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Obama Administration to Revise Contraceptives Coverage Rule Accommodation for Non-Profit Religious Groups

The U.S. Department of Justice has filed a legal brief with the Tenth Circuit indicating that the Obama administration plans on issuing interim final rules within the next month to create a work-around to ensure that employees of certain non-profit religious institutions, whose leaders have religious objections to contraceptives, can continue to get birth control with no co-pay through their employee health insurance plans. ( Little Sisters of the Poor Home for the Aged, et al. v. Burwell, (2014, CA10) No. 13-1540 )

The accommodation.

The Affordable Care Act (ACA) requires providers of health insurance, including companies that administer self-insured employer health plans, 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.

An exemption from the guidelines for religious institutions and other houses of worship was narrowly drafted so as to exclude religious institutions incorporated as nonprofit rather than religious organizations. DOL later promulgated and enlarged the exemption to bring religious nonprofits within its scope.

To exercise a religious nonprofit’s right to opt out of having to pay for contraceptive coverage either directly or indirectly through a health insurer, nonprofit religious organizations must 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.” (See Pension and Benefits Week ¶  9  04/07/2014.) 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 contraceptive coverage requirement.

The government’s brief.

According to the brief filed by the Department of Justice, an alternative plan, which is still being developed, will be created in response to a Supreme Court order issued to Wheaton College earlier this month. A majority of the Supreme Court justices granted Wheaton College, an Illinois Christian school, a temporary reprieve from ACA’s contraceptives coverage requirement. Together with other high-profile challengers, such as the University of Notre Dame (see Pension and Benefits Week ¶  9  04/07/2014), Wheaton filed a lawsuit claiming that the accommodation was inadequate because by submitting the form, the college would still be complicit in the provision of birth control. The Supreme Court’s Wheaton order said that the college did not have to sign the form, but could instead simply inform the Obama administration of its religious objections.

In the Department of Justice’s legal brief, the government noted that the decision rendered by the U.S. Supreme Court in Hobby Lobby (see Pension and Benefits Week ¶  5  07/07/2014) underscored the infirmity of Wheaton’s position. In Hobby Lobby , the Supreme Court held that the contraceptives coverage requirement violated the Religious Freedom Restoration Act (RFRA) with respect to closely-held for-profit corporations that—unlike the plaintiffs in the Wheaton case—could not opt out of the requirement. The Supreme Court concluded that the opt-out regulations, which “seek to respect the religious liberty of religious nonprofit corporations while ensuring that the employees of these entities have precisely the same access to all FDA-approved contraceptives as employees of companies whose owners have no religious objections to providing such coverage,” demonstrate that the Department of Health and Human Services (HHS) has “at its disposal an approach that is less restrictive than requiring employers to fund contractive methods that violate their religious beliefs.” The Court reasoned that the accommodation allowed under the regulations “serve HHS’s stated interests equally well” because “female employees would continue to receive contraceptive coverage without cost sharing for all FDA-approved contraceptives, and they would continue to ‘face minimal logistical and administrative obstacles'” in obtaining the coverage.

RIA observation: The Supreme Court is likely to hear the Wheaton’s case next session. By developing a new accommodation for non-profit religious groups, the Obama administration may be able to avoid the college’s allegations.