Accommodating the Accommodated? Not-For-Profits Challenges to the Contraception Mandate Exemptions

Transcription

1 Illinois Association of Defense Trial Counsel Rochester, Illinois IDC Quarterly Volume 25, Number 1 ( ) Feature Article Colleen Tierney Scarola* University of Denver, Sturm College of Law, Denver Accommodating the Accommodated? Not-For-Profits Challenges to the Contraception Mandate Exemptions In 2010, Congress passed the Patient Protection and Affordable Care Act (Affordable Care Act), 42 U.S.C. 2000bb-1, which aims to provide all Americans with health insurance coverage. Korte v. Sebelius, 735 F.3d 654, 659 (7th Cir. 2013). The Affordable Care Act includes a provision requiring employers to provide coverage for contraception and sterilization procedures in their employee health care plans at no cost (contraception mandate). 45 C.F.R There are two ways to be exempt from the mandate: (1) qualifying as a religious employer, and (2) qualifying for the accommodation. 45 C.F.R This article focuses on the accommodation. Qualifying for the Affordable Care Act s accommodation requires that an organization be a not-for-profit, religious organization that objects to providing all or partial contraceptive coverage because of its sincerely held religious beliefs. 45 C.F.R (b). Additionally, the organization must also complete the EBSA Form 700 self-certification, stating that it has satisfied the preceding three requirements. 45 C.F.R (b). This article is a follow up to our initial piece that discussed the five federal circuit court cases that have received religious challenges to the contraception mandate by private corporations and the courts decisions extending certain constitutional rights to corporations. Colleen Tierney Scarola with assistance from Joshua Turk, Secular, For-Profit Corporations Ability to Challenge the Constitutionality of the Contraception Mandate, 24.2 IDC Q., 10 (2014). The on-going litigation surrounding the accommodation exemption brought by not-for-profit plaintiffs is analyzed. Due to the United States Supreme Court s recent ruling in the consolidated cases of Sebelius v. Hobby Lobby Stores, 134 S. Ct. 678 (2013), Hobby Lobby Stores v. Sebelius, 723 F.3d 1114 (10th Cir. 2013) and Conestoga Wood Specialties Corp. v. Sec y of U.S. Dep t of Health & Human Servs., 134 S. Ct. 678 (2013), Conestoga Wood Specialties Corp., v. Sec y of U.S. Dep t of Health & Human Servs., 724 F.3d 377 (3rd Cir. 2013) (collectively Hobby Lobby), constitutional challenges to the mandate, challenges to the accommodation and its self-certification requirement, and proposed revisions to the Affordable Care Act, it is necessary to examine these pending, not-for-profit cases to determine how the goals of the law will be achieved, while protecting the religious freedoms of its challengers. The Hobby Lobby decision involved for-profit companies challenges to the contraception mandate on religious grounds. The for-profit entities position relied on the Religious Freedom Restoration Act (RFRA), 42 U.S.C. 2000bb-1. Ultimately, the Court sided with the for-profit entities and ruled that under the RFRA, closely held, for-profit corporations with religious owners cannot be required to pay for insurance coverage of contraception if their owners object on account of sincerely held religious beliefs. Hobby Lobby, 134 S. Ct. at The Court also found that the mandate was not the least restrictive way to ensure access to contraceptive Page 1 of 8

2 care and noted that a less restrictive alternative, the self-certification EBSA Form 700, was provided for religious not-for-profits and that perhaps corporations should follow suit. Id. at Numerous religious-based not-for-profits object to the sufficiency of the accommodation and its selfcertification process, which the Supreme Court endorsed, and have filed suit challenging it. Currently, there are 42 cases pending in the federal circuit courts of appeal that seek to expand upon (or fix ) Hobby Lobby by accommodating the accommodated organizations. Status of the Lawsuits Challenging the Affordable Care Act s Birth Control Coverage Benefit, NAT L WOMEN S LAW CTR. (Sept. 03, 2014), The remainder of this article will highlight pending or recently decided cases from the United States Courts of Appeals, all of which are facing one or more challenges from not-for-profits regarding the accommodation. The arguments advanced by both sides are similar in all of the cases, yet the results are not always the same. The crux of the not-for-profits arguments is that the self-certification requirement unduly burdens their religious beliefs by requiring that they trigger the process of providing contraceptives and associate with a third party to provide the services that they find objectionable. As such, they claim that the self-certification requirement violates the RFRA and the First Amendment. The government s argument has