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Contraceptive coverage mandate under fire


Religious nonprofits fighting the federal health care reform law's contraceptive mandate may get their day before the U.S. Supreme Court, where they would argue that even relaxed requirements violate their right to religious freedom.

The Supreme Court could grant a hearing to one or more religious nonprofit employers challenging the coverage mandate as early as next month and potentially resolve a key question unanswered in the court's 2014 ruling Hobby Lobby Stores Inc. v. Sylvia Burwell et al.: Does the Obama administration's accommodation for nonprofit groups violate the Religious Freedom Restoration Act?

Experts say a hearing before the high court is highly likely in light of a ruling earlier this month by a three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis in favor of religious nonprofits challenging the accommodation's legality, directly contradicting previous decisions by seven other appeals courts.

Ruling in two cases, the 8th Circuit upheld lower court orders temporarily barring the government from forcing religiously affiliated schools, hospital systems and other charities to offer their employees cost-free prescription contraceptives or, under a religious charity accommodation finalized in July, pass the obligation to their health insurers or third-party health plan administrators.

The 8th Circuit's ruling contrasts sharply with seven other appeals courts, which ruled that requiring nonprofits to notify the government or their insurers and TPAs of their objections does not violate their religious freedom rights.

Plaintiffs in the seven cases decided earlier have already petitioned the high court for a hearing.

Though the Obama administration has not yet indicated whether it will appeal the latest rulings or seek a review by the full 8th Circuit, legal experts say this could be the ideal opportunity to get the case before the court.

“Now that we have the 8th Circuit ruling in contradiction of the other circuits ... I think it does set up a conflict that would be ripe for the Supreme Court to decide,” said Susan Nash, a Chicago-based partner at McDermott Will & Emery L.L.P.

“I think this makes for a good test, particularly when you look at the grounds on which the 8th Circuit panel made its decisions,” said James Napoli, a Washington-based partner at Seyfarth Shaw L.L.P.

Typically, legal experts said, entities seeking the religious freedom law's protection from a law or regulation must demonstrate that their right to exercise their faith has been substantially burdened, a threshold previous appeals courts said religious nonprofits failed to meet.

However, in its 29-page ruling in favor of Heartland Christian College and CNS International Ministries Inc. on Sept. 17, the 8th Circuit panel held that the plaintiffs' assertions that the government's nonprofit accommodation is, in and of itself, sufficient proof of that burden under the religious freedom law.

“The question here is not whether CNS and (Heartland Christian College) have correctly interpreted the law, but whether they have a sincere religious belief that their participation in the accommodation process makes them morally and spiritually complicit in providing abortifacient coverage,” Judge Roger Wollman wrote for the panel. “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 also ruled that the government has other ways to achieve the objective of broadening women's access to contraceptive prescriptions and other health care services, concurring with the plaintiffs that “the government could provide subsidies, reimbursements, tax credits or tax deductions to employees, or that the government could pay for the distribution of contraceptives at community health centers, public clinics and hospitals with income-based support.”

“On the minimal record thus far developed, the government has not shown that these alternatives are infeasible,” Judge Wollman wrote.

“The reason I think this case is ripe for review by the Supreme Court is that you have all of these other courts that are getting ready to go through a merit determination on this issue, so the question of whether a substantial burden is simply a matter of assertion or one where there's some proof required is going to be a key issue in all of the underlying cases,” Mr. Napoli said. “It's going to be very interesting.”

Experts said a ruling against the government in any of the cases, which effectively would exempt religious nonprofits entirely from the coverage requirement, also could mean such an exemption could be extended to include closely held for-profit companies with religious objections to the requirement.

“The 8th Circuit's holdings are a bit surprising because many saw Hobby Lobby as the case that provided an acceptable blueprint of how to deal with employers who objected to the ACA's contraception mandate,” said Steven Friedman, a shareholder and co-chair of Littler Mendelson P.C.'s employee benefits practice group in New York.

If the Supreme Court upholds the 8th Circuit's ruling, “it will be much more difficult for those who are employed at organizations/companies that object to contraception to get access to coverage,” he said. “An affirmation by the Supreme Court may also result in more challenges to the ACA, as those who do not want to comply with ACA requirements may be encouraged if they see that others have succeeded.”

Judge Wollman noted that while the Supreme Court held in Hobby Lobby that the accommodation process was less burdensome to religious employers than requiring them to directly fund contraceptive methods that violate their faith, the court did not rule as to whether it complies with the religious freedom law.

“That was the piece that was sort of missing from the Supreme Court's decision in Hobby Lobby,” said Sharon Cohen, a Washington-based principal at Buck Consultants at Xerox. “They indirectly nodded at the government's accommodation, but they never specifically addressed whether it would violate religious freedom laws, so there's a good chance that they'll circle back and address that issue directly. How that will play out, I'm not exactly sure.”