan C
as of July 1, 2018, based on a 12-month
plan year, results in a target normal cost of
$200,000 and a shortfall amortization in-
stallment of $116,852, attributable to a
shortfall amortization base established
July 1, 2018. There are no other shortfall
or waiver amortization bases for Plan C as
of July 1, 2018. Thus, the minimum re-
quired contribution for Plan C without
regard to the merger is the $316,852 (that
is, $200,000 plus $116,852).

(e) The actuarial valuation for Plan D
as of January 1, 2018, based on a 12-
month plan year, results in a target normal
cost of $110,000 and a shortfall amortiza-
tion installment for 2017 of $185,000, at-
tributable to a shortfall amortization base
established January 1, 2018. There are no
other shortfall or waiver amortization
bases for Plan D as of January 1, 2018.

(f) The minimum required contribution
for Plan D for the short plan year de-
scribed in paragraph (4) of this section
5.03 is determined as follows:

2018, through February 28, 2018) is
$20,000.

(ii) In accordance with § 1.430(a)-
1(b)(2)(ii)(A), the shortfall amortization
installment is prorated to reflect the two
months covered by the short plan year.
Accordingly, the shortfall amortization in-
stallment for the short plan year is
$30,833 (that is, $185,000 multiplied by
2/12).

(iii) The total minimum required con-
tribution for the short plan year is $50,833
(that is, the sum of the target normal cost
of $20,000 plus the shortfall amortization
installment of $30,833). A final Schedule
SB is filed for Plan D for this short plan
year based on these results. Pursuant to
paragraph (4) of this section 5.03, to be
eligible for the automatic approval in this
section 5.03, by 81/2 months after the date
of the merger of February 28, 2018 (that
is, November 15, 2018), sufficient contri-
butions must have been made to Plan D to
eliminate any unpaid minimum required
contribution for any plan year that ended
prior to January 1, 2018, and to satisfy the
minimum required contribution for the
short plan year that ended on February 28,
2018.

(g) The target normal cost and amorti-
zation installments attributable to Plan D
for the interim period (March 1, 2018, to
June 30, 2018, which is the period from
the date of the merger to the end of the
plan year of the ongoing plan) is deter-
mined as follows:

(i) Based on a determination that the
present value of benefits earned from Jan-
uary 1, 2018, to June 30, 2018, is $58,000,
the target normal cost attributable to Plan
D for the interim period is $38,000 (that
is, the difference between $58,000 and the
$20,000 amount determined in paragraph
(f)(i) of this Example 2 based on accruals
for the period from January 1, 2018, to
February 28, 2018).

(ii) The shortfall amortization install-
ment for the interim period is $61,667
(that is, $185,000 multiplied by 4/12).

(h) Following the rules of paragraph
(6) of this section 5.03, the total minimum
required contribution for Plan C for the
plan year from July 1, 2017, to June 30,
2018, is $416,519. This is the total of the
target normal cost of $238,000 (the total
of the target normal cost for Plan C dis-
regarding the merger of $200,000 and the

target normal cost attributable to Plan D
for the interim period of $38,000) plus the
total amortization installment of $178,519
(the total of the amortization installment
for Plan C disregarding the merger of
$116,852 plus the amortization install-
ment attributable to Plan D for the interim
period of $61,667). A Schedule SB is filed
for Plan C reflecting the merger. Pursuant
to paragraph (4) of this section 5.03, to be
eligible for the approval under this section
5.03, Plan C must not have any unpaid
minimum required contribution and must
satisfy the minimum required contribution
for the plan year ending June 30, 2017, as
of the contribution deadline of March 15,
2018 (81/2 months after the close of that
plan year).

Example 3. Mid-year plan merger of
two plans using different asset valuation
methods.

(a) The facts are the same as in Exam-
ple 2. Both Plan C and Plan D use an
actuarial asset valuation method that de-
termines the value of plan assets as the
average of fair market value on the valu-
ation date and adjusted fair market value
determined for two prior determination
dates which are 12 months and 24 months
before the valuation date. The methods are
the same in all respects, except that, for
Plan C, the determination dates are July 1
of each year and, for Plan D, the determi-
nation dates are January 1 of each year
(corresponding to their respective valua-
tion dates). The expected rates of return
that were used to determine the actuarial
value of assets for the plan years begin-
ning in 2016, 2017, and 2018 were 6.0%
for Plan C and 6.5% for Plan D.

(b) The determination dates for Plan D
are changed to correspond to the valuation
date of the ongoing plan. Therefore, the
determination dates for the July 1, 2018,
valuation (the first valuation after the date
of the merger) will be July 1, 2016, and
July 1, 2017, and the cash flows for Plan
D will need to be reconstructed to corre-
spond to the periods from July 1, 2016,
through June 30, 2017, and from July 1,
2017, through June 30, 2018.

(c) The expected earnings for the pe-
riod from July 1, 2016, through June 30,
2017, and for the period from July 1,
2017, through June 30, 2018, are calcu-
lated separately for the reconstructed cash

flow for Plan D (using Plan D's expected
earnings rate of 6.5%, limited so that it
does not exceed the applicable third seg-
ment rate under § 430(h)(2)(C)(iii)) and for
the cash flow from Plan C (using Plan C's
expected earnings rate of 6.0%, limited so
that it does not exceed the applicable third
segment rate under § 430(h)(2)(C)(iii)). The
resulting expected earnings are then added
and used to determine the adjusted fair mar-
ket value as of July 1, 2016, and July 1,
2017, as described in § 430(g)(3) and Notice
2009-22 (or subsequent guidance).

(d) For plan years beginning July 1,
2018, or later, the expected earnings for
the ongoing plan will be determined using
a single expected earnings rate, equal to
the actuary's best estimate of the antici-
pated rate of return on the combined as-
sets of Plan C and Plan D, limited so that
it does not exceed the applicable third
segment rate under § 430(h)(2)(C)(iii).
The actuarial value of assets for the ongo-
ing plan as of July 1, 2019, will reflect the
expected earnings for the period from July
1, 2017, through June 30, 2019, deter-
mined using:

(i) The expected earnings for the pe-
riod July 1, 2017, through June 30, 2018,
based on the combined expected earnings
from Plan C and Plan D, determined as
described in paragraph (c) of this exam-
ple, and

(ii) The expected earnings for the pe-
riod from July 1, 2018, through June 30,
2019, based on the single expected earn-
ings rate described in this paragraph (d).

