On October 6, 2017, the Departments of Health and Human Services, Labor, and Treasury, released two interim final rules addressing religious and moral objections to the coverage of contraceptives under the preventive services requirement of the Affordable Care Act, as well as accommodations for those objections.

Treasury released with the interim final rules two accompanying proposed rules (here and here) apparently required for technical reasons because Treasury released temporary rules. HHS also updated the Health Resources and Services Administration women’s health guidelines to reflect the rule change. Finally, HHS also released also October 6 a guidance on coverage of abortions by qualified health plans. This post will cover the interim final rules and an update will address the abortion guidance.

The interim final rules are effective October 6, but the administration will accept comments on the rule until December 5, 2017. An earlier leaked version of the regulation was covered here in early June Unlike the leaked version, the published version of the interim final rule separates the religious and moral exemption and accommodation rules into two separate rules, presumably to make clear that each stands on its own against legal challenges. Otherwise the regulatory language is very similar to the leaked version. The preambles of the published versions, however, are much longer and develop much more extensively the arguments made in the preamble to the leaked rule.

The rules depart dramatically from the position the Obama administration took on the contraceptives issue. The Obama administration asserted a compelling governmental interest in women having seamless access to contraceptives without cost sharing through the insurance plans that otherwise covered their health care. It carved out limited exceptions and accommodations for religious organizations that opposed covering their employees and students, and twice went to the Supreme Court defending the scope of its accommodation as it litigated dozens of cases brought by 122 nonprofit entities and 87 for-profit entities claiming that the requirement infringed their religious liberty.

The Trump administration rule, in a 180-degree reversal, declares that the government has no compelling interest in women having access to contraceptives through employers that object to provision of such coverage for religious or moral reasons. The departments essentially assert that the prior determination of this issue by the Health Resources and Services Administration (HRSA) and the Institute of Medicine (now National Academy of Medicine) was wrong as it applies to organizations that object to contraceptive coverage for religious or moral reasons. Therefore, any non-governmental organization that objects for religious or moral reasons to providing contraceptive coverage for its employees or students should not have to do so.

Broad Protections For Religious Objections

The interim final rules essentially expand an exemption in the earlier rules, which previously applied only to churches and similar religious organizations. Under the new rules, this exemption will now be available to many non-governmental employers, issuers, and individuals that have a sincerely held religious or moral objection to the provision of all or a subset of contraceptives or sterilization items, procedures, or services or related patient education and counseling (collectively referred to here as contraceptives). The rules not only exempt such organizations from the contraceptive mandate—they go further by explicitly providing that the HRSA guidelines do not apply to these entities at all. Although the rules maintain the existing accommodations process, they make this process entirely optional for exempt entities who are no longer required to self-certify or otherwise request an accommodation.

With respect to objections based on sincerely held religious beliefs, this new rule covers all types of non-governmental employers, including for-profit corporations, regardless of their size or whether they are publicly or privately held, as well as churches, integrated church auxiliaries, church conventions or associations, religious orders, nonprofit organizations, and institutions of higher education. The preamble asserts that “the mechanisms for determining whether a company has adopted and holds such principles or views is a matter of well-established state law with respect to corporate decision-making,” but it does not describe how the religious or moral position of employers will be determined. Indeed, the rule seems to assume throughout that any claimed religious objection will be honored without question and provides no mechanism through which employees could challenge the legitimacy of their employer’s religious claims.

In extending the religious exemption to for-profit entities that are not closely held, the Departments recognized the possibility that some publicly traded entities could use the exemption. They note that “some publicly traded entities might claim a religious character for their company, or that the majority of shares (or voting shares) of some publicly traded companies might be controlled by a small group of religiously devout persons so as to set forth such a religious character.” However, they deem it “very unlikely” that a religious publicly traded company would object to contraceptive coverage.

A Narrower Scope For Moral Objections—At Least For Now

In contrast, the rule on moral exemptions is more limited in scope. Under this separate rule, only certain non-governmental employers—nonprofit organizations, privately held for-profit employers, insurers, and institutions of higher education—can assert an exemption to the contraceptive mandate based on sincerely held moral convictions. The Departments request comment on whether the moral objection exemption should be further extended to all for-profit entities (regardless of whether they are closely held or publicly traded) and non-federal governmental employers, such as local government hospitals. The preamble notes that the Departments lack sufficient information about the need to further extend the exemption, particularly noting the dearth of litigation brought by for-profit entities with non-religious moral convictions to challenge the contraceptive mandate.

