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Newland V Sebelius: The General Welfare, Religious Liberty, And Contraception Coverage Under The ACA



July 30th, 2012

On July 27, 2012, Judge John Kane of the United States District Court for Colorado entered a preliminary order in Newland v. Sebelius prohibiting the Secretaries of Health and Human Services, Labor, and Treasury from requiring Hercules Industries, Inc., a for-profit, privately-held Colorado Corporation, to cover women’s preventive health services, including contraception, through its group health plan. The court found that the contraceptive coverage rule potentially violates the Religious Freedom Restoration Act (RFRA), as applied to Hercules.

This is one of about two dozen cases that have been filed in the federal courts challenging the preventive services rule under the First Amendment’s freedom of religion clause and the RFRA.  Two of these cases have already been dismissed by other courts on grounds that the plaintiffs (including seven state governors in one case) were not actually injured by the rule and that challenges were premature.  This is the first case to achieve at least temporary success.

Our System’s Built-In Tension Between Promoting The General Welfare And Protecting Religious Liberty

At the time of its founding, the United States was unique among the nations in embracing the principle that the government would not involve itself in matters of religion: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”  For over 200 years we have struggled with the application of this principle.  The problem, of course, is that religion is not simply a matter of abstract beliefs, but affects every aspect of practical life. Thus occasions frequently arise where laws adopted to “promote the general welfare” come into conflict with the religious practices of some Americans.

In few areas is this as true as with health care.  Religious Americans of various persuasions hold deeply held beliefs opposing abortion, blood transfusions, withdrawal or withholding of life-prolonging medical treatment, organ transplantation, in vitro fertilization, and even medical treatment itself.  For decades, Congress and the courts have debated to what extent federal funds can be used to pay for abortion in the federal/state Medicaid program, resulting in an uneasy truce in which federal funding is available for abortion only when the mother’s life is endangered and in cases of rape and incest. It was clear, therefore, that when Congress took on the task of extending federally funded health care to millions of additional Americans, religious concerns would play a prominent role.

In fact, adoption of the Affordable Care Act almost failed at the last minute because of insistence of pro-life Democrats that the Obama administration provide assurance that abortion would not be covered.  As adopted, the ACA prohibits the expenditure of federal premium tax credits to fund abortion except where Medicaid funding would be available, and it requires health insurance to be available through the exchanges that does not cover abortion.  Abortion coverage can only be purchased through the exchanges by following complicated procedures that will ensure that it is not widely available.  States can limit or completely ban abortion coverage through the exchanges, and 19 already have, including a number of states that have no intention of establishing an exchange.

The ACA also prohibits discrimination by health plans against individuals because of their age, disability, or expected length of life, as well as discrimination against health plans that cover services to prevent death that might be considered inappropriate or too costly.  Finally, the ACA’s individual mandate explicitly does not apply to members of religious groups that are conscientiously opposed to insurance and members of health care-sharing ministries. In sum, the ACA attempted throughout to accommodate diversity of religious belief and practice.

Nevertheless, a number of the cases filed upon the adoption of the ACA claimed that the ACA infringed the freedom of religion.  The plaintiffs in Liberty University v. Geithner asserted that the ACA violated the Establishment Clause by exempting from the individual mandate some religious groups and not others and the Free Exercise Clause by requiring funding of abortion.  The District Court held that the ACA neither violated the Establishment Clause nor funded abortion.  This decision was affirmed by the Fourth Circuit.  The plaintiffs in Seven Sky v. Holder claimed that the individual mandate violated the Free Exercise Clause. This claim was rejected by both the District Court and the District of Columbia Circuit Court of Appeals and review was denied by  the Supreme Court.

The ACA And Contraception Coverage

As implementation of the ACA has proceeded, however, a new dispute has arisen.  Section 2713 of the ACA provides that insurers must cover women’s “preventive care and screenings . . . as provided for in comprehensive guidelines supported by the Health Resources and Services Administration . . . ” Among the preventive services recommended by HRSA are:

All Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.

HRSA recommended that contraceptive services be covered on the basis of a consensus report by the Institute of Medicine finding that planned pregnancies provide health benefits for both women and babies.  Group plans and health insurers that do not have grandfathered status must implement this coverage for plan or policy years beginning after August 1, 2012.

