Grace Sch. v. Burwell

• Decision Date: 04 September 2015
• Docket Number: Nos. 14–1430 & 14–1431.,s. 14–1430 & 14–1431.
• Parties: GRACE SCHOOLS, et al., and Diocese of Fort Wayne–South Bend, Inc., et al., Plaintiffs–Appellees, v. Sylvia Mathews BURWELL, et al., Defendants–Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

801 F.3d 788

GRACE SCHOOLS, et al., and Diocese of Fort Wayne–South Bend, Inc., et al., Plaintiffs–Appellees

v.Sylvia Mathews BURWELL, et al., Defendants–Appellants.

Nos. 14–1430 & 14–1431.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 3, 2014.

Decided Sept. 4, 2015.

Rehearing En Banc Denied Nov. 5, 2015.

Gregory Baylor, Attorney, Alliance Defending Freedom, Washington, DC, M. Scott Hall, Attorney, Hall & Gooden, William T. Hopkins, Jr., Attorney, Barnes & Thornburg LLP, Robert E. Doelling, Jr., Attorney, Burt, Blee, Dixon, Sutton & Bloom, LLP, Fort Wayne, IN, Matthew A. Kairis, Attorney, Melissa D. Palmisciano, Attorney, Jones Day, Columbus, OH, Alison M. Kilmartin, Attorney, Jones Day, Pittsburgh, PA, for Plaintiff–Appellee.

Adam C. Jed, Attorney, Alisa B. Klein, Attorney, Patrick Nemeroff, Attorney, Michael C. Pollack, Mark B. Stern, Attorney, Megan Barbero, Attorney, Benjamin L. Berwick, Attorney, Department of Justice, Washington, DC, for Defendant–Appellant.

Before MANION, ROVNER, and HAMILTON, Circuit Judges.

Opinion

ROVNER, Circuit Judge.

The district court entered a preliminary injunction in favor of the plaintiffs, a number of religious, not-for-profit organizations, preventing the defendants from applying or enforcing the so-called “contraceptive mandate” of the Patient Protection and Affordable Care Act of 2010 (“ACA”) to the See 42 U.S.C. § 300gg–13(a)(4) ; Pub.L. No. 111–148, 124 Stat. 119 (2010). The plaintiffs contend that the ACA's accommodations for religious organizations impose a substantial burden on their free exercise of religion, and that the ACA and accompanying regulations are not the least restrictive means of furthering a compelling government interest, in violation of the' rights under the Religious Freedom Restoration Act of 1993 (“RFRA”). See 42 U.S.C. § 2000bb et seq. The defendants, several agencies of the United States government, appeal. We conclude that ACA does not impose a substantial burden on the' free exercise rights and so we reverse and remand. However, we will maintain the injunction for a period of sixty days in order to allow the district court adequate time to address additional arguments made by the parties but not addressed prior to this appeal.

I.

The ACA requires group health plans and third-party administrators of self-insured plans to cover preventive care for women under guidelines supported by the Health Resources and Services Administration (“HRSA”), a component of the Department of Health and Human Services (“HHS”). 42 U.S.C. § 300gg–13(a)(4) ; 45 C.F.R. § 147.130(a)(1)(iv) ; University of Notre Dame v. Burwell, 786 F.3d 606, 607 (7th Cir.2015) (hereafter “Notre Dame II ”); University of Notre Dame v. Sebelius, 743 F.3d 547, 548 (7th Cir.2014), vacated by ––– U.S. ––––, 135 S.Ct. 1528, 191 L.Ed.2d 557 (2015) (hereafter “Notre Dame I ”). The relevant guidelines include “all Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.” 77 Fed.Reg. 8725–26. The regulations adopted by the three Departments implementing this part of the ACA require coverage of, among other things, all of the contraceptive methods described in the guidelines. See 45 C.F.R. § 147.130(a)(1)(iv)(HHS) ; 29 C.F.R. § 2590.715–2713(a)(1)(iv) (Labor) ; 26 C.F.R. § 54.9815–2713(a)(1)(iv) (Treasury).¹

