Employers to decide if OTC birth control will be covered at no cost 

Last week, the U.S. Food and Drug Administration (FDA) approved Opill, the first daily oral contraceptive to be sold over-the-counter (OTC) without a prescription. The U.S. joins over 100 other countries where birth control pills are available to consumers OTC, including the United Kingdom, Russia, China, India, and nearly all of Latin America. Perrigo, the pill's manufacturer, announced that Opill—a progestin-only pill—will be available online and in stores across the U.S. for individuals of all ages in early 2024. Before then, employers may want to determine how, and if, health plan coverage of OTC birth control pills fits into their reproductive health and family planning strategies.   

Today, most individuals who receive medical coverage through an employer-sponsored health plan can get prescription birth control with no out-of-pocket costs. This is because the Affordable Care Act (ACA) requires non-grandfathered group health plans (with some exceptions) to cover without cost sharing at least one form of female-controlled FDA-approved contraception in each identified category, including progestin-only oral contraceptives. A plan doesn’t have to cover every FDA-approved contraception in each category, and, the no-cost coverage requirement does not extend to Opill or other OTC contraception purchased without a prescription. 

Plan sponsors will have to decide if Opill sold OTC will be covered at no cost to plan participants without a prescription. (Insured plans in some states are already required to cover some OTC birth control without a prescription.) Plans subject to the ACA preventive care mandate should already be covering at no cost at least one progestin-only birth control pill. Opill will be available in packages consisting of a 28-day supply. Pricing hasn’t yet been released. 

Unless required by federal law, self-insured employer-sponsored plans typically don’t provide coverage for OTC drugs or products. Plan participants can use health savings accounts, health flexible spending accounts, and certain health reimbursement arrangements to be reimbursed for nonprescription OTC purchases. Depending on the pricing, this process can present both financial (initial out-of-pocket costs) and procedural barriers (e.g., claim submission and substantiation requirements for reimbursement) for individuals looking to purchase OTC birth control pills. Employer plan sponsors may want to look for ways to align nonprescription OTC birth control coverage with prescription contraceptive coverage under the medical (or pharmacy) plan, and educate plan participants on how to best use the plan benefits.  

The OTC birth control pill may be most impactful for plan participants without an established patient-provider relationship, or those without ready access to transportation, time-off or childcare to attend a doctor’s visit for a prescription and/or the pharmacy for the medication. It could also ease access for plan participants living in states where pharmacists can refuse to dispense contraceptives based on religious or moral objections. The ability to obtain oral contraceptives without a prescription may also reduce unintended pregnancies and the resulting adverse maternal and infant health outcomes, as well as associated health plan costs.

The Biden administration continues to focus on protecting and expanding access to reproductive healthcare, including contraceptives. This focus includes enforcement of the ACA contraceptive coverage requirement – part of the preventive care mandate. In addition, just last fall, Congress signaled its disapproval of persistent barriers like cost-sharing requirements, coverage exclusions, exceptions process and outcomes, in employer-sponsored plans to no-cost contraceptive coverage despite the federal requirements.  

Over the last year, the President has issued three executive orders requiring the Secretaries of the Treasury, Labor and Health and Human Services (HHS) to protect and expand access to reproductive healthcare services, and to take action to ensure comprehensive coverage of no-cost contraceptives, including increased access to affordable OTC birth control. The agencies, for their part, have issued additional guidance addressing required health plan coverage of FDA-approved contraceptive products and a letter to noncompliant plan sponsors and issuers warning them of future enforcement action. In addition, HHS published a report identifying “safeguarding access to birth control” as one of its six core priorities in expanding and protecting access to reproductive healthcare. Notably, the HHS Office for Civil Rights announced steps taken by major national pharmacy retailers to resolve consumer complaints about delayed or denied access to contraceptives, among other concerns. 

Group health plan coverage of the OTC birth control pill at low or no cost presents another opportunity for employers to advance women’s health initiatives (in our Mercer survey 46% of employer respondents with 500 or more employees said they will offer at least one specialized reproductive benefit). Employer group health plan sponsors may want to begin conversations with their carrier or third-party administrator and pharmacy benefit manager about coverage of OTC birth control pills in 2024. Employers should be prepared to answer questions about coverage from plan participants.  

In addition, employers should review current and future plan coverage of contraceptives – including the plan’s exceptions process – with an eye towards ACA compliance in light of agency guidance and focus on enforcement. More compliance guidance may be forthcoming in response to the President’s recent Executive Order to Strengthen Access to Affordable, High-Quality Contraception and Family Planning Services.