Last week, the Obama Administration issued revised HHS regulations which accommodate religious organizations that object to providing contraception and abortion services as part of their requirement to provide health insurance under the Affordable Care Act.
Although this was the very best they could have hoped for, the Catholic bishops objected to even these new regulations.
The HHS regulations, which are based on the Affordable Care Act, are rooted in economics and medical science. One really need not consult an expert to figure out that avoiding pregnancy is less expensive than having and raising a baby; but to come to that—and other—conclusions, the government consulted “actuaries, economists, and insurers” and reviewed the findings of the “independent Institute of Medicine, which had undertaken a review of the scientific and medical evidence on women’s preventive services.” They concluded that a system that provides for reproductive healthcare is likely revenue neutral and significantly more likely to be less expensive than a system without such care. Thus, the health care law’s requirement that women be provided with reproductive healthcare services is based on neutral and verifiable facts. It is certainly not motivated by animus toward any religious viewpoint.
While the HHS regulations do not say so explicitly, it is also surely based on the constitutional reality that Americans have a constitutional right to obtain contraception, and women to obtain abortions in consultation in with their doctors. It is a protected, private, personal choice. The reality many doctors have observed is that many women will forego their choice of contraception and abortion if not covered by health insurance. While the bishops and evangelicals have fought Roe v. Wade, taking on Griswold v. Connecticut is guaranteed to fail politically and constitutionally. To take on contraception and access to it is a step too far both politically and constitutionally.
The HHS rules also rest on the fact that the vast majority of Americans disagree with the bishops. Many Catholic and evangelical men and women join millions of other Americans in believing that women’s use of reproductive health services is appropriate, and in fact, preferable. Given the large numbers of American women who use reproductive healthcare, given that such care is a long-recognized element of responsible health care, and that a system without reproductive health care is more expensive than one with it, the requirement that women receive coverage is a solid and compelling public policy.
Despite the rhetoric floated by the Catholic bishops and evangelicals, arguments about “religious liberty” are not based on persuasive constitutional analysis. In effect, their public pressure is intended to force accommodation. The question of whether and how to accommodate religious organizations that are opposed to reproductive health care is political, not constitutional. Obviously, the bishops lost the political battle, but continue to embrace weak constitutional arguments in order to obtain the maximum accommodation possible.
The Battle Over the Affordable Care Act’s Reproductive Health Care Requirements and the Exemption for Religious Employers
As an initial matter, the Administration could have enacted a completely neutral policy, which treated all women as individual believers who choose their own reproductive healthcare, regardless of their religion or employer. That policy could have constitutionally applied to churches and to religious universities and hospitals.
But the political reality is that the Catholic bishops and evangelical pastors are potent lobbyists, who insisted on accommodation. Balancing the rights of women to make their own decisions about reproductive matters against the demands of the religious organizations, the Obama Administration initially offered up an accommodation defining religious entity in a way that was not as expansive as under Title VII or the federal tax code.
In the HHS regulations’ earlier iteration, only churches and organizations with employees who were fellow believers were permitted to avoid paying for healthcare for contraception, abortion, or other reproductive health services. However, the Catholic bishops, along with evangelical Christian churches, objected that the regulations offended their religious freedom because they excluded religious universities and hospitals. In response, the Obama Administration expanded the exemption to include not just churches, but also religious universities and hospitals.
There was no constitutional requirement to increase the category of those exempted, as I discussed in this earlier column, but accommodation is appropriate where others are not hurt.
The Exemption, Its Four Criteria, and How the Rules Work
The new definition establishes the following four criteria for an organization to be included in the exception:
 The organization opposes providing coverage for some or all of the contraceptive services required to be covered under section 2713 of the PHS Act on account of religious objections.  The organization is organized and operates as a nonprofit entity.  The organization holds itself out as a religious organization.  The organization self-certifies that it satisfies the first three criteria, as described later in this section.
While the regulation expanded the set of those organizations that can avoid the requirement of providing reproductive health services, the Administration stuck to its original view, which is that women should be able to obtain these services under ordinary health insurance coverage. Thus, the burden falls on the insurer to contact the religious organization’s employees to alert them to the availability of separate no-cost coverage for reproductive services. The religious organization doesn’t have to negotiate for such care, and it does not have to cover it. But the woman has mandatory access to it.
As the regulation explains:
These proposed rules aim to provide women with contraceptive coverage without cost sharing and to protect eligible organizations from having to contract, arrange, pay, or refer for contraceptive coverage to which they object on religious grounds. . . . The eligible organization would have no role in contracting, arranging, paying, or referring for this separate contraceptive coverage. Such coverage would be offered at no charge to plan participants and beneficiaries, that is, the issuer would provide benefits for such contraceptive services without the imposition of any cost sharing requirement (such as a copayment, coinsurance, or a deductible), premium, fee, or other charge, consistent with section 2713 of the PHS Act.
