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Eighth Circuit Becomes the First Federal Appellate Court to Enjoin ACA’s Contraceptive Coverage Mandate

For the first time, a federal appellate court, the Eighth Circuit, has barred the government from enforcing the Affordable Care Act’s (ACA’s) contraceptive coverage mandate. ( Sharpe Holdings Inc. v. HHS (2015, CA8) 2015 WL 5449491, and Dordt College v. Burwell (2015, CA8) 2015 WL 5449504)


ACA requires providers of health insurance, including companies that administer self-insured employer health plans (TPAs), to cover certain preventive services without cost to the insured. With respect to women, such coverage includes all Food and Drug Administration (FDA) approved contraceptive methods. 42 CFR §300gg-13(a)(4) provides an exemption from the guidelines for religious institutions and other houses of worship. Whereas this regulation was narrowly drafted so as to exclude religious institutions that, like the nonprofit religious organizations (NROs) at issue here, were incorporated as nonprofit rather than religious institutions, Labor Reg. 2590.715-2713A(a) was later promulgated to bring the NROs within its scope.

To exercise the right to opt out of having to pay for contraceptive coverage either directly or indirectly through a health insurer, an NRO must simply complete EBSA Form 700, a short form containing the following sentence: “I certify that, on account of religious objections, the organization opposes providing coverage for some or all of any contraceptive services that would otherwise be required to be covered; the organization is organized and operates as a nonprofit entity; and the organization holds itself out as a religious organization.” EBSA Form 700 requires that an organization or its plan must provide a copy of the certification to the plan’s health insurance issuer (for insured health plans), or a third-party administrator (for self-insured health plans), in order for the plan to be accommodated with respect to the contractive coverage requirement.

Under Labor Reg. 2590.715-2713A(b)(1)(ii), an alternative form of notice can be used to qualify for the accommodation. Specifically, an NRO can submit a written notice to the Department of Health and Human Services (HHS). While the notice need not take a particular form, the notice must include the name of the organization; a statement that the organization opposes, on religious grounds, providing coverage for some or all contraceptives; the name and type of the plan; and the name and contact information of the plan’s insurer or third-party administrator, if applicable.

Legal contests.

The mandate has been the focus of numerous legal challenges. Regarding the claims of NROs, federal appellate courts had previously all ruled that the accommodation which informs the government of a religious objection did not interfere with an NRO’s religious rights. However, several appeals are currently pending at the U.S. Supreme Court.

As to closely-held corporations, the U.S. Supreme Court held in Burwell v. Hobby Lobby Stores, Inc. (see Pension and Benefits Week ¶  6  07/7/2014) that the Religious Freedom Restoration Act of 1993 (RFRA) prohibited the government from enforcing ACA and its implementing regulations that required them to provide health-insurance coverage for methods of contraception that violated the sincerely held religious beliefs of the companies’ owners.


The main Eighth Circuit ruling was in a case involving CNS Corporation (CNS), a non-profit residential services firm, and Heartland Christian College (HCC). Both CNS and HCC offer healthcare coverage to employees through self-insured plans. The panel then applied the opinion’s reasoning to a second case, involving Dordt College (Dordt) and Cornerstone University. In both cases, federal trial courts had temporarily blocked the contraceptive mandate for those entities.

Integral to the identities of both CNS and HCC are Christian beliefs and practices, with both entities striving “to promote certain moral and ethical standards in their employees, including … a belief in the sanctity of life which precludes abortion on demand,” or the functional equivalent. Whereas CNS is subject to the mandate, HCC has fewer than 50 employees, and is not required by the ACA to offer healthcare coverage.

The NROs contended that ACA’s mandate and the accommodation process imposed a substantial burden on their free exercise of religion in violation of the RFRA, and the Free Exercise Clause of the First Amendment to the U.S. Constitution. Specifically, the NROs argued that the government was coercing them to violate their religious beliefs by threatening to impose severe monetary penalties unless they either directly provided coverage for objectionable contraceptives through their group health plans, or indirectly provided, triggered, and facilitated that objectionable coverage through the accommodation process. The government’s argument, which had prevailed in all previous circuit court cases, was that the accommodation process could not substantially burden the exercise of religion because, as a matter of law, it did not trigger, facilitate, or make CNS and HCC complicit in the provision of that coverage. This was so, according to the government, because ACA already imposed an obligation on third-party administrators to provide contraceptive coverage to employees and plan beneficiaries.

Eighth Circuit holdings and analyses.

The Eighth Circuit upheld the district court orders enjoining the mandate’s enforcement, and granted preliminary injunctions with the enforcement bar to remain in effect while the cases moved ahead on the legal merits of the challenges. The substantial burden imposed by the government on CNS and HCC’s exercise of religion was the imposition of significant monetary penalties should CNS and HCC have adhered to their religious beliefs and refused to comply with the contraceptive mandate or the accommodation regulations, the court said.

Although the court did not dispute the government’s interest in providing women with access to free birth control, the court noted that the RFRA requires that the government do so by the “least restrictive means” necessary to protect the entities’ religious views. Moreover, the government bore the burden of proof on this issue, which, according to the court, required the government to come forward with evidence that the contraceptive mandate and the accommodation process were the only feasible means to distribute cost-free contraceptives to women employed by religious organizations, and that no alternative means would have sufficed to achieve the government’s compelling interest.

According to the Eight Circuit, one alternative that the government could use would be to have the entities file a simple notice of their objection to coverage. Such a notice, the panel ruled, would be “less onerous” than the alternatives the government has devised, and the entities would not be providing any information about their insurers to aid the government in starting coverage. Requiring the government to initiate a search to learn which insurer provides coverage for a given entity would not be a significant burden on the government and would not involve the entities in the process, the court reasoned. The government could also opt to provide the contraceptives itself, making birth control available through the ACA health insurance exchanges or through health centers, clinics, and hospitals, or using some combination of subsidies, reimbursements, tax credits, and/or tax deductions.

In Burwell v. Hobby Lobby Stores, Inc. (see Pension and Benefits Week ¶  6  07/7/2014), the U.S. Supreme Court had determined that the accommodation process was “less restrictive than requiring employers to directly fund contraceptive methods that violate their religious beliefs.” However, the Court also emphasized that it was specifically not deciding whether an approach of this type complied with RFRA for purposes of all religious claims.

In the Eighth Circuit’s view, the high Court had simply suggested that the accommodation process would be an acceptable alternative for organizations that did not assert a religious objection to the accommodation process itself. The Eighth Circuit noted that the idea that the Court had sanctioned the existing accommodation process for all purposes was dispelled soon after when the Court enjoined the government’s enforcement of the contraceptive mandate against both Wheaton College(see Pension and Benefits Week ¶  8  07/13/2015 ) and Little Sisters of the Poor (see Pension and Benefits Week ¶  8  07/27/2015).

Although the Eighth Circuit concluded that CNS and HCC were entitled to relief on their RFRA claim, the court declined to address their Free Exercise claim.

RIA observation: The Obama administration can now either ask the full Eight Circuit to rehear the instant cases en banc, or appeal the cases directly to the U.S. Supreme Court. A government appeal to the high Court would highlight a conflict in the circuits, and make it more likely to grant certiorari would be granted.