This document provides an overview of the Affordable Care Act's contraceptive coverage mandate and related litigation. It discusses how the mandate requires employers to provide insurance covering contraceptives without cost sharing. While some religious non-profits are exempt or accommodated, other religious employers and for-profit companies have objected and filed lawsuits. The document outlines the key legal questions in these cases regarding whether for-profit corporations have religious rights and if the mandate imposes substantial burdens under federal law. It also discusses the government's interests and potential alternatives.

1. Presented by:
Contraceptive Coverage
Mandate and Litigation
January 31, 2014
Holly Fernandez Lynch, J.D., M.Bioethics
Executive Director, Petrie-Flom Center

2. Overview
I. Employer mandate and contraceptives coverage
II. Freedom of religion basics
III. Regulatory exemptions, accommodations, and
requirements
IV. Litigation update
• Religious non-profits
• For-profit companies (secular, with religious owners)
V. A few more things…
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3. ACA’s Employer Mandate
• Employers with 50 or more full-time employees (or
equivalents) must offer health insurance coverage to their
employees or face penalties
• Plans must:
• Include certain “essential” health benefits
• Provide coverage without cost sharing (co-pay or deductible)
for “preventive” services
• HHS definition includes all FDA-approved contraceptive
methods, sterilization procedures, and patient education
with Rx (based on IOM recommendation)
3

4. Government’s Stated Rationale
• Public health reasons
• 99% of US women have relied on contraceptives at some point, and
more than half between 18-34 have struggled to afford them
• Unintended pregnancies or those that are too close together have
worse outcomes
• Pregnancy contraindicated for some women
• Equality reasons
• Protect women from disproportionately bearing costs of contraception
• Protect women’s opportunity for equal participation in workforce
• Alternative approaches wouldn’t work or work as well
4

5. Conflict of Conscience
• Employers must offer plans that provide contraceptive
services free of charge
• But some employers have religious objections to
contraceptives
• Problem remains for them even if cost-sharing were allowed,
unless they could completely avoid their funds being used
AND having to make any of the arrangements
• Framing issue:
• Is an employer being required to take an action that directly
violates his religious beliefs?
• Or is an employer merely being required to be complicit – take
action that enables other people to do things that are at odds
with his religious beliefs?
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6. First Amendment
• Does the contraceptives coverage mandate w/o any
religious exemptions violate the Free Exercise Clause?
• Smith: neutral laws of general applicability pass muster
(rational basis review)
• Mandate is neutral – not generated by religious animus
• Mandate is generally applicable – doesn’t specifically
target religious employers
• BUT voluntary exemptions might be problematic if they
render the mandate no longer generally applicable
• Then facing strict scrutiny
• Further exemptions may be needed to satisfy that test
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7. Religious Freedom Restoration Act
• Fed gov’t may not (1) substantially burden free exercise,
unless (a) in furtherance of a compelling interest (2) using
the least restrictive means (restoring strict scrutiny test)
• To determine if exemptions to the mandate are needed for
religious employers under RFRA, first ask if mandate
imposes substantial burden
• If no, then no exemptions needed
• If yes, only need exemptions if government lacks compelling
interest for mandate or could have used less restrictive means
• Voluntary exemptions can create problems here too
• Offering them seems to acknowledge substantial burden
• Weakens case on compelling interest
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8. Timeline – Gov’t Attempts at Compromise
• July 2010: Interim final regs to implement essential benefits
requirement
• Aug. 2011: Amended interim regs to exempt certain religious
employers (i.e., churches) opposed to contraceptives
• Feb. 2012: Final regs retained narrow definition of religious
employers but offered temporary safe harbor for non-exempt
non-profit religious orgs (i.e., hospitals/schools)
• March 2012: ANPRM seeking comment on how to ensure
access to free contraceptives and protect religious employers
• Feb. 2013: Proposed rule to maintain exemption but add
“accommodation” for certain non-exempt non-profits
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9. July 2, 2013 Final Rule (78 C.F.R. 39870)
• Simplified Exemption (churches) – effective 8/1/13
• “Religious employers” are completely exempted from having
to provide contraceptives coverage = no litigation
• Prior rule had very narrow definition that required religious
employer have inculcation of religious values as its purpose
and primarily employ and serve persons who share its
religious tenets
• New rule relies exclusively on tax code definition
• Rationale: Clarify that house of worship would not be excluded
from the exemption because it provides charitable social services
to or employs people of different religious faiths
Not a compromise – employees in this situation do not have
free access to contraceptives
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10. July 2, 2013 Final Rule (78 C.F.R. 39870)
• New Accommodation (relig. hospitals/universities) – 1/1/14
• Org eligible for accommodation if (1) non-profit, (2) holds itself out as
religious, (3) opposes contraceptives coverage for religious reasons,
and (4) and self-certifies as meeting these criteria
• Doesn’t have to contract, arrange, pay, or refer for contraceptives coverage
• Eligible org provides self-certification to insurance issuer  Issuer
excludes contraceptives from org’s coverage  Issuer assumes sole
responsibility for providing payments for contraceptive services
• Why would insurer be willing? At least cost neutral (although some dispute)
• Self-insured plans – similar process through 3rd party plan administrators
• Why would administrator be willing? Cost of such payments offset by
adjustment in Exchange user fees
KEY: enrollees and eligible orgs don’t pay;
insurers/administrators do  balance access and
conscience
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11. July 2, 2013 Final Rule (78 C.F.R. 39870)
• Mandate in full force with regard to non-profit secular and
for-profit employers (rule offers nothing to these groups)
• E.g., religious owner of a restaurant chain, craft store, mining
company may have objections to the mandate but not eligible for
exemption/accommodation
Employer responsible for providing contraceptives
coverage without cost sharing
March 14, 201411