## SECTION 6. RESTRICTIONS ON USE OF AUTOMATIC APPROVAL UNDER THIS REVENUE PROCEDURE

.01 This revenue procedure does
not apply unless the plan administrator
(within the meaning of § 414(g)) or an
authorized representative of the plan
sponsor indicates on the Form 5500 series
return filed for the plan for the plan year
for which the change is effective that the
plan administrator or plan sponsor agrees
to the change in funding method. In the
case of special approval for a change in
funding method described in section 4 of
this revenue procedure (other than the ap-
proval for fully funded terminating plans
in section 4.04 of this revenue procedure),
and approval for a change in funding

method in connection with plan mergers
described in section 5 of this revenue pro-
cedure, the requirement that the plan ad-
ministrator or authorized representative of
the plan sponsor agree to the change is
satisfied if the plan administrator or an
authorized representative of the plan
sponsor is made aware of the change be-
fore the Schedule SB is filed (or, in the
case of a plan for which Schedule SB is
not required to be filed, by the time the
Schedule SB is delivered to the em-
ployer).

.02 This revenue procedure does not
apply for a plan year of a plan if a mini-
mum funding waiver under § 412(c) has
been granted and there is a waiver amor-
tization charge for the plan year or a fu-
ture year, or a plan sponsor has applied for
a funding waiver under § 412(c) for the
plan and the waiver application is pend-
ing.

.03 This revenue procedure does not
apply if the plan is under an Employee
Plans examination for any plan year, or if
the plan sponsor, or a representative, has
received verbal or written notification
from the Tax Exempt and Government
Entities Division of an impending Em-
ployee Plans examination, or of an im-
pending referral from another part of the
IRS for an Employee Plans examination,
or if the plan has been under such an
examination and is in Appeals or in liti-
gation for issues raised in an Employee
Plans examination.

.04 This revenue procedure does not
apply if the change in funding method is
being made in connection with a plan
merger (unless the change is made as pro-
vided in sections 5.01 through 5.03 of this
revenue procedure) or in connection with
a plan spin-off.

.05 This revenue procedure does not
apply if the change in funding method is
being made in connection with a plan
merger if any of the following conditions
apply:

(1) The adjusted funding target attain-
ment percentages (AFTAPs), as defined in
§ 436(j), immediately before the plan
merger, are not within the same range for
all of the plans to be merged. For this
purpose:

(a) The AFTAPs are the AFTAPs that
have been certified as provided in § 1.436-
1(h)(4) for the plan year of the change (or if

no certification has been made, the pre-
sumed AFTAPs for the year of change).
However, if no certification for the preced-
ing year was issued during the preceding
plan year, the deemed percentage continues
as described in § 1.436-1(h)(1)(iii).

(b) The ranges are the ranges described
in § 1.436-1(h)(4)(ii) (less than 60%, at
least 60% but less than 80%, 80% or
higher, or 100% or higher), except that an
AFTAP of 80% or higher is treated as
being in the same range as an AFTAP of
100% or higher.

(2) As of the most recent valuation date
for each of the plans, one of the plans
involved in the plan merger has a funding
shortfall described in § 430(c)(4) and an-
other of the plans involved in the plan
merger does not have a funding shortfall.

(3) The asset valuation method is being
changed and the asset valuation method
was changed in any of the four preceding
plan years for any of the plans involved in
the merger.

(4) The valuation date is being changed
and the valuation date was changed in
either of the two preceding plan years for
any of the plans involved in the merger.

.06 Except as provided in section 4.04
of this revenue procedure, this revenue
procedure does not apply to a change that
is made for a plan year in which the plan
is terminated.

.07 This revenue procedure does not
apply to a change that is made for a plan
for which an election has been made pur-
suant to section 402(a) of the Pension
Protection Act of 2006, Pub. L. 109-280
(120 Stat. 780) (including a change in-
volving a merger of such a plan with a
plan that has not made such an election).

# SECTION 7. EFFECTIVE DATE

This revenue procedure is effective for
plan years commencing on or after Janu-
ary 1, 2018. However, taxpayers may
elect to apply this revenue procedure for
earlier plan years.

# SECTION 8. EFFECT ON OTHER DOCUMENTS

This revenue procedure modifies Rev.
Proc. 2000-40 to provide that the auto-
matic approvals set forth in Rev. Proc.

2000-40 do not apply to plans that are
subject to section 430.

This revenue procedure modifies An-
nouncements 2010-3 and 2015-3 to pro-
vide that the automatic approvals set forth
in those announcements do not apply to a
change in funding method for a plan year
beginning on or after January 1, 2018. For
earlier plan years, taxpayers may use ei-
ther the automatic approvals set forth in
those announcements or the automatic ap-
provals set forth in sections 4.01 and 4.02
of this revenue procedure.

# SECTION 9. DRAFTING INFORMATION

The principal author of this revenue
procedure is Thomas Morgan, Office of
the Associate Chief Counsel (Tax Exempt
and Government Entities). For further in-
formation regarding this revenue proce-
dure, contact Mr. Morgan at (202) 317-
6700 or Carolyn E. Zimmerman of the
Employee Plans, Tax Exempt and Gov-
ernment Entities Division at (412) 404-
9755 (not toll-free numbers).

# Rev. Proc. 2017-57

26 CFR § 601.201: Rulings and determination
letters.

# SECTION 1. PURPOSE

The purpose of this revenue procedure
is to update Rev. Proc. 2000-41, 2000-2
C.B. 371, to take into account the enact-
ment of subsequent legislation. This rev-
enue procedure sets forth the procedure
for obtaining approval of the Internal Rev-
enue Service (IRS) for a change in the
funding method used for a defined benefit
plan, as provided by § 412(d)(1) of the
Internal Revenue Code ("Code") and sec-
tion 302(d)(1) of the Employee Retire-
ment Income Security Act of 1974, Public
Law 93-406 (88 Stat. 829 (1974)), as
amended (ERISA). This revenue proce-
dure also sets forth the procedure for ob-
taining approval of the IRS to revoke an
election relating to interest rates pursuant
to § 430(h)(2)(D)(ii) or § 430(h)(2)(E) of
the Code and the corresponding sections
of ERISA.

# SECTION 2. BACKGROUND

.01 Sections 412 (minimum funding
standards), 430 (minimum funding stan-
dards for single-employer defined benefit
pension plans other than CSEC plans),
431 (minimum funding standards for mul-
tiemployer plans), and 433 (minimum
funding standards for CSEC plans) of the
Code set forth funding rules for defined
benefit plans.175 Under § 412(d)(1), a
change of funding method for a plan may
take effect only if the change is approved
by the IRS. A funding method is a recog-
nized actuarial technique utilized for es-
tablishing the amount and incidence of the
annual actuarial cost of pension plan ben-
efits and expenses.