Insurance coverage of contraceptives is common in the United States.  Twenty-eight states have laws requiring health insurers to cover contraceptives (although twenty-one have some form of religious exemption).  Studies cited in the preamble to the preventive care  regulation found that over 80 percent of insurers and large employers already cover contraceptives.  Several court decisions have held that an employer’s failure to provide contraceptive coverage is illegal sex discrimination.

But some religious groups, notably the Catholic Church, believe that contraception is wrong.  These religious groups employ thousands of Americans and provide them with employee health benefits.  Thus the agencies implementing the ACA have attempted to reach an accommodation between the public health objective of increasing access to preventive services and the goal of protecting religious freedom.

The first response of the administration to this issue  was to exclude “religious employers” from the contraceptive coverage requirement, defining the term to mean churches and their integrated auxiliaries, conventions, and associations and religious orders that have inculcation of religious values as their purpose and primarily serve and employ persons who share their religious tenets.  Churches and other organizations that fit in this category do not have to provide coverage for contraception at all.

This exception did not, however, extend to religious hospitals, universities, or charities.  Many of these organizations objected strenuously to providing contraceptive coverage for their employees.  The Administration, therefore, created a second exception through guidance.  This exception establishes a safe harbor for one year (until August 1, 2013) from enforcement of the regulations to protect non-profit organizations with a religious objection to covering contraceptive services.  In March, the administration  published an Advance Notice of Proposed Rulemaking announcing its intention of drafting rules to accommodate these religious organizations.  The ANPRM proposed various approaches that would allow employees of these religious organizations to secure access to contraception without the organizations having to pay directly for it.

In the meantime, about two dozen lawsuits have been filed by various Catholic organizations and others challenging the contraception requirement.  Many of these lawsuits raise First Amendment freedom of religion issues, most rely primarily on the RFRA.  Congress adopted RFRA in 1993 in the wake of a Supreme Court decision that had held Congress did not have to show a compelling governmental interest when it adopted a “neutral law of general applicability” limiting religious practice in some way.

In RFRA, Congress rejected this position, prohibiting any law (including neutral laws of general applicability) that “substantially burden a person’s exercise of religion” unless the law is justified by a compelling governmental interest and is the least restrictive approach to furthering  the governmental interest.  The Supreme Court has held that RFRA is unconstitutional as applied to state law (since the Court itself, and not Congress, has the authority to interpret the First Amendment)  but has upheld RFRA as it applies to federal law.

So far, two courts have dismissed cases challenging the contraception mandate, holding that the plaintiffs (including seven state governors) did not show that the contraception rule actually caused them any injury and that resolution of the issue is premature while the moratorium still applies and the federal government is still clarifying its approach.

Judge Kane’s Holding In The Newland Case

The Newland case, however, involved a private company that is covered by the preventive services requirement and not subject to any currently proposed exception.  The case therefore involves a real, current dispute and raises several important questions.  The first is whether the contraception challenge involves “a person’s exercise of religion.”  Most cases involving RFRA have involved some sort of explicitly religious practice, such as the use of prohibited drugs or protected wildlife in religious worship; however, some religious freedom cases have also, like the Newland case, involved employment-related practices, such as required contributions to Social Security or denial of unemployment compensation to employees who lost their jobs because they refused to work on the Sabbath.  The plaintiffs are likely to prevail on this issue, therefore.

More problematic is the question of whether a for-profit, secular corporation can hold a religious belief.   Judge Kane essentially considered the family-owned Hercules corporation as indistinguishable from its owners.  But would the situation be different  the corporation was a large privately-held corporation, with thousands of employees, or even a publicly-held corporation that espoused certain religious principles in its founding documents?  Can any private corporation hold religious beliefs?  Judge Kane left these questions open for later resolution.

Holding that the preventive services rule “substantially burdened” the free exercise rights of the Hercules Corporation, Judge Kane proceeded to consider whether the requirements of RFRA had been met.  Judge Kane first held that the government had not shown a compelling interest for the rule. Recognizing that protecting public health is a compelling governmental concern, Judge Kane held that HHS had undermined its assertion that uniform protection of this interest was compelling by granting broad exceptions for grandfathered plans, for small employers (which need not provide any employee coverage), and for religious employers.  Judge Kane further held that the government had not refuted the plaintiffs’ argument that there was a less restrictive alternative for providing contraception — a government program.

