Health Reform WK-EDGE HHS clarifies rights of faith-based organizations participating in federal programs
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Wednesday, January 29, 2020

HHS clarifies rights of faith-based organizations participating in federal programs

By Rebecca Mayo, J.D.

As part of an overhaul to ensure equal treatment of religious organizations participating in federal programs, HHS is revising current rules as they relate to faith-based providers of social services.

In an effort to ensure that faith-based social service providers are treated equally under government programs, several government agencies have each proposed new rules to clarify the rights and obligations of faith-based organizations. The proposed rules issued by the Departments of Health and Human Services, Homeland Security, Justice, and Labor are aiming to make clear that faith-based organizations shall retain autonomy, rights of expression, religious character and independence from federal, state and local governments. For HHS, this means clarifying and revising language, as well as removing requirements that are currently imposed on faith-based organizations in order to qualify for financial assistance, but not secular organizations. HHS details the changes it intends to make and how each change ensures that HHS programs are consistent with the requirements of federal law, including the First Amendment to the Constitution and the Religious Freedom Restoration Act (RFRA) (Proposed rule, 85 FR 2974, January 21, 2020).

Referrals. The proposed rule would delete the requirement that faith-based social service providers refer beneficiaries objecting to receiving services from them to an alternate provider. Under the previous Executive Order, "if a beneficiary or a prospective beneficiary of a social service program supported by Federal financial assistance objects to the religious character of an organization that provides services under the program, the organization shall, within a reasonable time after the date of objection refer the beneficiary to an alternative provider." According to HHS, requiring faith-based providers to provide referrals to alternative providers but not requiring other providers of federally funded social services to do the same, is in tension with case law relating to nondiscrimination and the Attorney General’s Memorandum on Religious Liberty. Additionally, requiring faith-based organization to comply with the alternative provider requirement could result in the provider being forced to refer a beneficiary to an alternative provider that provides services in a manner that violates the organization’s religious tenants. Thus, the burden imposed is also in tension with RFRA.

Notice requirements. The proposed rule would also eliminate the requirement that faith-based organizations provide notices that are not required of secular organizations. The previous Executive Order was amended to require that faith-based social service providers funded with direct Federal funds provide a broader notice to beneficiaries and potential beneficiaries than other providers. They are required to provide notice of the right to an alternative provider, notice of nondiscrimination based on religion, that participation in religious activities must be voluntary and separate in time or space from activities funded with direct federal funds, and that beneficiaries or potential beneficiaries may report violations. However, all providers of social services are required to follow the law and the requirements and conditions applicable to the grants and contracts they received and there is no reason to assume that faith-based providers are less likely than other social services providers to follow the law. Therefore, the notice requirements place an unnecessary additional administrative burden on faith-based providers that is not imposed on similarly situated secular providers.

Definition of "indirect." The rule would also amend the definition of "indirect Federal Financial assistance" to align more closely with the Supreme Court’s definition. A final rule was issued that required beneficiaries have at least one adequate secular option for the use of Federal financial assistance in order to qualify for indirect Federal financial assistance. According to HHS, this made the definition of "indirect" aid hinge on the availability of secular providers which was in tension with the Supreme Court’s choice not to make the definition of indirect aid hinge on the geographically carrying availability of secular providers.

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