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Implementing Health Reform: Contraceptive Coverage Litigation Moves Toward The Supreme Court



July 29th, 2013

Litigation challenging the Affordable Care Act preventive services rule continues its march toward the Supreme Court.  As discussed in earlier posts, the ACA requires insurers and group health plans to cover preventive services without cost sharing.  Preventive services include women’s health services, which HHS has defined to include contraceptive coverage. This requirement has been challenged by over 60 lawsuits filed across the country by religious organizations and employers that object on religious grounds either to contraceptives generally or to specific contraceptives — like Ella or Plan B — that operate after the fertilization of an egg by a sperm.

HHS has recently issued regulations intended to accommodate the objections of religious employers and organizations to covering contraceptives.  These regulations do not, however, accommodate the objections of secular, for-profit, businesses.  According to the Becket Fund for Religious Liberty, which keeps track of the litigation, thirty-five cases have been filed by for-profit employers that object to the contraceptive mandate.  Thirty of these cases have resulted in court decisions, primarily on preliminary injunctive relief or injunctions pending appeal.  Twenty-three court decisions, including cases decided by the Seventh, Eighth, and Tenth Circuit Courts of Appeal, have ruled for the employer.  Seven cases, including cases decided by the Third and Sixth Circuit Courts of Appeal, have ruled against employers.

A conflict in the Circuits.  On June 27, 2013, five of the eight judges of the Tenth Circuit Court of Appeals ruled in an en banc decision that Hobby Lobby, a for-profit business that operates more than 500 arts and crafts stores nationally employing 13,000 employees, had established that it was likely to succeed in the merits in its claim that the regulation requiring that it cover post-fertilization contraceptives violated its rights under the Religious Freedom Restoration Act.  Three of the judges dissented vigorously.  The court split on the question of whether certain other requirements for the entry of a preliminary injunction had been met; thus the court sent the case back to the district court to decide these issues.  On July 22, 2013, the district court entered an injunction deciding the remaining issues against HHS and barring the federal government from enforcing the contraceptive mandate against Hobby Lobby.

On July 26, 2013, a three judge panel of the Third Circuit Court of Appeals reached the opposite conclusion.  The Third Circuit decided two to one that Conestoga Wood Specialties Corporation, a wood cabinet company with 950 employees, was not entitled to a preliminary injunction barring the regulation’s requirement that they cover all contraceptives.  Again, Conestoga only objected to contraceptives that operate post-fertilization.

The Religious Freedom Restoration Act bars federal regulations that substantially burden a person’s free exercise of religion unless they are the least restrictive means of achieving a compelling governmental interest.  The majority of the Third Circuit in Conestoga concluded that secular corporations cannot have religious beliefs that are burdened by government regulations and cannot under standard corporation law assert the religious beliefs of their owners vicariously.  The dissenting judges in the Tenth Circuit agreed.  The majority of the Tenth Circuit reached the contrary conclusion, and additionally decided that the preventive services regulation substantially burdened the free exercise rights of Hobby Lobby and was not the least restrictive means of achieving a compelling governmental interest.

The plaintiffs, the federal government, and the Hobby Lobby district court judge have, according to Lyle Denniston at SCOTUSblog, reached an agreement under which the Department of Justice can appeal the Hobby Lobby injunction directly to the Supreme Court.  Since the Tenth Circuit has already ruled on the merits of the case, there is little point in returning again to that court.  The Justice Department has until September 25, 2013, to file a petition for review in the Supreme Court. Given the split among the circuit courts, it is quite possible that the Court will take the case, even though all rulings so far have been on preliminary relief rather than final decisions on the merits.  It is important to note, however, that any decision of the Supreme Court would not call into question the ACA itself — only a regulation adopted pursuant to the ACA.

In other news, HHS has largely finished up its 2014 ACA rulemaking and continues to move ahead with implementation.  On July 29, 2013, for example, HHS announced the availability of applications and training for certified assistance counselors.  New technical implementation guidance continues to become available on an almost daily basis at the RegTAP portal.  In a July 26, 2013 Paperwork Reduction Act Notice,  CMS also revealed that there will be an enrollment assistance program in addition to the navigator program in some federally facilitated exchange states.

States are also releasing information on insurance rates or premiums under the ACA.  This process has proven quite confusing, as there is no uniform approach to describing and comparing current or prospective rates and some information released by the states has been quite misleading.  The Government Accountability Office has released a helpful report describing on a state-by-state basis current health insurance premiums.  Sara Lueck at the Center on Budget and Policy Priorities has also published a useful blog post questioning the methodologies some states are using to claim that premiums are increasing substantially under the ACA.

 

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