been that the burden, if any, is de minimus, thereby precluding relief. Second Circuit The plaintiffs include Diocesans, who qualify as religious employers, and non-diocesans, who qualify for the accommodation. Both sets of the plaintiffs contend that their religious beliefs oppose the use and provision of contraceptives. The Roman Catholic Archdiocese of N.Y., et al., v. Sebelius, et al., 987 F. Supp. 2d 232 (E.D. N.Y. 2013). Together, they argued that the contraception mandate obligates them to violate their religious beliefs irrespective of the exemptions available to religious employers and entities that qualify for the accommodation. The Roman Catholic Archdiocese of N. Y., 987 F. Supp. 2d at 243. The Diocesan plaintiffs, who are exempt from the mandate, advanced an atypical argument that their religious beliefs are substantially burdened because the mandate compels the non-diocesan plaintiffs to either provide contraceptive coverage or self-certify to qualify for the accommodation. Id. at 252. The district court rejected that argument. Id. The non- Diocesan plaintiffs objected to self-certification because to them, authorizing others to provide services that the plaintiffs themselves cannot is tantamount to an endorsement or facilitation of such services. Id. at 243. The government argued self-certification is an administrative task that only requires the party to restate the same religious objection it already made to its third-party administrators to ensure their plans do not cover contraception. Id. at 249. The district court rejected the it s just a form argument as unsupported by case law. Id. Instead, the court applied the substantial pressure test and found that the mandate and accommodation impose a substantial burden on the plaintiffs exercise of religion. Id. at Though the court ruled in favor of the plaintiffs and granted an injunction, it found that the plaintiffs would have no argument if the government, either on its own or, with a third party provided contraceptive coverage to the employees, with no action required of the plaintiffs. Because this is not currently the case, the court made clear, [w]hat the Government cannot do absent a compelling interest and narrow tailoring is compel plaintiffs to act in violation of their religious beliefs. Id. at 251, 259. The court further explained that the injunction does not prevent employees from obtaining contraception, but merely requires them to cover the costs, as was the case prior to the Affordable Care Act. Id. at 259.The government appealed the decision to the Second Circuit, where the case is currently pending. Page 2 of 8

3 Third Circuit The United States Court of Appeals for the Third Circuit consolidated three cases that sought its review, Geneva Coll., et al., Persico, et al., Zubik et al. v. Sec y of the U.S. Dep t of Health & Human Servs., Docket No.: The underlying district court results from these three cases are discussed below. The plaintiffs in both Persico and Zubik, are bishops in the Roman Catholic Church and the government is the defendant. Zubik v. Sebelius, 983 F. Supp. 2d 576 (W.D. Pa. 2013). The court noted that the mandate could not be equally applied to the plaintiffs dioceses and their affiliated not-for-profit entities because the dioceses are religious-employers that are exempt from the mandate, while the not-for-profits must seek accommodation. Id. at 583. Such unequal application was relevant because the dioceses health care plans covered the not-forprofits employees. Id. The plaintiffs argued that the not-for-profits would then be left to choose between four, non-satisfactory options: (1) provide health insurance that covers contraception, in violation of their religious beliefs; (2) seek accommodation via self-certification, which also violates their religious beliefs because it starts the process through which contraception is provided; (3) not provide health insurance to their employees and be monetarily penalized for doing so; or (4) provide health insurance without contraceptive coverage and be monetarily penalized for doing so. Id. at Ultimately, the court granted the plaintiffs preliminary injunctions, which were later converted into permanent injunctions. Id. at 615; Persico v. Sebelius, 1: , 2:13-cv , 2013 WL , at *2 (W.D. Pa. Dec. 20, 2013). The government appealed the decision to the Third Circuit, where oral argument was scheduled for November 21, NAT L WOMEN S LAW CTR., supra. In Geneva College, the plaintiff was a not-for-profit educational institution with strong Christian roots. Geneva College v. Sebelius, 960 F. Supp. 2d 588, 591 (W.D. Pa. 2013). As a not-for-profit entity, the plaintiff qualified for the accommodation exemption from the mandate. Id. at 600. The plaintiff argued that the accommodation does not go far enough toward protecting its religious interests. Geneva College, 906 F. Supp. 2d at 591. The plaintiff operates health