.02 Section 430(h)(2) provides the re-
quirements for the interest rates that are
used under § 430. Unless the plan sponsor
elects to use interest rates under the cor-
porate bond yield curve, the interest rates
that must be used are based on the three
segment rates for the applicable month.
Under § 430(h)(2)(E), the applicable
month is the month that includes the val-
uation date, unless the plan sponsor elects
to use a different permitted applicable
month. As provided under §§ 430(h)(2)
(D)(ii) and 430(h)(2)(E), an election to
use the corporate bond yield curve, as well
as an election of a permitted applicable
month other than the month that contains
the valuation date (if use of the corporate
bond yield curve is not elected), may be
revoked only with the consent of the IRS.

.03 Rev. Proc. 2000-41 provides pro-
cedures for obtaining the IRS's approval
for a change in funding method, but it
does not take into account the changes to
the minimum funding requirements en-
acted in legislation after it was issued,
including the Pension Protection Act of
2006, Pub. L. 109-280, the Cooperative
and Small Employer Charity Pension
Flexibility Act, Pub. L. 113-97, and the
Multiemployer Pension Reform Act of
2014, which was enacted as part of the
Consolidated and Further Continuing Ap-
propriations Act, 2015, Pub. L. 113-235.

.04 Rev. Proc. 2017-4, 2017-01 I.R.B.
146, sets forth the current general proce-
dures of the IRS relating to the issuance of
rulings, determination letters, and opinion

175Sections 302, 303, 304 and 306 of ERISA contain parallel funding rules for defined benefit plans.

letters on employee plans and exempt or-
ganization matters (including user fees).
These general procedures are updated an-
nually. Sections 6.02(11) and (12) of Rev.
Proc. 2017-4 set forth the requirements
for designating an authorized representa-
tive.

.05 Rev. Proc. 2017-56, 2017-44
I.R.B. xx, provides automatic approval for
certain changes in funding method for
single-employer defined benefit plans for
calculations described under § 430, and
Rev. Proc. 2000-40, 2000-2 C.B. 357,
provides automatic approval for certain
changes in funding method for defined
benefit plans that are not subject to the
required minimum funding rules of § 430.

# SECTION 3. SCOPE OF THIS REVENUE PROCEDURE AND APPLICABLE DEFINITIONS

.01 This revenue procedure applies to
any defined benefit plan that is subject to
§ 412 of the Code or section 302 of
ERISA. Pursuant to § 412(d)(1) of the Code
and section 302(d)(1) of ERISA, any
change in funding method must be ap-
proved by the IRS. Section 433(c)(5)(B) of
the Code and section 306(c)(5)(B) of
ERISA also provide that a change of fund-
ing method for a CSEC plan must be ap-
proved by the IRS. Thus, this revenue pro-
cedure applies for purposes of all of those
sections. See sections 4 and 5 of this reve-
nue procedure. This revenue procedure also
provides for approval of the revocation of an
election relating to interest rates pursuant to
§ 430(h)(2)(D)(ii) or 430(h)(2)(E) of the
Code and section 303(h)(2)(D)(ii) or 303(h)
(2)(E) of ERISA. See section 6 of this rev-
enue procedure.

.02 A funding method is used for a plan
year if it is used to determine the mini-
mum required contribution for the plan
year as reflected in the Schedule SB
(Single-Employer Defined Benefit Plan
Actuarial Information) or the Schedule
MB (Multiemployer Defined Benefit Plan
and Certain Money Purchase Plan Actu-
arial Information), as applicable, that is
attached to the Form 5500, "Annual Re-
turn/Report of Employee Benefit Plan." A
plan's funding method includes not only

the overall actuarial cost method used by
the plan but also each specific method of
computation used in applying the overall
method. Any change in a plan's current
method of computing the minimum fund-
ing requirement under § 412 of the Code
is a change in funding method. This in-
cludes any change in the determination of
the value of plan assets or liabilities that is
not the result of changes in data or actu-
arial assumptions. A change in funding
method includes any changes in the selec-
tion of data elements that are used in the
valuation. Data elements are types of data,
such as compensation, dates of birth or
hire, or gender, used to value the plan
liabilities. For example, a change from
using assumed data to using actual data
for purposes of determining plan liabili-
ties (such as changing from assuming that
each male participant's spouse is three
years younger than the participant to using
the actual age of each male participant's
spouse) is a change in the selection of data
elements. However, if actual data gener-
ally was used for the prior plan year ex-
cept that assumed data was used to fill in
for some data that was missing or incom-
plete, then the use of actual data for the
current plan year (because there is no lon-
ger a need to fill in for missing or incom-
plete data) would not be a change in the
selection of data elements.

(a) The following are examples of
changes in funding method:176

Example 1 - The method of valuing liabilities is
unchanged, but the method of valuing assets is
changed from one method to another method.

Example 2 - The plan year is not changed, but
the valuation date for the plan is changed from the
date that is the first day of the plan year to the date
that is the last day of the plan year.

Example 3 - The valuation date for the plan has
been the date that is the first day of the plan year. The
plan year is changed, and the valuation date is
changed to the date that is the first day of the new
plan year.

Example 4 - The plan's enrolled actuary ceases
using Vendor A's software to determine the plan's
minimum funding requirement, and begins using
Vendor B's software, with the result that some com-
putations are not the same after the change in valu-
ation software.

Example 5 - The plan year is the calendar year
and the valuation date is January 1. For the prior plan
year, the data element used to project future com-
pensation was the actual annual compensation (as

reported on Form W-2, "Wage and Tax Statement"),
for the plan year preceding the valuation date. For
the current plan year, the data element used to proj-
ect future compensation is the monthly rate of pay as
of the valuation date.

Example 6 - The plan year is the first plan year
of a plan that is the result of a spin-off to which the
de minimis rule of § 1.414(1)-1(n)(2) does not apply
and the funding method is not the same as the
funding method used prior to the spin-off.

Example 7 - The plan year is the first plan year
following a merger of two or more plans and the
funding method is not the same as the funding
method used by all of the merging plans prior the
merger.

(b) The following are examples of
changes in funding method for plans with
respect to which § 430 does not apply
(such as multiemployer plans):

Example 1 - The actuarial cost method used to
determine the minimum funding requirement is
changed from the entry age normal method to the
unit credit method.

Example 2 - The method used to determine the
minimum funding requirement is changed from the
aggregate method under which the normal cost is
level as a percentage of compensation to the aggre-
gate method under which the normal cost is level as
a dollar amount.

Example 3 - The method for determining the
cost of ancillary benefits is changed from one
method to another method.

Example 1 - For the prior plan year, projected
static mortality tables were used for the plan and for
the current plan year, generational mortality tables
are used for the plan.

Example 2 - The plan is subject to the require-
ments of § 430, and the determination of the value
of plan assets uses averaging of fair market values
as provided in § 430(g)(3)(B). For the prior plan
year, the expected earnings were based on an
assumed earnings rate of seven percent. For the
current plan year, an assumed earnings rate of six
percent is used. (In both cases, the assumed earn-
ings rates are limited to the third segment rate
applicable under § 430(h)(2)(C)(iii).)

