Recap: The Latest Supreme Court Decision on the ACA Contraceptive Coverage Requirement

Recap: The Latest Supreme Court Decision on the ACA Contraceptive Coverage Requirement

Earlier this week, the Supreme Court issued its third major opinion concerning the Affordable Care Act (ACA) requirement that health plans cover all FDA-approved contraceptive methods for women without cost sharing. In Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania (Little Sisters), the Court upheld 2018 regulations allowing essentially any employer, college, or university with a religious or moral objection to contraception to provide health care coverage that does not comply with the ACA requirement.

While the ruling is a significant setback for women in need of contraceptive care – in particular for low-income women, women of color, and LGBTQ people, who have long been denied equitable access to health care – the Court made clear that the case can continue in the lower courts.

A (Very) Abbreviated History of the Requirement

Under the ACA, most health plans must cover “such additional preventive care and screenings    . . . as provided for in comprehensive guidelines supported by the Health Resources and Services Administration.” In 2011, HRSA issued guidelines that included all FDA-approved contraceptive methods and sterilization procedures for women, as well as patient education and counseling. The guidelines reflect the medical consensus that contraception is essential preventive health careit protects the health and well-being of women, as well as their children.

The Obama administration issued regulations allowing various categories of entities to offer health plans that do not cover all FDA-approved contraceptive methods. First, the regulations exempted health plans established or maintained by religious employers, such as a churches, church associations, or other similar religious orders, from the coverage requirement.

Second, the regulations contained an accommodation for religious non-profit entities with an objection to some or all contraceptives. Pursuant to the accommodation, these entities notified HHS or their insurance issuer or third party administrator of their objection. Generally, the insurance issuer or third-party administrator assumed responsibility for providing the contraceptive coverage directly to plan enrollees.

Finally, in response to the Supreme Court decision in Burwell v. Hobby Lobby Stores, Inc., the Obama administration extended the accommodation to some closely held for-profit organizations with a religious objection to contraception. (In Hobby Lobby Stores, Inc., the Supreme Court held that the contraceptive coverage requirement violated the plaintiff companies’ rights under the Religious Freedom Restoration Act of 1993 (RFRA).)

However, dozens of non-profit religious entities objected to the accommodation process itself, arguing that it made them complicit in the provision of contraception. These entities filed suit, claiming that the contraceptive coverage requirement violated RFRA and the Constitution. Their claims reached the Supreme Court in Zubik v. Burwell.

The Supreme Court did not decide the merits of their claims, instead remanding the cases back to the lower courts with instructions that they assist the parties in reaching a solution that would account for the plaintiffs’ religious beliefs, while also ensuring that women “receive full and equal health coverage, including contraceptive coverage.” Nevertheless, the parties could not identify a “feasible approach.”

The Regulations at Issue in the Case

Soon after President Trump assumed office, the Departments of Health and Human Services, Labor, and Treasury issued interim final rules, and later final rules, that not only addressed the religious objection raised by the non-profit entities in Zubik, but went a great deal further.

The final rules permit any non-governmental, non-profit or for-profit entity and any college or university with a sincerely held religious objection to contraceptive services to offer a health plan that does not cover all FDA-approved contraceptive methods. Similarly, the regulations allow a slightly narrower category of entities with a sincerely held “moral” objection to some or all contraceptive services to offer a plan that does not comply with the coverage requirement. In short, virtually any employer or educational institution may deny contraceptive coverage to their workers or students.

Pennsylvania, later joined by New Jersey, challenged the regulations in court, arguing that they were invalid under the Administrative Procedure Act. Little Sisters, a Catholic non-profit employer, intervened in the case – even though it is not required to include contraceptive coverage in its health plans. The district court granted a preliminary injunction prohibiting the Departments from enforcing the regulations nationwide.

The Third Circuit affirmed, holding that: (1) the ACA empowered HRSA to determine the “preventive care and screenings” that must be covered, not to exempt certain health plans from the coverage requirement; (2) RFRA did not require or permit the broad religious exemption; and (3) the procedure the administration used to issue the final regulations violated the APA’s notice and comment requirements.

The Decision

In an opinion written by Justice Thomas, the Supreme Court reversed the Third Circuit. The Court held that the text of the ACA “gives HRSA broad discretion to define preventive care and screenings and to create the religious and moral exemptions.” The Court went on to say that any concerns regarding the impact of the regulations on women “are more properly directed” at Congress, as it was Congress (not the administration) that failed to ensure “protection for contraceptive coverage.”

Given its decision that the ACA allowed the 2018 regulations, the Court declined to reach the question of whether RFRA provided an independent basis for the religious exemption. However, the Court did say that it was proper for the Departments to consider RFRA. In fact, the Court indicated that if the administration had not considered RFRA during the rulemaking process, it “would certainly be susceptible to claims that the rules were arbitrary and capricious for failing to consider an important aspect of the problem.”

Finally, the Court held that the 2018 final rules were free of procedural defects. In short, the Court determined that the interim final rules functioned as a notice of proposed rulemaking and satisfied the APA notice requirements. And, even assuming that the administration erred in not issuing a document titled “notice of proposed rulemaking” before promulgating the final rules, that error was harmless.

Justice Alito, joined by Justice Gorsuch, concurred in the judgment, but would have reached the RFRA question. He would hold that RFRA “compels an exemption for the Little Sisters and any other employer with a similar objection” to the accommodation.

Justice Kagan, joined by Justice Breyer, wrote a separate concurrence. While she agreed that the ACA provision does authorize the 2018 regulations, she would have reached that result via a different route. She concluded that the ACA provision was ambiguous, and under Chevron U.S.A. Inc. v, Natural Resources Defense Council, Inc., she would have deferred to the Departments’ reasonable interpretation of the provision.

Importantly, Justice Kagan emphasized “that does not mean the Departments should prevail when these cases return to the lower courts.” In addition to arguing that the Departments lacked the authority to promulgate the regulations, the States claimed that the regulations are arbitrary and capricious under the APA, a claim Justice Kagan described as “now ready for resolution” in the lower courts. She went on to detail why the regulations do not appear to be the result of reasoned decision-making, highlighting the “mismatch between the scope of the religious exemption and the problem the agencies set out to address.”

Finally, Justice Ginsburg, joined by Justice Sotomayor, filed a dissenting opinion in which she roundly criticized the Court for breaking with precedent and “cast[ing] totally aside countervailing rights and interests in its zeal to secure religious rights to the nth degree.” After outlining the “significant burdens” that the regulations would impose on women, she concluded that RFRA does not require or permit such a result.

She would also hold that the plain text of the ACA prohibits the Departments from adopting the religious and moral exemptions. In support of that interpretation, Justice Ginsburg pointed out that HRSA’s “expertise does not include any proficiency in delineating religious and moral exemptions,” making it highly unlikely that Congress would have delegated that task to the agency.

What’s Next?

The legal battle to preserve the contraceptive coverage requirement – and prevent the religious and “moral” (whatever that means) beliefs of business executives from controlling women’s access to critical reproductive health care – will continue. Pennsylvania has already committed to pursuing its arbitrary and capricious claim in the lower courts. And a day after releasing Little Sisters, the Court granted certiorari in a similar case filed by California and 13 other states (DE, VA, MD, NY, IL, WA, MN, CT, DC, NC, VT, RI, HA), vacated the judgment of the Ninth Circuit in that case, and remanded for further consideration. Thankfully, the legal fight to protect women’s health, economic security, and reproductive autonomy is not over.

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