insurance plans for its employees and students. The plaintiff advanced the unique argument that the mandate burdens not only its religious beliefs, but also its recruitment efforts of students and staff due to uncertainty as to which contraceptives and related services will be covered under its health insurance plans, placing it at an economic disadvantage. Id. at 596. Ultimately, the court issued the college a preliminary injunction, which the government appealed to the Third Circuit. Id. at 602. Fifth Circuit The plaintiffs are two universities affiliated with the Baptist Church and an intervenor affiliated with the Presbyterian Church. E. Tex. Baptist Univ., et al., v. Sebelius et al., 988 F. Supp. 2d 743, (S.D. Tex. 2013). The plaintiffs are not religious employers, but qualify for the accommodation. E. Tex. Baptist Univ., et al., 988 F. Supp. 2d. at 754. Unlike other cases, the plaintiffs here only objected to the provision of emergency contraceptives under the mandate. Id. at The plaintiffs contend that self-certifying provides access to emergency contraceptives in contravention of their religious beliefs that they protect innocent life from the moment of conception until death. Id. at 757. In response, the government argued any such burden imposed was de minimus and that the governmental interests involved, public health and gender equality, are sufficiently compelling to justify the enforceability of the accommodation against the plaintiffs. Id. The district court found that a substantial burden is imposed on the plaintiffs religious beliefs. Id. at 769. The court stated, [T]he self-certification form requires the organizations to do much more than simply protest or object... The purpose and effect of the form is to accomplish what the organization finds religiously forbidden and protests. Id. at 767. In issuing the plaintiffs a permanent injunction, the court explained its view that the accommodation falls short of truly accommodating the plaintiffs in stating that [t]he effort to Page 3 of 8

4 accommodate the religious organizations by reducing their involvement in providing their employees with such access to emergency contraception did not end the plaintiffs involvement so as to avoid required acts on their part that offend their faith. Id. at 769. The government appealed to the Fifth Circuit where the case has been consolidated with two others. Univ. of Dallas, and Roman Catholic Diocese of Fort Worth, et al., and E. Tex. Baptist Univ., et al., and Catholic Diocese of Beaumont, et al., Plaintiffs-Appellees, Westminster Theological Seminary, Intervenor Plaintiff-Appellee, v. Sylvia M. Burwell, et al., Case: (5th Cir. 2014). Sixth Circuit The plaintiffs are five Catholic-based, not-for-profit organizations that qualify for the accommodation. Ave Maria Found. v. Sebelius, 991 F. Supp. 2d 957, (E.D. Mich. 2014). The plaintiffs primary argument in opposition to the self-certification requirement is that it requires them to indirectly support contraception, sterilization, and abortion. Ave Maria Found., 991 F. Supp. 2d at 964. While the arguments the plaintiffs asserted are similar to other related cases, the court s response to the government s de minimus burden argument is particularly interesting. In explaining why it believes the de minimus burden argument fails as to sincerely-held religious beliefs, the court explained that simply completing a form is not a significant burden, as the plaintiffs also object to self-certifying, the government s argument amounts to a disbelief that the self-certification has much religious significance. Id. at 965 (citing 42 U.S.C. 2000cc-5(7)(A) (emphasis added)). The court believed that adopting the government s argument would require examination of the sincerity of the plaintiffs declared beliefs which the government does not question or second-guessing the importance or rationality of the plaintiffs convictions a task beyond the Court s ability or competence. Id. Because the accommodation obligates the plaintiffs to modify their behavior, as was conceded by the government, the court held that the newly required action cannot be labeled as trivial by the government. Id. Accordingly, the district court issued the plaintiffs a preliminary injunction. Id. at 968. The government appealed the decision to the Sixth Circuit, which later consolidated the case with Legatus v. Sebelius, 901 F. Supp. 2d 980 (E.D. Mich. 2012). Since consolidation, the Sixth Circuit has decided a related case, Mich. Catholic Conference & Catholic Family Servs. v. Burwell, 755 F.3d 372 (6th Cir. 2014), in favor of the government. Id. at 398. As a result, the plaintiffs in Ave Maria Foundation now face an uphill challenge against Sixth Circuit precedent because in Michigan Catholic Conference, the court held that it is not self-certification that initiates the process through which contraceptive coverage is provided, but rather