Implementing Health Reform: A Follow-Up Supreme Court Contraceptives Decision At Odds With Hobby Lobby
July 4th, 2014
July 6, 2014 update: After reading Marty Lederman’s post on the Wheaton College decision, and rereading the federal regulations, I conclude that Justice Sotomayor, Judge Posner, and I were wrong in contending that the Form 700 served no other purpose than to communicate Wheaton College’s religious beliefs to its third-party administrator (TPA). This goes to the third point discussed below as to the burden the regulation places on Wheaton. Form 700 also, under the federal regulations, has the effect of authorizing the TPA to serve as plan administrator in providing contraceptive benefits. The extent to which this imposes an impermissible substantial burden on Wheaton College’s free exercise of religion is a debatable question, but the Court could conclude consistent with Hobby Lobby that it does.
Professor Lederman’s post also raises the question as to whether the accommodation such as the one I suggest below can be made to work under ERISA, as it is not clear under what authority the government could appoint the TPA to serve as plan administrator under ERISA or otherwise to provide contraceptive benefits under ERISA. Apparently the majority of the Court believes this is possible. If the Court ultimately concludes that it is not possible, this could well mean that there is no less restrictive alternative under RFRA, and that the accommodation currently in place is enforceable.
Original post: On July 3, 2014, the Supreme Court decided its second contraceptive case of the 2013-2014 term, Wheaton College v. Burwell. The decision demonstrates why more Americans now believe that the justices are doing a poor job (27 percent) than believe they are doing an excellent or good job (26 percent combined), and why 76 percent of Americans believe that the justices decides cases based on their own personal and political opinions rather than legal analysis.
The Wheaton College decision seems to contradict directly the Hobby Lobby decision the Court had entered three days earlier. The Court offered virtually no justification for its change of position. Indeed, one wonders whether the men on the Court, in their haste to get out of town even bothered to read the scathing but well-reasoned dissent filed by Justice Sotomayor for the women of the Court, with which they did not engage.
The Court in Hobby Lobby held that a closely held for-profit corporation could refuse to cover contraceptives in its employee health insurance program if it believed that contraceptives — or in the Hobby Lobby case, certain contraceptives — were sinful. The Court held that under the terms of the Religious Freedom Restoration Act, the Affordable Care Act regulation requiring the coverage of contraceptives without cost sharing substantially burdened the plaintiffs’ free exercise of their beliefs.
The Court in Hobby Lobby assumed that the government was pursuing a compelling governmental interest in giving employees access to contraceptives without cost sharing, but the Court said there was as a less restrictive alternative the government could offer employers who objected for religious reasons. Specifically, the government could allow for-profit employers, as it already allowed nonprofit employers, to certify to their insurers or third-party administrators (using Employee Benefits Security Administration (EBSA) form 700) that they were conscientiously opposed to covering contraceptives; at that point, an insurer would have to cover the contraceptives out of the savings it incurred from not covering pregnancies, or a third-party administrator (TPA) would pay for the contraceptives itself out of funds that otherwise would have gone to pay for federal exchange administrative fees. Since a less restrictive alternative was available, the requirement that for-profit employers with religious objections pay for contraceptives themselves was unenforceable.
The Court was careful not to give its final blessing to the legality of the accommodation, and indeed noted in two footnotes that the accommodation was being challenged in other litigation. The Court came very close to doing so, however, as its whole decision turned on the availability of a “less restrictive” alternative to the requirement it invalidated. Justice Kennedy, who was the fifth vote for Hobby Lobby, and whose position is thus central, seemed even clearer.
Sotomayor in her dissent in the Wheaton case quoted at length from the majority and concurring Hobby Lobby opinions on this point:
Indeed, as justification for its decision in Hobby Lobby—issued just this week—the very Members of the Court that now vote to grant injunctive relief concluded that the accommodation “constitutes an alternative that achieves all of the Government’s aims while providing greater respect for religious liberty.” see also (“The effect of the [Dept. of Health and Human Services (HHS)]-created accommodation on the women employed by Hobby Lobby and the other companies involved in these cases would be precisely zero. Under that accommodation, these women would still be entitled to all FDA-approved contraceptives without cost sharing”); (“At a minimum . . . [the accommodation] does not impinge on the plaintiffs’ religious belief that providing insurance coverage for the contraceptives at issue here violates their religion, and it serves HHS’s stated interests equally well”); see also (KENNEDY, J., concurring) (“[I]t is the Court’s understanding that an accommodation may be made to the employers without imposition of a whole new program or burden on the Government. As the Court makes clear, this is not a case where it can be established that it is difficult to accommodate the government’s interest, and in fact the mechanism for doing so is already in place”).
