Labor & Employment Law Daily 9th Circuit affirms injunction barring enforcement of ACA final rules allowing religious, moral exemptions
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Friday, October 25, 2019

9th Circuit affirms injunction barring enforcement of ACA final rules allowing religious, moral exemptions

By Rebecca Mayo, J.D.

The Ninth Circuit affirmed a district court decision enjoining the final rules that exempt employers with religious and moral objections from the contraceptive mandate under the ACA.

According to the appeals court, there was sufficient evidence to hold that providing free contraceptive services was a core purpose of the Women’s Health Amendment and that nothing in the ACA permitted the agencies to determine exemptions from the requirement. Little Sisters of the Poor, in challenging the injunction, failed to demonstrate a substantial burden on religious exercise and therefore the district court did not abuse its discretion in concluding that the states were likely to succeed on the merits of their claim that the agencies lacked authority to issue the final rules (State of California v. Little Sisters of the Poor, October 22, 2019, Wallace, J.).

Religious accommodation. The Patient Protection and Affordable Care Act (ACA) mandates that group health plans and health insurance issuers offering group or individual health insurance coverage shall, at a minimum, provide coverage for and shall not impose any cost sharing requirements for contraceptive care. In the time since the ACA was enacted, HHS, the Department of Treasury, and the Department of Labor have attempted to carve out religious and moral exemptions to this mandate; however, they have faced multiple legal challenges.

In 2019, the Religious Exemption and the Moral Exemption final rules were issued. The Moral Exemption allowed entities and persons that objected to the mandate based on sincerely held moral convictions to opt out by notifying HHS in writing that it opposed providing coverage for contraceptive care. HHS would then notify the insurance issuer or third-party administrator, which would then provide contraceptive care for the organization’s employees without any further involvement by the organization.

In January 2019, a federal court in California issued a preliminary injunction preventing the implementation of the final rules (see Court enjoins 2019 final rules for religious, moral exemptions ). The agencies Little Sisters of the Poor and March for Life appealed.

Standing. Although there is a similar nationwide injunction issued by a court in Pennsylvania, the appeals court held that an injunction imposed by one district court against a defendant does not deprive every other federal court of subject matter jurisdiction over a dispute in which a plaintiff seeks similar equitable relief against the same defendant. It further held the court retained jurisdiction under the exception to mootness for cases capable of repetition, yet evading review.

Here, there is a reasonable expectation that the federal defendants will again be subjected to injunction in this case. If the Supreme Court vacates the nationwide scope of the Pennsylvania injunction or the injunction expires, the federal defendants will once again be subjected to the injunction in this case.

Statutory authority. The court found that the core purpose of the Women’s Health Amendment was to mandate group health plans and health insurance issuers to cover preventative care without cost sharing. The agency has the discretion to determine which types of preventative care are covered but does not delegate to the agency the discretion to exempt who must meet the obligation. Additionally, Congress provided for religious and moral protections in certain contexts under the ACA,but it did not provide them for the preventative care requirement. The court found that the district court did not err in concluding that the agencies likely lacked statutory authority under the ACA to issue the final rules.

Substantial burden. The Religious Freedom Restoration Act (RFRA) charges the courts with determining violations and addressing those violations. Therefore, the argument that the final rules were necessary to eliminate a RFRA violation fails. The religious exemption operates in a manner fully at odds with the careful, individualized, and searching review mandate by RFRA. The agencies claim an authority under RFRA to impose a blanket exemption for self-certifying religious objectors that far exceeds what RFRA authorizes.

Additionally, federal courts accept neither self-certifications that a law substantially burdens a plaintiff’s exercise of religion, nor blanket assertions that a law furthers a compelling governmental interest. Whether a government action imposes a substantial burden on sincerely-held religious beliefs is a question of law. The Supreme Court suggested that it did not, and multiple courts of appeals have concluded that it did not.

The court here held that the accommodation process likely does not substantially burden the exercise of religion. The accommodation is specifically designed to ensure organizations are not complicit and to minimize their involvement. Further, RFRA does not entitle organizations to control their employees’ relationships with third parties that are willing and obligated to provide contraceptive care.

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