On August 4, 2017, the Third Circuit Court of Appeals affirmed the district court’s decision for the government in Real Alternatives v. HHS, a case involving objections to the requirement to provide contraceptive coverage without cost-sharing imposed by the Affordable Care Act’s preventive services mandate. Specifically, the case involved two issues: whether the government must exempt an employer that objects on moral, as opposed to religious, grounds to contraceptive coverage from the requirement to provide such coverage, and 2) whether individuals who object to contraceptives on religious grounds must be allowed to purchase insurance that does not cover contraceptives.

Two of the three judges on the appellate panel answered both questions in the negative. The third judge accepted their position on the first issue involving moral objections but filed a long and passionate dissent on the religious freedom issue. This is the first appellate court decision on both issues, but a federal district court answered both questions in the affirmative in March for Life v. Burwell, while yet another district court in Wieland v. HHS enjoined the federal government from enforcing the contraceptive requirement against insurers that would be willing to sell insurance without contraceptives to individuals who object to contraceptives on religious grounds.

The Majority Opinion

The majority had little trouble disposing of the claim of Real Alternatives, which is essentially a non-religious organization that offers counselling on alternatives to abortion. Real Alternatives had relied on an equal protection claim, but equal protection only applies between entities that are “similarly situated.” The court observed that, even if moral philosophies that essentially function as religions might claim the same protections as religious beliefs under the Equal Protection Clause, Real Alternatives did not claim to hold a comprehensive, non-theistic, moral belief system, but simply a moral position on a single issue.

The religious organization exception to the contraceptive requirement is based on a respect for the religious autonomy of houses of worship. The court held that single-issue, non-profit organizations are not similarly situated for purposes of claiming constitutional protection. The court held that the contraceptive rule as applied to Real Alternatives was not arbitrary and capricious under the Administrative Procedures Act for the same reason. It further held that the requirement did not violate the ACA’s abortion funding prohibition because contraceptives by definition do not cause abortions (a finding the dissent disagreed with as to certain preimplantation contraceptives) and that it also did not violate federal conscience protection prohibitions.

The dissent was willing to follow the two-judge majority that far, but then parted ways. The majority proceeded to hold that the Religious Freedom Restoration Act does not afford individuals who object to contraceptives for religious reasons the right to purchase insurance coverage that does not cover contraceptives (presuming any insurer would sell it). RFRA allows the government to substantially burden an individual’s exercise of religious only if it can show that a requirement is the least restrictive means of furthering a compelling governmental interest. The majority held that the contraceptive requirement did not substantially burden the religious exercise of individuals who object to purchasing insurance with contraceptive coverage. It expressly rejected the March for Life and Wieland decisions to the contrary.

The court observed that all the contraceptive regulation did was to require the plaintiffs to enroll in coverage for which they could claim, if they chose, reimbursement for contraceptive services. This requirement did not compel the plaintiffs to engage in conduct that violated their belief. Neither did it require plaintiffs to participate in activity that violated their beliefs in the way the mandate that employers offer contraceptive coverage to their employees did in the Hobby Lobby case. Subscribing to an insurance plan does not cause an individual to take an active role in the underlying plan in the same way. The government mandates that a choice be made available to the plaintiff to use a particular service, but does not compel the plaintiffs to take advantage of that choice.

The plaintiffs could also not object that the regulation made a choice available to others. RFRA cannot be used to force the government to structure its relationships with third parties—here insurers—in ways that individuals prefer because of their religious beliefs. And, the majority wrote, the remedy the plaintiffs sought would not be workable. People object to all kinds of medical services for religious reasons, and allowing insurers to omit any of the services that people might find objectionable would render the system of insurance regulation unworkable.

The Dissent

Judge Jordan in dissent vigorously disagreed. He argued that the ACA requires the individual plaintiffs to buy insurance, and the preventive services regulation requires them to purchase insurance that covers contraceptives, some of which they believe are abortifacients. The majority had neither the right to judge those beliefs nor to characterize them as insubstantial. The plaintiffs are being forced to purchase insurance to which they object or pay a penalty, and that, Judge Jordan observed, is what RFRA prohibits.

By purchasing insurance that covers contraceptives, Judge Jordan contended, the plaintiffs would participate in and contribute to a pool of funding that is used to purchase contraceptives by others. The contraceptive mandate not only regulates insurers; it also regulates the conduct of the plaintiffs who are forced to buy insurance with contraceptive coverage. Judge Jordan also rejected the workability argument, asserting that RFRA inevitably makes the enforcement of universal regulations less workable, and that in any event, if insurers did not find it practical to sell insurance without contraceptive coverage, they would not do so.

Finally, the dissent, having concluded that the contraceptive mandate in fact substantially burdens free exercise, found that it was not supported by a compelling governmental interest. The government could make contraceptives available in other ways, and the exceptions to the rule undermine the argument that it is necessary for a uniform health care system. Moreover, the plaintiffs’ interests could be accommodated by simply not requiring the insurers to provide contraceptive coverage to those who object to it for religious reasons.

The Draft Rule

The Office of Management and Budget is currently considering a draft interim final rule proposed by the Trump administration that would reportedly allow organizations that object to contraceptive coverage for moral reasons to not provide it for their employees, and allow individuals who object to contraceptives for either religious or moral reasons to purchase insurance without contraceptive coverage if insurers will offer it. The Third Circuit decision holds that these accommodations are not legally required. Whether the Trump administration will nevertheless offer them remains to be seen.