The Sixth Circuit reaffirmed its position that the religious accommodation for the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) contraceptive mandate does not violate the Religious Freedom Restoration Act (RFRA) (42 U.S.C. § 2000bb). After reviewing the Supreme Court’s decisions in Burwell v. Hobby Lobby Stores, Inc. (Hobby Lobby) and Wheaton College v. Burwell (Wheaton College), the Sixth Circuit adhered to its prior opinion—a preliminary injunction was inappropriate because it was unlikely that the challengers would succeed on the merits of their claims—and held that “nothing in Hobby Lobby” changed that conclusion (Michigan Catholic Conference v. Burwell, August 21, 2015, Moore, K.).
At an earlier stage in the litigation, several religious organizations challenged the exemption and the accommodation. The plaintiffs sought a preliminary injunction on the grounds that the exemption and accommodation violated the RFRA. The district court and the Sixth Circuit rejected the request (see Religious employers lacked strong likelihood of success in contraceptive mandate challenge, Health Reform WK-EDGE, June 18, 2014). Subsequently, the groups filed a petition for a writ of certiorari with the Supreme Court, asserting that the accommodation violated the RFRA. The Supreme Court granted the writ filed by the Michigan Catholic Conference (MCC) and the Catholic Diocese of Nashville (CDN), vacated the Sixth Circuit’s decision, and remanded the case back to the appellate court. The high court directed the Sixth Circuit to reconsider the case in light of the Supreme Court decisions in Hobby Lobby and Wheaton (see ACA’s contraceptive coverage provisions may not provide sufficient protection, Health Reform WK-EDGE, April 27, 2015).
The Sixth Circuit’s second evaluation of the accommodation challenge centered around the objections of nine religious employers: MCC; CDN; Catholic Charities Diocese of Kalamazoo; Catholic Charities of Tennessee, Inc.; Camp Marymount, Inc.; Mary, Queen of Angels, Inc.; St. Mary Villa, Inc.; Aquinas College; and Dominican Sisters of St. Cecilia Congregation. Some of the religious organizations (MCC, CDN, and St. Cecilia Congregation) are eligible for the exemption whereas the others are only eligible for the accommodation.
Entities defined as religious employers under federal law are exempt from the ACA’s mandate that health insurance plans provide coverage for contraception. This means that religious employers do not need to provide or pay for contraceptive coverage to individuals covered under their insurance plans or have their insurance plan provide or pay for contraceptive coverage. The contraceptive mandate, simply stated, does not apply to these organizations—they are exempt.
For some objecting organizations that are not exempt, an accommodation is available. The accommodation, initially, was available only for objecting non-profit entities. However, the Hobby Lobby decision expanded the reach of the accommodation to closely held, for-profit corporations. However, the non-exempt religious organizations in the litigation are all within the accommodation because they are non-profit entities. Catholic Charities of Kalamazoo offers a self-insured health plan. Otherwise, the remaining organizations offer fully-insured group health plans. The two types of plans, for the purposes of the contraceptive mandate, are distinguished by the fact that, under self-insured plan, the employer bears the risk associated with providing health benefits. Under a fully-insured group health plan, the insurance company assumes the risk.
For non-objecting entities, the contraceptive mandate is satisfied by requiring the insurance company to provide contraceptive coverage without cost-sharing to insured individuals. In this circumstance, the insurance company provides contraceptive coverage, and the non-objecting entity pays for the coverage with the premiums collected. However, when a non-profit entity objects to such a coverage scheme, the objecting entity may take part in an accommodation either through a self-certification form (EBSA Form 700) or by notifying HHS directly of the objection. All that changes, in the context of a fully-insured group health plan, is that an insurance issuer “must segregate premium revenue collected from the eligible organization from the monies used to provide payments for contraceptive services.” With or without an accommodation, “the insurance company must, as a matter of federal law, provide contraceptive coverage to insured individuals without cost-sharing.” The coverage is identical—the payor changes.