No Self-Certification Or Notice Of Objection Is Required, But ERISA Rules May Apply

Under either rule, if an employer objects to contraceptive coverage on religious or moral grounds, the group health plan, the insurer, and the coverage itself are exempt from the HRSA guidelines and thus would not face a penalty for failing to cover contraceptives for plan enrollees. Employers who claim an exemption would not have to provide any kind of self-certification or notice to the government (although the Departments solicited public comment on whether exempt entities would find value in being able to maintain or submit a specific form of certification to claim or otherwise document their exemption).

ERISA rules, however, require employers to document services covered in their group health plan’s summary of benefits; exempt employers would thus need to update these plan documents to reflect the fact that some or all contraceptives would no longer be covered. Employees would essentially have to search the list of covered benefits and find that contraceptives were not on the list. Under ERISA, employers must also, however, give employees notice of a change in benefits, so if employers had been offering contraceptives and ceased to do so, they would have to inform their employees.


Insurers that offer group or individual coverage and have a religious or moral objection to providing contraceptive coverage could also not be required to cover contraceptives. The Departments admit that the administration knows of no insurers who hold such an objection, but the rules cover the possibility. If an insurer did object to covering some or all contraceptive services, enrollment in coverage offered by that insurer would be limited to plan sponsors or individuals who themselves object and are also exempt from the mandate based on their objection. Where an objecting insurer covers a group health plan for an employer that does not object to coverage, the insurer must notify the employer of this fact and the employer must provide coverage through some other means.

Third-Party Administrators

The rules do not expressly exempt third party administrators (TPAs)—the entities that process claims and otherwise administer their plans for them—from contraceptive coverage, but the preamble of the religious objection rule asserts that third party administrators are not subject to the preventive services requirement at all except through the contraceptive accommodation process, which the new rules deem optional. The preamble also specifies that third party administrators that have their own objection to complying with the accommodation process may decline to enter into, or continue, contracts as third party administrators of such plans. The Departments request comment on whether there are situations where it would be helpful to provide distinct protections for third party administrators based on religious or moral objections.

Individual Enrollees

Finally, the rules would allow willing group plan sponsors and insurers (including governmental employers) to accommodate individual enrollees who object to contraceptive coverage for religious or moral reasons by offering separate benefit packages, options, policies, certificates, or contracts that exclude contraceptive coverage. This “individual exemption” would apply to the enrollee’s entire coverage unit, such as a family policy, but would not otherwise affect the obligation of employers or insurers to cover contraceptives for other employees or insureds. An individual exemption could also not be relied on to force employers or insurers to provide coverage excluding contraceptives or to violate state contraceptive mandates. In the preamble, the Departments note that the individual exemption is expected to “reduce the incidence of certain individuals choosing to forego health coverage because the only coverage available would violate their sincerely held religious beliefs.”

The contraceptive mandate would otherwise remain in place for entities that do not object for religious or moral reasons. The rules do, however, allow objecting entities to choose an accommodation much like the current accommodation process under which employees would get contraceptive coverage through the employer’s insurer or third party administrator without the employer having to pay for it. Alternatively, the new rules allow objecting entities to simply refuse contraceptive coverage altogether under the exemption. Organizations that are currently operating under the religious accommodation provision, or that choose to do so in the future for either religious or moral reasons, could revoke the accommodation and simply rely on the exemption, but they must give their employees 60-days’ notice if they choose to do so or allow the revocation to begin on the first day of the first plan year that begins on or after 30 days after the date of the revocation.

In expanding these exemptions, the Departments assert that they are removing obstacles that entities and individuals may have faced when they otherwise wished to participate in the health care market and that these exemptions “advance [] the Affordable Care Acts goal of expanding health coverage among entities and individuals that might otherwise be reluctant to participate.” The Departments also assert that the rules do nothing to affect the many federal programs—such as family planning grants, the Medicaid program, and Maternal and Child Health Block Grants, among others—that provide contraceptives to low-income women and families.