The experts, including actuaries, economists, and insurers concluded, based on the numbers, that this is at worst a cost-neutral opportunity for insurers. Why? Because it costs more for everyone if women don’t have access to reproductive healthcare. Again, the bottom line is that the Pill is much less expensive than having and caring for a baby. Thus, this exemption is not only economically rational, but factually compelling.
From an Economic Perspective, the Religious Entities Are Acting Irrationally
The religious entities are, in fact, acting economically irrationally. In the event that their employees follow their precepts, they are on the hook for the health costs of accidental pregnancies; the pain and suffering of women who have been raped and would have to carry the pregnancy to term on their theories; and the otherwise- prevented deaths of women from unplanned pregnancies. Forget the emotional side of this debate. Just on the numbers, the religious institutions are going to have much higher health care costs if their employees follow their dictates. The government is saving them money by putting the decision into the hands of each individual woman herself.
In the words of the Regulation itself:
The Departments believe that, in the case of insured group health plans, this proposed arrangement would alleviate the need for the eligible organization to contract, arrange, pay, or refer for contraceptive coverage while providing contraceptive coverage to plan participants and beneficiaries at no additional cost. Actuaries, economists, and insurers estimate that providing contraceptive coverage is at least cost neutral, and may result in cost-savings when taking into account all costs and benefits for the insurer. In this instance, contraceptive coverage without cost sharing would be provided to plan participants and beneficiaries through individual health insurance policies, separate from the group policy through which all other coverage would be provided to plan participants and beneficiaries. The Departments believe that issuers generally would find that providing such contraceptive coverage is cost neutral because they would be they would be insuring the same set of individuals under both policies and would experience lower costs from improvements in women’s health and fewer childbirths.
The Religious Exemption to the Affordable Care Act Is Not Available to For-Profit Businesses
The Affordable Care Act’sregulations are limited to non-profit organizations and do not exempt for-profit businesses. “[A]n organization is not considered to be organized and operated as a nonprofit entity if its assets or income accrue to the benefit of private individuals or shareholders.” The Administration did its homework and looked to religious accommodation in other areas of federal law, correctly concluding that “Religious accommodations in related areas of federal law, such as the exemption for religious organizations under Title VII of the Civil Rights Act of 1964, are available to nonprofit religious organizations but not to for-profit secular organizations.”
In the wake of the first Affordable Care Act regulation, lawsuits were filed arguing that the employer’s religious liberty was infringed. Such lawsuits included those filed by universities and/or hospitals, and those filed by for-profit companies. Neither group of employers has a viable religious liberty claim now and, in fact, they are both risking gender discrimination lawsuits if they defy the law and exclude women from having even an exterior (that is, outside the workplace) opportunity to obtain contraception and other reproductive health services.
Neither claim is likely to be successful. The United States Conference of Catholic Bishops has issued all sorts of statements about what it calls “religious liberty” over the last year, though few track First Amendment doctrine.
Neutral, generally applicable laws are constitutional, unless they are irrational, under the Supreme Court’s decision in Employment Div. v. Smith. And there is no question that the Affordable Care Act’s requirement of coverage of women’s reproductive health care is neutral and generally applicable. The argument by those opposing the Act is simply that they want a broader accommodation than already is provided in the Act. The Obama Administration withdrew its earlier, narrower exemption, and replaced it with the one that is reflected in federal tax law and in the federal civil rights laws. This new iteration is, in my view, bulletproof. No federal court, reading the cases faithfully, is going to be able to hold that this exemption is unconstitutional; if it did so, it would also put at risk the longstanding carve-outs for religion under Title VII and tax law.
It is no wonder that, to date, the for-profit entities have lost most of their challenges to the earlier version of the exemption. Their arguments get no stronger under the new regulations and so I would expect the for-profit entities to lose as they did before inGrote Industries v. Sebelius (S.D. In. 2012);Hobby Lobby Stores v. Sebelius (W.D. Ok. 2012); Frank R.O’Brien v. U.S. Dep’t of Health and Human Services, (E.D. Mo. 2012).
In turn, non-profits have not received rulings yet, because their claims were unripe while the rules were being amended, but they should also expect to lose, because the First Amendment does not give them a right to block contraceptive care for women, particularly where the nonprofits are not paying for that care, or even involved in the issue. Nebraska v. U.S. Dep’t of Health and Human Services, (D. Ne. 2012) Wheaton College v. Sebelius (D.C. Cir. 2012) Roman Catholic Archbishop of Washington v. Sebelius,(D. D.C. 2013); University of Notre Dame v. Sebelius (N.D. In. 2012). There is in fact no burden on their religious exercise unless it is a constitutionally cognizable burden that employers have employees who disagree with them on reproductive health. It is not.
