Last month, on November 6, 2015, the United States Supreme Court granted certiorari and consolidated seven cases brought by religious nonprofit organizations challenging the "opt out" provision of the Affordable Care Act's (ACA's) contraception mandate, claiming it violates their right to religious freedom.1

Federal law currently requires employers to provide all FDA-approved contraceptive measures and sterilization procedures to employees through their health plans and without any cost-sharing. A total exemption to this rule, however, is provided to houses of worship (45 C.F.R. § 147.131(a)) and a special "accommodation" is provided to religiously affiliated nonprofit organizations (45 C.F.R. § 147.131(b)).2 The accommodation allows nonprofit religious organizations to opt out of purchasing contraceptive coverage for their employees. In such cases, the legal obligation to provide contraceptive coverage is transferred to the organization's insurance company.

In order to request such an accommodation, an organization was originally required to submit to its health insurer or third-party administrator (TPA) a self-certification form stating that (1) it opposes providing coverage for some or all of any contraceptive services required to be covered under the contraceptive mandate on account of religious objections, (2) it is organized and operates as a nonprofit entity, and (3) it holds itself out as a religious organization. See 45 C.F.R. § 147.131(b). The Department of Health and Human Services (HHS), however, amended the accommodation following the Supreme Court's decision inWheaton College v. Burwell, 134 S. Ct. 2806, 189 L. Ed. 2d 856 (2014), to simplify the opt-out procedure. Now, religious nonprofit organizations are allowed simply to certify their objections in a notice to the Secretary of HHS or their insurer.

Plaintiffs Challenge the Accommodation as a Burden on Religious Freedom

Per federal law, even though the plaintiffs in the seven consolidated cases are not required to provide contraceptive coverage, they nonetheless continue to challenge the accommodation as posing a substantial burden on their religious freedom as guaranteed by the Religious Freedom Restoration Act (RFRA). Under the RFRA, a law that substantially burdens religious freedom can be upheld only if it furthers a compelling government interest and is the least restrictive means of doing so. 42 U.S.C. § 2000bb-1(a)-(b). Plaintiffs contend that even with the accommodation afforded under federal law, they are nonetheless still being forced to violate their sincerely held religious beliefs, because notifying HHS or their insurance companies of their objections will trigger their insurer's obligation to provide contraceptive coverage, thereby making them a conduit to conduct that they believe to be morally wrong. As explained in Priests For Life v. U.S. Dept. of Health and Human Services, 772 F.3d 229, 251-52 (D.C. Cir. 2014):

Plaintiffs nonetheless insist that, even with the accommodation, the regulations substantially burden their religious exercise by continuing to require that they play a role in the facilitation of contraceptive use. In particular, they contend that: (1) "signing and submitting the self-certification" or alternative notice "triggers" or "impermissibly facilitates delivery of the objectionable coverage" to the beneficiaries of their health plans; (2) the regulations require "contracting with third parties authorized or obligated to provide the mandated coverage;" and (3) the regulations require "maintaining health plans that will serve as conduits for the delivery of the mandated coverage." Additionally, self-insured Plaintiffs contend that their self-certification expressly and impermissibly authorizes their TPAs to provide contraceptive coverage.

In essence, the plaintiffs do not want contraceptive coverage to be made available to their employees—no matter who finances the coverage—because they believe that requiring their insurers or TPA to provide such coverage makes them complicit in immoral conduct that is tantamount to abortion. Therefore, they seek a total exemption from the law—such as the one provided to houses of worship.

Courts of Appeals Are Split

The United States Courts of Appeals are split, doubtless leading to the Supreme Court's grant of certiorari. Plaintiffs' argument was rejected by the Third, Fifth, Tenth and D.C. Circuits from which these seven consolidated cases stem, but was accepted by the Eighth Circuit.3

In Little Sisters of the Poor Home for the Aged, Denver, Colo. v. Burwell, 794 F.3d 1151, 1182-84 (10th Cir. 2015), the Tenth Circuit stated:

The opt out does not "cause" contraceptive coverage; it relieves objectors of their coverage responsibility, at which point federal law shifts that responsibility to a different actor. The ACA and its implementing regulations have already required that group health plans will include contraceptive coverage and have assigned legal responsibilities to ensure such coverage will be provided when the religious nonprofit organization opts out…. Although a religious nonprofit organization may opt out from providing contraceptive coverage, it cannot preclude the government from requiring others to provide the legally required coverage in its stead. In short, the framework established by federal law, not the actions of the religious objector, ensures that plan participants and beneficiaries will receive contraceptive coverage.

The court then rejected the plaintiffs' contention that the accommodation is a substantial burden because it makes them "complicit in the overall scheme to deliver contraceptive coverage." Id. at 1191. The court noted that "the purpose and design of the accommodation scheme is to ensure that Plaintiffs are not complicit" and "[o]pting out sends the unambiguous message that they oppose contraceptive coverage and refuse to provide it, and does not foreclose them from objecting both to contraception and the Mandate in the strongest possible terms." Id. The court further noted that the "de minimis administrative task" involved in opting out does not substantially burden religious exercise. Id. at 1192.

On September 17, 2015, the Eighth Circuit created a split in authority with its opinion in Sharpe Holdings, Inc. v. U.S. Dep't of Health & Human Servs., 801 F.3d 927, 942 (8th Cir. 2015), which held the opt-out processcan be viewed as a substantial burden of religious faith in violation of RFRA. "The question here is not whether [Plaintiffs] have correctly interpreted the law, but whether they have a sincere religious belief that their participation in the accommodation process makes them morally and spiritually complicit in providing abortifacient coverage. Their affirmative answer to that question is not for us to dispute."

In reaching its decision, the court found that the government had not met its burden of demonstrating that the "contraceptive mandate and the accommodation process are the only feasible means to distribute cost-free contraceptives to women employed by religious organizations and that no alternative means would suffice to achieve its compelling interest." Id. at 943. For example, "The government could provide subsidies, reimbursements, tax credits, or tax deductions to employees, or that the government could pay for the distribution of contraceptives at community health centers, public clinics, and hospitals with income-based support." Id. at 945.

The Supreme Court Will Address Whether the Accommodation Violates RFRA

On review, the Supreme Court will address the issue of whether the accommodation granted to religious nonprofit organizations violates the RFRA. In considering possible outcomes, one potential impactful issue to note is that the plaintiffs in the underlying cases offer health insurance in various ways.4 This may become an issue because some dissenting judges in the lower court opinions have emphasized the difference between insured and self-insured plans in terms of who bears the legal responsibility for providing contraceptive coverage once a religious nonprofit organization has opted out. See Little Sisters of the Poor Home for the Aged, Denver, Colo. v. Burwell, 794 F.3d 1151, 1184 (10th Cir. 2015).