Alito stymies Third Circuit, temporarily blocks enforcement of mandate

Supreme Court Justice Samuel Alito has recalled a decision of the Third Circuit Court of Appeals, which lifted a preliminary injunction preventing the federal government from enforcing the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) contraception mandate against the Roman Catholic Diocese of Pittsburgh and an affiliate nonprofit corporation. On April 15, 2015, Alito issued an order in Zubik v. Burwell, recalling and staying the Third Circuit’s mandate pending a response from the government.

Background

The Most Reverend David A. Zubik, Bishop of the Roman Catholic Diocese of Pittsburgh, along with the Diocese and Catholic Charities of the Diocese of Pittsburgh, Inc. (collectively, the Diocese) alleged that the contraception mandate violated the organizations’ rights under the Religious Freedom Restoration Act (RFRA) (42 U.S.C. §§2000bb et seq.). In 2013, a federal district court in Pennsylvania granted them a preliminary injunction against enforcement of the mandate (see Catholic dioceses granted preliminary injunction, Health Law Daily, November 26, 2013).

The case was consolidated with others and, in February 2015, the Third Circuit reversed the injunction (see Catholics stay clean: form submission ‘washes their hands’ of involvement with contraceptive coverage, Health Reform WK-EDGE, February 18, 2015). The appellate court determined that the requirement to execute EBSA Form 700-Certification, which certifies an organization’s religious objection to the mandate, did not burden the Dioceses’ exercise of religion. The Diocese, however, maintained that completing the form, which triggers notification that a third-party administrator must assume responsibility for providing or arranging contraceptive coverage to employees, made it complicit in sin. The Diocese sought an en banc hearing before the appellate court; the court denied the request on April 6, 2015.

Impact

Religious groups view this as a positive step toward unravelling the contraception mandate. Lori Windham, Senior Counsel at the Becket Fund for Religious Liberty, has represented organizations with religious objections to the mandate in other cases. She issued a statement on Justice Alito’s order, noting “The government really needs to give up on its illegal and unnecessary mandate.” The government’s response is due no later than April 20, 2015.

The Affordable Care Act at age five: a look back and a look ahead

Somewhere near their first birthdays, children learn to walk. At three years of age, they might start pedaling a tricycle, and at age five, they are poised to enter kindergarten. March 23, 2015, marks the fifth anniversary of the enactment of President Obama’s signature health reform law, the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Has the ACA, at five years of age, made the same amount of progress as a child?

Critics argue that the ACA has failed, but proponents say that it is moving closer to achieving its goal of quality, affordable health care for all Americans. As a law that seeks to expand health insurance coverage for Americans, improve the functioning of health insurance markets, and control the efficiency and quality of health care, the ACA has “had a major positive impact, and one that will continue to bring efficiencies over time,” said Keith Fontenot, the managing director of government relations and public policy at Hooper, Lundy & Bookman, P.C.

Regardless of whether it has met its milestones, it is clear that the ACA has already made an impact. It has had significant effects on the uninsured rate, the affordability of coverage via the provision of subsidies, the use of preventive services, and the actions of large employers and insurers. Many ACA provisions have gone into effect over the last five years; however, due to design or delay, a number of significant reforms have yet to be implemented or fully realized.

This White Paper looks at the ACA’s impact on Medicare and Medicaid issues and its impact on the private insurance market. It also looks at major ACA changes facing health care providers and employers in the coming months.

Read further, “The Affordable Care Act at age five: a look back and a look ahead.”

Notre Dame contraception battle revived

More than one year after the Seventh Circuit Court of Appeals denied the University of Notre Dame’s plea for relief from the Patient Protection and Affordable Care Act’s (ACA’s) (P.L. 111-148) contraception mandate exemption requirements, the U.S. Supreme Court ordered the appellate court to revisit the issue. The High Court granted Notre Dame’s petition for writ of certiorari, vacating the Seventh Circuit’s order and remanding the case in light of the Supreme Court’s decisions in Burwell v. Hobby Lobby Stores, Inc. (Hobby Lobby) and Wheaton College v. Burwell (Wheaton College). Notre Dame’s contentions focused on the allegedly substantial burdens imposed on it by the requirement that it complete EBSA Form 700.

Notre Dame

Despite its status as a Catholic university, Notre Dame does not meet the ACA’s definition of a religious employer. In order to be exempt from the ACA’s requirement to provide FDA-approved contraceptive coverage to its employees and students, the university was required to execute EBSA Form 700, certifying that it was a nonprofit entity holding itself out as a religious organization and that it opposed the provision of contraceptive services. Upon execution, Notre Dame’s insurers would become responsible for providing contraception coverage. However, Notre Dame argued to the Seventh Circuit that the requirement imposed a substantial burden on its exercise of religion because completion of the form would serve as a trigger to provide contraceptive coverage, in contravention of its religious beliefs. The appellate court disagreed, referring to the form as a warning, rather than a trigger, and stating, “It enables nothing.” The court denied the case (see Notre Dame signs EBSA Form 700-Certification, not substantially burdened, Health Reform WK-EDGE, February 26, 2014).

