EBIA Weekly Newsletter

U.S. Supreme Court Returns Contraceptive Coverage Accommodation Challenges to Appellate Courts

   May 19, 2016

Zubik v. Burwell, 2016 WL 2842449 (U.S. 2016)

Available at http://www.supremecourt.gov/opinions/15pdf/14-1418_8758.pdf

In the latest development involving challenges to health care reform’s contraceptive mandate, the U.S. Supreme Court has decided not to decide the issue—sending it back to the appellate courts. As background, health care reform requires non-grandfathered group health plans to provide coverage for specified preventive services, including contraceptive coverage, without cost-sharing. Under a special accommodation for certain employers with religious objections to contraceptives, an eligible organization that notifies its insurer or third-party administrator (TPA) of its objection, or notifies HHS and provides the insurer’s or TPA’s contact information, is relieved of penalties for failure to provide contraceptive coverage (see our Checkpoint article). Instead, the insurer or TPA must provide or arrange for the coverage. A variety of nonprofit religious organizations sued the government, asserting that the notice requirement impermissibly burdens their exercise of religion by effectively compelling them to facilitate contraceptive coverage. The Supreme Court accepted review of the issue following several appellate court rulings (see our Checkpoint article), consolidating the various cases.

After hearing arguments earlier this year, the Court requested supplemental briefing addressing alternative approaches that would allow contraceptive coverage to be provided to an objecting organization’s employees without the organization having to provide notice to insurers, TPAs, or HHS. In response to the Court’s request, the religious organizations had stated that their religious exercise would not be infringed if they could simply purchase health coverage that did not include contraceptive coverage, even if their employees received contraceptive coverage from the same insurance company, so long as the contraceptive coverage was truly independent (including a separate enrollment process). The government indicated that it would be amenable to modifying the accommodation to allow for this process for insured plans, but this approach would not seem to work for organizations with self-insured plans. In light of the “refinement” of the parties’ views, the Court decided to send the cases back to the appellate courts, anticipating that those courts would give the parties “sufficient time” to resolve any outstanding issues between them. It also noted that, through this litigation, these organizations adequately invoked the religious accommodation, and thus may not be penalized for failure to follow the regulatory notice process. The Court emphasized that it expressed no view on the merits of the cases: whether the organizations’ religious exercise was infringed; whether the government has a compelling interest in ensuring the availability of contraceptive coverage; and whether the accommodation was the least restrictive means of serving that interest.

EBIA Comment: The various cases now return to the Third, Fifth, Tenth, and D.C. Circuits. The Supreme Court’s implied optimism that the parties can reach agreement on an accommodation process may be misplaced. The religious organizations’ insistence on separate enrollment for contraceptive coverage clashes with the agencies’ position that contraceptive coverage must be “seamless,” and the sides are far apart on how to address self-insured plans. For more information, see EBIA’s Health Care Reform manual at Section XII.C.2 (“Required Coverage of Preventive Services”); see also EBIA’s Group Health Plan Mandates manual at Section XIII.C.2 (“Required Coverage of Preventive Services”) and EBIA’s Self-Insured Health Plans manual at Section XIII.C.7 (“Preventive Health Services”).

Contributing Editors: EBIA Staff.