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High court to take on religious nonprofit groups' challenge to ACA contraceptive mandate

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Oral arguments will lead the U.S. Supreme Court to resolve nonprofit religious organizations' challenge of the health care reform law's contraceptive mandate.

The cases are part of a string of litigation challenging the Patient Protection and Affordable Care Act provision that requires employers to cover prescription contraceptives as part of their benefit plans.

The organizations, mainly Christian colleges and charities, argue that the ACA violates their rights under the U.S. Religious Freedom Restoration Act by forcing them to provide birth control coverage, which they argue is immoral — even with an accommodation where they can pass the obligation to their health insurer or third-party administrator. The religious nonprofits argue that even the accommodation violates their rights, and they want to be exempted from the rule, an option now available only to churches.

A September ruling in Heartland Christian College et al. finally opened a split compared with seven other appeals courts, when a three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis struck down the ACA requirement. “That they themselves do not have to arrange or pay for objectionable contraceptive coverage is not determinative of whether the required or forbidden act is or is not religiously offensive,” the 8th Circuit ruled.

In October, the U.S. Justice Department reversed its stance and asked the Supreme Court to hear Roman Catholic Archbishop of Washington et al. v. Sylvia Burwell et al., in which the appeals court sided with six others in ruling that the requirement did not put an undue burden on the religious nonprofits.

The Supreme Court consolidated the seven cases in November with oral arguments set for the spring.

“Whatever the court discerns … whether they discern it on a very technical matter or if they take a broader position on the status of the Religious Freedom Restoration Act, it could have a significant impact down the road,” said Karen McLeese, Kansas City, Missouri-based vice president of employee benefit regulatory affairs at CBIZ Inc.



CONTRACEPTIVE 7

The U.S. Supreme Court on Nov. 6 accepted seven cases challenging the Affordable Care Act's contraceptive mandate. Briefs are due by March 11.


Roman Catholic Archbishop of Washington et al. v. Sylvia Burwell et al.

What: Archdiocese of Washington and other Catholic nonprofits


Background: In January 2013, the U.S. District Court for the District of Columbia dismissed the case. The U.S. Court of Appeals for the District of Columbia Circuit consolidated the case with Priests for Life v. U.S. Department of Health and Human Services, and in November 2014 rejected all petitioners' claims. In May 2015, it denied a request for a rehearing en banc.



Priests for Life v. U.S. Department of Health and Human Services


What: Staten Island, New York-based Catholic organization that works to end abortion


Background: The U.S. District Court for the District of Columbia in December 2013 denied an injunction sought by Priests for Life. In November 2014, the U.S. Court of Appeals for the District of Columbia Circuit dismissed the case and denied an en banc rehearing in May 2015.



Zubik v. Burwell

Who: Rev. David A. Zubik, Bishop of the Catholic Diocese of Pittsburgh

Background: In December 2013, the U.S. District Court for the Western District of Pennsylvania granted a permanent injunction against the mandate, but the 3rd U.S. Circuit Court of Appeals reversed it in February 2015. It rejected an en banc rehearing in March 2015.



Geneva College v. Burwell

What: Christian college in Beaver Falls, Pennsylvania

Background: The 3rd U.S. Circuit Court of Appeals in February 2015 reversed a decision from the U.S. District Court for the Western District of Pennsylvania granting a preliminary injunction against the ACA rule.



Little Sisters of the Poor Home for the Aged v. Burwell

What: Denver-based nonprofit organization of Roman Catholic nuns

Background: The U.S. District Court for the District of Colorado in December 2013 denied the Little Sisters of the Poor's motion for a preliminary injunction. In July 2015, the 10th U.S. Circuit Court of Appeals ruled Little Sisters of the Poor must comply with the mandate.



Southern Nazarene University v. Burwell

What: Bethany, Oklahoma-based private Christian university

Background: The U.S. District Court for the District of Oklahoma in December 2013 granted the university a preliminary injunction. The 10th U.S. Circuit Court of Appeals in July 2015 overturned the injunction.



East Texas Baptist University v. Burwell

What: Marshall, Texas-based private Christian university

Background: In December 2013, the U.S. District Court for the Southern District of Texas granted the university's request for a preliminary injunction against the mandate. The 5th U.S. Circuit Court of Appeals reversed the ruling in June 2015.



OTHER SUITS SEEKING TO DERAIL HEALTH CARE REFORM

Maria De Lourdes Parra Marin v. Dave & Buster's Inc., Dave & Buster's Entertainment Inc.

