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From Health Reform WK-EDGE, August 11, 2017

Religious exemption to contraceptive mandate not extended to nonreligious employers

By Kathryn S. Beard, J.D.

"After careful review, but without any hesitation," the Third Circuit determined that the religious exemption to the Affordable Care Act’s contraceptive mandate does not apply to a secular anti-abortion group with no religious affiliation and affirmed the district court’s grant of summary judgment to the federal government. It also found that an employee’s religious beliefs are not substantially burdened by the mandate (Real Alternatives, Inc. v. HHS Secretary, August 4, 2017, Rendell, M.).

Background. Real Alternatives, Inc. is a nonprofit, nonreligious, anti-abortion organization that excluded contraceptive care from its employees’ health insurance plans until 2014, when its provider terminated the plan based on the contraceptive mandate in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The organization argued that the three federal agencies responsible for implementing the ACA should have extended an exemption made for religious employers (see 76 FR 46621, August 3, 2011) to employers with a moral aversion to contraceptive. At the same time, its only full-time employees—three men—claimed that their religious rights are violated by the contraceptive mandate. The district court granted summary judgment to the government, determining that a moral objection is not entitled to the same protection as an exercise of religious freedom (see Take the coverage! Court declines to apply moral objection to contraceptives, December 16, 2015). Real Alternatives and its employees appealed.

Real Alternatives’ claims. Real Alternatives’ arguments were based on (1) the Equal Protection clause of the Fifth Amendment to the U.S. Constitution; and (2) the Administrative Procedures Act (APA). The Third Circuit first determined that Real Alternatives is not similarly situated to a religious employer because it does not involve a comprehensive belief system—diety-centric or otherwise—and therefore mirrors a single-issue interest group rather than a religious organization. The court of appeals found that Real Alternatives "is in no way" similarly situated to a religious group, and is not entitled to any of the autonomy the government grants for houses of worship. It also determined that Real Alternatives’ APA argument—that the contraceptive mandate is arbitrary and capricious and violates the Constitution and federal law—lacked merit.

Employees’ claims. Real Alternatives’ employees presented the court with a question of first impression: whether a substantial burden on religious exercise is imposed on employees who oppose contraceptives on religious grounds but work for secular employers that are required to provide health insurance coverage that includes services to which the employees object. The claim is based on the Religious Freedom Restoration Act (RFRA) (42 U.S.C. §2000bb to 2000bb-4). Under RFRA, an impermissible burden occurs when the government compels individuals to perform acts that are undeniably at odds with fundamental tenets of their religious beliefs. The court found that because of the way health insurance coverage works—each employee can take advantage of eligibility for different health services as he or she sees fit—does not indicate support or advocacy of one or some of hundreds of covered services. Similarly, paying for coverage does not give an employee an active role in the underlying plan; merely subscribing to a plan is not closely related to the services an employee, or any other subscriber, chooses to seek out and use. Therefore, the employees’ RFRA claims failed.

Dissent. Judge Kent Jordan dissented from the panel’s decision with regard to RFRA, but otherwise joined in the opinion. His dissent said that the ACA represented the federal government giving itself "a vastly greater role in the health insurance market" and thereby left "less room" for individual purchasers to decide the type of coverage they would purchase. Taking away individuals’ choices in this way, Jordan argued, is a type of government coercion that does cause a significant burden. He wrote that the contraceptive mandate is not narrowly tailored, and therefore does not satisfy scrutiny.

The case is No. 16-1275.

Attorneys: Elissa M. Graves (Alliance Defending Freedom) and Jeremy L. Samek (Independence Law Center) for Real Alternatives Inc. Adam A. Grogg, U.S. Department of Justice, for Secretary, U.S. Department of Health and Human Services.

Companies: Real Alternatives Inc.; U.S. Department of Health and Human Services; U.S. Department of Labor; U.S. Department of the Treasury

Cases: CaseDecisions AccessNews AgencyNews ContraceptionCoverageNews EssentialBenefitNews GCNNews PreventiveCareNews DelawareNews NewJerseyNews PennsylvaniaNews NewsFeed

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