Judge Kane’s determinations as to RFRA compliance raise serious questions.  While it is arguable that the widespread exceptions to the preventive services requirement undermines the claim that it is absolutely essential, it surely cannot be the case that the government cannot defend a rule as serving a compelling interest if the rule admits to any exceptions.  Leaving aside the question of whether the plaintiffs would willingly pay taxes to finance a public program covering contraception, the plaintiffs’ least restrictive alternative argument would seem to preclude a private sector solution to the problem of health care financing, one of the primary goals of the Affordable Care Act.

Judge Kane concluded by noting the limited nature of his order; it only covers these specific parties and only lasts for three months until the issues can be further argued.  The issues raised by the case will continue to be debated for some time, and will likely have to be settled by the higher courts, possibly the Supreme Court.  These questions are unavoidable in a society that attempts to on the one hand adopt generally applicable laws addressing controversial subjects, and on the other hand maintain a high regard for religious liberty.

Unfortunately, this discussion is taking place in a bitterly divided country in the highly charged political atmosphere of an election year.  While “war against religion” rhetoric serves political purposes, it does a real disservice to the sincere, if not yet successful, attempts of the administration to reconcile the serious public health concerns described by the Institute of Medicine with the deeply held beliefs of devout Catholics.

It seems to me that one issue that deserves particular attention here is the reconciling of the religious freedom of employers with the right of employees to access vital health services.  The plaintiffs in this case objected to contraception, but other employers might object to coverage of blood transfusions or even of any medical care based on their religious convictions.  The original rule properly, it seems to me, excludes from its coverage churches and similar organizations, whose religious beliefs are quite apparent and who are likely to employ primarily persons who concur in their beliefs.

The situation of institutions like universities and hospitals that are owned by religious organizations but carry out purposes similar to those of secular organizations present a harder case.   These institutions often employ individuals who do not share the beliefs of the organization, and the administration is struggling with how to ensure these employees with access to contraception without violating the principles of the explicitly religious organizations that employ them.

If every for-profit business in the United States can claim to be free from laws of general applicability on a case-by-case basis because of the religious beliefs of its owners, it is hard to see how any law can apply generally.  It cannot be expected that the employees of a for-profit business will share the religious beliefs of its owners, and indeed federal law prohibits employers with more than 15 employees from discriminating on the basis of religion.  In a similar situation, the Supreme Court held in U.S. v. Lee that an Amish employer could not refuse on the basis of religious conviction to pay Social Security taxes for his employees — even though the self-employed Amish are not required to contribute to Social Security — because of the overriding national interest in operating a uniform Social Security system.  Congress subsequently passed a law excusing employer contributions to Social Security where both the employer and employee had religious objections, but not otherwise.  As the administration, the courts, and possibly Congress continue to consider this issue, perhaps a solution like this should be considered.

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1 Trackback for “Newland V Sebelius: The General Welfare, Religious Liberty, And Contraception Coverage Under The ACA”

  1. The Day After the HHS Mandate Kicked In - Interview - National Review Online - Page 2 - Christian Forums
    August 3rd, 2012 at 11:57 am

1 Response to “Newland V Sebelius: The General Welfare, Religious Liberty, And Contraception Coverage Under The ACA”

  1. xuinkrbin. Says:

    You misconstrue the situation when You say, “If every for-profit business in the United States can claim to be free from laws of general applicability on a case-by-case basis because of the religious beliefs of its owners, it is hard to see how any law can apply generally.” Under the Religious Freedom Restoration Act (RFRA), as You note elsewhere but appear to have forgotten by the time You wrote this line, a regulation and/or law is acceptable if, in addition to furthering a “compelling government interest” and “generally applicable”, it is also the least restrictive towards the exercise of religion; simply claiming a contrary religious belief is not enough. Additionally, the RFRA contains a provision where the congress can explicitly exempt a law and/or regulation from the Act’s requirements, in which case the more lenient Smith standard applies.

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