Supreme Court litigation

Three months later, the U.S. Supreme Court issued its landmark ruling in Hobby Lobby, holding that the mandate could not be applied to for-profit closely-held corporations with religious objections to the mandate because the regulations violated the Religious Freedom Restoration Act (RFRA) (42 U.S.C. §§2000bb et seq.). Although it declined to rule on whether the provision of contraception was a compelling government interest, the Supreme Court determined that the mandate was not the least-restrictive means of furthering that interest. One week later, the Court granted an injunction to Wheaton College, a Christian liberal arts college, enjoining the government from requiring Wheaton to execute EBSA Form 700, which Wheaton believed, would “make it morally complicit in the wrongful destruction of human life.” In doing so, the Court noted the existence of a circuit split as to whether to enjoin the requirement that religious nonprofit organizations use EBSA Form 700 (see Supreme Court: religious college doesn’t have to file contraception mandate opt-out form, Health Reform WK-EDGE, July 9, 2014).

Certiorari and remand

In light of the Hobby Lobby and Wheaton College decisions, Notre Dame filed a petition for certiorari with the Supreme Court, asking it to vacate the Seventh Circuit decision and remand it for consideration. Notre Dame argued that the Hobby Lobby decision focused on the “‘consequences’ of noncompliance,” while the Seventh Circuit decision, “focused on the actions that Notre Dame was compelled to take.” Furthermore, according to Notre Dame, the Hobby Lobby decision left it to plaintiffs to determine whether an act was sufficiently connected to conduct as to make it immoral. It renewed its argument that the mandate substantially burdened Notre Dame’s exercise of religion, yet neither served a compelling government interest nor was the least restrictive means of doing so.

The Supreme Court granted the petition, vacating the Seventh Circuit’s decision and remanding the case to the appellate court. Mark Rienzi, Senior Counsel at the Becket Fund for Religious Liberty, which filed an amicus brief in the case, referred to the grant as, “a strong signal that the Supreme Court will ultimately reject the government’s narrow view of religious liberty.”

Highlight on Texas: Even Exchange Concerns are Bigger

A recent nationwide Gallup survey reported that Texas’ uninsured rate dropped more than 2 percent between 2013 and 2014, as more people were provided health coverage under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). But the state still had the highest uninsured rate nationwide. Nationally, the overall uninsured rate fell by 3.5 percent in 2014. Despite its uninsured rate drop, Texas is the only state in which more than 20 percent of its population is without health coverage. The high percentage is partly a consequence of the state’s reluctance to expand Medicaid or establish a state-operated marketplace.

The ACA provides for the establishment of Health Insurance Exchanges through which individuals can purchase health insurance. It also authorizes federal tax credits to low- and middle-income Americans to help offset the cost of the health coverage. By not setting up a state-operated marketplace, Texas relies upon exchanges run by the federal government. In the last open enrollment cycle that ended on February 15, 2015, more than 1 million Texans signed up for coverage on the federal Exchange. This places Texas second overall in the total number of enrollees among the 37 states on the federal marketplace.

Without a state-operated marketplace and a large number of enrollees in the federal Exchange, however, the Texans that did sign up for health insurance may be severely impacted by the eventual decision in King v. Burwell. In that case, individual residents of Virginia argued that the phrase “established by the State” in an implementing provision of the ACA made clear that health insurance subsidies were only available to enrollees living in the 16 states that set up their own exchanges. The individuals argued that the IRS erred in offering tax credits to individuals who lived in states that have federally run exchanges. As noted, Texas is one such state.

With oral argument scheduled for early March, health insurers in Texas are keeping a watchful eye on the Supreme Court’s eventual determination. If the high court finds that the subsidies were unlawful, then their elimination could affect the overall health insurance market. In Texas, 86 percent of the residents who purchased insurance on the federal Exchange received a tax subsidy that reduced their premiums by an average of 72 percent. Some industry groups have suggested that the elimination of subsidies would result in young and healthy enrollees leaving the Exchange and choosing to pay the ACA penalty rather than higher insurance prices. The loss of these younger, healthier individuals would mean that insurance rolls would have more individuals requiring medical care than not. As a consequence, insurers losing out on a larger pool of enrollees to fund health insurance plan payments could raise premiums for all of those insured, not just those who enrolled under the ACA, because of this exposure to higher risk enrollees.

In 2012 former Texas Governor Rick Perry had written a sharply worded letter to the HHS, refusing federal money to create a state-operated marketplace as a “brazen intrusion” on the state’s sovereignty. Then, just as now in Texas, political support from anti-ACA legislators, along with constituent outcry about federal government involvement, bolstered Perry’s stance. With the looming consequences of King v. Burwell, however, the current Texas administration has been quiet about opposition to a state-operated exchange.