the Affordable Care Act. Id. at 387. That ruling runs directly counter to the plaintiffs contention in Ave Maria Foundation that self-certification indirectly support[s] contraception, sterilization, and abortion [to which they object on religious grounds]. Ave Maria Found., 991 F. Supp. 2d at 963. Seventh Circuit The plaintiff, University of Notre Dame, is a not-for-profit Catholic university. A unique aspect of this case is that the plaintiff complied with the contraception mandate under duress by submitting the selfcertification form to its insurer, but still brought action to enjoin enforcement of the mandate. Univ. of Notre Dame v. Sebelius, 743 F.3d 547, 552 (7th Cir. 2014). In accord with Roman Catholic doctrine, the plaintiff has never paid for its students or staff s contraception or permitted its carrier to provide it. Univ. of Notre Dame, 743 F.3d at 549. The court noted that the plaintiff never identified what it wanted enjoined. Id. at 551. Instead, the court assumed that the plaintiff wanted an order forbidding insurance companies to provide any contraceptive coverage to the plaintiff s staff and students pending final judgment in the district court. Id. at Page 4 of 8

5 554. The Seventh Circuit refused to issue such an order noting that the plaintiff does not have the right to prevent other institutions from engaging in acts that merely offend it. Id. In evaluating the plaintiff s likelihood of success on the merits in the district court, the Seventh Circuit rejected the plaintiff s argument that the process of certifying its religious objection violates its religious beliefs by triggering the provision of contraceptive coverage. Id. at 554. The court found that the accommodation already exempted the plaintiff from offering contraceptive coverage. Id. at 557. The plaintiff s broader argument that the process of requesting the accommodation itself burdened its exercise of religion is paradoxical and virtually unprecedented. Id. The court affirmed the district court s denial of preliminary injunction. Id. No appeal has been filed in the United States Supreme Court. Eighth Circuit The plaintiffs are employers affiliated with the Catholic Church. Like the plaintiffs in other cases, they argued that the mandate, including the self-certification piece, requires them to participate in a scheme to provide coverage that they oppose. Archdiocese of St. Louis v. Burwell, No. 4:13-CV-2300-JAR., 2014 WL , at *3 (E.D. Mo. 2014). They also argued that the RFRA protects any exercise of religion and does not limit its protections to significant or substantial acts. Archdiocese of St. Louis, 2014 WL , at *6. The government did not challenge the sincerity of the plaintiffs beliefs and instead argued that the regulations do not impose a substantial burden on their exercise of religion. Id. The court granted the plaintiffs a preliminary injunction to enjoin enforcement of the contraception mandate until their claims are resolved. Id. at *12. The unique aspect of the decision rests with the court s statement that in light of legal uncertainty regarding enforceability of mandate with respect to nonprofit organizations with religious objections it is in the public interest to preserve the status quo, enjoining enforcement of the mandate. Id. at *12. The district court also concluded that the mandate applies substantial pressure on the plaintiff s exercise of their religious beliefs by requiring them to choose between providing contraceptive coverage to their employees or paying substantial financial penalties if they refuse. Id. at *8. Because the plaintiffs demonstrated a substantial burden on their exercise of freedom of religion, the government had to show the mandate is the least restrictive means of furthering a compelling governmental interest. Id. at *9. The court determined that the mandate was not the least restrictive means to further the government s compelling interests in promoting public health and gender equality. Id. at *11. Additionally, the court noted that the United States Supreme Court has observed that the government could achieve its goal without imposing substantial burden by assuming the cost of contraception to any woman unable to obtain it from employers. Id. at *10. The case is currently pending before the Eighth Circuit. Tenth Circuit/U.S.S.C. The plaintiffs are self-insured, not-for-profit, Catholic organizations and a Catholic third-party administrator for the organizations church plans. The plaintiffs asserted that executing the self-certification form burdens their religious beliefs. Little Sisters of the Poor Home for the Aged v. Burwell, 134 S. Ct (2014). They contended that taking any action that triggers the provision of contraception, sterilization, and abortifacients violates their religious beliefs. The government did not dispute the sincerity of the plaintiffs beliefs, but instead challenged the plaintiff s interpretation of how their religious beliefs are impacted by the contraception mandate and the Final Rules. Little Sisters of the Poor Home for the Aged, 6 F. Supp. 3d at 1239; see also 78 Fed. Reg. 127, 870 (July 2, 2013). Specifically, the government argued that because the plaintiffs Page 5 of 8