The Privileged Status Of Objections To Abortion And Contraceptives In American Law And Policy

Curiously, the rules do not refer to other services that employers or individuals might object to for religious or moral reasons, except in one footnote in the moral objection rule. The preventive services requirement requires coverage of certain vaccinations that may be objectionable to some. Coverage of other services that some may object to, like blood transfusions, may be required under the essential health benefits requirement, but this receives no attention. Should an employer that objects for reasons of conscience to verifying the citizenship or legal immigrant status of its employees be permitted to opt out of verification requirements? Should an employer that objects to taxes for war be able to refuse to withhold taxes from its employee’s paychecks? The rules again illustrate the privileged status that objections to contraception and abortion hold in American religious liberty policy.

The interim final rule should bring a quick end to dozens of cases in which religious organizations have challenged the Obama administration contraceptive requirement accommodation. Indeed, the administration is already filing motions to dismiss those cases. But the rule has also already resulted in litigation challenging the administration’s change of position. The American Civil Liberties Union and SEIU filed a lawsuit on the afternoon of October 6 challenging the rules, claiming that they violate the Establishment Clause of the First Amendment, the Equal Protection Clause of the Fifth Amendment, and the Administrative Procedures Act. The Commonwealth of Massachusetts has also filed a lawsuit, as has California.

Five Supreme Court justices in Hobby Lobby accepted the Obama administration’s position that the government had a compelling interest in women having access to contraceptives through their employers, and the most recent Supreme Court order in the Zubik case asked the government to find an accommodation that would allow women continued access to coverage. Whether or not the courts will defer to the Trump administration’s change of position remains to be seen.

This post will first examine the history of the contraceptive accommodation and background of the new rules. It will then explore in greater depth the Trump administration’s interim final rules themselves.

Background On Contraceptive Litigation And New Rules

The interim final rules were promulgated in response to President Trump’s executive order on religious liberty, which stated:

The Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services shall consider issuing amended regulations, consistent with applicable law, to address conscience-based objections to the preventive care mandate promulgated under section 300gg-13(a)(4) of title 42, United States Code.

The cited section is the ACA’s preventive services requirement, which requires non-grandfathered health insurance coverage and employer-sponsored group health plans to cover preventive services without cost sharing. The preventive services provision explicitly requires coverage of women’s preventive services as defined by the Health Resources and Services Administration (HRSA). In response to this requirement, HRSA asked the Institute of Medicine (now the National Academy of Medicine) to recommend women’s preventive services that should be covered.

In 2011, on the basis of the IOM recommendation, HRSA defined women’s preventive services to include all contraceptives approved by the Food and Drug Administration, sterilization procedures, and patient education and counseling for women of reproductive capacity as prescribed by a health care provider (collectively referred to a contraceptive services). The final preventive services rules promulgated by the departments of Health and Human Services, Labor, and Treasury in 2012 required insurers and group health plans to cover all such contraceptive services.

Recognizing that some religions object to contraceptive coverage, however, the departments promulgated rules in 2012 that excluded from the mandate’s coverage “religious employers,” defined as non-profit institutions that have inculcation of religious values as their purpose, primarily employ and serve individuals who share their religious tenets, and fall within an Internal Revenue Code definition that largely apples to churches and houses of worship. Under rules issued in June of 2013, the agencies simplified their definition of “religious employer” and provided an accommodation for other non-profit “eligible organizations” (such as religious universities, hospitals, or charities) that object to providing contraceptive coverage for their employees or students for religious reasons.

Under the 2013 accommodation, eligible organizations (defined as non-profits that held themselves out as religious organizations and that had a religious objection to providing all or some contraceptives) did not have to contract, arrange, pay, or refer for contraceptive coverage their employees or students. But their employees and students were not left without contraceptive coverage. Eligible organizations that had insured plans had to self-certify, using an ERISA form 700, to their insurers that they objected to providing coverage to their insurers. The insurers then had to provide coverage for contraceptives to employees or students at no cost to the women or the organization. It was assumed that the insurers would save enough money to cover the cost of coverage.

Organizations with self-insured plans had to self-certify their religious objections to their TPAs using the ERISA form 700. The TPA was then responsible for providing contraceptive coverage, recovering the cost of coverage through an arrangement with a health insurer that would deduct the cost of coverage from fees that it would otherwise have owed a federally facilitated exchange.

For-Profit Objectors Successfully Sued After Being Offered No Accommodation

No accommodation was made for for-profit organizations under the 2013 final rule, as the departments concluded that for-profit corporations could not hold religious beliefs. Several dozen for-profit employers sued, however, claiming that the Religious Freedom Restoration Act (RFRA) protected them from having to provide contraceptive coverage. RFRA prohibits federal government from promulgating regulations that substantially burden the exercise of religion unless the regulation is the least restrictive means to accomplish a compelling governmental interest.

