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Appeals Court Narrows Injunction on Contraceptive Coverage Exemption Interim Final Rules



California v. Azar, 2018 WL 6566752 (9th Cir. 2018)

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A federal appellate court has ruled on the status of a California trial court’s nationwide injunction blocking enforcement of interim final regulations regarding the contraceptive coverage exemption (see our Checkpoint article). As background, qualifying religious employers are exempt from the contraceptive coverage mandate, and certain other employers with religious objections to contraceptives may engage in an accommodation process relieving them of this coverage obligation (see our Checkpoint article). Interim final regulations expanded the exemption to include certain individuals and entities based on their sincerely held religious beliefs. And separate interim final regulations extended the exemption to others objecting to coverage based on sincerely held moral convictions (see our Checkpoint article). Nationwide preliminary injunctions (from trial courts in California and Pennsylvania) blocked enforcement of both sets of interim final regulations based on claims that they violated the federal Administrative Procedure Act (APA). In October, the federal government appealed the California trial court’s injunction. In November, the government issued final regulations that generally adopted the interim final regulations, with clarifications (see our Checkpoint article).

The Ninth Circuit has now upheld the California trial court’s preliminary injunction as to California, Delaware, Virginia, Maryland, and New York (the states that filed the lawsuit), holding that the government likely lacked authority to bypass the APA’s notice and comment requirements. However, the court also held that the scope of the injunction was overbroad and vacated the injunction as to other states. In addition, the court concluded that the appeal was not moot because the final regulations are not effective until January 14, 2019, and will not supersede the interim final regulations until then.

EBIA Comment: The contraceptive coverage mandate has been—and is likely to continue to be—controversial. Those potentially eligible for the expanded exemptions under the final regulations will want to stay abreast of the latest developments. Like the interim final regulations, the final regulations may produce litigation seeking to block their enforcement. For more information, see EBIA’s Health Care Reform manual at Section XII.C (“Coverage of Preventive Health Services”) and EBIA’s Group Health Plan Mandates manual at Section XIV.E (“Contraceptive Coverage: Exemptions and Accommodations Based on Religious Beliefs and Moral Convictions”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C.1 (“Preventive Health Services”).

Contributing Editors: EBIA Staff.

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