SCOTUS Upholds Affordable Care Act’s Religious and Moral Exemptions

In Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, 591 U. S. ____ (2020), the U.S. Supreme Court upheld the Affordable Care Act (ACA) exemption for employers with religious and conscientious objections the healthcare law’s “contraceptive mandate.” According to the seven-member majority, the Health Resources and Services Administration (HRSA) was well within its authority in creating exceptions to the mandate.

Facts of the Case

The Patient Protection and Affordable Care Act of 2010 (ACA) requires covered employers to provide women with “preventive care and screenings” without “any cost sharing requirements,” and relies on Preventive Care Guidelines (Guidelines) “supported by the Health Resources and Services Administration” (HRSA) to determine what “preventive care and screenings” includes. Those Guidelines mandate that health plans provide coverage for all Food and Drug Administration approved contraceptive methods.

When the Departments of Health and Human Services, Labor, and the Treasury (Departments) incorporated the Guidelines, they also gave HRSA the discretion to exempt religious employers, such as churches, from providing contraceptive coverage. Later, the Departments also promulgated a rule accommodating qualifying religious organizations that allowed them to opt out of coverage by self-certifying that they met certain criteria to their health insurance issuer, which would then exclude contraceptive coverage from the employer’s plan and provide participants with separate payments for contraceptive services with- out imposing any cost-sharing requirements.

Religious entities challenged the rules under the Religious Freedom Restoration Act of 1993 (RFRA). In Burwell v. Hobby Lobby Stores, Inc., 573 U. S. 682, the Supreme Court held that the contraceptive mandate substantially burdened the free exercise of closely held corporations with sincerely held religious objections to providing their employees with certain methods of contraception. Subsequently, in Zubik v. Burwell, 578 U. S. ___, the Court opted to remand without deciding the RFRA question in cases challenging the self-certification accommodation so that the parties could develop an approach that would accommodate employers’ concerns while providing women full and equal coverage.

In accordance with the Court’s instructions, the Departments promulgated two interim final rules (IFRs). The first significantly expanded the church exemption to include an employer that “objects . . . based on its sincerely held religious beliefs,” “to its establishing, maintaining, providing, offering, or arranging [for] coverage or payments for some or all contraceptive services.” The second created a similar “moral exemption” for employers with sincerely held moral objections to providing some or all forms of contraceptive coverage. The Departments requested post-promulgation comments on both IFRs.

Pennsylvania sued, alleging that the IFRs were procedurally and substantively invalid under the Administrative Procedure Act (APA). After the Departments issued final rules, responding to post-promulgation comments but leaving the IFRs largely intact, New Jersey joined Pennsylvania’s suit. Together they filed an amended complaint, alleging that the rules were substantively unlawful because the Departments lacked statutory authority under either the ACA or RFRA to promulgate the exemptions. They also argued that the rules were procedurally defective because the Departments failed to comply with the APA’s notice and comment procedures. The District Court issued a preliminary nationwide injunction against the implementation of the final rules, and the Third Circuit affirmed.

Supreme Court’s Decision

By a vote of 7-2, the Supreme Court reversed. “We hold that the Departments had the authority to provide exemptions from the regulatory contraceptive requirements for employers with religious and conscientious objections,” Justice Clarence Thomas wrote. “We accordingly reverse the Third Circuit’s judgment and remand with instructions to dissolve the nationwide preliminary injunction.”

The Court rejected the central argument that the Departments lacked statutory authority to promulgate the rules. In reaching its decision, the majority explained that the Departments invoke §300gg–13(a)(4), which states that group health plans must provide women with “preventive care and screenings . . . as provided for in comprehensive guidelines supported by [HRSA],” as the legal basis for the exemptions. It then highlighted that the pivotal phrase, “as provided for,” grants sweeping authority to HRSA to define the preventive care that applicable health plans must cover. More importantly, that same grant of authority empowers it to identify and create exemptions from its own Guidelines.

“Congress could have limited HRSA’s discretion in any number of ways, but it chose not to do so,” Justice Thomas wrote. “Instead, it enacted ‘expansive language offer[ing] no indication whatever’ that the statute limits what HRSA can designate as preventive care and screenings or who must provide that coverage.”

The majority also emphasized that the principle that “absent provision[s] cannot be supplied by the courts” applies not only to adding terms not found in the statute, but also to imposing limits on an agency’s discretion that are not supported by the text. “By introducing a limitation not found in the statute, respondents ask us to alter, rather than to interpret, the ACA,” Justice Thomas wrote.

“By its terms, the ACA leaves the Guidelines’ content to the exclusive discretion of HRSA. Under a plain reading of the statute, then, we conclude that the ACA gives HRSA broad discretion to define preventive care and screenings and to create the religious and moral exemptions,” Thomas wrote. In response to the argument that that the Departments’ interpretation thwarts Congress’ intent to provide contraceptive coverage to the women who are interested in receiving such coverage, the majority noted that that “such a policy concern cannot justify supplanting the text’s plain meaning.” It also argued that such concerns are better directed to Congress.