Although the U.S. Supreme Courts 2014 ruling in the Burwell v Hobby Lobby Stores case addressed in broad terms how exceptions to the Affordable Care Acts mandate for contraceptive benefits coverage can be granted in the private sector, it left some unresolved questions both in the for-profit and in the nonprofit world.
Forty-six cases are pending in federal courts filed by nonprofits seeking to get out from under the contraceptive mandate, according to research by the Kaiser Family Foundation. The U.S. Supreme Court has been embroiled in the issue, sending cases back to appeals courts for further consideration.
Affordable Care Act regulations exempt houses of worship from having to provide contraceptives if they have a religious objection to birth control. As initially interpreted, the Hobby Lobby decision gave closely held private companies the same opportunity. That could change.
Forthcoming regulations will address whether closely held corporations with religious objections to contraception continue to qualify for an exemption or an accommodation, and this will determine whether or not women workers and dependents will have no-cost contraceptive coverage as part of their health plan, according to KFF.
Unlike an exemption, an accommodation only gives eligible employers today (particularly religiously affiliated nonprofits) the freedom to avoid covering the direct cost of contraceptive coverage, even as it remains available to employees and dependents. Technically it is paid for by the third-party administrator or insurer, although the dollars ultimately come from the employer and employees.
To receive that accommodation, eligible employers originally were required to complete an EBSA 700 form, certifying their eligibility for the accommodation, and furnishing it to their TPA or insurance carrier. Last year interim final federal regulations also allowed employers seeking an accommodation to inform HHS instead of their TPA or insurer.
According to KFF, many religiously affiliated nonprofits are dissatisfied with the accommodation approach, wanting instead the same opportunity for a complete exemption from the mandate now enjoyed by houses of worship. They also object to the notification requirement, arguing that it imposes a burden in violation of the 1993 Religious Freedom Restoration Act.
Just as in the cases brought by for-profit corporations [e.g. Hobby Lobby], if the nonprofit corporation can show that it is substantially burdened, then the government will then need to prove that the contraceptive coverage requirement is a compelling interest that is met in the least restrictive means, according to KFF. The compelling interest and least restrictive means are the standards set by the RFRA.
Two federal appeals courts have upheld the reporting requirements for accommodation status as insufficiently burdensome as to violate the RFRA. However, KFF anticipates that the Supreme Court may ultimately have to decide whether the accommodation substantially burdens the religious exercise of both nonprofit and for-profit closely held corporations, whether the government has a compelling interest, and whether there is a less restrictive way of achieving the same of goal of allowing women coverage for all FDA-approved contraceptive methods without cost-sharing.
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