Even as the Court was seemingly accepting the accommodation in Hobby Lobby, however, 51 cases were working their way up through the courts in which nonprofit religious organizations were challenging that same accommodation. Those cases claim that the requirement that the nonprofit organizations file form EBSA 700 itself violates RFRA because it forces the organizations to authorize their insurers or third party administrators to pay for contraceptives, thus making them complicit in sin.
The vast majority of district courts that have heard these cases have issued temporary injunctions for the organizations, blocking the government from requiring the organizations to file the form with their insurers or TPAs, However, both the Sixth and Seventh Circuit Courts of Appeals have denied injunctions, finding that the accommodation does not violate RFRA. Wheaton College, a Protestant College located in Illinois in the Seventh Circuit which objects to two forms of contraceptives that it regards to be abortifacients, was denied an injunction both by the district court and by the Seventh Circuit itself.
A Flawed Decision
In their July 3 ruling, the six male members of the Court issued a temporary injunction prohibiting the government from requiring Wheaton College to file form EBSA 700 with its insurer or TPA. The Court noted that its order did not prohibit Wheaton’s insurer or TPA from providing contraceptives to Wheaton’s employees or students. The government already knew of Wheaton’s objection, the Court observed, and could require its insurer or TPA to cover these services. The decision and its reasoning, such as it is, come to about a page.
It is followed by a fifteen page indignant dissent by Justice Sotomayor, joined by the other two women on the Court, Justices Kagan and Ginsburg. Justice Sotomayor explicitly accepts the sincerity of Wheaton’s stated beliefs, including its belief that the requirement substantially burdens its free exercise rights — Wheaton is a well-respected Christian college, and its opposition to what it regards as abortion is beyond question. It is also a nonprofit rather than a for-profit organization, and the legitimacy of making accommodation for its beliefs was accepted by all even before Hobby Lobby. But, as Justice Sotomayor points out, the decision of the majority for Wheaton is badly flawed.
First, the decision completely ignores long-standing requirements for the Supreme Court granting emergency injunctions. The Court granted Wheaton an injunction under the All Writs Act, “a form of relief as rare as it is extreme.” Under prior Supreme Court authority, the Court grants injunctions blocking the operation of a federal law while litigation is pending below only where “the legal rights at issue are indisputably clear,” and where an injunction is a “necessary or appropriate in aid of [the Court’s] jurisdiction.” In earlier cases, the Court has found that such an injunction was inappropriate where the circuit courts were divided on a particular issue because by definition the law was not “indisputably clear.” In clear contradiction to its earlier decisions, the Court referred to the division of the circuits on this issue as a reason for, rather than an argument against, issuing an extraordinary injunction in Wheaton College.
Second, Justice Sotomayor noted that the Court’s Wheaton College decision directly contradicts the Hobby Lobby decision entered three days earlier. Quoting again from her dissent:
Those who are bound by our decisions usually believe they can take us at our word. Not so today. After expressly relying on the availability of the religious-nonprofit accommodation to hold that the contraceptive coverage requirement violates RFRA as applied to closely held for-profit corporations, the Court now, . . . retreats from that position. That action evinces disregard for even the newest of this Court’s precedents and undermines confidence in this institution.
Although Hobby Lobby did leave open the question as to the legality of the accommodation, in the end the result of the case turned on the accommodation provided by the government to nonprofits offering a less restrictive alternative to an absolute mandate. The Supreme Court can and does overturn its own precedents from time to time. But doing so in less than a week is as far as I know unprecedented, and again calls into serious question the legitimacy of the Court’s decision.