In its Hobby Lobby decision, the Supreme Court ruled in favor of the for-profit organizations, finding that “closely held” for-profit employers had religious free exercise rights, that the contraceptive mandate substantially burdened these rights, and that — although the contraceptive rule might serve a compelling governmental interest — the religious organization accommodation rule demonstrated that the federal government could in fact accommodate the interest of for-profit employers. Thus the rule as it stood without an accommodation could not be enforced against the plaintiffs under RFRA.

Dozens of religious organizations also sued under RFRA claiming that the accommodation offered by the Obama administration was inadequate to protect their rights. Immediately following the release of its Hobby Lobby decision, the Supreme Court entered an order enjoining the administration from requiring Wheaton College, a religious organization, to file a self-certification ERISA form 700 with its third party administrator. The Court stated that Wheaton could merely notify the government of its beliefs. The Court assumed that the federal government could then assure provision of contraceptive coverage to the College’s employees.

In August of 2014, HHS released an interim final rule providing another alternative accommodation for non-profit religious organizations. Instead of filing the ERISA form 700 with its insurer or TPA, an “eligible organization” could simply inform HHS in writing of its religious objection. HHS released a form that could be used for this purpose. The notification had to include the name of the eligible organization and the basis under which it qualified as an eligible organization. The entity was required to state its religious objection and identify the contraceptives to which it objected.

Upon receiving this notice with respect to an insured plan, HHS would inform the insurer of its obligation to cover contraceptives under the ACA. If a plan was self-insured, HHS notified the Department of Labor, which designated the TPA of the plan as the ERISA plan administrator for providing contraceptive services. The insurer or TPA would then be required to provide contraceptive services. In accordance with the Supreme Court’s decision in Hobby Lobby, the administration extended this accommodation to closely held for-profit corporations whose owners object to contraceptive coverage for religious reasons. This rule was finalized in 2015.

Zubik v. Burwell And Its Aftermath

The accommodations offered by the administration were not, however, acceptable to a number of religious entities, which continued their RFRA lawsuits challenging both accommodations. Nine of the federal appellate courts that ruled on lawsuits brought by these organizations held that the accommodation did not substantially burden the exercise of religion and several held that it was the least restrictive means of accomplishing a compelling governmental interest. One appellate court, however, held that the accommodation violated RFRA, creating a split among the circuits.

In the spring of 2016, the Supreme Court heard the appeal of the religious entity challengers in Zubik v. Burwell. After oral arguments, the Supreme Court ordered the parties to brief the question of whether contraceptive coverage could be provided through the insurers of religious entities without the entities having to submit the notices to which they objected.

In May of 2016 the Supreme Court, likely split four to four on the merits and hoping for compromise, unanimously agreed to remand the cases to the lower courts for

.an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans “receive full and equal health coverage, including contraceptive coverage.”

The Supreme Court seemed to suggest a procedure under which the objecting employers would contract with insurers to cover their employees but inform their insurers that they did not want to include contraceptive coverage. The insurers would then separately provide contraceptive coverage to the employees without any involvement or payment from the objecting employers.

In July of 2016, the Obama administration published a “request for information” seeking input from interested parties as to whether a resolution of the dispute was possible that would meet the objections of the religious entities but still ensure women’s access to health care. The administration received over 54,000 comments from the public responding to its request from organizations and individuals representing a wide variety of perspectives.

On January 9, 2017, the Obama administration released its response to the Supreme Court’s query. It concluded that a process like the one suggested by the Supreme Court would not be acceptable to the religious entities and would present administrative and operational challenges that would undermine women’s access to health care. The administration concluded based on comments it received that this compromise was not feasible for insurers, which would face administrative difficulties in identifying and tracking employers and women employees not subject to the contraceptive coverage requirement. The administration also concluded that contraceptive-only coverage was not feasible and that the Supreme Court’s suggested approach could not work for self-insured employers. It decided, therefore, not to modify its accommodation regulations.

In August of 2017, a Third Circuit opinion held unanimously, as noted below, that entities that have only a moral, as opposed to a religious, objection to providing contraceptives to their employees are not exempt from the requirement. In a divided opinion, it also held that the preventive services contraceptive requirement applied to insurers in the individual market, even in cases where individuals object to purchasing insurance that covers contraceptives on a religious basis.