Example 3 - For the prior plan year, the com-
pensation used to project future compensation was
equal to the compensation for the plan year preced-
ing the valuation date increased by three percent. For
the current plan year, the compensation used to proj-
ect future compensation is equal to the compensation
for the plan year preceding the valuation date in-
creased by four percent.

(d) The following are examples of in-
terest rate elections (for which approval is
not required), as well as revocations of
interest rate elections for single-employer

176Rev. Proc. 2017-56 and Rev. Proc. 2000-40 provide automatic approval for certain of the changes in funding method illustrated in these examples.

177 Although a change in actuarial assumptions does not constitute a change in funding method, certain changes in actuarial assumptions may not be made without approval of the IRS pursuant
to § 430(h)(5) and § 433(c)(5)(C). See Rev. Proc. 2017-4, or its successor, for procedures on how to request approval for such a change in actuarial assumptions.

plans subject to the requirements of § 430
(for which approval is required and may
be requested pursuant to section 6 of this
revenue procedure), rather than changes in
funding method:

Example 1 - Plan liabilities are valued using the
corporate bond yield curve for the 2016 plan year,
the segment rates for the 2017 plan year, and the
corporate bond yield curve for the 2018 plan year.
The change from interest rates under the corporate
bond yield curve for the 2016 plan year to the
segment rates for the 2017 plan year is made through
a revocation of an election to use the corporate bond
yield curve, which requires the approval of the
IRS, in accordance with § 430(h)(2)(D)(ii) and
§ 1.430(h)(2)-1(e). The change from segment rates
to the corporate bond yield curve for the 2018 plan
year is an election to use the corporate bond yield
curve, which does not require the approval of the
IRS, in accordance with § 430(h)(2)(D)(ii) and
§ 1.430(h)(2)-1(e).

Example 2 - The applicable month used to
determine the segment rates is changed from the
fourth month preceding the valuation date to the first
month preceding the valuation date. This change is
made through a revocation of an election pursuant to
§ 430(h)(2)(E) and § 1.430(h)(2)-1(e) (which re-
quires the approval of the IRS) combined with a new
election under those provisions.

.03 Approval will be given to a change
in funding method only if the proposed
method is permitted under applicable
funding rules and the transition to the pro-
posed method is acceptable. In addition, a
change in funding method that has a sig-
nificant effect on a plan's minimum re-
quired contribution, maximum tax deduct-
ible contribution, operations under § 436
for the year of change, or status under
§ 432(b) (in the case of a multiemployer
plan) may be reviewed to assess the ap-
propriateness of the change in light of that
effect.

# SECTION 4. APPLICATION PROCEDURES

.01 A plan administrator, plan sponsor,
or the authorized representative of either,
that seeks to obtain approval for a change
in funding method must make a written
request for that approval that satisfies all
the requirements of Rev. Proc. 2017-4 (or
its successor). Attention is called to sec-
tions 6.02(10) through (14) of Rev. Proc.
2017-4 (or the corresponding portions of
its successor) concerning signatures, au-
thorized representatives (such as attorneys
and enrolled actuaries), a power of attor-
ney and declaration of representative, and
a penalties of perjury statement. However,
a statement of proposed deletions pursu-

ant to § 6110(c) is not required to be
furnished. All signatures must be accom-
panied by the typed name and title (if
applicable) of the signer. Refer to Appen-
dix A of this revenue procedure for a
checklist of the information that must be
included with the request for approval.
Any information described in this revenue
procedure that is unduly burdensome to
furnish need not be included, but the re-
quest for approval must include a state-
ment indicating why this material is not
being furnished.

.02 The request should generally be
made no later than 21/2 months following
the close of the plan year for which the
change is to be effective. Requests made
after 21/2 months following the close of the
plan year generally will not be considered
unless the request involves a plan merger.
In the case of a request for approval for a
change in funding method that involves a
plan merger, the request should be made
no later than 4 months before the Form
5500 filing deadline for the ongoing plan
for the plan year in which the merger took
place.

.03 The information specified in this
section 4.03 must accompany the request:

(1) The employer identification num-
ber, the plan name and number, and the
name, address, and phone number of the
plan administrator or plan sponsor.

(2) A statement of the plan year first
affected by the proposed change.

(3) A copy of the actuarial valuation
report for the plan year preceding the year
of change, and, if available, a draft of the
actuarial valuation report for the year of
change.

(4) A copy of the most recently filed
Schedule SB or Schedule MB, as applica-
ble, of Form 5500 including attachments
thereto.

(5) A description of the current funding
method, the proposed funding method,
and the transition between the two fund-
ing methods. For this purpose, a funding
method may be described by reference to
a funding method contained in Rev. Proc.
2000-40, Rev. Proc. 2017-56, or other
published guidance. The description of a
funding method should include sufficient
details so that two independent actuaries
applying the described method would ar-
rive at the same valuation results using the
same assumptions for a given plan.

If applicable, the description must in-
dicate how the proposed method applies
differently in the first year of the change
than it applies in the subsequent years. For
example, a proposed asset valuation
method may start at market value in the
year of change and phase in gains and
losses in subsequent years. Additionally,
if either of those asset valuation methods
is not described in Rev. Proc. 2000-40 or
Rev. Proc. 2017-56 (as applicable), a nu-
merical illustration demonstrating the cal-
culation of the actuarial value of assets
under the current method and the pro-
posed method must be included.

(6) A brief statement of the reason for
the proposed change and a statement why
automatic approval under Rev. Proc.
2000-40 or Rev. Proc. 2017-56 (as ap-
plicable) may not be used to make the
change.

(7) A statement of whether a change in
funding method was made (or whether
approval for a change of funding method
was requested, but the change was not
made) for any of the 5 plan years preced-
ing the year of change. If the funding
method was changed, or a change was
requested, in any of the 5 preceding plan
years the following information must be
provided:

(A) If the change in funding method
was automatically approved,

(i) the plan year of the change

(ii) the details of the change in fund-
ing method, and

(iii) the specific provision of the
statute, regulation, revenue procedure, or
other authority providing for the auto-
matic approval.

(B) If approval for the change in fund-
ing method was requested and granted, a
copy of the approval letter.

(D) If approval for a change in funding
method was requested and the request
withdrawn, a summary of the request and
the reason for the withdrawal.

(8) A statement of whether a waiver of
the minimum funding standard was re-
quested for any of the 5 plan years pre-
ceding the year of change. Also, provide a
statement of whether a request for a
waiver is currently pending or is expected
to be submitted in the near future. If a

waiver was requested in any of the pre-
ceding 5 plan years, the following infor-
mation must be provided:

(A) If the waiver was approved, a copy
of the letter granting the waiver.

(B) If the waiver was denied, a copy of
the letter denying the waiver.