Third, as Justice Sotomayor pointed out, while it is up to Wheaton to define its own religious beliefs, it is the job of the courts to determine whether Wheaton’s free exercise of those beliefs is “substantially burdened.” Wheaton contended that its signing EBSA 700, the self-certification form, implicated it in the provision of the contraceptives to which it objected, but it is clear, as Judge Posner writing for the Seventh Circuit in the Notre Dame case noted, that this is not true. Indeed, one must wonder whether the majority of the Supreme Court even bothered to read the form, which Justice Sotomayor attached to her opinion.
EBSA 700 requires the responsible representative of an organization to sign a certification stating:
I certify that, on account of religious objections, the organization opposes providing coverage for some or all of any contraceptive services that would otherwise be required to be covered; the organization is organized and operates as a nonprofit entity; and the organization holds itself out as a religious organization.
The religious organization must sign the form and provide it to its insurer or TPA. The back of the form refers the insurer or TPA to the regulation requiring them to provide contraceptives, but the law, not the religious organization, requires that provision. The form on its face does not require the religious organization to authorize the coverage to which it objects. The regulation goes further and forbids the organization from interfering with the insurer or TPA’s provision of contraceptives or seeking to influence the TPA’s decision to provide contraceptives, but the injunction entered by the Court goes to the form, not the regulation. Even though the Court in Hobby Lobby concluded that it was up to the plaintiffs to decide whether their actions had the effect of enabling an immoral act on the part of their employees, surely simply declaring that one believes a practice to be immoral cannot itself be immoral.
Finally, Justice Sotomayor observed that the majority is attempting–without giving the matter any real thought—to craft a new administrative accommodation to replace the one that the Departments of Labor, Treasury, and Health and Human Services devised through notice and comment rulemaking after having considered 400,000 public comments. Under the Court’s new regime, Wheaton must simply inform the government in writing that it is a nonprofit organization that has religious objections to covering contraceptives. It does not need to inform its insurer or TPA. It is then up to the government to ensure that Wheaton’s employees and students receive contraceptive coverage.
How is the government supposed to do that? In fact the government presumably knows who Wheaton’s insurers and TPAs are, but only because of the litigation. Employers with health plans with more than 100 plan participants must file annually an ERISA form 5500. That form identifies any insurers that cover services for plan participants. It does not, however, identify TPAs. Presumably once the government receives a certification from a nonprofit objecting to contraceptive coverage, it will need to contact the organization to ask who the organization uses for its insurer or TPA is, and then separately contact the insurer or TPA. Whether the nonprofit is legally required to respond to the government inquiry is not clear. What accommodation the government must now offer for-profits, like Hobby Lobby, is also far from clear.
To quote again Justice Sotomayor:
The Court’s actions in this case create unnecessary costs and layers of bureaucracy, and they ignore a simple truth: The Government must be allowed to handle the basic tasks of public administration in a manner that comports with common sense. It is not the business of this Court to ensnare itself in the Government’s ministerial handling of its affairs in the manner it does here.
What The Government Should Do Now
The Departments of Treasury, Labor, and HHS should issue an emergency regulation as soon as possible requiring nonprofit and for-profit organizations that object to the provision of contraceptives to their employees to file a form stating so with the appropriate agency. The form should provide the name and contact information for their insurer or TPA. For-profit entities should have to file evidence to verify the pre-existence of their religious beliefs. The government should then notify the appropriate insurer or TPA of their obligation to provide contraceptive services to employees and students. It is hard to conceive that an organization could claim that having to inform the government of its objection to complying with a law and to notify the government as to the identity of its insurer or TPA, which it could no doubt be required to do under ERISA in any event, would violate its religious freedom. This should moot out 100 lawsuits and allow everyone to get on with their business.
A final comment: As a member of a minority religion, I hold our freedom of religion particularly dear. My own father had to go to the Supreme Court in 1954 to obtain United States citizenship, which he had been denied because of his religious beliefs. But if the Supreme Court is to retain its legitimacy, it must try harder to observe its own precedents and to explain when it varies from or modifies those precedents. It has singularly failed to do so in this case.Email This Post Print This Post
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