In the case of a self-insured plan, without an objection, a third party administrator (TPA) would process a claim for contraceptive coverage and the non-objecting entity would pay the claim. In the case of an objecting entity with a self-insured plan, the responsibilities for contraceptive coverage shift entirely to the TPA. The federal government then reimburses the TPA for the expenses associated with providing the coverage.
Success on the merits
When reconsidering whether a preliminary injunction should have been granted, the Sixth Circuit began by evaluating the likelihood that the religious organizations would succeed on the merits of their accommodation challenges. Specifically, as directed, the court considered how Hobby Lobby did or did not alter the earlier conclusion. The court explained that the, in essence, Hobby Lobby stood for the proposition “that the government cannot compel closely held companies with sincere religious objections to provide contraception coverage to their employees.” However, the Sixth Circuit explained, that the holding in Hobby Lobby and the case at issue, were “fundamentally different.” The court reasoned that Hobby Lobby did nothing to “negate the underlying federal requirement that some entity must provide contraceptive coverage.”
With respect to whether the accommodation constitutes a substantial burden under the RFRA, the Sixth Circuit noted that every circuit evaluating the issue has answered the question in the negative. Specifically, the court pointed to the Tenth Circuit’s analysis in Little Sisters of the Poor Home for the Aged v. Burwell (Little Sisters), where the Tenth Circuit explained that “whether a law substantially burdens religious exercise in one or more of these ways is a matter for courts—not plaintiffs—to decide.” The Sixth Circuit agreed with the reasoning in Little Sisters that the substantiality of a burden cannot turn on “moral or theological consequences.”
ACA and exempt organizations
The court decided not to revisit its analysis of whether the exempt religious organizations would succeed on the merits of their exemption challenge. The court explained that their mere status as religious employers meant that they did not need to provide, pay for, or facilitate access to contraceptives either before the ACA or after its enactment. Accordingly, the contraceptive mandate had no effect on those organizations and, therefore, the exempt organizations had no basis for a legal challenge to the mandate.
The court engaged in a more detailed analysis regarding the merits of the accommodation challenges. In the context of both fully-insured plans and self-insured plans, the Sixth Circuit explained that there is hardly a less burdensome requirement. The court characterized the obligations of the accommodation simply—“tell us who you are, and tell us how we can contact you.” The court went on to agree with the holding in Little Sisters that, in the context of fully-insured plans, the accommodation does not impact the provision of contraceptive coverage because insurers are obligated to provide contraceptive coverage under the ACA as an independent obligation that runs “irrespective of the notification.”
Regarding the single self-insured plan, Catholic Charities of Kalamazoo, the court explained that the accommodation did not require it to “provide, pay for, and/or facilitate contraceptive coverage.” The Sixth Circuit explained that the accommodation shifts the cost of contraceptive coverage from the objecting entity to the federal government, and leaves the administration of the coverage to the TPA. The court also rejected the argument that such a shift could be construed to mean that the accommodation “triggered” contraceptive coverage, because it was the ACA, and not some aspect of the accommodation, that triggered the contraceptive coverage obligations. The Sixth Circuit also acknowledged that a TPA, unlike an insurer of a fully-insured group health plan, is not required to provide contraceptive coverage prior to an accommodation. However, the court reasoned that even though the accommodation is “a but-for cause of someone else—the TPA—providing contraceptive coverage,” that is the point of an accommodation, to shift a responsibility from an objector to a non-objector.
The court explained that the accommodation challenges were premised upon a misunderstanding of the RFRA. The court reasoned that while the RFRA allows a particular party to request that the government create an exception to the rule for that particular party, “it does not, however, allow accommodated parties to challenge the rule itself.” After reasoning that the religious entities failed to demonstrate a likelihood of success on the merits of their accommodation challenge, the court analyzed the other factors under consideration for injunctive relief. The court explained that there were no other factors which did anything to outweigh “the clear unlikelihood of success.”
The case is No. 13-2723/6640.