(9) A statement of whether an exten-
sion of any amortization period is cur-
rently in effect or whether an amortization
extension was requested for any of the 5
plan years preceding the year of change.
Also, provide a statement of whether a
request for an amortization extension is
currently pending or is expected to be
submitted in the near future. If an amor-
tization extension was requested in any of
the preceding 5 plan years, the following
information must be provided:

(A) If the amortization extension was
approved, a copy of the approval
letter.

(B) If the amortization extension was
denied, a copy of the denial letter.

(10) A statement of other changes be-
ing made for the year of the proposed
change that have an impact on the funding
requirements, such as a plan amendment
or a change in actuarial assumptions.

(11) The technical information speci-
fied in sections 4.03(12) through (14) of
this revenue procedure, as applicable, de-
pending on whether the plan is a single-
employer plan subject to § 430, a single-
employer plan not subject to § 430, or a
multiemployer plan.

(12) Technical information for single-
employer plans subject to § 430:

(A) A worksheet prepared by the en-
rolled actuary for the plan containing
the information described in sections
4.03(12)(B) through (D) of this revenue
procedure, determined as of the valua-
tion date in the year of the change in
funding method. That information must
be shown both (i) without regard to any
change in plan provisions, actuarial as-
sumptions, or funding methods that first
apply in the year of change, and (ii)
taking into account the change in fund-

ing method and other changes that first
apply in the year of change. In addition,
if there are changes in actuarial assump-
tions or plan provisions, then the work-
sheet must separately identify the im-
pact of the change in funding method by
including the information before and af-
ter the change in funding method, with
both sets of information based on a con-
sistent set of actuarial assumptions and
plan provisions (which may either re-
flect the changes in the actuarial as-
sumptions and plan provisions or not
reflect those changes).

(B) If there are any shortfall or waiver
amortization bases, for each base:

(i) The type of base (shortfall or
waiver);

(ii) The valuation date as of which the
base was established;

(iii) The amortization installment;

(iv) The number of years remaining in
the amortization period; and

(v) The present value of any remaining
installments (including the installment for
the current plan year).

(C) The calculation of the § 430 mini-
mum required contribution for the year of
change (determined without regard to the
use of the prefunding balance or funding
standard carryover balance). This infor-
mation must include the funding target,
the fair market value of assets, the actu-
arial value of assets, target normal cost,
and amortization installments.

(D) The calculation of the § 436 ad-
justed funding target attainment percent-
age (AFTAP) for the year of change.

(13) Technical information for single-
employer plans not subject to § 430:

(A) A worksheet prepared by the en-
rolled actuary for the plan containing the
information described in sections 4.03(13)
(B) through (D) of this revenue procedure,
determined as of the valuation date in the
year of the change in funding method.
That information must be shown both (i)
without regard to any change in plan pro-
visions, actuarial assumptions, or funding
methods that first apply in the year
of change, and (ii) taking into account
the change in funding method and other
changes that first apply in the year of
change. In addition, if there are changes in
actuarial assumptions or plan provisions,
then the worksheet must separately iden-
tify the impact of the change in funding

method by including the information be-
fore and after the change in funding
method, with both sets of information
based on a consistent set of actuarial as-
sumptions and plan provisions (which
may either reflect the changes in the actu-
arial assumptions and plan provisions or
not reflect those changes).

(B)(i) A list of the amortization bases
maintained (including, for each base, the
type of base, outstanding balance, amorti-
zation amount, and remaining amortiza-
tion period). The calculation of the new
base or bases must also be shown. If bases
are combined or offset in the year of
change, in addition to the resulting single
base, show information for each base.

(ii) The unfunded liability of the plan.
For immediate gain methods, show the
actuarial value of assets prior to any ad-
justments (such as adjustments for credit
balances or outstanding balances of amor-
tization bases) but excluding contributions
designated for the current plan year.

(iii) The basic funding formula (or
equation of balance). If the equation of
balance is not satisfied, explain the effect
on the operation of the funding method in
the year of change.

(C) The calculation of the minimum
required contribution for the year of
change (determined without reduction for
the credit balance in the funding standard
account). This information must include
the accrued liability (if applicable), the
fair market value of assets, the actuarial
value of assets, the normal cost, and the
amortization charges and credits.

(D) The calculation of the full funding
limitation under § 412 (prior to amend-
ment by the Pension Protection Act of
2006 (PPA '06), Public Law 109-280
(120 Stat. 780 (2006)), or § 433(c)(7) (as
applicable), for the year of change.

(14) Technical information for mul-
tiemployer plans:

(A) A worksheet prepared by the en-
rolled actuary for the plan containing the
information described in sections 4.03(14)
(B) through (F), determined as of the valu-
ation date in the year of the change in fund-
ing method. That information must be
shown both (i) without regard to any change
in plan provisions, actuarial assumptions, or
funding methods that first apply in the year
of change, and (ii) taking into account the
change in funding method and other

changes that first apply in the year of
change. In addition, if there are changes in
actuarial assumptions or plan provisions,
then the worksheet must separately identify
the impact of the change in funding method
by including the information before and af-
ter the change in funding method, with both
sets of information based on a consistent set
of actuarial assumptions and plan provisions
(which may either reflect the changes in the
actuarial assumptions and plan provisions or
not reflect those changes).

(iii) The basic funding formula (or
equation of balance). If the equation of
balance is not satisfied, explain the effect
on the operation of the funding method in
the year of change.

(C) The calculation of the § 431 mini-
mum required contribution for the year of
change (determined without reduction for
the credit balance in the funding standard
account). This information must include
the accrued liability (if applicable), the
fair market value of assets, the actuarial
value of assets, the normal cost, and the
amortization charges and credits.

(D) The calculation of the § 431 full
funding limitation for the year of change.

(E) The following additional informa-
tion must be provided with respect to a
multiemployer plan if the plan is in en-
dangered status or critical status (includ-
ing critical and declining status) under
§ 432 for the year of change:

(i) Projections, for 10 plan years (or
over the remainder of the applicable fund-
ing improvement period or rehabilitation
period if longer) of (a) any funding stan-
dard account credit balance or accumu-
lated funding deficiency, (b) actuarial
value of assets and market value of assets,

(ii) A copy of the most recent certifi-
cation under § 432(b)(3) of the plan's
status, and a statement of whether or not
the plan sponsor has made an election to
be treated as in critical status under
§ 432(b)(4).

(iii) A copy of any funding improve-
ment plan or rehabilitation plan to which
the plan is currently subject in accordance
with § 432, or to which the plan has been
subject at any time within the 5 years
preceding the year of change, and all up-
dates to the funding improvement plan or
rehabilitation plan.

