Catholic Health Care Sys. v. Burwell

• Decision Date: 07 August 2015
• Docket Number: Docket No. 14–427–cv.
• Parties: CATHOLIC HEALTH CARE SYSTEM, Catholic Health Services of Long Island, Cardinal Spellman High School, Monsignor Farrell High School, Plaintiffs–Appellees, v. Sylvia Mathews BURWELL, in her official capacity as Secretary of the United States Department of Health and Human Services, United States Department of Health and Human Services, Thomas Perez, in his official capacity as Secretary of the United States Department of Labor, United States Department of Labor, Jacob L. Lew, in his official capacity as Secretary of the United States Department of Treasury, United States Department of Treasury, Defendants–Appellants.
• Court: U.S. Court of Appeals — Second Circuit

796 F.3d 207

CATHOLIC HEALTH CARE SYSTEM, Catholic Health Services of Long Island, Cardinal Spellman High School, Monsignor Farrell High School, Plaintiffs–Appellees

v.Sylvia Mathews BURWELL, in her official capacity as Secretary of the United States Department of Health and Human Services, United States Department of Health and Human Services, Thomas Perez, in his official capacity as Secretary of the United States Department of Labor, United States Department of Labor, Jacob L. Lew, in his official capacity as Secretary of the United States Department of Treasury, United States Department of Treasury, Defendants–Appellants.¹

Docket No. 14–427–cv.

United States Court of Appeals, Second Circuit.

Argued: Jan. 22, 2015.

Decided: Aug. 7, 2015.

Megan Barbero, Attorney, Appellate Staff, United States Department of Justice (Stuart F. Delery, Assistant Attorney General, Beth S. Brinkmann, Deputy Assistant Attorney General, Mark B. Stern, Alisa B. Klein, Adam C. Jed, Patrick G. Nemeroff, Attorneys, Appellate Staff, Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, on the brief), Washington, DC, for Defendants–Appellants.

Todd R. Geremia (Charles M. Carberry, Toni–Ann Citera, Patrick J. Smith, Julie R. Gorla, on the brief), Jones Day, New York, N.Y., for Plaintiffs–Appellees.

Mailee R. Smith, Americans United for Life, Washington DC, for Amici Curiae Association of American Physicians and Surgeons, et al.

Ayesha N. Khan, Americans United for Separation of Church and State, Washington, DC, for Amici Curiae Americans United for Separation of Church and State, et al.

Charles E. Davidow, Paul, Weiss, Rifkind, Wharton & Garrison LLP (Andrée J. Goldsmith, Karin Dryhurst, Paul, Weiss, Rifkind, Wharton & Garrison LLP; Marcia D. Greenberger, Judith G. Waxman, Emily J. Martin, Gretchen Borchelt, Leila Abolfazli, National Women's Law Center, on the brief), Washington, DC, for Amici Curiae National Women's Law Center, et al.

Martha Jane Perkins (Dipti Singh, on the brief), National Health Law Program, Carrboro, NC, for Amici Curiae National Health Law Program, et al.

Before: LEVAL, POOLER, and CHIN, Circuit Judges.

Opinion

POOLER, Circuit Judge:

Defendants–Appellants, the Secretaries of Health and Human Services, Labor, and the Treasury, appeal from the December 16, 2013 order of the United States District Court for the Eastern District of New York (Cogan, J. ) which, in relevant part, granted Plaintiffs–Appellees' motion for summary judgment and denied Defendants–Appellants' cross-motion for summary judgment. The district court concluded that regulations promulgated under the Patient Protection and Affordable Care Act that allow religious non-profit employers to opt out of providing contraceptive coverage themselves violate these religious employers' rights under the Religious Freedom Restoration Act. We reverse, concluding that the challenged accommodation for religious objectors relieves, rather than imposes, any substantial burden on Plaintiffs' religious exercise, and thus does not violate the Religious Freedom Restoration Act.

BACKGROUND

I. Statutory and Regulatory Background

This case concerns regulations promulgated under the Patient Protection and Affordable Care Act of 2010 (the “ACA”), Pub.L. No. 111–148, 124 Stat. 119. The ACA generally requires employers with fifty or more full-time employees to offer “a group health plan or group health insurance coverage” that provides “minimum essential coverage.” 26 U.S.C. § 5000A(f)(2) ; id. § 4980H(a)(1), (c)(2). Unless an exception applies, as part of this minimal essential coverage, the ACA requires an employer's group health plan or group health insurance coverage to furnish “preventive care and screenings” for female employees without “any cost sharing requirements.” 42 U.S.C. § 300gg–13(a)(4). Without “cost sharing requirements” means without requiring plan participants and beneficiaries to make copayments or pay deductibles or coinsurance. See 45 C.F.R. § 147.131(c)(2)(ii). An employer whose health plan does not include the required coverage is subject to penalties of $100 per day, per affected beneficiary. 26 U.S.C. § 4980D(b). An employer who drops employee health care coverage altogether is generally subject to a penalty of $2000 per year, per employee, after the first thirty employees. Id. § 4980H(a), (c)(1), (c)(2)(D)(i).

