By Jeffrey H. Brochin, J.D.
The Commonwealth of Massachusetts lacked standing to sue HHS over two interim final rules (IFRs) which expanded the religious exemption to the contraceptive mandate of the Patient Protection and Affordable Care Act (ACA) (P. L. 111-148), a federal district court in Massachusetts has ruled. Because the Commonwealth failed to set forth specific facts establishing that it would likely suffer future injury from HHS’ conduct, it lacked standing to prosecute the action and therefore their motion for summary judgment was denied, while that of HHS was granted (Commonwealth of Massachusetts v. HHS, March 12, 2018, Gorton, N.).
Background. The ACA generally requires that employer-sponsored healthcare plans include a range of preventive care services on a no-cost basis. That requirement also mandates no-cost coverage with respect to women as provided for in comprehensive guidelines supported by the Health Resources and Services Administration (HRSA), an agency within HHS. HRSA enlisted the Institute of Medicine (IOM), which recommended that the services include all FDA-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity. Therefore, when the HRSA promulgated its Women’s Preventive Services Guidelines in August 2011, non-exempt employers were required to provide coverage, without cost sharing, for all FDA-approved contraceptive methods.
The ‘Church Exemption.’ In 2011 and 2012, HHS issued regulations automatically exempting churches from the contraceptive mandate under what became known as the "Church Exemption". And, in 2013, they issued regulations providing an accommodation for objecting religious, non-profit organizations and institutions of higher education. That process was expanded to cover closely held, for-profit companies in response to Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014), in which the Supreme Court held that the contraceptive mandate violated the Religious Freedom Restoration Act (RFRA) for certain for-profit employers.
Executive order regarding new regulations. On May 4, 2017, the President issued an "Executive Order Promoting Free Speech and Religious Liberty," that instructed agencies to consider issuing amended regulations to address conscience-based objections to the preventive-care mandate promulgated under section 300gg-13(a)(4). In accordance with the executive order, on October 6, 2017, HHS issued the two IFRs (see Contraception coverage exemptions extended for objecting employers on religious, moral grounds, October 11, 2017).
Expanded religious exemption. The IFRs created an expanded religious exemption, exempting objecting entities "from any guidelines’ requirements that relate to the provision of contraceptive services" (Final rule, 82 FR 82 FR 47792, October 13, 2017, and Final rule, 82 FR 47838, October 13, 2017). The Religious Exemption Rule expanded objecting entities to include any non-governmental plan sponsor that objects to establishing, maintaining, providing, offering, or arranging (as applicable) coverage, payments, or a plan that provides coverage or payments for some or all contraceptive services, based on its sincerely held religious beliefs. The religious exemption also applied to institutions of higher education in their arrangement of student health insurance coverage to the extent of that institution’s sincerely held religious beliefs.
The Moral Exemption Rule provided an exemption for nonprofit organizations and for-profit entities with no publicly traded ownership interests that object to establishing, maintaining, providing, offering, or arranging coverage or payments for some or all contraceptive services, or for a plan, issuer, or third party administrator that provides or arranges such coverage or payments, based on its sincerely held moral convictions.
Impact on MassHealth. In Massachusetts, almost two million residents are enrolled in their MassHealth program, and in addition, MassHealth serves as a secondary payer for approximately 150,000 residents who have commercial coverage, including employer-sponsored insurance and student health insurance, i.e. the MassHealth ‘wrap-around’ coverage for certain services not provided by the resident’s commercial insurance.
States are ‘not normal litigants.’ The court noted that the standing inquiry at issue was affected by the fact that the plaintiff was the Commonwealth of Massachusetts, and that "States are not normal litigants for the purposes of invoking federal jurisdiction." (Massachusetts v. E.P.A., 549 U.S. 497, 518 (2007)). The U.S. Supreme Court previously articulated a variety of theories by which a state may attempt to invoke federal jurisdiction, such as to vindicate its sovereign interests, its quasi-sovereign interests or its non-sovereign interests. Sovereign interests and certain non-sovereign interests, such as proprietary interests, reflect a direct injury to the state itself. Massachusetts proffered three injuries to establish standing: an injury to the state fiscal interests, an injury to the health and well-being of its residents and a procedural injury under the Administrative Procedures Act (APA).
Proportional theory. Massachusetts asserted that in the short and long term, the IFRs would inflict significant financial harm on the Commonwealth, which would be legally obligated to assume the costs of contraceptive, prenatal and postnatal care for many women who would lose coverage. Specifically, the IFRs would result in thousands of Massachusetts women losing coverage for contraceptive care and services. HHS on the other hand argued that such a "proportional theory" must fail as a matter of law because a state cannot establish standing based on a claim of injury from such alleged indirect effects. The court noted that even assuming that the Commonwealth’s theory were to succeed as a matter of law, they had not made the requisite demonstration of specific facts: general and hypothetical allegations of injury cannot succeed at the summary judgment stage where the Commonwealth needed to do more than merely allege legal injury.
Intervening ‘ACCESS Act.’ The court further found the Commonwealth’s assumption that it would be proportionally affected by the IFRs to be tenuous. The Commonwealth did not address the "ACCESS Act," which was enacted after the filing of their lawsuit. That state statute was reported one month after the IFRs were promulgated and was signed into law two weeks later, and the court noted that enactment of the ACCESS Act rendered suspect the Commonwealth’s assumption that the IFRs would affect women proportionally throughout the country. Furthermore, the Commonwealth failed to establish that it was likely that any Massachusetts employers would avail themselves of the IFRs’ expanded exemptions.
No injury to quasi-sovereign interests. Massachusetts also argued that the IFRs would inflict an injury to its quasi-sovereign interests in the health and wellbeing of its residents and in securing its residents from the harmful effects of discrimination. However, the court found that they also failed to set forth facts demonstrating such a claim. Quasi-sovereign interests are distinct from sovereign, proprietary and sovereign interests, and consist of a set of interests that a state has in the well-being of its populace.
Based on the foregoing reasons, the court found that the Commonwealth failed to demonstrate that it was likely to suffer an injury due to the IFRs, and that they therefore lacked standing to sue. HHS’ motion for summary judgment was granted.
The case is No. 1:17-cv-11930-NMG.
Attorneys: Julia E. Kobick, Office of the Attorney General, for Commonwealth of Massachusetts. Daniel Riess, U.S. Department of Justice, for U.S. Department of Health and Human Services.
Companies: Commonwealth of Massachusetts; U.S. Department of Health and Human Services
Cases: CaseDecisions NewsFeed AccessNews ContraceptionCoverageNews GeneralNews MassachusettsNews
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