12. March 14, 201412
Source: The Beckett Fund for Religious Liberty, HHS Mandate Information
Central, 1/26/31, http://www.becketfund.org/hhsinformationcentral/#tab4

13. Litigation by Religious Non-Profits
• They are accommodated now, what could the problem be?!
• Argument: accommodation is insufficient, want full exemption
• Accommodated entities still have to provide health insurance
coverage to employees that includes free contraceptives (or
face fines)  accommodation just allows employer to avoid
paying for coverage of included contraceptive services
• If exempt, they would provide insurance coverage that did not
include these services at all
• Also argue that self-certification by employer has the effect of
triggering coverage of the objectionable services (just
authorizing and designating someone else to engage in
objectionable activity)  complicity
13

14. Litigation by Religious Non-Profits
• Example case: Little Sisters of the Poor v. Sebelius
• Jan. 24, SCOTUS temporary injunction: Gov’t cannot enforce
contraceptives coverage mandate against Little Sisters while
litigation is pending so long as it notifies HHS that it is a non-
profit religious entity with religious objection – do not have to use
gov’t form or notify insurer
• Employers’ Argument:
• Accommodated entities still face a substantial burden; complicit
in providing a plan that offers services they find objectionable
• Govt’s Argument:
• No substantial burden remains because employer doesn’t have
to finance the objectionable services; this is just about
paperwork, which is itself protective of religious liberty
14

15. Litigation by For-Profit Employers
• Secular companies w/ religious owners  lots of litigation
because must fully comply regardless of owners’ objections:
• Pay for objectionable coverage OR
• Pay penalty for failing to provide such coverage OR
• Pay penalty for not providing any coverage at all
• Outcomes so far:
• 3rd and 6th Circuits: for-profit companies can’t assert religious liberty claims
and owners have no individual claims because mandate applies to company
• D.C. Circuit: for-profit companies have no claims, but owners in closely
held companies do
• 7th Circuit: for-profit companies and their owners when closely held can
both assert religious liberty claims
• 10th Circuit: for-profit companies can exercise religion15

16. Litigation by For-Profit Employers @ SCOTUS
• Sebelius v. Hobby Lobby Stores, 10th Cir. (gov’t appeal)
• Does RFRA allow a for-profit corporation to deny its
employees contraceptives coverage to which they are entitled
under the ACA based on the religious objections of the
corporation’s owners?
Company’s rights
RFRA
• Conestoga Wood v. Sebelius, 3rd Cir. (company appeal)
• Do religious owners of a family business, or their closely held
for-profit corporation, have free exercise rights that are
violated by the contraceptive coverage mandate?
Company’s rights and owners’ rights
RFRA and 1st Amendment
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17. Main Questions/Issues
• When do we get to abstain from laws that we find
objectionable?
• Concern about crippling gov’ts ability to solve national problems
through laws of general applicability
• How to deal with complicity?
• Is mandate any different from paying employees and having
them use salaries to buy contraceptives?
• Any different from paying taxes to support objectionable things?
• What are the reasonable limits of accommodation?
• Objection to covering other health care services, e.g., hospice,
vaccines, psych care, blood transfusions, etc.?
• Objection to how employees spend their salaries or behave
outside of work?17

18. Are for-profit accommodations legally required?
• Who is burdened, corporations or owners as individuals?
• Do for-profit corporations have a right to free exercise?
• Yes, corporations can be people as under Citizens United; not
excluded by RFRA; in closely held companies, owners’ rights
pass through/up
• No, religion can only be exercised by individuals or religious
organizations; owners’ rights cannot pass through in corporation
• Does contraceptives mandate impose substantial burden?
• Yes, employers must actively facilitate access to services they
find religiously objectionable – different from salary/taxes
• No, employers can still choose not to use contraceptives if they
object and no substantial burden from having one’s money
circuitously flow to support the possible conduct of others
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19. Are for profit accommodations legally required?
• Is the government’s interest compelling?
• Yes, public health and equality
• No, can’t be compelling given all the exceptions (churches,
grandfathered plans, small employers, etc.) – several million
employees not covered
• Are there less restrictive alternatives?
• Yes, government/insurers could provide contraceptives
• Even if accommodations are just permissive, if cost-neutral, why
not extend accommodation to all religious objectors, or even
across the board to all employers?
• No, alternatives are infeasible/less effective/more complicated
IMO: If we get to these 2 questions, government loses
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20. Final Points
• 28 states have contraceptives mandates of their own
• But federal RFRA does not apply to the states
• States often lack the broader employer insurance
requirements (so objectors can just not provide any coverage)
• Potential conflict between RFRA and Title VII of CRA
• Title VII prohibits employment discrimination on the basis of
sex without exception for for-profit secular employers
• EEOC has determined that an employer’s failure to provide
coverage of contraception, when it covers other prescription
drugs and preventive care, is a violation of the law, although
not all courts have agreed
• Best to avoid arguments about whose beliefs are getting
imposed on whom – goes both ways and proves nothing20