A district court had earlier held that entities that had a moral objection to covering contraceptives for their employees did not have to do so. In the same decision it held that insurers should not be prohibited from selling coverage that does not pay for contraceptives to individuals who have a religious objection to contraceptives. Another district court also sided with an individual who sought insurance without contraceptive coverage.

The cases remanded by the Supreme Court remain pending in the courts of appeal. The plaintiffs in these cases have been pushing the Trump administration to take a stand supporting them in the litigation. The interim final rule is its response.

The Interim Final Religious Exemption Rule

The preamble to the religious exemption rule begins by citing a long list of statutory provisions through which Congress has protected religious beliefs regarding health care, including sections of the ACA. The preamble acknowledges that the ACA requires health insurers and group health plans to cover preventive services without cost sharing, including women’s preventive care and screenings as provided for in HRSA guidelines, and that HRSA exercised its discretion to require coverage of contraceptives. It also notes that the agencies have attempted to accommodate religious objections to contraceptive coverage, but observes that these attempted accommodations have resulted in litigation.

The agencies then state that they are issuing these interim final regulations to “better balance” the government’s interest in providing coverage for contraceptive with the government’s interest in protecting sincerely held religious beliefs. They ground these religious rights in President Trump’s executive order, the First Amendment, RFRA, a history of congressional enactments protecting religious freedom in health contexts, and comments received in response to the earlier request for information.

The preamble notes that in enacting the women’s health preventive services requirement to the ACA, Congress did not specifically require coverage of contraceptives, nor did it incorporate existing guidelines as it did with other preventive services; rather, it delegated broad discretion to HRSA to develop guidelines. It also argues that Congress did not intend a uniform preventive services requirement, since it excluded from the coverage of the requirement grandfathered plans which still cover 22.5 million of the 150 million Americans with employer coverage.

The preamble proceeds to reexamine the HRSA recommendations. The HRSA recommendations were based on an Institute of Medicine report recommending coverage of the full range of FDA-approved contraceptives. The preamble notes that some of these methods prevent implantation of an embryo and are regarded by many persons and organizations as abortifacients. The preamble also notes the dissent of one of the fifteen members of the IOM committee who accused the panel of making its decision based on the preferences of its members “filtered through a lens of advocacy.”

The preamble next describes in detail the regulatory process that established the current accommodations for religious objections to contraceptives. The 2011 interim final and 2012 final rules exempted, as noted above, some religious organizations, mainly churches, from the requirement without any notice requirement. The definition of “religious employer” was expanded in the 2013 final rule.

The 2013 final rule also created an accommodation for other religious nonprofits, as described above, that allowed their employees through the self-certification process to receive contraceptive coverage through the insurers or TPAs that covered or administered their plans, without the employer having to pay for contraceptive coverage. The preamble asserts that the final rule cited no supporting evidence for its conclusion that the nonprofits that claimed the accommodation would be less likely to employ individuals who shared the organization’s opposition to contraceptives than employees of the churches and religious orders covered by the religious organization exception.

The preamble then describes the history of contraceptive litigation, again in great detail. It reports the conclusions of the Supreme Court in  Hobby Lobby that for-profit closely held corporations could claim the protection of the religious freedom restoration act, that the rule “substantially burdened” the plaintiffs’ exercise of religion, and that the government had not shown that the rule was the least restrictive alternative for achieving a compelling governmental interest (which the majority opinion assumed), since an accommodation like that granted religious nonprofits was possible.

The preamble notes that the opinion of the Court stated that, under RFRA, the government could not rely on compelling interests “couched in very broad terms”, but must demonstrate that a compelling interest was served by refusing an exemption to the particular claimants. The preamble omits mention, however, of the fact that a majority of the Court—including the four dissenting justices and Justice Kennedy, who concurred in the majority opinion—concluded, in the words of Justice Ginsburg, that the contraceptive mandate served compelling governmental interests that “are concrete, specific, and demonstrated by a wealth of empirical evidence.” (Justice Kennedy concluded that “the HHS regulation here at issue furthers a legitimate and compelling interest in the health of female employees.”)

