ACA Contraceptive Coverage

At A Glance

Under the ACA, an HSA, health FSA, or HRA can reimburse an individual for the cost of over-the-counter contraception,

ACA Policy on Contraceptive Coverage

Following President Biden’s Executive Order on ensuring access to reproductive health care, the U.S. Department of Health and Human Services, alongside the Departments of Labor and of the Treasury, issued guidance regarding birth control coverage under the Affordable Care Act (ACA). Under the ACA, most private health plans are required to provide birth control and family planning counseling at no additional cost.

The ACA guarantees coverage of women’s preventive services, including free birth control and contraceptive counseling, for all individuals and covered dependents with reproductive capacity. This includes, but is not limited to:

• Hormonal methods, like birth control pills and vaginal rings
• Implanted devices, like intrauterine devices
• Emergency contraception
• Barrier methods, like diaphragms and sponges
• Patient education and counseling
• Sterilization procedures
• Any additional contraceptives approved, granted, or cleared by the FDA

An HSA, health FSA, or HRA can reimburse an individual for the cost (or portion of the cost) incurred for over-the-counter contraception to the extent that cost is not paid or reimbursed by another plan or coverage. Expenses incurred for contraception paid or reimbursed by a plan or issuer are not qualified medical expenses for purposes of an HSA.

If the entire cost of contraception is not paid or reimbursed by the plan or issuer, qualified medical expenses include the portion of the cost not paid or reimbursed by the plan or issuer. Similarly, the cost (or the portion of the cost) of contraception paid or reimbursed by a plan or issuer cannot be reimbursed by a health FSA or HRA, but if costs for OTC contraceptives are not paid or reimbursed by a plan or issuer, they may be reimbursed from a health FSA or HRA. Plans and issuers must cover the cost of certain OTC contraceptives when prescribed for an individual by their health care provider.

Finally, if an individual mistakenly takes a distribution from an HSA for contraception costs paid or reimbursed by a plan or issuer, the individual must either (1) include the distribution in gross income, or (2) repay the distribution to the HSA. If an individual mistakenly receives reimbursement from a health FSA or HRA for contraception costs covered by a plan or issuer, the individual should contact the health FSA or HRA administrator regarding correction procedures.

Next Steps

Paylocity will continue to monitor contraceptive coverage and will provide updates as necessary.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.