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Scalia's death could leave court deadlocked on contraceptives

Scalia's death could leave court deadlocked on contraceptives

The death of U.S. Supreme Court Justice Antonin Scalia casts new uncertainty on the how the court will rule in the next case challenging the health care reform law.

That case, Zubik et al v. Burwell, involves a key issue for religious, nonprofit employers: the legality of Department of Health and Human Services' 2015 rules on employer coverage of prescription contraceptives.

Under those rules, nonprofit religiously affiliated organizations are required to notify HHS in writing of their objections to the coverage.

For nonprofits with an insured plan, HHS then would notify the insurer, with the insurer becoming responsible for providing the coverage.

For self-funded employers, the U.S. Department of Labor would notify the organization's third-party administrator, with the TPA then arranging the coverage.

The insurers or TPAs then would pay for the coverage.

The same approach also applies to for-profit closely held organizations with religious objections to prescription contraceptives. The rules define such employers as those that are not publicly traded and in which five or fewer individuals own more than 50% of the entity.

Those rules were suggested by the Supreme Court in its 2014 ruling in Hobby Lobby Stores Inc. v. Sylvia Burwell et al., in which it struck down an earlier HHS requirement that closely held employers had to arrange for prescription contraceptive coverage even if they had religious objections.

But the HHS' modification of the rules last year rules did not end the legal controversy. Several organizations, mainly Christian colleges and charities, challenged the mandate as violating their rights under the U.S. Religious Freedom Restoration Act.

Seven federal appeals courts upheld the revised HHS rules, but the 8th U.S. Circuit Court of Appeals in St. Louis struck down the rules last September. The split opened the door for the U.S. Supreme Court to decide the controversy.

Justice Scalia's vote had been expected to be pivotal in the case since he was one of five justices that struck down the earlier HHS prescription contraceptives rules in 2014.

And last year, he wrote the dissent in the Supreme Court decision upholding Treasury Department rules authorizing government health care reform law premium subsidies in the state and federal public exchanges.

“Normal rules of interpretation seem always to yield to the overriding principle of the present court: The Affordable Care Act must be saved,” Justice Scalia wrote in last year's dissent.

But with his sudden death over the weekend, several congressional leaders, including Senate Majority Leader Mitch McConnell, R-Ky., said the next president should nominate a successor and that Republicans would oppose anyone nominated by President Barack Obama.

“The American people‎ should have a voice in the selection of their next Supreme Court justice. Therefore, this vacancy should not be filled until we have a new President,” Sen. McConnell said in a statement shortly after Justice Scalia's death was made public.

Without Justice's Scalia's vote, the nation's high court could be deadlocked on the issue.

“We could well have a 4-4 split,” said Steven Friedman, a shareholder and co-chair of Littler Mendelson P.C.'s employee benefits practice group in New York.

In the event of a tie vote, experts say the lower court rulings would stand, with affected employers in the 8th Circuit exempt from the HHS rules.

“Things would become a little messy,” said Sharon Cohen, a principal at Xerox HR Services in Washington.

Should that happen, it is possible lawmakers might try to pass legislation to put all employers under the same set of rules, experts say, adding though, that the likelihood of such a scenario is low.

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