The preamble proceeds to describe the Court’s order in the Wheaton College case, the 2014 rule changes to the accommodation that resulted from it, and the continuing litigation that ensued, all explained above. It describes the Court’s remand in Zubik asking the parties to come up with a settlement, but leaves out the Court’s instructions that the settlement ensure that “the affected women receive contraceptive coverage seamlessly, together with the rest of their health coverage,” and “receive full and equal health coverage, including contraceptive coverage.”

The preamble describes the Obama administration’s conclusion in January of 2017 that it could not find a way to accommodate the objections of the eligible organizations while “pursing the Departments’ policy goals.” It ends its historical section with a description of President Trump’s executive order on religious liberty. It also notes the conflicting court decisions on whether the preventive services mandate can be enforced to deny individuals with religious objections an opportunity to purchase insurance that does not cover contraceptives.

Having established their interpretation of the history of the disputes concerning contraceptives, the departments move on to a deeper consideration of RFRA and the government’s interest in this issue. They observe that “despite multiple rounds of rulemaking . . . the Departments have not assuaged the sincere religious objections to contraceptive coverage, nor have we resolved the pending litigation.” They therefore embark on a new course–expanding the current church exemption to cover other employers with religious objections, although preserving the accommodation for those that prefer it. They also create a process whereby a willing employer or insurer may allow an objecting individual to get coverage without contraceptive coverage. They do not change HRSA’s authority to require contraceptive coverage; they rather expand those exempted from the requirement.

The preamble then turns to examining RFRA requirements more closely. Acknowledging that the majority of appellate courts have held that the contraceptive mandate with the accommodation does not impose a substantial burden, the departments conclude that it does.

Disputing The Existence Of A Compelling Governmental Interest

The Departments then state that they have concluded, on reconsideration, that there is no compelling governmental interest in applying the mandate to entities that object to coverage of contraceptives for religious reasons. They offer a number of reasons for reaching this conclusion.

First, they observe again that the ACA itself does not specifically require contraceptive coverage but rather granted HRSA discretion to define women’s preventive services. Next they note again that Congress exempted grandfathered plans from the preventive services requirement in general (although the departments later note that only 6 percent of employers surveyed before the ACA said that they did not offer contraceptive coverage). Third, they note that some of the covered organizations are willing to cover some contraceptives, thus satisfying women’s interests in having access to contraceptives. Fourth, they note that self-insured church plans are not required to provide contraceptives and that churches and similar religious organizations are exempt from the contraceptive requirement, undermining the claim to a compelling interest.

The departments had earlier justified the church exception by claiming that employees of churches were more likely to share their employer’s religious beliefs than employees of other religious organizations, such as universities or hospital. The preamble now asserts, however, that many of the employees of objecting institutions are required to sign a statement of faith, or at least are on notice of the institution’s position on contraceptives when they accept employment with the institution. Moreover, the departments express a concern that requiring contraceptive coverage may encourage some entities to not offer coverage, undermining the broader interest of the ACA in promoting coverage.

As their argument proceeds, the departments call into question the conclusions of the original IOM report on which the HRSA requirement was based. They assert that the gender gap in preventive services identified by the IOM has likely been closed by the provision of other women’s preventive services under the ACA. They note that many other federal, state, and local programs (“dozens” they state at one point) provide free or subsidized contraceptives for low-income women. They also observe that most forms of contraceptives are available for around $50 a month.

Moreover, the departments assert, the women identified as “most at risk” of unintended pregnancy by the IOM report are young, unmarried, low-income, minority women, who, the departments suggest, are not generally the kind of women who have employer-based group health plans or attend the objecting entities’ private universities. And most such women are already using contraceptives.

In any event, the departments conclude, a causal relationship between access to contraceptives and reduced unintended pregnancies has not been established. Statewide contraceptive mandates have “not necessarily” lowered rates of unintended pregnancy. A long discussion follows of studies that show that contraceptive use increases sexual activity, which may increase unintended pregnancies. The preamble also cites studies showing negative health effects from contraceptive, use although it also acknowledges positive health effects.

The preamble acknowledges that many women use contraceptives for medical reasons, not to prevent pregnancy. According to one survey, 15 million American women use contraceptives for medical reasons other than birth control. The departments observe however, that these uses are treatment, and are thus not covered by the preventive services mandate.

Concluding that no compelling governmental interest requires application of the contraceptive mandate to the objecting organizations, the interim final rule essentially broadens the exemption that formerly applied only to churches and similar “religious organizations” to cover all objecting organizations. The government further concludes that there is no compelling governmental interest in requiring employers or insurers to provide contraceptive coverage to individuals who have religious objections to such coverage. Insurers and employers are not required to provide such coverage to individuals, but could provide it if they chose to do so.