Type: ERISA Section 510 challenge

Status: Pending in the U.S. District Court for the Southern District of New York

A proposed class action against sports bar chain Dave & Buster's may shed light on whether employers can reduce or limit their employees' hours to avoid paying for health coverage for those who work 30 or more hours a week.

The suit brought on behalf of 10,000 workers last May against Dallas-based Dave & Buster's in U.S. District Court of the Southern District of New York alleges the sports bar chain began reducing employee hours in June 2013 to avoid ACA-related costs, resulting in workers losing their health insurance or being offered inferior plans.

The case, which is novel in the context of the health reform law, will “shed a little more light on how far employers can go” to reduce workers' hours to cut costs, said Hrishi Shah, a Chicago-based associate at law firm Franczek Radelet P.C.

At issue is Section 510 of the Employee Retirement Income Security Act of 1974, which prohibits employers from interfering with an employee's right to collect benefits.

Previous lawsuits under Section 510 that proved an employer fired an employee right before being vested in the pension plan or fired a worker who has high medical claims have been successful, but there is no precedent for the Dave & Buster's case, Mr. Shah said.

While few employers have cut the number of workers to avoid paying for health insurance for full-time workers, more have reduced hours to avoid the 30-hour threshold.

According to a Society for Human Resource Management survey in March 2015, 14% of employers already reduced part-time employee hours and 6% planned to do so. Two percent of employers already reduced full-time employee hours, and 2% planned to do so. Only 5% of employers had already reduced or planned to reduce the total number of employees because of the ACA requirement, according to SHRM.

It's “a little riskier” for an employer to “take someone who had health coverage by virtue of working over 30 hours and then (bring) them back down under 30 so that they lose health coverage that they had,” Mr. Shah said.

“This is sort of unprecedented territory. The outcome of this case is going to be pretty huge,” he said.


Matt Sissel v. Department of Health and Human Services

Type: Origination clause challenge

Status: Petition to appeal pending in the U.S. Supreme Court

A lawsuit against the U.S. Department of Health and Human Services could be a death sentence for the ACA if it succeeds.

The case, brought by Washington artist Matt Sissel, alleges that the ACA originated in the U.S. Senate and not in the U.S. House of Representatives, violating the origination clause of the U.S. Constitution that stipulates all revenue-raising bills must originate in the House.

“If this were to succeed, it would be devastating,” said M. Miller Baker, a partner at McDermott Will & Emery L.L.P. in Washington.

The U.S. Court of Appeals for the District of Columbia Circuit in July 2014 upheld a lower court ruling that said the ACA was not meant to raise revenue, but instead was meant to “overhaul the nation's health insurance market.” In that case, the origination clause would not apply.

Mr. Sissel asked the appeals court for a rehearing en banc, and the court denied the request in August. He asked the Supreme Court in October to hear the appeal; the court has not ruled on the request.

Another case, Steven F. Hotze et al. v. Burwell et al., which is pending in the 5th U.S. Circuit Court of Appeals in New Orleans, makes the same argument. The court dismissed that suit as well, saying he had no standing to sue. Mr. Hotze has asked for a rehearing.

While the case could be devastating if it succeeds, Mr. Miller said it has little chance of success. First, the 5th Circuit has narrowly construed the origination clause, and second, the ACA did technically originate in the House, even though the Senate “gutted the original” bill and replaced it with the law we have today, he said.


U.S. House of Representatives v. Burwell

Type: Cost-sharing challenge

Status: Pending in the U.S. District Court for the District of Columbia

A suit brought by House Republicans could render the cost of health insurance unaffordable for ACA plan enrollees.

The Republican-backed suit filed in November 2014 raises two key claims. It alleges that the U.S. Health and Human Services and the Treasury departments have spent billions of dollars that have not been appropriated by Congress to support the ACA. Namely, the suit argues that HHS and Treasury illegally reimbursed health insurers required by the ACA to reduce low-income plan members' out-of-pocket costs.

The suit also argues that HHS illegally delayed enactment of the ACA.If the challenge were to succeed, “it would be a significant blow to the ACA, but it would not be fatal,” said M. Miller Baker, a partner at McDermott Will & Emery L.L.P. in Washington.

Eliminating the insurer subsidies would result in unaffordable coverage costs, experts say.

In September, U.S. District Judge Rosemary Collyer ruled that the House has standing to sue over the billions spent without congressional appropriation. In October, the judge denied the Obama administration's request to immediately appeal to the U.S. Court of Appeals for the District of Columbia Circuit.

“Defendants will have a chance to make their argument to the Court of Appeals; the only question is whether they may do so now,” Judge Collyer wrote in the October order.

Judge Collyer set the final deadline for briefs on Jan. 18, and oral arguments will follow.