In the Aftermath of Hobby Lobby

By Gregory Curfman and Holly Fernandez Lynch

[A quick follow up to our recent NEJM Perspective on the case, with I. Glenn Cohen]

Immediately after Justice Samuel Alito’s announcement on June 30 of the majority opinion in Burwell v. Hobby Lobby, the Supreme Court took further actions on the contraceptive mandate, and both supporters and opponents of the opinion were furiously assessing the implications and impact of what has proved to be a wild week for women’s access to contraception.

A report from the IMS Institute last April found that 24 million more prescriptions for oral contraceptives without a copayment were written in 2013 (when the contraceptive mandate was in full effect) than in 2012 (when it was not). This translates into a savings of $483 million for women (on average $269 per person). The percentage of women with no out-of-pocket costs for contraceptives increased from 14% to 56%. What will be the impact of the Supreme Court’s decision in Hobby Lobby on these trends?

The Hobby Lobby opinion is quite clear that the contraceptive mandate, spawned by the Affordable Care Act, may not be enforced against closely held, for-profit companies with religious objections to paying for contraceptives coverage. In other words, such companies will not face the hefty fines for noncompliance that would otherwise be imposed by the Department of Health and Human Services.

Nonprofit Organizations

The opinion does not, however, apply to religious-affiliated, nonprofit organizations, such as Catholic schools or religious charities. For such organizations that object to paying for contraceptives coverage, the applicable regulation provided an accommodation by which the entities themselves were off the hook, but instead their insurers (or in the case of self-insured organizations, a third party administrator) would be required to provide free contraceptives coverage without cost to either the employee or the employer.  In order to be eligible for this accommodation, the nonprofit entity must complete a form designating its objection and provide a copy to its health insurance issuer or a third party administrator. A number of nonprofits filed lawsuits asking that they be exempt from even this requirement, on the grounds that they were still being required to violate their religious beliefs by deputizing someone else to provide the objectionable services. One such group, the Little Sisters of the Poor in Colorado, a group of nuns who perform charity work, was granted an injunction by the Supreme Court last January.

Thus far, several lower courts have ruled against the nonprofits. A complaint from the University of Notre Dame was dismissed by the 7th Circuit, and the university now provides contraceptive coverage, which it claims violates its religious principles.

On Tuesday July 1, Wheaton College, a Christian college in Illinois, was granted a two-day injunction by the Supreme Court, but the Obama administration asked that the injunction not be extended when it expired. Instead, on Thursday the Supreme Court, in a 6-to-3 opinion, granted Wheaton a temporary injunction (“interim order”) exempting it from compliance with the contraceptive mandate as long as it informs HHS in writing that it meets the eligibility requirements for the accommodation – in other words, Wheaton need not fill out the otherwise required form and provide it to its insurance issuer, it must only notify the government.  Presumably, the government could then notify the insurer, acting as a middleman to ensure that Wheaton employees retain access to free contraceptives. As the Court articulated “Nothing in this order precludes the Government from relying on this notice, to the extent it considers necessary, to facilitate the provision of full contraceptive coverage under the Act.”  The Court’s order made it clear that it was acting on an application for an injunction and that “this order should not be construed as an expression of the Court’s views on the merits.”

Justice Sotomayor issued a strongly worded dissent, an unusual step with an injunction, which was joined by Justices Ginsburg and Kagan. It suggested that the issuance of the injunction ran contrary to the majority opinion in Hobby Lobby, which pointed to the accommodation offered to nonprofit religious organizations as precisely the sort of alternative that might also be offered to for-profit employers objecting to the contraceptive mandate. The Court’s order in Wheaton was unsigned, though a brief statement indicated that Justice Scalia concurred in the order. It can be presumed that in the order, the 6-to-3 vote split along gender lines.

It seems highly likely that in the next Supreme Court term, a nonprofit case will be on the docket, which will then allow the Court to assess the merits.

The White House is now scrambling to try to provide a mechanism for covering contraceptive agents without a copayment for those women who may be forced to go without such coverage in the light of the two Court decisions.

