Implementing Health Reform. On November 6, 2015, the Supreme Court agreed to review the accommodation that the government has offered nonprofit religious organizations to excuse them from complying with a regulatory requirement that they provide contraceptive coverage without cost-sharing to their employees and students. The Court granted certiorari in seven cases in which federal courts of appeal had rejected claims that the accommodation violates the Religious Freedom Restoration Act (RFRA).
The cases come from the Second, Third, Fifth, Sixth, Seventh, Tenth, and District of Columbia Circuits. An eighth case in which the Eighth Circuit ruled against the government on this issue was not included in the grant of certiorari because the time has not yet run for the government to request review, and thus it was not before the Court. In a brief recently filed with the Court in one of the cases, however, the government stated that it was not opposed to review of the question raised by these cases because the Supreme Court would have to resolve the issue in any event with a disagreement among the circuits.
The Background
The history of this litigation has been often discussed here. The Affordable Care Act requires insurers and self-insured group health plans to cover preventive services without cost sharing, including preventive services for women provided under comprehensive guidelines promulgated by the Health Resources and Services Administration (HRSA). HRSA asked the Institute of Medicine (now National Academy of Medicine) for guidance on this issue; pursuant to the IOM’s recommendations, HRSA included in its guidelines coverage for all Food and Drug Administration approved contraceptive services. In 2012, the agencies that enforce the ACA—Labor, Treasury, and HHS—promulgated regulations requiring insurers and group health plans to cover FDA contraceptives as preventive services without cost sharing.
Recognizing, however, that some religious organizations view the use of contraceptives as sinful, the regulations exempted from the requirement houses of worship and similar religious organizations. In subsequent rulemaking, in 2013, the agencies provided a separate accommodation for other religious nonprofits—such as universities, hospitals, and charities—that object to the use of some or all contraceptives. These organizations could file with HHS or with their insurer or third-party health plan administrator (TPA) a form (ERISA form 700) that would certify that the organization had religious objections to covering contraceptives. The organization’s TPA or insurer would then be obligated under the regulation to provide contraceptive services with no funding or assistance from the religious organization.
Approximately one hundred lawsuits were filed challenging the contraceptive requirement under the Religious Freedom Restoration Act (RFRA). Congress passed RFRA in the wake of Supreme Court cases that it saw as undermining the protection of freedom of religion under the First Amendment. RFRA provides that the federal government may not substantially burden a person’s exercise of religion unless the burden imposed on the person is the least restrictive means of achieving a compelling governmental interest.
Approximately half of these cases were brought by for-profit corporations and challenged the fact that the accommodation only protected nonprofits and did not apply to for-profit organizations that had religious objections to some or all contraceptives. In 2014 in Burwell v. Hobby Lobby, the Supreme Court held that under RFRA the government did in fact have to offer an accommodation to closely held for-profit organizations with religious objections to contraceptive coverage. The agencies subsequently promulgated a rule offering the same accommodation to for-profits that it offered to nonprofits.
In 2014 the Court also entered an injunction in a case brought by Wheaton College that suggested that the accommodation offered in the 2013 rule did not go far enough. In response to this order, the agencies provided an additional accommodation permitting religious employers simply to inform HHS of their objection to covering contraceptives and of the name and contact information of their insurer or TPA. HHS would then direct the insurer or TPA to provide the coverage with no further involvement of the religious organization.
This accommodation did not satisfy the religious organizations, however, which continued to sue, now challenging the new as well as the initial accommodation. In four of these cases during the past year the Supreme Court has either remanded circuit court decisions in favor of the government for reconsideration in light of Hobby Lobby or enjoined the enforcement of the lower court’s order pending appeal. As noted above, seven appellate courts in the end ruled for the government and one for the plaintiffs. In three cases the full circuit court of appeals denied a rehearing en banc. But the Supreme Court will now make a final decision.
The Issues
The primary argument of the plaintiffs in the nonprofit cases is that the act of notifying the government of their objection to providing contraceptive coverage and identifying their insurer or TPA implicates them in the government’s subsequent act of requiring the insurer or TPA to provide contraceptive coverage, and thus the requirement that they notify the government substantially burdens their exercise of their religious beliefs. The fundamental question seems to be one of causation, and of whether causation is a question of law or a question of religious belief. The plaintiffs argue that they believe as a matter of religious conviction that for them to facilitate in any way the provision of contraceptives to their employees and students is sinful.
The government argues, and the seven courts whose decisions are being reviewed have concurred, that it is the law, not the actions of the plaintiffs, that results in contraceptive coverage being provided to their employees and students. As a matter of law, the organizations are only responsible for informing the government, not for causing contraceptive coverage to be provided. Therefore their religious rights have not been substantially burdened.
In a certiorari petition, the petitioner must state the legal question that it wants the Court to decide. All seven of the petitions ask the Court to decide that both accommodations violate RFRA. Four specifically mention the substantial burden test, four specifically cite Hobby Lobby. Only one specifically raises the least restrictive alternative to achieve a compelling governmental interest test.
The religious organizations did argue in the courts below that the government’s interest is not compelling and that it has other means of meeting its concerns, such as offering contraceptives through a government program. In Hobby Lobby a majority of the judges seemed to conclude that a compelling governmental interest was involved in the contraceptive mandate, but if the Court finds that there is a substantial burden in these cases it will have to directly address this question, as well as whether a less restrictive alternative exists.
Plaintiffs in two of the cases also argued that the agencies violated the First Amendment by offering different accommodations to houses of worship and to other religious organizations and thus discriminating among them. The Supreme Court decided not to hear this issue. None of the petitions raise questions of the First Amendment protection of religious liberty itself, which quite clearly is not violated by the rule as the First Amendment is presently understood.
The Court did, however, agree to decide one other issue in one of the cases, one of some complexity. Some of the plaintiffs in the Little Sisters case from the Tenth Circuit provided coverage to their employees through what is called a “church plan.” A self-insured church plan is a group health plan operated by a church or association of churches covering their employees. Church plans are not subject to the Employee Retirement and Income Security Act (ERISA), and thus the government cannot require their TPAs to cover contraceptive services.
The government has taken the position that the employer in these cases must still notify the government of its objection, even though the government cannot require the church plan to cover contraceptive services. The plaintiffs in Little Sisters argue that that should not have to meet the government’s “demanding test,” that is, notify the government of their objections, if it will not result in coverage for their employees. The Tenth Circuit held that under these circumstances the notification requirement could not substantially burden the plaintiffs. The Court has agreed to decide this question.
The Stakes
Although this grant of review will be touted in the media as yet another Supreme Court ACA case, these cases do not represent fundamental challenges to the ACA. They do not challenge the statute as such, or even the overall preventive services regulatory requirements, but rather a particular accommodation under a particular regulatory requirement.
The cases do raise very important questions as to the scope of religious freedom and of the rights of employers to limit access to legal health services by their covered employees. But regardless of what happens, the outcome will not affect the overall fate of the ACA, which was decidedly not true of the 2012 National Federation of Independent Business or the 2015 King v. Burwell cases.
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