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Religious nonprofits make contraceptive mandate case to Supreme Court

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The health reform law's controversial contraceptive mandate on Wednesday went in front of the Supreme Court for a second time.

The nation's high court on Wednesday morning heard oral arguments for a group of religious nonprofits challenging the legality of the Affordable Care Act's contraceptive mandate, which requires employers to provide contraceptive coverage to employees at no cost.

Central to the case, Zubik et al v. Burwell, which includes seven consolidated cases, is whether the accommodation to the mandate provided to religious nonprofits by the government violates their rights under the 1993 Religious Freedom and Restoration Act.

The religious nonprofits argue that the accommodation, which allows employers to pass the obligation to their health insurer or third-party administrator, still requires the nonprofits to be complicit in providing contraceptives to their employees — an act they believe is in violation of their faith.

Speaking for four of the religious nonprofit plaintiffs, Paul D. Clement, partner at law firm Bancroft P.L.L.C., argued during the hearings, “they can adhere to their religious beliefs and pay millions of dollars in penalties, or they can take steps that they believe to be religiously and morally objectionable and that the government deems necessary, for them to provide contraception coverage through their health care plans,” according to an official transcript of the oral arguments.

The plaintiffs are mostly religiously affiliated nonprofit universities and colleges, nursing homes, charities and Roman Catholic clergy.

The government argues that the accommodation requiring a religious nonprofit to notify the government of its religious objections to the mandate does not violate the nonprofits' rights.

U.S. Solicitor General Donald B. Verrilli Jr., in defense of the government, argued that the accommodation “strikes precisely the sensible balance between religious liberty and compelling governmental interests that Congress sought when it enacted RFRA,” according to the transcript.

Nine appeals courts have heard cases brought by religious nonprofits challenging the accommodation. Of those, eight ruled in favor of the government, and only one — the 8th U.S. Circuit Court of Appeals in St. Louis — ruled that the accommodation violates the religious nonprofit's rights.

How the Supreme Court will rule, however, is up in the air.

In the first contraceptive mandate case before the Court in 2014, Burwell v. Hobby Lobby , the court ruled 5-4 that the contraceptive mandate violated the closely held, religiously affiliated employer's rights under RFRA. An accommodation to the mandate was not available for such closely held, religious for-profit companies at the time, but was extended to them in response to the Hobby Lobby ruling.

“I'm not sure it's a slam dunk. I'm not sure that you can predict this one,” said Amy Gordon, Chicago-based co-chair of law firm McDermott Will & Emery's Health and Welfare Benefits Affinity Group.

Still, she said, “the reason why I might assume … that the court is going to find that filling out the form (informing the government of its need for accommodation) doesn't raise concerns for religious freedom is because it seems like it was implied when the Hobby Lobby decision was drafted and the briefs were pretty much saying that they didn't think that it would override a religious belief.”

For example, in 2014's Burwell v. Hobby Lobby, Justice Samuel Alito wrote in the majority opinion that the accommodation established by the government for religious nonprofits “is less restrictive than requiring employers to fund contraceptive methods that violate their religious beliefs” and “it 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 (Department of Health and Human Services) stated interests equally well.”

Still, some observers say the death of Justice Antonin Scalia in February could lead to a deadlock in the case.

“The fact that there's eight justices creates the possibility of a 4-4 split, especially when one takes into account who those eight justices are,” said Steven Friedman, New York-based co-chair of the employee benefits practice at law firm Littler Mendelson P.C.

Others say the court is likely to find a way to avoid a split, which would mean that the lower courts' decisions are upheld, even the St. Louis outlier.

Whichever way the Court decides, there could be significant implications, sources said.

“If (the ruling) would come out in favor of Zubik, it is really going to throw a monkey wrench into our long tradition of legislative accommodations,” Marci Hamilton, New York-based Yeshiva University law professor, said in a Kaiser Family Foundation web briefing for reporters last week. That's because the plaintiffs are essentially asking to “fine-tune” an accommodation to a law according to one group's specific set of beliefs, she said.

“It's hard to think of what other issues (would) come up, but it's certainly possible that once the door is open for other issues to come forward and for further employers to come forward and say we don't believe in this type of treatment or that type of treatment,” Mr. Friedman said.

Still, the contraceptive mandate issue is a niche one, and most employers are unlikely to be affected by the decision.

“The whole question of the contraceptive mandate is something that affects a fairly narrow group of employers, and it certainly is an issue really only for closely held companies and certain nonprofits and churches and other types of folks that are going to have public positions on contraception,” Mr. Friedman said.

According to a December analysis by the Kaiser Family Foundation, only 10% of all nonprofit groups offering health insurance in 2015 with 1,000 or more workers have sought an accommodation. And overall, only 3% of nonprofits with 10 or more employees have requested an accommodation, the analysis showed.

There were about 1.4 million nonprofits registered with the Internal Revenue Service in 2013, Kaiser said, though the IRS does not collect uniform information on whether the nonprofits are religiously affiliated, according to the analysis.