(F) If, for the year of change, the plan
is in critical and declining status under
§ 432 and an application for approval of a
proposed suspension of benefits under
§ 432(e)(9) has been either approved by
or is pending with the Secretary of the
Treasury, a copy of the application must
be provided. In lieu of including a copy
of the application with this request, ref-
erence may be made to the Department
of Treasury website (www.treasury.gov)
if the benefit suspension application has
been posted on that website when the re-
quest for the change in funding method is
filed.

.04 In the case of a change in funding
method involving a plan merger, the in-
formation described in section 4.03 of this
revenue procedure must be provided for
all merging plans as of the date of the
merger. In addition, the technical informa-
tion described in the sections 4.03(12)
through (14) of this revenue procedure, as
applicable depending on the plan, for the
ongoing plan must be provided taking into
account the merger.

.05 In the case of a change in funding
method involving a spin-off, the informa-
tion described in section 4.03 of this rev-
enue procedure must be provided for the
original plan as of the date of the spin-off.
In addition, the technical information de-
scribed in the sections 4.03(12) through
(14) of this revenue procedure, as appli-
cable depending on the plan, for the orig-
inal plan and all spun-off plans must be
provided taking into account the spin-off.
With respect to a plan that, following the
spin-off, is not maintained by a member of
the controlled group of the plan sponsor

requesting the approval for the change in
funding method, this information may be
provided using the assumption that there
are no changes following the spin-off.

.06 The IRS may request additional
information as needed. For example, the
IRS may request detailed valuation results
for test lives that illustrate the effect of the
change. See section 27 of Rev. Proc.
2017-4 (or the corresponding portion of
its successor) for timing to respond to a
request for additional information.

.07 If a conference has been requested,
a conference will be granted only in ac-
cordance with section 28 of Rev. Proc.
2017-4 (or the corresponding portion of
its successor). If the IRS proposes an ad-
verse holding, the taxpayer will be offered
a conference in accordance with section
28 of Rev. Proc. 2017-4 (or the corre-
sponding portion of its successor).

.08 If the request for the change in
funding method is approved, the instruc-
tions to Schedule SB or Schedule MB, as
applicable, of Form 5500 should be fol-
lowed in reporting the change.

# SECTION 5. CLASS RULINGS

.01 In a case in which approval is
sought for a change in funding method for
a group of plans, a "class ruling" provid-
ing approval of that change for all plans
within that class may be requested. A
class consists of a group of at least 40
plans (1) that receive actuarial services
from the same insurance company, con-
sulting firm, or business organization, or
whose actuarial valuations are produced
using the software of the same vendor,
and (2) for which an identical change in
funding method is proposed. A class rul-
ing will provide approval for all plans in
the class.

.02 An enrolled actuary may request a
class ruling on behalf of an insurance
company, consulting firm, or business
organization that provides actuarial ser-
vices to the plans within the class. An
enrolled actuary may also request a class
ruling on behalf of a software vendor,
and the ruling would apply to all plans
for which the actuarial valuations are
produced using that vendor's software
(both before and after the change in
funding method).

.03 The enrolled actuary making the
request must state the period for which the

class ruling is proposed to be effective,
and a plan covered by the class ruling is
permitted to use the approval for a plan
year that begins within the stated period.
The stated period may not begin prior to
12 months before the month in which the
request is made. Generally, the period
may not exceed 36 months.

.04 In lieu of the plan-specific informa-
tion otherwise required under section 4 of
this revenue procedure, the request for a
class ruling must contain the following
information:

(1) The name and enrollment number
of the actuary making the request.

(2) The name and address of the insur-
ance company, consulting firm, business
organization, or software vendor de-
scribed in section 5.02 of this revenue
procedure.

(3) A statement indicating that the ap-
plicant believes that the class ruling will
be applied to at least 40 plans and an
estimate of the number of plans that are
expected to change the funding method in
accordance with the class ruling.

(4) The information described in sec-
tions 4.03(5), 4.03(6), and sections
4.03(12) through (14), as applicable de-
pending on the plans within the class, of
this revenue procedure, except that the
numerical results requested in sections
4.03(12) through (14) of this revenue pro-
cedure should be illustrative examples
rather than actual numerical results.

.05 If the change in funding method is
approved, a class ruling will be issued to
the insurance company, consulting firm,
business organization, or software ven-
dor on whose behalf the ruling is re-
quested. The change in funding method
will apply to a plan within the class if
the plan sponsor or plan administrator
consents to the change. In such a case,
the instructions to Schedule SB or
Schedule MB, as applicable, and Sched-
ule R (Retirement Plan Information) of
Form 5500 should be followed in report-
ing the change for the plan. However,
the plan administrator or plan sponsor of
any plan need not agree to the change in
funding method, and, if neither the plan
administrator nor plan sponsor of a plan
agree to the change in funding method,
then the change in funding method ap-
proved in the class ruling will not be
applied for the plan.

.06 If a request for a class ruling is
approved, at least 30 of the plans covered
by the ruling must make the approved
change in funding method in order for the
class ruling to become effective. If the
change in funding method is not made for
at least 30 of the plans covered by the
ruling, then the class ruling is not effective
with respect to any plan, and the change
may not be made for any plan unless the
change is approved by the IRS separately
for that plan.

.07 The IRS may, in its discretion, limit
the period for which a class ruling will be
effective, impose conditions on the use of
the class ruling, or decline to issue a class
ruling.

# SECTION 6. REQUESTING APPROVAL FOR REVOCATION OF AN INTEREST RATE ELECTION

.01 A plan sponsor (or the authorized
representative of the plan sponsor) of a
plan subject to § 430 that is requesting
approval for a revocation of an interest
rate election must make a written request
for that approval that satisfies all the re-
quirements of Rev. Proc. 2017-4 (or its
successor). Attention is called to sections
6.02(10) through (14) of Rev. Proc.
2017-4 (or the corresponding portions of
its successor) concerning signatures, au-
thorized representatives (such as attorneys
and enrolled actuaries), a power of attor-
ney and declaration of representative, and
a penalties of perjury statement. However,
a statement of proposed deletions pursu-
ant to § 6110(c) is not required to be
furnished. All signatures must be accom-
panied by the typed name and title (if
applicable) of the signer. Refer to Appen-
dix A of this revenue procedure for a
checklist of the information that must be
included with the request for approval.
However, items 8 and 11 of the checklist
are not applicable to a request for ap-
proval of a revocation of an interest rate
election. Any information requested that
is unduly burdensome to furnish need not
be included, but the request for approval
must include a statement indicating why
this material is not being furnished.

.02 The rules of sections 4.02, 4.03,
and 4.06 through 4.08 of this revenue pro-
cedure apply to a request to revoke an
interest rate election. For purposes of

those rules, the revocation of an interest
rate election is treated as change in fund-
ing method.

