The key issue in Zubik v. Burwell, being heard today by the Supreme Court, is whether the Department of Health and Human Services’ guidelines under the Affordable Care Act’s contraceptive-coverage mandate requirements and its accommodation violate the Religious Freedom Restoration Act of 1993 by forcing religious nonprofits to act in violation of their religious beliefs.

The regulations include an exemption from contraceptive coverage for the group health plans of religious employers. The exemption does not mean that such services are not covered, but that they are not covered through a cost-sharing mechanism born by the religious employers. The contraception mandate requires these organizations to “facilitate” the provision of insurance coverage for contraceptive services that they oppose on religious grounds.

[Image credit: Bloomberg]
[Image credit: Bloomberg]

The outcome of this decision should hopefully answer three questions — first, do HHS’s guidelines satisfy the RFRA’s test for overriding religious objections; second, do HHS’s guidelines advance a compelling government interest; and third, is the government using the least restrictive means to advance that interest?

Similar issues were heard by the Supreme Court in the Burwell v. Hobby Lobby, Inc. case, which ended with a 5-4 victory in favor of Hobby Lobby. Justice Alito delivered the Court’s majority opinion, and Chief Justice Roberts and Justices Scalia, Kennedy and Thomas joined.

The Court held that requiring the plaintiffs, which were closely held for-profit corporations, to comply with the contraception mandate violates the RFRA. The Court relied solely on RFRA for its conclusion that the contraception mandate violated plaintiffs’ religious freedom. The actual decision did not limit the ruling to the four contraceptive devices originally at issue with Hobby Lobby, but was broader and applied to the entire contraception mandate. Since Justice Scalia sided with Hobby Lobby, his absence in Zubik v. Burwell will add an interesting dynamic to the outcome of this case.

The RFRA prohibits the federal government from taking any action that substantially burdens the exercise of religion, unless that action constitutes the least restrictive means of serving a compelling government interest. In Burwell vs. Hobby Lobby, Inc. the Court agreed with Hobby Lobby that the contraception mandate imposes a substantial burden on their exercise of religion.

In reaching this conclusion, the Court noted that the contraception mandate left Hobby Lobby with three choices. First, they could violate their religious belief that life begins at conception by providing the contraceptive devices at issue. Second, they could exclude the objectionable contraceptive devices from their group health coverage, in which case they would have to pay an ACA penalty equal to $100 per day per affected individual (or approximately $475 million per year in Hobby Lobby’s case). Third, they could stop providing group health coverage to their employees altogether.

However, if they chose this route and at least one of their full-time employees received subsidized coverage on an ACA health insurance marketplace exchange, they would be required to pay an ACA tax of $2,000 per full-time employee, after the first 30 full-time employees (i.e., 30 employees per organization are exempt, and the rest subject to the tax). This penalty would be approximately $26 million per year in Hobby Lobby’s case, significantly less than the penalty, noted above, for offering group health coverage that does not provide morning-after pills and intrauterine devices at no cost to employees, but still significant.

To the Court, this trio of alternatives imposed a substantial burden on Hobby Lobby’s ability to exercise religious freedom. Essentially, the government presented Hobby Lobby with a choice between violating its religious beliefs on the one hand and paying millions of dollars in annual Internal Revenue Service penalties on the other hand.

As to the questions of whether the contraception mandate furthers a compelling governmental interest and, if so, is the least restrictive means of doing so, the Burwell v. Hobby Lobby Court declined to rule on question of a compelling governmental interest. The majority hinted that it had doubts about whether the government could satisfy this requirement: the decision called it odd that the government was claiming a compelling interest in ensuring that employers provide free access to all 20 FDA-approved contraceptive devices, given that the law had exempted religious nonprofit organizations, group health plans of employers with under 50 employees, and grandfathered health plans from satisfying the contraception mandate — the last for no apparent reason except administrative convenience.

The Court focused its inquiry on whether the contraception mandate is the least restrictive means that the government could have chosen to serve its compelling interest in providing women with free access to contraception, assuming that it has such a compelling interest. The least restrictive means test is one of the most demanding standards in constitutional jurisprudence, and in the Hobby Lobby case the court concluded that the government failed to satisfy that test. The government “has not shown,” wrote the Court, “that it lacks other means of achieving its desired goal without imposing a substantial burden on the exercise of religion by the objecting parties in these cases.”

The Court gave examples of less restrictive means the government could utilize, such as the government itself providing contraception to women who are unable to obtain it through employer-sponsored health insurance policies due to employers’ religious objections. Unlike before Hobby Lobby, the government has now established an accommodation exempting religious nonprofit organizations from the contraception mandate; however, the Court in Zubik v. Burwell will need to decide if the contraception mandate furthers a compelling governmental interest and, if so, if the existing accommodations are the least restrictive means.

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