6 are eligible for the accommodation, they need not contract, arrange, pay, or refer for contraceptive coverage. Id. (citing 77 Fed. Reg. 7 (Jan. 3, 2012)). The district court rejected the plaintiffs arguments and denied their motion for a preliminary injunction. The court found that under the eligible organizations accommodation in the Final Rules once plaintiffs completed the self-certification form and delivered it to their third-party administrator they satisfied the requirements of the contraception mandate and have no further obligations. Little Sisters of the Poor Home for the Aged, 6 F. Supp. 3d at Thus, the court concluded that the regulations do not require the plaintiffs to participate in the provision of contraceptive coverage or provide health benefits that include contraceptive coverage. Further, the court also determined that the plaintiffs religious beliefs were not substantially burdened by an authorized representative of their organizations executing the self-certification form and delivering it to their third-party administrator. Finally, the court found that the plaintiffs failed to meet their burden that an injunction was necessary to prevent an imminent harm. Id. at The case is currently pending in the Tenth Circuit. Eleventh Circuit The plaintiff is a television network that promotes the Roman Catholic Church s teachings, and as such, opposes the use of contraception in any form. Eternal World Television Network, Inc. v. Burwell, CG- C, 2014 WL , at *1 (S.D. Ala. 2014). In the lower court, the plaintiff argued that the contraception mandate violates the RFRA, the Free Exercise Clause, the Establishment Clause, and the Free Speech Clause. Eternal World Television Network, Inc., 2014 WL , at *1. The health-care coverage the plaintiff provides to its employees excludes coverage for artificial contraception, sterilization, and abortion. Id. The plaintiff filed a motion for summary judgment and sought expedited consideration to meet the deadline for compliance with the mandate. Id. The court stated that the question is not whether anything in the mandate offends the plaintiff s religious beliefs; rather, the focus is on the particular actions that the mandate requires the plaintiff to perform. Id. at *3. The court denied the motion, concluding that executing the selfcertification form does not impose substantial burden on the plaintiff s religious beliefs. Id. at *4. The unique aspect of this case is the court s determination that the plaintiff s only religious objection to the mandate hinges upon the effect it will have on other parties after the plaintiff signs the certification form and not on anything inherent in the act of signing and delivering the form. Id. at *5. The United States Court of Appeals for the Eleventh Circuit granted the plaintiff an injunction pending appeal but did not address the merits of its claims. Eternal World Television Network, Inc. v. Burwell, 756 F.3d 1339 (11th Cir. 2014). D.C. Circuit The Court of Appeals for the D.C. Circuit recently joined the short list of federal appellate courts to render judgment in a not-for-profit challenge to the accommodation. The plaintiffs include Priests for Life, a pro-life group of Catholic priests, and other employers. Priests For Life v. U.S. Dep t of Health and Human Servs., No , 2014 WL (D.C. Cir. Nov. 14, 2014). This case is unique because it involves the theme of notice as it relates to the accommodation. Priests For Life, 2014 WL , at *1. The plaintiffs argued that, under the RFRA, they have the right not to provide notice to any entity if they remove contraceptive coverage from their health plans. Id. The plaintiffs also contended that the government does not have a sufficiently compelling reason for requiring them to provide notice to be granted an accommodation. Id. Page 6 of 8

7 Further, the plaintiffs argued that the government did not demonstrate that the notice requirement was the least restrictive way to achieve any governmental interests involved. Id. at *3. The court held that the accommodation does not violate the plaintiffs free exercise rights as secured under RFRA. Id. In so holding, the court stated that to opt out, all the plaintiffs must do is state their beliefs and seek what they want in a letter or two-page-form. Id. Overall, the court believed that the governmental interests involved in the accommodation are sufficiently compelling to outweigh the alleged substantial burden imposed on the plaintiffs free religious exercise rights. Id. The court also believed that the accommodation requires as little as it can from those that object to