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Contraception rule could lead to $100 fines, Hill report says

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It may not take federal action to enforce the mandate, the CRS memo says. | Jay Westcott/POLITICO

By J. LESTER FEDER | 2/28/12 4:00 PM EST

So what, exactly, is the “or else” in the Obama administration’s contraception coverage mandate?

House Republicans asked the Congressional Research Service to look into it, and now they’re blasting out the answer they got. According to the research service, insurers and employers that do not comply with the contraception coverage rule could face federal fines of $100 per day per employee.

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But it may not take federal action to enforce the mandate, according to the CRS memo released Tuesday by the House Energy and Commerce Committee. Individual beneficiaries may also be able to sue their health plans if they do not fulfill the requirement that all contraceptives be fully covered.

“If a group health plan or health insurance issuer failed to provide contraceptive services pursuant to guidelines authorized by ACA, it seems possible ... that a plan participant could be able to bring a claim for that benefit,” the memo states.

Even without lawsuits, though, the possibility of big federal fines gave the Energy and Commerce Committee Republicans a new talking point in the political war over the contraception rule.

“Implementing a federal mandate that violates the conscience of an individual or organization, regardless of their religious affiliation or organizational purpose, is in direct violation with the First Amendment,” the committee said in a release announcing the report. “Imposing a fine on these individuals pours salt in the wound.”

If the federal government were to take action against noncompliant employers or insurers, the memo details how enforcement powers are divided between the Department of Labor, the IRS and HHS.

The Department of Labor has jurisdiction over secular employers, so it could take action against a business owner who tried to deny contraception coverage to his employees. But the IRS has jurisdiction over what are known as “church plans” that also cover employers like religious charities and universities.

According to the report, the IRS is empowered to levy a tax penalty on noncompliant religious employers of $100 per day for each employee in their health plan.

The House Energy and Commerce Committee said that could add up quickly. If a charity or hospital with 100 employees “chooses to exercise its religious rights instead of complying with the Obamacare mandate, it could be subject to a $3.65 million annual fine,” the committee said in its release.

HHS has the authority to take action against insurers who do not comply. This power may be more important now that the Obama administration has shifted the responsibility to insurers for providing free contraceptive coverage to employees of religiously affiliated institutions.

HHS also has the power to fine noncompliant insurers $100 per day per employee.

This article first appeared on POLITICO Pro at 3:53 p.m. on February 28, 2012.

Read more: http://www.politico.com/news/stories/0212/73399.html#ixzz1nonZCUjL