Injunctions Halt Trump Administration’s Attempt to Expand Religious Exemption for Obamacare Contraceptive Mandate

Seth Johnson
Associate Editor
Loyola University Chicago School of Law, JD 2020

A pair of injunctions in the Northern District of California on January 13, and the Eastern District of Pennsylvania on January 14, halted the implementation of amendments to a religious exemption to the so-called contraception “mandate” of the Affordable Care Act, also known as Obamacare. The “mandate” requires most employers to include contraception coverage in the insurance plans they offer to employees. While Obama administrative agencies contemplated religious exemptions early on, contentious litigation and political transition expanded the scope of the exemption until these latest developments.

The Contraception “Mandate”

The contraception “Mandate” is not contained in the text of the Obamacare law. Instead, it follows from a 2010 amendment to the law, which authorized the Health Resources and Services Administration (HRSA) to create “guidelines” for “preventative care”. That which was defined as preventative care by the HRSA would then be required in employer offered health-insurance plans.  in August of 2011, the HRSA, acting pursuant to Obamacare, listed FDA-approved contraceptives as preventative care.

Exemptions 2011-2014

The first religious exemption to the mandate was also issued in August of 2011. It was promulgated by the Departments of the Treasury, Health and Human Services (the parent agency of the HRSA), and Labor. It was the most restrictive exemption, allowing the HRSA discretionary authority to consider the effect its guidelines might have on narrowly-defined religious employers. It defined qualifying employers on four criteria, requiring that they have a purpose of inculcating religious values; employ mostly people of the same religion; primarily serve religious customers; and operate as a non-profit. The rule was amended in February 2012 to require only that those wanting an exemption be non-profit and religious in nature. Religious groups still objected to the new rules, and further changes were quickly proposed. In July of 2013, the mandate was amended once again to allow “self-certification” of non-profit, religious organizations as eligible for the exemption. It also allowed such organizations to avoid taking any steps that could be construed as helping to facilitate contraceptive coverage, while still enabling their employees to access said coverage via other means.

2014 Supreme Court cases further expand exemptions

The June 2014 decision in Burwell v. Hobby Lobby Stores, Inc. expanded the exemption from only non-profit organizations, to closely-held, religious, family businesses as well. The Supreme Court found that the 2013 rules were a a violation of the Religious Freedom and Restoration Act’s (RFRA) requirement that the Government pursue its legitimate interests using the least restrictive means to the free exercise of religion. Days after the decision, the Court allowed Wheaton College to avoid filing the self-certification required for the exemption in a ruling by the 2013 rules.

2014 exemption amendments

In the wake of the unfavorable Supreme Court decisions, the exemption was twice amended. The first amendment expanded exemption eligibility to for-profit businesses that are not publicly traded, whose owners have a religious opposition to providing contraceptive coverage in employee health insurance plans. The second, issued contemporaneously, gave exempt organizations the ability to choose between using the old self-certification process or another process consistent with the Supreme Court’s action with regard to Wheaton College.

Zubik case pushes envelope

In the 2016 Supreme Court Case of Zubik v. Burwell, exempt organizations asked the court whether it would be permissible for their employees to obtain contraceptive coverage through the employer insurance company, without the employer having to give notice to the insurance company. The court did not reach the merits of the case, remanding it to lower courts with the parties intending to reach an agreement that would satisfy the exempt organizations while still providing coverage.

Obama administration’s last moves

The agencies originally involved in promulgating the mandate exemption issued a statement in early January of 2017 expressing doubts about the “feasibility” of reaching a settlement like the one sought by the organizations in Zubik. This was the final word from the administration prior to the transition to the Trump Presidency.

Trump administration mandate amendment attempts of 2017

In May of 2017, President Trump issued an executive order directing the original agencies involved in the first mandate exemption to consider further amendments to the exemption with the aim of addressing “conscience-based objections”. Later that October, the agencies promulgated two new amendments to the exemption, notably omitting the notice and comment period normally required by the Administrative Procedure Act (APA). The first amendment addressed religious objectors only. It eliminated the requirement that organizations seeking the exemption be privately held and owned by religious persons. It also explicitly stated that self-certification need not occur at all. A second amendment created an entirely new kind of exemption, dubbed a “moral” exemption. Unlike the religious exemption, the moral exemption did not apply to publicly-traded companies. However, it permitted non-profits and closely-held businesses to declare exemption for moral reasons, without any religious motivation at all. In November 2017, California, Delaware, Maryland, New York, and Virginia filed a complaint in federal court, asking for a preliminary injunction blocking the implementation of the new rules on several grounds. Most relevant among these was an argument that the new amendments violated the APA’s notice and comment requirements. In December, the trial court in the Northern District of California granted the preliminary injunction. The administration appealed to the 9th circuit, which affirmed the injunction.

2019 amendments and latest injunctions

The administration attempted to cure the enjoined 2017 amendments by issuing substantially identical amendments in November 2018, this time after the notice and comment period normally required by the APA. The same plaintiffs, this time joined by Connecticut, Hawaii, Illinois, Minnesota, North Carolina, Rhode Island, Vermont, Washington State, and D.C, filed suits and motions for preliminary injunctions in the Northern District of California and the Eastern District of Pennsylvania, both in December of 2018. The California Court granted the injunction on APA grounds, holding that the amendments likely do not have statutory authority from Obamacare because they have the effect of making it more difficult for women to access preventative care, rather than enabling it, as was the apparent intent of the law. The court nevertheless stated that the plaintiffs still need to address the defendants’ arguments that the language in the Obamacare law was not a “mandate” in the proper sense of the word, but rather a discretionary authorization to mandate contraceptive coverage, if agencies decided that was what was required in order to provide preventative care coverage. The court in the Eastern District of Pennsylvania also granted the injunction on APA grounds. It noted that the language in the Obamacare law specifically gave the HSRA authority to define preventative care, which it did so in 2011 by including contraception. None of the departmental agencies that issued the regulations in question are themselves the HSRA, and therefore the Court found it unlikely that they had authority under the APA to promulgate the latest amendments.