Legal Alert

Supreme Court Upholds Exemption to ACA’s Contraceptive Mandate

by the Employee Benefits and Executive Compensation Group
July 10, 2020

In Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, the Supreme Court this week upheld regulations issued by the U.S. Departments of Treasury, Labor, and Health and Human Services (the Departments) that exempted employers with sincerely held religious beliefs and employers with moral objections from the requirement to provide contraceptive coverage under their group health plans.

This contraceptive mandate derives from a provision within the Patient Protection and Affordable Care Act of 2010 (ACA) that requires health plans to provide women with preventive care and screenings without imposing any cost-sharing requirements. Regulations issued by the Health Resources and Services Administration (HRSA) defined preventive care to include coverage for FDA-approved contraceptive (also known as birth control) methods. Confronting legal challenges, the Departments modified the rules to exempt certain religious organizations from the requirement to provide contraceptive coverage within their health plans through a process of self-certification. Plan participants could then separately obtain contraceptive coverage, generally through an insurer or claims administrator. With ongoing litigation and a change in Administrations, the Departments published two new sets of regulations that allowed plan sponsors to opt out of providing contraceptive coverage under their plans based on either sincerely held religious beliefs or moral objections.

The states of Pennsylvania and New Jersey challenged these rules, leading a District Court to issue a preliminary injunction, preventing the rules from being enforced, a decision that the Third Circuit Court of Appeals later affirmed.

The Supreme Court reversed the lower courts’ decisions. First, the Supreme Court determined that the Departments—and more specifically, the HRSA, a division of the Department of Health and Human Services—had broad authority to issue the rules based on the ACA’s provision that requires group health plans to provide preventive care and screening “as provided for in comprehensive guidelines supported by the [HRSA].” The Supreme Court reasoned that if the HRSA had the authority to create rules under the ACA, it also had the authority to create exemptions from its own rules. The Supreme Court also found that the Departments satisfied the procedural requirements of the Administrative Procedure Act. In a concurring opinion, Justices Samuel A. Alito and Neil M. Gorsuch further concluded that the application of the contraceptive mandate without appropriate exemptions violated the Religious Freedom Restoration Act (RFRA) because it required some employers to engage in conduct to which they had a strong religious objection. In a separate concurrence, Justices Elena Kagan and Stephen G. Breyer took a narrower view, arguing that the case should be sent back down to the lower courts for an examination of the breadth of the exemption.

Justices Ruth Bader Ginsburg and Sonia Sotomayor dissented. They found that the ACA allowed the HRSA to determine the types of preventive health services that would be covered, but it did not dictate who must provide coverage for these services. They also found that the RFRA did not require the exemption in view of the burden that the exemption places on women.

Based on the Supreme Court’s holding, employers that object to providing contraceptive coverage based on a sincerely held religious belief or moral principle will be exempt from providing contraceptive coverage under the ACA.
As a result, employees who work for an exempt employer (and, as applicable, their spouses and dependents) may not have coverage for birth control pills or other forms of contraception under their employer’s health plan or related insurer or administrator.

Copyright © 2020 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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