The Key Arguments Against the Religious Objections to the HHS Regulations
None of the religiously based objections to the Affordable Care Act hold water, for the following reasons:
First, religious organizations, who object to even the new regulations, are not being asked to pay for contraception or abortion, or even to have to negotiate about these health care options for women. They are out of the loop altogether. That is true accommodation.
The insurer is required to notify the woman of the availability of such coverage, and the woman herself then makes a purely independent decision whether to accept this no-cost coverage. The bishops’ argument comes down to an argument to keep contraception from all women. As a National Catholic Reporter editorial has put it, “Cardinal Timothy Dolan, president of the USCCB, has argued in a response to the new rules that such a provision still means that all employees, even of church ministries, will ultimately have access to contraceptives. That is a bit like arguing that all drug stores should close because the Catholic church objects to contraceptives.”
For-profit businesses must have reproductive health care within their insurance programs, but no one is required to use it, least of all the owner, or his or her family. The decisions about health care remain with the employee-patient, alone, and those employees could not be selected according to religion or gender (or race), as I discuss below.
Second, especially when it comes to for-profit employers, the bishops are fighting long-settled First Amendment precedent. The bedrock principle is best explained in United States v. Lee, where the majority held that the Amish did not have a constitutional right to avoid Social Security taxes simply because they believed that the taxes violated their belief in caring for their own elderly themselves. “Congress and the courts have been sensitive to the needs flowing from the Free Exercise Clause, but every person cannot be shielded from all the burdens incident to exercising every aspect of the right to practice religious beliefs. When followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity.” In a nutshell, using the free market to impose one’s religious beliefs on others is antithetical to well-settled First Amendment principles.
Third, at stake here is gender equality. Religious organizations won the right, via the First Amendment, to discriminate against their clergy and ministers in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC. The federal anti-discrimination laws do not apply to those employees. Religious organizations also are exempt from Title VII’s ban on discrimination according to religious belief, though for non-ministerial employees, they may not discriminate on gender or race.
In the for-profit universe, employers may not discriminate on race, gender, or religion. The EEOC explains the scope of this rule against discrimination as follows: “The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.”
Thus, for-profit businesses shaping health care according to gender is a federal civil rights violation. Just let an employer try to give men orthopedic care, but not women! This is no different: The HHS regulations only relate to women’s reproductive healthcare, so it is quite clear that denying such coverage is gender discrimination.
Finally, for-profit businesses are forbidden from discriminating on the basis of religion. A company that blocks contraceptive and abortion coverage discriminates against the religious believers, who, as part of their religious worldview believe family-planning is required and responsible. For-profit employees may not discriminate on the basis of religion in hiring, benefits or any other category listed above. Thus, we have a market for employment within which the boss may not force his or her religious beliefs on the employee. For an employer to shape benefits—which are part of the protected activities of the employee—based on religion, is a violation of the employee’s civil rights.
It is unclear if the groups backing the bishops on the HHS regulations fully understand where their true interest lies. Such groups are usually the first to take a case on behalf of the religious employee arguing religious discrimination by a company or boss. Now they are advocating for the employers who would discriminate against employees with different beliefs. Can they play both sides and win? I don’t think so.
Some will argue that the benighted Religious Freedom Restoration Act will place a thumb on the side of the for-profit business owner, but it is highly unlikely the for-profit business can prove that the regulations substantially burden their owners’ religious conduct. They entered the free market as for-profit employers and have over 15 employees, subjecting them to Title VII, and have known for decades that they may not discriminate on the basis of religion or gender. Any burden is self-imposed by their decision to enter the marketplace, and at most an indirect burden, as I discussed in this column.
Moreover, the very way the religious organizations have framed this issue is sexist. It is rank sexism to treat women as though their decisions over their bodies belong to their bosses, showing the inherent tension between the arguments being made and Title VII itself.
Under RFRA, the government must also prove it has a compelling interest served in the least restrictive means. Here, the government can easily demonstrate that laws banning discrimination against women and religion serve a compelling interest in the least restrictive means. God help the for-profit business owners who argue in court that they should get a free pass to discriminate against women or on the basis of religion. The market would roar.
Thus, the tables may well turn against the for-profit businesses balking at the HHS regulations. Women have actual federal civil rights they can assert against an employer who shapes benefits according to gender or religion. Who’s on the high ground now?