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Posted: December 19, 2013

Affordable Care Act Violates Non-Profits’ Religious Beliefs

In The Roman Catholic Archdiocese of New York. v. Sebelius, 12 CV 2542 (E.D.N.Y. Dec. 13, 2013), Judge Brian M. Cogan held that the Patient Protection and Affordable Care Act (the “ACA”) violated certain plaintiffs’ core religious beliefs under the Religious Freedom Restoration Act (“RFRA”).   The ACA requires that group health insurance plans cover certain preventative services, including contraception, sterilization and related counseling (the “Mandate”).

Certain religious employers, primarily churches such as plaintiffs the Archdioceses of New York and the Diocese of Rockville Center (the “Diocesan Plaintiffs”), are exempt from the Mandate.  By recent regulation, religious non-profits, including the four other plaintiffs (the “non-exempt Plaintiffs”) who are affiliated with the Roman Catholic Church, were not required to pay for a health plan that covered contraceptive services; instead, an eligible entity must provide its issuer or third party administrator (“TPA”) with a self-certification form stating its objection to the Mandate on religious grounds.  The TPA is then required to provide contraceptive services free of charge to plan participants.  Plaintiffs claimed that, notwithstanding the exemptions that applied to them, the Mandate required them to violate their religious beliefs which prohibited them from providing, facilitating or sponsoring the provision of contraception, sterilization or abortion-inducing services.   Plaintiffs moved for summary judgment on all of their claims under RFRA, the Administrative Procedures Act, and the Establishment, Free Exercise, and Free Speech Clauses of the First Amendment.  Defendants cross-moved for summary judgment.

Since the Diocesan Plaintiffs were exempt from the Mandate, the Court found that they would not have suffered a substantial burden on their religion under the RFRA; and since these claims failed under the more lenient standard of the RFRA, they could not succeed on their remaining constitutional claims.  Accordingly, the Court granted defendants summary judgment with respect to the Diocesan Plaintiffs’ claims.  As described below, the non-exempt plaintiffs were entitled to summary judgment and a permanent injunction against enforcement of the Mandate as to them.  The Court found the remaining constitutional claims moot.

In a bizarre twist, late in the briefing of these motions after almost 18 months of litigation, the government realized that all of the plaintiffs’ health plans were exempt under ERISA, which provided the Department of Labor with authority to enforce the Mandate.  The government belatedly argued that since it had no authority to require the plaintiffs’ TPAs to provide contraceptive coverage, the plaintiffs lacked standing because their TPAs could not be forced to provide coverage for any objectionable services.  While noting that it is unclear how citizens like plaintiffs could know what the ACA requires if the government itself was unsure, the Court found that even if the government had finally come to an accurate understanding of how to apply the ACA and the Mandate, plaintiffs’ alleged an injury-in-fact was sufficient for Article III standing.

Plaintiffs suffered an injury because the Mandate made them complicit in a plan to provide coverage to which they had a religious objection, regardless of whether it provided contraceptive coverage.  The government argued that since all plaintiffs have to do is to complete a form stating their religious objections to contraceptive coverage, completing the form was a de minimis act and placed no burden on their religion.  However, in deciding whether a law imposes a “substantial burden”, the RFRA explicitly states (and the Supreme Court’s Free Exercise cases equally state) that a court may not consider the centrality of a particular religious practice to an adherent’s faith.  Here, the ACA required the non-exempt plaintiffs to complete and submit a self-certification, which authorized a third-party to provide the contraceptive coverage.  According to these plaintiffs, the self-certification was a compelling affirmation of a repugnant belief.  Thus, the Court rejected what it called the government’s “it’s just a form” argument and found that since the monetary fines for non-compliance were substantial the Mandate compelled the non-Diocesan plaintiffs to perform acts that were contrary to their religion.

Because the Court found that the non-exempt plaintiffs had demonstrated a substantial burden on their religious beliefs, the government then had to demonstrate that the Mandate was the least restrictive means of furthering a compelling governmental interest.  The Court first noted that every Circuit court presented with a similar argument in connection with RFRA challenges had held that the Mandate failed the RFRA’s test of strict scrutiny.

The Court rejected the government’s argument that it had a compelling interest in uniform enforcement of the Mandate that would be undermined by granting plaintiffs the exemption they sought.  First, the Mandate was not uniform because tens of millions or people qualified for one of various exemptions.  Second, the government’s belated realization that the ACA did not require plaintiffs’ TPAs to provide contraceptive coverage undermined any claim that imposing the Mandate served a compelling governmental interest, because in this case, the Mandate would force plaintiffs to fill out a form that violated their religious beliefs even though it ultimately had no effect whatsoever.  The Court concluded: “A law that is totally ineffective cannot serve a compelling interest.”  Finally the Court noted that the Mandate was far from the least restrictive means by which the Government could achieve the goals of the ACA and the Mandate to improve public health and equalize women’s access to healthcare.  Among many other options, the government could avoid requiring plaintiffs’ participation by providing the contraceptive services or insurance coverage directly to plaintiffs’ employees.

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