Procedural Issues

The preamble to the religious objection rule recognizes the obvious—that the interim final rule represents a dramatic change in the positions earlier taken by the departments. It cites Supreme Court authority for the proposition, however, that agencies “are free to change their existing policies as long as they provide a reasoned explanation for the change.” Moreover, it presents the change in the contraceptive rule as only the latest of a long series of changes.

The rule is, as noted, being promulgated as an interim final rule. Under the Administrative Procedures Act, agencies must normally publish a proposed rule for comment and then consider these comments before publishing a final rule. The departments claim authority under their own statues to depart from this procedure by issuing an interim final rule without notice and comment rulemaking, but the statutes they cite give only generic authority without specifying when it is appropriate. They also argue for application of the “good cause” exception under the Administrative Procedures, noting that three earlier interim final rules have been issued addressing the issue, that dozens of lawsuits have been pending on the issue for nearly five years and the Zubik remand is over a year old, that the departments are subject to injunctions in some of these cases, that the departments have received more than 100,000 comments on the issue on multiple occasion, and that delay will increase the cost of health coverage for entities that choose to remain with grandfathered plans rather than comply and may deter other entities from offering coverage at all. Of course, the comments were not on this specific proposal, and notice and comment always causes delay.

Whether these justifications are sufficient to support such a radical change in the rules without giving the public notice and an opportunity to comment will surely be an issue that will have to be decided by the courts. The fact that issuance of the rule was delayed for four months while it sat at the Office of Management and Budget also raises questions about whether the agencies could not await public comment, as the APA normally requires.

The Economic Impact of the Rule

The preamble to the rule contains an extensive section analyzing the effects of the rule on religious entities and on women covered by their health plans. The rule will reduce the regulatory burden for entities that will be exempt from the filing requirements of the accommodation, although they will still be required to give notice to their employees if they drop coverage during a plan year. The departments state that they lack the data necessary to determine the actual effect of the rule on plan participants and beneficiaries in terms of costs they may incur or unintended pregnancies. There are too many variables involved, such as how many entities will make use of the rule, which women covered by those plans would want coverage, how many of them will purchase contraceptives anyway, and how many of them might not otherwise have coverage if the exemption were not available.

They do take a shot, however, at estimating how many women will be affected by the rule. They estimate that about 209 eligible entities will claim either the exemption or the accommodation, based on the fact that 122 nonprofit and 87 for-profit entities have sued challenging the mandate or accommodation. They assume that there are few entities interested in claiming the exemption that have not already sued, and that a total of 109 will claim the exemption and 109 will use the accommodation. Applying various assumptions as to the number of employees these litigating entities employ (65,000), the number of these who have coverage (34,000), the number of their dependents (34,000), the percentage that are of childbearing age (20.2 percent), and the percentage of these who use contraceptives (44.3 percent) the departments conclude that 7,221 women employees will be affected by the rule. Additionally, 1,462 female students of objecting institutions will be affected, for a total of 8,700 women associated with litigating entities.

In addition, however, the departments estimate that about 576,000 persons are covered by self-insured plans with third party administrators that have claimed the user fee adjustment under the accommodation. The departments estimate that another 451,000 were covered by fully insured plans using the accommodation. The departments believe that the biggest employers are religious hospitals and health systems and that they will continue to claim the accommodation rather than the exemption. If 25 percent of covered persons end up in exempt plans, 23,000 women who are of child-bearing age and use birth control will be affected by the rule.

If this number is added to the 8700, the departments conclude, less than 0.1 percent of the 55.6 million women in private plans will be affected by the rule. These women would, the departments estimate, spend about $18.5 million on contraceptives.

The departments also make a second attempt at estimating the number of women affected by the rule starting with the percentage of health plans that did not cover contraceptives prior to the ACA and assuming that a certain percentage of these did not offer coverage for religious reasons. Using this approach, they come up with a total of 120,000 affected women, who would have to spend $70.1 million on contraceptive coverage. The departments conclude, however, that much of this cost would be offset by reduced premiums.