it. Id. But, the Obama Administration s new proposed rules infer that even less can be required of objectors. The Obama Administration s New Proposed Rules On August 22, 2014, the Obama Administration released additional proposed rules, which it claims would provide employees of religiously-affiliated organizations with a way to obtain contraceptive services as part of their health insurance coverage, while respecting the religious beliefs of their employers. Administration takes steps to ensure women s continued access to contraception coverage, while respecting religious-based objections, HHS, (last visited Nov. 2, 2014). Under the proposed rules, religiously-affiliated employers would notify the government, not their insurers, of their objections to the contraception mandate. 79 Fed. Reg , (Aug. 27, 2014). In turn, the government would notify the insurers to provide the contraception coverage. Id. Opponents of this proposed rule contend that it is essentially the same as self-certification, as it merely changes who the religious employer notifies from the insurer or third-party administrator to the government. The objections asserted by the religious organizations seem to be more about what the self-certification does, as opposed to who it notifies. It may be beneficial if the proposed rule included a statement that the religious organization would make to the government, in objecting to providing contraceptives, such as: This religiously-affiliated organization s acknowledgment, as provided in this form, that it objects to providing all or partial contraceptive coverage as part of its health care plan, in accordance with its sincerely held religious beliefs, in no way serves as any action or means through which contraceptive coverage is ultimately provided to its employees or other qualifying individuals, despite the fact that contraceptive coverage may ultimately be provided to some of its employees by the government or other authorized third-party. Such a statement, coupled with the enactment of the new proposed rules, may help accommodate these accommodated not-for-profit organizations by giving added voice to their sincere religious objections. It would also attempt to provide an additional layer of removal from any responsibility they feel is assumed by self-certifying, while still ensuring contraceptive coverage, albeit by an alternate provider, to women who seek coverage under the Affordable Care Act. Few federal circuit courts of appeal have adjudicated the not-for-profit cases pending before them. Overall, the district courts have been divided as to the outcomes in these cases, with a slight advantage to the not-for-profits. As the Fifth Circuit stated in E. Tex. Baptist Univ., Because the issues are legal and the facts are essentially undisputed, this and other district court opinions are at most data points, chiefly important as necessary steps to the appellate courts. E. Tex. Baptist Univ., 988 F. Supp. 2d at 747. It largely remains to be determined whether the federal circuit courts of appeal will follow in the paths paved by the district courts. About the Authors Colleen Tierney Scarola is a career consultant at the Office of Career Development & Opportunities at the University of Denver Sturm College of Law. Ms. Scarola assists students and alumni in formulating their career plans, and connects potential employers with qualified applicants. Prior to joining the Office of Career Development & Opportunities, Ms. Scarola was an associate at McVey Page 7 of 8

8 & Parsky, LLC. Ms. Scarola represented Fortune 100 companies and self-insured businesses throughout the country. In recognition of her professional achievements, Ms. Scarola was selected as a Super Lawyers Rising Star for 2011, 2013, and 2014 a designation given to only 2.5% of attorneys in Illinois each year. Ms. Scarola received her J.D. from The John Marshall Law School in She is participates in the Lawyer-to-Lawyer Mentoring Program at The John Marshall Law School where she mentors new attorneys. *Joshua Turk, 3L at Chicago-Kent College of Law, contributed to the content of this article. Ms. Scarola gratefully acknowledges his contribution. About the IDC The Illinois Association Defense Trial Counsel (IDC) is the premier association of attorneys in Illinois who devote a substantial portion their practice to the representation of business, corporate, insurance, professional and other individual defendants in civil litigation. For more information on the IDC, visit us on the web at Statements or expression of opinions in this publication are those of the authors and not necessarily those of the association. IDC Quarterly, Volume 25, Number Illinois Association of Defense Trial Counsel. All Rights Reserved. Reproduction in whole or in part without permission is prohibited. Illinois Association of Defense Trial Counsel, PO Box 588, Rochester, IL , , , idc@iadtc.org Page 8 of 8