# SECTION 7. EFFECT ON OTHER DOCUMENTS

01 Rev. Proc. 2000-41, 2000-2 C.B.
371, is superseded.

.02 Rev. Proc. 2017-4 is modified by
substituting references to this revenue
procedure for references to Rev. Proc.
2000-41.

# SECTION 8. EFFECTIVE DATE

This revenue procedure is effective for
requests for a change in funding method
submitted on or after January 1, 2018.
However, taxpayers may elect to apply it
for earlier requests.

# SECTION 9. PAPERWORK REDUCTION ACT

The collection of information con-
tained in sections 4 and 5 of this revenue
procedure has been reviewed and ap-
proved by the Office of Management and
Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. § 3507) under
control number 1545-1704. The collection
of information contained in section 6 of
this revenue procedure has been reviewed
and approved by the Office of Manage-
ment and Budget in accordance with the
Paperwork Reduction Act under control
number 1545-1520.

An agency may not conduct or spon-
sor, and a person is not required to re-
spond to, a collection of information un-
less the collection of information displays
a valid control number.

The collection of information in this
revenue procedure is in sections 4, 5, and
6. This information is required to evaluate
and process the request for approval of a
change in funding method or the revoca-
tion of an interest rate election. The col-
lection of information is required to obtain
approval for a change in funding method
or the revocation of an interest rate of
election. The likely respondents are busi-
nesses or other for-profit institutions, non-
profit institutions, and small businesses
and organizations.

The estimated total annual reporting
burden is 126 hours.

The estimated annual burden per re-
spondent varies from 12 to 24 hours, de-
pending on individual circumstances, with
an estimated average burden of 18 hours.
The estimated number of respondents
and/or recordkeepers is 7.

The estimated annual frequency of re-
sponses is 1.

Books or records relating to a collec-
tion of information must be retained as

long as their contents may become mate-
rial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by 26 U.S.C. § 6103.

# SECTION 10. DRAFTING INFORMATION

The principal author of this revenue
procedure is Thomas C. Morgan, Office of

the Associate Chief Counsel (Tax Exempt
and Government Entities). For further in-
formation regarding this revenue proce-
dure, contact Mr. Morgan at (202) 317-
6700 or Carolyn E. Zimmerman of the
Employee Plans, Tax Exempt and Gov-
ernment Entities Division at (412) 404-
9755 (not toll-free numbers).

# Appendix A

## CHANGE IN FUNDING METHOD REQUEST CHECKLIST

### Instructions

The IRS will be able to respond more quickly to your change in funding method request if it is carefully prepared and complete.
To ensure your request is complete, use this checklist. Answer each question in the checklist by inserting Y for yes, N for no, or N/A
for not applicable, as appropriate, in the blank next to the item. Sign and date the checklist (as taxpayer or authorized
representative) and place it on top of your request.

You must submit a completed copy of this checklist with your request. If a completed checklist is not submitted with your request,
substantive consideration of your submission will be deferred until a completed checklist is received. However, this checklist need
not be submitted if the request involves a class ruling described in section 5 of this revenue procedure, and certain items on the
checklist are not applicable to a request for approval of a revocation of an interest rate election under section 6 of this revenue
procedure, as specified therein.

If you want to designate an authorized representative or a third party contact, have you included a properly executed Form 2848 (Power of Attorney and Declaration of Representative) or Third Party Contact Authorization Form?

Have you satisfied all the requirements of Rev. Proc. 2017-4 or its successor? (See sections 2.05, 4.01 and 6.01 of this revenue procedure)

Have you included the employer identification number, the plan name and number, and the name, address, and phone number of the plan administrator or plan sponsor? (See section 4.03(1) of this revenue procedure)

Have you included a statement of the plan year first affected by the proposed change? (See section 4.03(2) of this revenue procedure)

Have you included a copy of the actuarial valuation report for the plan year preceding the year of change, and, if available, a draft of the actuarial valuation report for the year of change? (See section 4.03(3) of this revenue procedure)

Have you included a copy of the last Schedule SB or Schedule MB, as applicable, of Form 5500, including attachments thereto for all plans for which information is requested? (See section 4.03(4) of this revenue procedure)

Have you included a complete description of the current and proposed funding methods, including asset valuation methods? (See section 4.03(5) of this revenue procedure)

Have you included a brief statement of the reason for the proposed change and a statement why au- tomatic approval under Rev. Proc. 2000-40 or Rev. Proc. 2017-56, as applicable, cannot be used to make the change? (See section 4.03(6) of this revenue procedure)

Have you included a statement of whether a change in funding method was made or requested for any of the 5 plan years preceding the year of change? (See section 4.03(7) of this revenue procedure)

10.

Have you included a statement of whether a waiver of the minimum funding standard was requested for any of the 5 plan years preceding the year of change? (See section 4.03(8) of this revenue proce- dure)

11.

Have you included a statement of whether an extension of any amortization period is currently in effect or whether an amortization extension was requested for any of the 5 plan years preceding the year of change? (See section 4.03(9) of this revenue procedure)

12\.
Have you included a statement of other changes being made for the year of change, such as a change
in plan year or change in actuarial assumptions? (See section 4.03(10) of this revenue procedure)

13\.
Have you included a worksheet prepared by the enrolled actuary for the plan containing the required
information both with and without regard to changes and separately identifying the effect of the
change in funding method if there are other changes that have an impact on the funding requirement
being made for the plan year? (For a single-employer plan subject to § 430, see section 4.03(12) of
this revenue procedure. For a single-employer plan not subject to § 430, see section 4.03(13) of this
revenue procedure. For a multiemployer plan, see section 4.03(14) of this revenue procedure.)

14\.
If this is a multiemployer plan, have you included the projections and certification for multiemployer
plans in endangered status or critical status (including critical and declining status) under § 432 for
the year of change? (See section 4.03(14)(E) of this revenue procedure)

15\.
If this is a multiemployer plan, have you included the information for multiemployer plans with ap-
plications pending or approved for benefit suspensions? (See section 4.03(14)(F) of this revenue pro-
cedure)

16\.
In the case of a change in funding method involving a merger, have you included information for
each of the merged plans and for the ongoing plans? (See section 4.04 of this revenue procedure)

17\.
In the case of a change in funding method involving a spin-off, have you included information for
the original plan and each of the spun-off plans? (See section 4.05 of this revenue procedure)

Signature

Title or Authority

Typed or printed name of person signing checklist

Date

# Definition of Terms

Revenue rulings and revenue procedures
(hereinafter referred to as "rulings") that
have an effect on previous rulings use the
following defined terms to describe the
effect:

Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).

Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.

Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.

Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A

and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).

Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.

Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.

Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-

stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.

Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.

Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

# Abbreviations

The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.

A-Individual.

Acq .- Acquiescence.

B-Individual.

BE-Beneficiary.

F.R .- Federal Register.

FUTA-Federal Unemployment Tax Act.