All of this is very speculative, however. There are about 600 Catholic hospitals, 1,400 Catholic long-term care facilities, and 200 Catholic colleges and universities in the United States. There are many Protestant entities or entities of other faiths that may object to all or some contraceptives. Many of them, no doubt, have not filed lawsuits or so far claimed the accommodation. But some may be under pressure to take advantage of the new exemption once it becomes available. The universe of employees and students affected by the rule may be far greater than the departments assume.

Moral Objections To Contraceptives

As noted earlier, a second rule creates a new exemption and extends the existing accommodation to entities that have moral objections to covering contraceptives for their employees or students or to purchasing insurance that covers contraceptives. The preamble of this rule repeats much of what is in the preface to the religious exemption rule. From the outset, however, it presses the argument that “Congress has a consistent history of supporting conscience protections for moral convictions alongside protections for religious beliefs, including as part of its efforts to promote access to health services.”

The preamble includes a section on the regulatory and litigation history of the current rule that largely mirrors the corresponding section in the religious liberty preamble, although it is somewhat abbreviated and focuses on moral objections. The preamble discusses at some length March for Life v. Burwell, a district court decision that concluded that an employer with a non-religious moral objection to contraception should not have to comply with the contraception mandate. It pays much less attention to the Third Circuit Court of Appeals decision in Real Alternatives v. Burwell, which concluded that RFRA does not protect moral beliefs unless they hold the place in an individual’s life that a traditional religion would and that the Equal Protection Clause does not require the government otherwise to offer moral convictions the same protection offered religious beliefs. It notes that there was a dissent in that case, but not that the decision was unanimous in its rejection of the moral right issue.

The preamble emphasizes again the scope of the discretion the departments have in deciding which services must be covered as women’s preventive services. It again notes that the grandfather exception excludes many women from protection in any event. It cites a number of authorities for protecting moral as well as religious rights of conscience, including President Obama’s own executive order on abortion coverage through the ACA, that should shape the department’s exercise of their discretion. It includes an extended discussion of the Church Amendment which protects conscientious objection on the basis of moral conviction to “any lawful health service,” although it is specifically aimed at objections to abortion

The preamble further discusses Welsh v. United States, which recognized a right of conscientious objection to military service based on deeply held moral or ethical beliefs that “occupy in the life of that individual ‘a place parallel to that filled by . . . God’ in traditionally religious persons.” The preamble does not, however, engage the conclusion of the Third Circuit in Real Alternatives, the one appellate court to address this issue, that a moral position on a single issue does not meet the Welsh test. The preamble also discusses state laws protecting moral objections to the provision of various services, most of which cover abortion but about a quarter of which pertain to contraceptives. Finally, it cites Presidents Washington, Jefferson, and Madison, and President Trump’s executive order on moral objections.

Throughout, the preamble notes that not all moral objections to particular medical services (like vaccinations) must be protected, or that protection of moral objections will always enjoy the same status as religious objections, but it does contend that protection of moral objections is appropriate here.

The preamble to the moral objection rule, like the religious objection rule, includes a lengthy section justifying the use of interim final rulemaking, making much the same arguments.

Finally, the preamble turns to the anticipated effects of the rule. It notes that only two organizations have challenged the contraceptive rule claiming moral objections, both of which have fewer than five employees and require their employees to agree to their objection to coverage. It estimates that there are perhaps nine organizations that will claim the protection of the rule, which will have between them perhaps 81 employees, including 15 women of childbearing age who might use contraceptives.

Inevitable New Lawsuits, State Laws Complicate Situation

As was noted at the outset, the interim final rules are likely to provoke a whole new round of litigation. Lawsuits are likely be filed challenging the departments’ new conclusion that no compelling governmental interest supports the contraceptive rule, given the opinions of five Supreme Court justices to the contrary. Litigation will also raise claims of gender discrimination under section 1557 of the ACA, and violation of an obscure section (1554) of the ACA that prohibits any HHS regulation that “(1) creates any unreasonable barriers to the ability of individuals to obtain appropriate medical care; or (2) impedes timely access to health care services.” Violations of the Administrative Procedures Act are also likely to be alleged. After a half a decade of litigation on the contraceptive issue, we can look forward to years more.

Finally, it should be noted that the new regulation only exempts employers from the federally imposed preventive services mandate. Twenty-six states require insurers to cover contraceptives. Twenty-one have religious exemptions of some kind, but it should not be presumed that these are coextensive with the new federal exemption. The state mandates would not apply to self-insured ERISA plans, but they would apply to insurers.