SCOTUS to Revisit ACA’s Contraception Mandate

The U.S. Supreme Court has agreed to again take on the Affordable Care Act’s (ACA) controversial contraception mandate. This time around, the justices will consider rules adopted by the Trump Administration that expanded the mandate’s exceptions to allow private employers with religious or moral objections to opt-out of providing coverage for their employees.

Prior ACA’s Challenges

The ACA requires employers with more than 50 employees to provide health insurance coverage for the 20 contraceptive methods approved by the Food and Drug Administration. Religious employers, such as churches, are exempt from this contraceptive mandate. In addition, the Department of Health and Human Services (HHS) created an additional exemption for religious nonprofit organizations that object to providing coverage for contraceptive services.

In Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014), the Supreme Court held that the exemption must be extended to closely-held for-profit corporations with sincere religious objections to the provision of contraceptive coverage so that their religious beliefs were not substantially burdened under the Religious Freedom Restoration Act of 1993(RFRA). The Court found that use of the accommodation process was a less restrictive means to ensure access to cost-free contraceptives. Days later, in Wheaton College v. Burwell, 573 U.S. 958 (2014), the Court concluded that Wheaton College, who also lodged a religious objection to providing insurance for services covered by the Contraceptive Mandate, did not have to use the Accommodation self-certification form, known as the ESBA Form 700, but could instead rely on its notification to HHS to satisfy the Accommodation’s prerequisites.

Most recently, in Zubik v. Burwell, 578 U.S. __ (2016), several religiously affiliated nonprofit corporations alleged that being forced to “facilitate” the provision ofcontraception coverage under the Affordable Care Actviolates the RFRA. However, the Supreme Court failed to reach the merits of the case, instead remanding the case back to the lower courts with instructions for the parties to attempt to hash out the details of a compromise discussed during oral arguments.

Facts of the Case

In 2017, the Departments of Health and Human Services, Labor, and Treasury issued interim final rules, without notice or the opportunity for public comment, that created broad religious and moral exemptions from the contraception mandate. The religious exemption permitted private employers to opt-out of the contraceptive guarantee, without specific notice, if the employer holds a sincere religious objection to contraception. Meanwhile, the moral exemption provided the same exemption and voluntary accommodation process to nonprofit organizations and non-publicly traded organizations “with sincerely held moral convictions opposed to coverage of some or all contraceptive or sterilization methods.” While legal challenges were pending, the agencies finalized the rules without making any substantive changes.

Lower Court’s Decision

The States of Pennsylvania and New Jersey challenged the rules in federal district court. Little Sisters of the Poor Saints Peter and Paul Home (Little Sisters), a religious nonprofit operating a home in Pittsburgh, intervened. The States alleged violation of Equal Protection of the laws under the Fifth Amendment; violation of Title VII of the Civil Rights Act and the Pregnancy Discrimination Act; violation of the procedural and substantive requirements of the Administrative Procedures Act (APA); and violation of the Establishment Clause of the First Amendment.

The district court issued a nationwide injunction after finding that the States had standing to challenge the final rules and established a likelihood of success on the merits of their APA claims. First, the court held that the States are likely to succeed on their procedural APA claims because the Agencies failed to comply with the notice-and-comment requirement and this defect tainted the Final Rules. Second, the court held that the States were likely to succeed on their substantive APA challenges because neither the ACA nor RFRA authorized the agencies to create exemptions. The Third Circuit unanimously affirmed.

Issues Before the Supreme Court

The Supreme Court has agreed to consider the following questions:

• Whether the Departments of Health and Human Services, Labor and the Treasury had statutory authority under the ACA and the RFRA to expand the conscience exemption to the contraceptive-coverage mandate;

• Whether the agencies’ decision to forgo notice and opportunity for public comment before issuing the interim final rules rendered the final rules – which were issued after notice and comment – invalid under the Administrative Procedure Act; and

• Whether the U.S. Court of Appeals for the 3rd Circuit erred in affirming a nationwide preliminary injunction barring implementation of the final rules.

Oral arguments have not yet been scheduled and are unlikely to occur prior to the end of the term in June.