FX-Foreign corporation.

G.C.M .- Chief Counsel's Memorandum.

GE-Grantee.

TFE-Transferee.

CFR-Code of Federal Regulations.

GP-General Partner.

TFR-Transferor.

T.I.R .- Technical Information Release.

TP-Taxpayer.

Ct.D .- Court Decision.

I.R.B .- Internal Revenue Bulletin.

TR-Trust.

CY-County.

LE-Lessee.

TT-Trustee.

D-Decedent.

LP-Limited Partner.

U.S.C .- United States Code.

DC-Dummy Corporation.

LR-Lessor.

X-Corporation.

DE-Donee.

Del. Order-Delegation Order.

Nonacq .- Nonacquiescence.

O Organization.

DR-Donor.

P-Parent Corporation.

PHC-Personal Holding Company.

PO Possession of the U.S.

PR-Partner.

PRS-Partnership.

PTE-Prohibited Transaction Exemption.
Pub. L .- Public Law.

REIT-Real Estate Investment Trust.

Rev. Proc .- Revenue Procedure.

Rev. Rul .- Revenue Ruling.

S Subsidiary.

S.P.R .- Statement of Procedural Rules.

Stat .- Statutes at Large.

BK-Bank.

B.T.A .- Board of Tax Appeals.

T.C .- Tax Court.

C-Individual.

T.D .- Treasury Decision.

C.B .- Cumulative Bulletin.

CI-City.

GR-Grantor.

COOP-Cooperative.

IC-Insurance Company.

M-Minor.

Y-Corporation.

Z-Corporation.

DISC-Domestic International Sales Corporation.

E-Estate.

EE-Employee.

E.O .- Executive Order.

ER-Employer.

ERISA-Employee Retirement Income Security Act.
EX-Executor.

F-Fiduciary.

FC-Foreign Country.

FICA-Federal Insurance Contributions Act.

FISC-Foreign International Sales Company.

FPH-Foreign Personal Holding Company.

T-Target Corporation.

## Numerical Finding List1

Bulletin 2017-27 through 2017-44

### Action on Decision:

2017-5, 2017-27 I.R.B. 1
2017-6, 2017-33 I.R.B. 194
2017-7, 2017-42 I.R.B. 311

### Announcements:

2017-05, 2017-27 I.R.B. 5
2017-08, 2017-28 I.R.B. 9
2017-09, 2017-35 I.R.B. 219
2017-10, 2017-33 I.R.B. 210
2017-11, 2017-39 I.R.B. 255
2017-12, 2017-38 I.R.B. 238
2017-13, 2017-40 I.R.B. 271

### Notices:

2017-36, 2017-33 I.R.B. 208
2017-37, 2017-29 I.R.B. 89
2017-38, 2017-30 I.R.B. 147
2017-39, 2017-31 I.R.B. 150
2017-40, 2017-32 I.R.B. 190
2017-41, 2017-34 I.R.B. 211
2017-42, 2017-34 I.R.B. 212
2017-43, 2017-36 I.R.B. 224
2017-44, 2017-36 I.R.B. 226
2017-45, 2017-38 I.R.B. 232
2017-46, 2017-41 I.R.B. 275
2017-47, 2017-38 I.R.B. 232
2017-48, 2017-39 I.R.B. 254
2017-49, 2017-40 I.R.B. 258
2017-50, 2017-41 I.R.B. 280
2017-51, 2017-40 I.R.B. 260
2017-52, 2017-40 I.R.B. 262
2017-53, 2017-42 I.R.B. 318
2017-54, 2017-42 I.R.B. 321
2017-55, 2017-42 I.R.B. 324
2017-56, 2017-43 I.R.B. 365
2017-57, 2017-42 I.R.B. 324
2017-58, 2017-42 I.R.B. 326
2017-60, 2017-43 I.R.B. 365
2017-61, 2017-43 I.R.B. 371
2017-62, 2017-44 I.R.B. 460
2017-63, 2017-44 I.R.B. 460

### Proposed Regulations:

REG-128841-07, 2017-42 I.R.B. 327
REG-139633-08, 2017-31 I.R.B. 175
REG-128483-15, 2017-32 I.R.B. 191

REG-136118-15, 2017-28 I.R.B. 9
REG-105004-16, 2017-41 I.R.B. 295
REG-125374-16, 2017-41 I.R.B. 300
REG-115615-17, 2017-44 I.R.B. 463
REG-129631-17, 2017-44 I.R.B. 464

### Revenue Procedures:

2017-41, 2017-29 I.R.B. 92
2017-42, 2017-29 I.R.B. 124
2017-43, 2017-31 I.R.B. 153
2017-44, 2017-35 I.R.B. 216
2017-45, 2017-35 I.R.B. 216
2017-46, 2017-43 I.R.B. 372
2017-47, 2017-38 I.R.B. 233
2017-48, 2017-36 I.R.B. 229
2017-50, 2017-37 I.R.B. 230
2017-52, 2017-41 I.R.B. 283
2017-53, 2017-40 I.R.B. 263
2017-54, 2017-42 I.R.B. 336
2017-55, 2017-43 I.R.B. 373
2017-56, 2017-44 I.R.B. 465
2017-57, 2017-44 I.R.B. 474

### Revenue Rulings:

2017-14, 2017-27 I.R.B. 2
2017-15, 2017-32 I.R.B. 176
2017-16, 2017-35 I.R.B. 215
2017-17, 2017-36 I.R.B. 222
2017-18, 2017-39 I.R.B. 239
2017-19, 2017-40 I.R.B. 257
2017-20, 2017-41 I.R.B. 273

### Treasury Decisions:

9819, 2017-29 I.R.B. 85
9820, 2017-32 I.R.B. 178

9821, 2017-32 I.R.B. 181
9822, 2017-33 I.R.B. 195
9823, 2017-33 I.R.B. 206
9824, 2017-42 I.R.B. 312
9827, 2017-44 I.R.B. 382
9828, 2017-44 I.R.B. 431

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017-01 through 2017-26 is in Internal Revenue Bulletin
2017-26, dated June 27, 2017.

### Finding List of Current Actions on Previously Published Items1

Bulletin 2017-27 through 2017-44

Notices:

2015-77
Amplified by
Notice 2017-40, 2017-32 I.R.B. 190

2017-10
Modified by
Notice 2017-58, 2017-42 I.R.B. 326
2017-29
Modified by
Notice 2017-58, 2017-42 I.R.B. 326

#### Revenue Procedures:

2016-27
Modified by
Rev. Proc. 2017-43, 2017-31 I.R.B. 153

2016-27
Superseded by
Rev. Proc. 2017-43, 2017-31 I.R.B. 153

2016-48
Superseded by
Rev. Proc. 2017-48, 2017-36 I.R.B. 232

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