Supreme Court Issues Half Pregnant Ruling

Celebrating Too Soon? Wait Until November 3…………

“The court sent the case back to a lower federal court for further action, inviting additional challenges………………”

Supreme Court says Broad Exemption from Contraceptives Mandate can Survive … for Now

MyHealthGuide Source: Ed Fensholt, 7/9/2020, Lockton

Case: Little Sisters of the Poor v. Pennsylvania, Supreme Court Ruling

The Supreme Court has handed the Trump administration a major, but perhaps temporary, victory in the long-simmering fight over whether employer-sponsored group health plans can be required by the Affordable Care Act (ACA) to provide no-cost contraceptives to their female members.

Half the court’s progressive bloc joined a 7-2 vote, where the court concluded that the administration had the authority to create – via regulations – broad exceptions to the ACA’s contraceptives mandate for employers with religious or moral objections to providing contraceptives. But the court sent the case back to a lower federal court for further action, inviting additional challenges concerning whether such regulations should be invalidated as arbitrary and capricious. In sum, the long running battle over the contraceptives mandate will continue.

Background: A decade of contention

At issue in the court’s recent ruling was an aspect of the ACA’s mandate that nongrandfathered medical insurance plans provide a variety of preventive care benefits at no out-of-pocket cost to the plans’ members.

The ACA does not expressly state that the cost-free preventive benefits must include contraceptives, but says the preventive benefits must include “such additional preventive care and screenings … as provided for in comprehensive guidelines supported by the Health Resources and Services Administration” (HRSA), an agency of the Department of Health and Human Services (HHS).

The wrangling began in earnest in 2011 when the HRSA issued preventive care guidelines that included the contraceptives mandate. That mandate re­quired health plans to provide coverage for all contraceptive methods and sterilization procedures approved by the Food and Drug Administration, as well as related education and counseling. Simultaneously, the Obama administration updated a related regulation, creating an exception from the contraceptives mandate for religious organizations. That updated regulation touched off a near decade-long legal battle over the scope of the exception.

Over the ensuing nine years the Obama administration, and later the Trump administration and the courts, have broadened the exception to first include nonprofit, religious organizations, then privately owned corporate entities with a sincere religious objection to contraceptives (the Hobby Lobby decision; see our alert), and most recently to privately or publicly held companies with a religious or simply a moral objection to providing contraceptives. The battle lines have shifted completely over those years, first from contraceptives opponents fighting against what they saw as too broad a federal coverage mandate, and lately by contraceptives advocates arguing against what they see as too broad an exception to the mandate.

It was the fight over this last, broad-based exception – for publicly or privately held companies – that the Supreme Court was asked to resolve.

The court, by a substantial majority, concluded HHS had the authority to craft the broad exception.

Lockton comment

Justices Eileen Kagan and Stephen Breyer, half of the court’s progressive bloc, agreed that the administration had the authority to carve out the exception for religious or moral objections, on the part of both privately and publicly held companies. But it’s clear from Kagan’s concurring opinion that she does not believe the exception reflects a reasonable interpretation of the contraceptives mandate. Her concurring opinion flatly invites additional challenges in the lower courts over the reasonableness of the exception. It seems obvious if that issue – the reasonableness of the exception – were to find its way to the Supreme Court, she would vote to strike the exception.

So, what now?

The majority of employers sponsoring group medical plans provide cost-free contraceptives to their female members and are willing to do so without regard to mandates and exceptions. For those employers the court’s ruling is inconsequential. But for those employers that hold religious or moral objections to contraceptives, the court’s ruling allows them to maintain the status quo, at least for now.

Additional court challenges are sure to follow, and a change in administrations next February would almost certainly trigger a quick change in approach by federal regulators to the scope of exceptions to the contraceptives mandate. We’ll continue to monitor this issue and keep you apprised of future developments.