The ACA does not specify what types of preventive care must be covered for female plan participants and beneficiaries. Instead, Congress left that issue to be determined via regulation by the Health Resources and Services Administration (“HRSA”), a division of the Department of Health and Human Services (“HHS”). 42 U.S.C. § 300gg–13(a)(4). In developing guidelines for preventative health services for women, HRSA requested the assistance of the Institute of Medicine (“IOM”), an arm of the National Academy of Sciences established in 1970 to inform health policy with available scientific information. See Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act, 77 Fed.Reg. 8725, 8726 (Feb. 15, 2012) ; Priests for Life v. U.S. Dep't of Health & Human Servs., 772 F.3d 229, 238 (D.C.Cir.2014).

In August 2011, consistent with IOM's recommendations, HRSA promulgated the Women's Preventive Services Guidelines, which generally require non-exempt employers to provide “coverage, without cost sharing, for all Food and Drug Administration (FDA) approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity, as prescribed by a [health care] provider.” 77 Fed.Reg. at 8725 (internal quotation marks and alterations omitted). These contraceptive coverage requirements were subsequently enacted by the three agencies responsible for the ACA's implementation—the Department of the Treasury, the Department of Labor, and HHS. See 26 C.F.R. § 54.9815–2713(a)(1)(iv) ; 29 C.F.R. § 2590.715–2713(a)(1)(iv) ; 45 C.F.R. § 147.130(a)(1)(iv). We refer to this required coverage as the “contraceptive coverage mandate.” The ACA and its implementing regulations create an exemption from the contraceptive coverage mandate for “religious employer[s],” a category that encompasses “churches, their integrated auxiliaries, and conventions or associations of churches,” as well as “the exclusively religious activities of any religious order.” 26 U.S.C. § 6033(a)(3)(A)(i), (iii) ; 45 C.F.R. § 147.131(a). The government created this exemption in response to concerns from religious groups objecting to the contraceptive coverage mandate.

In response to continued objections from religiously-affiliated organizations that did not qualify for the “religious employer” exemption, the government also crafted the so-called “accommodation,” which applies more broadly to religious non-profit organizations that object to providing contraceptive coverage. The accommodation was so named because it allows religious employers to opt out of paying for objectionable medical services without denying these services to employees who may or may not share the religious beliefs of their employer. Under the applicable regulations, an organization is eligible for this accommodation if it satisfies the following criteria:

(1) The organization opposes providing coverage for some or all of any contraceptive services required to be covered under § 147.130(a)(1)(iv) on account of religious objections.

(2) The organization is organized and operates as a nonprofit entity.

(3) The organization holds itself out as a religious organization.

(4) The organization self-certifies, in a form and manner specified by the Secretary, that it satisfies the criteria in paragraphs (b)(1) through

(3) of this section, and makes such self-certification available for examination upon request by the first day of the first plan year to which the accommodation in paragraph (c) of this section applies....

45 C.F.R. § 147.131(b) ; see also 26 C.F.R. § 54.9815–2713A(a) ; 29 C.F.R. § 2590.715–2713A(a). We refer to organizations that meet these criteria as “eligible organizations.”²

By way of background, eligible organizations generally provide their employees insurance in one of two ways. Employers are said to have an “insured” plan if they contract with an insurance company for insurance—the insurance company bears the financial risk of paying health insurance claims. Other employers, like the Plaintiffs here, who bear the financial risk of paying claims themselves, are said to have “self-insured” plans. Many self-insured employers use insurance companies or other third parties to administer their plans, performing functions such as developing networks of providers, negotiating payment rates, and processing claims. In this context, the insurance company or other third party is called a “third-party administrator” or “TPA.” See generally Congressional Budget Office, Key Issues in Analyzing Major Health Insurance Proposals 6 (2008).

Under the regulations, an eligible organization is not required “to contract, arrange, pay, or refer for contraceptive coverage” to which it has religious objections.

Coverage of Certain Preventive Services Under the Affordable Care Act, 78 Fed.Reg. 39,870, 39,874 (July 2, 2013). To be relieved of these obligations, an eligible organization has two options. First, it can complete a notification form issued by the Department of Labor, indicating that it has a religious objection to providing coverage for the required contraceptive services, and send a copy to its insurance company or third-party administrator. See id. at 39,875 ; see also 29 C.F.R. § 2590.715–2713A(a)(4), (b)(1)(ii)(A), (c)(1)(i). This one-page self-certification form requires only the name of the organization, and the name, title, and contact information of the person signing it. See Department of Labor, EBSA Form 700,...