Despite the U.S. Supreme Court's June 2012 ruling on the federal health care reform act's individual mandate, several legal challenges relative to employers' obligations under the law remain unsettled.

Last year, several dozen privately owned companies and nonprofit organizations filed lawsuits in federal courts seeking exemption from a rule issued by the U.S. Department of Health and Human Services in 2011 under the auspice of the reform act, requiring employers and/or their insurers to provide cost-free contraceptive prescriptions and other preventative care benefits.

In virtually all of the cases, plaintiffs claimed it contradicts their religious beliefs to provide access or funding for contraceptive drugs and other forms of birth control, and that forcing them to choose between adherence to those beliefs and compliance with the HHS requirement violates their rights under the federal Religious Freedom Restoration Act and the First Amendment to the Constitution.

The rule went into effect for non-grandfathered benefit plans beginning Aug. 1, 2012, and imposes a $2,000-per-year-per-employee penalty on companies that elect not to include the coverage, if and when an employee uses a federal subsidy to purchase health insurance through a public exchange.

Certain types of religious employers are exempt from the contraceptive coverage requirements. Initially, the exemptions were limited to houses of worship and their affiliated organizations. On Feb. 1, HHS issued a proposed rule extending exemptions to religious non-profit organizations, including health care providers, universities and other charities.

Under the proposed rule, an exempted organization’s group health plan members would be offered no-cost contraceptive coverage through separate individual health care plans directly administered by insurers or, if an employer self-insurers their group health benefits, by a third-party administrator.

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The proposed expanded exemptions do not include for-profit employers, regardless of their religious convictions. Nonetheless, experts said it may be difficult for those employers to prove that the coverage requirement substantially infringes on their right to religious expression.

“It’s a bit of a more compelling issue for the self-insured market, because they’re paying for the benefits directly as opposed to paying through premiums, but I still don’t know if that means they’ll succeed at trial.,” said Steve Wojcik, vice president of public policy at the Washington-based National Business Group on Health.

None of the lawsuits have yet drawn a final verdict at the district court level. However, several district and appellate courts have issued rulings either granting or denying employers' requests for temporary exemptions from the rule, pending the outcome of their suits.

Most recently, a three-judge panel of the 7th U.S. Circuit Court of Appeals in Chicago granted a preliminary injunction blocking enforcement of the contraceptive requirement for a Highland, Ill.-based construction firm. Similar requests for preliminary injunctions also have been granted by the 8th U.S. Circuit Court of Appeals and U.S. District Courts in the District of Columbia, the Eastern District of Michigan and the District of Colorado.

Conversely, U.S. Supreme Court Justice Sonya Sotomayor upheld in late December a 10th U.S. Circuit Court of Appeals panel's rejection of a request for temporary relief filed by the owners of Oklahoma City-based Hobby Lobby Stores Inc.

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Experts said the disparate opinions among the courts on preliminary injunctions could be an early signal that the overriding question of law — whether the coverage mandate violates the Religious Freedom Restoration Act and/or the First Amendment — is destined to be decided by the Supreme Court.

“Because the central issue of these cases seems to be of great importance as part of the health care reform act, and given that there could be a significant split among the appeals courts, it's certainly possible that this could find its way to the Supreme Court,” said Nicole Bogard, an Atlanta-based partner at Seyfarth Shaw L.L.P.

The other significant challenge to the health care reform act's implementation pertains to the availability of federal premium subsidies for health insurance purchased through public exchanges.

In September, state Oklahoma Attorney General Scott Pruitt asked a federal judge to overturn an Internal Revenue Service regulation providing subsidies for health care coverage purchased through insurance exchanges run either by individual states or the federal government. Under the health care reform law, federal exchanges will be established in states that refuse to set up their own exchange.

The IRS' rule includes steep tax penalties for employers that do not provide adequate and affordable health benefits if any of their employees uses a federal subsidy to buy coverage through an exchange.

Mr. Pruitt's lawsuit argues that the health care reform act's original language only allows the government to offer subsidies for insurance purchased through state-run exchanges, and not through exchanges operated by the federal government. Therefore, the lawsuit contends, Oklahoma employers should not be subject to the tax penalties prescribed by the IRS.

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Experts said a ruling in favor of Mr. Pruitt's claim could threaten the very framework of the health care reform act, as it would limit the government's ability to enforce minimum coverage requirements for employers in states that refuse to establish insurance exchanges, as well as provide access to subsidized health care coverage for millions of lower-income uninsured adults.

However, experts said, it remains unclear if the court will reach a consideration of the merits of Mr. Pruitt's case, as the state must first prove that it has a legal right to challenge the IRS rule.

“That's going to be a difficult challenge for the state,” Ms. Bogard said, noting that Mr. Pruitt's lawsuit does not establish that the state — as an employer — would be subject to the tax penalties.