In anticipation of objections from religious organizations to these requirements, the Departments provided an exemption from the contraception coverage provision for religious employers. 45 C.F.R. § 147.131(a). A religious employer is defined as “an organization that is organized and operates as a nonprofit entity and is referred to in section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as amended.” 45 C.F.R. § 147.131(a) ; 26 U.S.C. § 6033(a)(3)(A). That provision of the Internal Revenue Code, in turn, refers to “churches, their integrated auxiliaries, and conventions or associations of churches,” and “the exclusively religious activities of any religious order.” 26 U.S.C. § 6033(a)(3)(A)(i) and (iii). But the exemption did not cover religiously-affiliated non-profit corporations such as schools and hospitals that did not meet the IRS guidelines for religious employers. The Departments therefore adopted additional regulations providing accommodations for group health plans provided by these non-profit religious corporations, called “eligible organizations” in the regulations:

(b) Eligible organizations. An eligible organization is an organization that satisfies all of the following requirements:

(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. The self-certification must be executed by a person authorized to make the certification on behalf of the organization, and must be maintained in a manner consistent with the record retention requirements under section 107 of the Employee Retirement Income Security Act of 1974.

45 C.F.R. § 147.131(b).² See also 78 Fed.Reg. 39,874 –75.

Eligible organizations are not required “to contract, arrange, pay, or refer for contraceptive coverage” to which they have religious objections. 78 Fed.Reg. 39,874. The government developed a two-page form for eligible organizations to use to comply with this accommodation, the “EBSA Form 700—Certification.”³ The short form requires the eligible organization to supply its name, the name and title of the individual authorized to make the certification on behalf of the organization, and a mailing address and telephone number for that individual. The form also requires a signature verifying the statement, “I certify the organization is an eligible organization (as described in 26 CFR 54.9815–2713A(a), 29 CFR 2590.715–2713A(a) ; 45 CFR 147.131(b) ) that has a religious objection to providing coverage for some or all of any contraceptive services that would otherwise be required to be covered.” The organization must then provide a copy of the certification to the organization's health insurance issuer or, for self-insured plans, to its third-party administrator. The insurer or administrator receiving the certification is obligated to provide (or arrange for the provision of) contraception coverage for the health plan's participants without cost sharing through alternate mechanisms established by the regulations. 45 C.F.R. § 147.131(c). The insurer⁴ may not impose a charge of any variety, either directly or indirectly, on the eligible organization for the provision of contraception services.⁵ The insurer must also inform plan participants that the eligible organization will not provide or fund any contraception coverage. 45 C.F.R. § 147.131(d). As we will discuss below, since the filing of this suit, these regulations have been amended to allow a second method of objecting to contraceptive coverage, by notifying HHS directly of any religiously-based objection.

The plaintiffs are various religiously-based non-profit organizations including the Diocese of Fort Wayne–South Bend, Inc. (“Diocese”); Catholic Charities of the Diocese of Fort Wayne–South Bend, Inc. (“Catholic Charities”); Saint Anne Home & Retirement Community of the Diocese of Fort Wayne–South Bend, Inc. (“St. Anne Home”); Franciscan Alliance, Inc.; Specialty Physicians of Illinois LLC (“Specialty Physicians”); University of Saint Francis (“St. Francis”); Our Sunday Visitor, Inc. (“Sunday Visitor”); Biola University, Inc. (“Biola”) and Grace Schools. The plaintiffs objected below to the regulatory scheme, which they characterize as a “contraceptive services mandate,” on numerous grounds. Primarily, they asserted that the regulations force them to participate in a system that contravenes their religious beliefs in violation of the RFRA. 42 U.S.C. § 2000bb et seq.⁶ In particular, they are forced to contract with insurers or third-party administrators that will provide their employees (and, in some cases, their students) with coverage for contraceptives, sterilization, and abortion-inducing products, all in violation of their deeply held religious beliefs. The accommodation provides them no relief, they contended below, because it causes them to trigger and facilitate the same objectionable services for their employees and students. A non-complying employer⁷ who does not meet an exemption faces fines of $2000 per year per full time employee⁸ for not providing insurance that meets coverage requirements, 26 U.S.C. § 4980H(c), or $100 per day per employee for providing insurance that excludes the required contraceptive coverage, 26 U.S.C. § 4980D, and will face the risk of other enforcement actions.

The Diocese itself is exempted from challenged requirements under the religious employer exemption,⁹ and the remaining plaintiffs are subject to the accommodation for nonprofit, religiously-affiliated employers. The government does not contest the sincerity of the plaintiffs' religious objections to the required contraceptive coverage. Moreover, all of the plaintiffs consider the provision of health insurance for their employees and students to be part of their religious mission.

Although the plaintiffs concede that they are not required to pay for the objectionable services, they contended in the district court that being forced to contract with insurers or third-party administrators who must then provide those services makes them a facilitator of...