Legislative Fixes – Amending RFRA?

In a newly released report, the Center for American Progress (CAP) has proposed an amendment to the Religious Freedom Restoration Act, and to similar state-based laws, in order to ensure that religious exemptions emanating from RFRA do not burden third parties. An example of such an amendment, according to the report, would be: “This section (referring to the existing statute) does not authorize exemptions that discriminate against, impose costs on, or otherwise harm, others, including those who may belong to other religions and/or adhere to other beliefs.” CAP seeks to provide assurance that religious liberty will not be used to discriminate or deny needed medical care to patients.

Sen. Tom Harkin, chairman of the Senate HELP Committee, said that he will explore legislative fixes to the majority’s opinion in Hobby Lobby. Given the inexorable political stalemate in Washington, however, it is difficult to imagine that legislation to amend RFRA could be passed in both the House and Senate.

Widening the Opinion to Other Preventive Services

Within hours of the announcement of the majority’s opinion in Hobby Lobby, the Supreme Court ordered reconsideration by the appeals courts of three cases involving the preventive-services mandate. At issue in Hobby Lobby were four (ella, Plan B, and two intrauterine devices) of the 20 FDA-approved contraceptive agents. The three cases ordered by the Court to be reconsidered went much further and objected to HHS-mandated coverage of all pregnancy-related services. The outcome of the appeals courts’ reconsideration in Autocam Corp. v. Burwell, Gilardi v. Department of Health & Human Services, and Eden Foods v. Burwell will be quite important as a test of whether Justice Alito’s attempt at a narrowly cabined ruling in Hobby Lobby can actually remain narrow, or whether the dissenting Justices’ fears of a slippery slope will be realized.

Gays and Lesbians

On that slippery slope point, Justice Ginsburg’s Hobby Lobby dissent mentioned potential extension of the religious exemption for contraceptive agents to vaccinations, blood transfusions, antidepressants, medications derived from pigs, and other health care interventions that various religious groups may find objectionable. Where would the line be drawn?

A recent New York Times opinion piece focused on another worrisome concern, namely the possibility that services could be declined to gays and lesbians by employers with religious objections to their sexual orientation. Other civil rights concerns have also been raised, but discrimination against gays and lesbians may be a special risk given that some oppose homosexuality principally on religious grounds. We may expect a legal challenge from an employer who chooses not to provide medical or other services on the basis of sexual orientation, although it is probable that the reviewing courts will find that there is no less restrictive alternative to achieving the compelling government interest in equality than to require employer compliance.  Moreover, while there are certainly outspoken religious objectors to homosexuality itself, that is substantially distinct from religious objections to contributing to the medical care of homosexuals.

Nonetheless, challenges have already begun.  For example, last week a group of 17 religious leaders, including the president of a Christian college north of Boston, Gordon College, sent a letter to the White House requesting a “robust religious exemption” from a planned order barring federal contractors from discriminating in hiring on the basis of sexual orientation. In this light, we may also expect legal challenges from employers who choose not to provide medical or other services on the basis of sexual orientation.

Employer-Based Health Insurance

Finally, the majority opinion in Hobby Lobby brought into sharp focus a new concern about our system of employer-based health insurance, namely the authority of for-profit employers to dictate health benefits based on their own religious beliefs.  Employer-based health insurance is already under scrutiny. A new report from Accenture suggests that private insurance exchanges may begin to supplant some employer-based health insurance. The implementation in 2018 of the so-called “Cadillac tax” on more expensive health plans will be the first time the tax-exempt status of employer-based health insurance is amended. It is plausible that the Cadillac tax will prove to be only the first step in a process to tax employer-based health insurance, which could have a major impact on this approach to insuring employed Americans. Taken together with the opinion in Hobby Lobby, we may begin to see a change in the dominant position held by employer-based health insurance since the end of World War II.  And that would be a very, very good thing, potentially softening the political debate for the next round of health care reform.

The Petrie-Flom Center Staff

The Petrie-Flom Center Staff

The Petrie-Flom Center staff often posts updates, announcements, and guests posts on behalf of others.

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