Univ. of Notre Dame v. Sebelius

Decision Date07 May 2014
Docket NumberNo. 13–3853.,13–3853.
PartiesUNIVERSITY OF NOTRE DAME, Plaintiff–Appellant, v. Kathleen SEBELIUS, Secretary of U.S. Department of Health & Human Services, et al., Defendants–Appellees, and Jane Doe 1, et al., Intervening–Appellees.
CourtU.S. Court of Appeals — Seventh Circuit


Matthew A. Kairis, Attorney, Jones Day, Columbus, OH, for PlaintiffAppellant.

Adam C. Jed, Attorney, Alisa B. Klein, Attorney, Mark B. Stern, Attorney, Department of Justice, Washington, DC, for DefendantsAppellees.

Ayesha N. Khan, Attorney, Americans United for Separation of Church and State, Washington, DC, for Intervening–Appellees.

Before POSNER, FLAUM, and HAMILTON, Circuit Judges.

POSNER, Circuit Judge.

The Affordable Care Act requires providers of health insurance (including companies that administer self-insured employer health plans) to cover certain preventive services without cost to the insured, including, “with respect to women, such additional preventive care and screenings ... as provided for in comprehensive guidelines supported by the Health Resources and Services Administration.” 42 U.S.C. § 300gg–13(a)(4); see also 45 C.F.R. § 147.130(a)(iv), 76 Fed.Reg. 46621, 46623 (Aug. 3, 2011). Guidelines specifying such preventive care have now been promulgated, and they include “all Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.” Health Resources & Services Administration, “Women's Preventive Services Guidelines,” www. hrsa. gov/ womens guidelines (visited Feb. 21, 2014, as were the other websites cited in this opinion). To simplify exposition, we'll refer to all methods of female prevention of pregnancy as “contraceptives.” (Male contraceptives are not covered by the guideline.)

The health concerns that motivated the inclusion of contraception in the guidelines on needs of women for preventive care begin with the fact that about half of all pregnancies in the United States are unintended, and 40 percent of them end in abortion and many others in premature births or other birth problems. Institute of Medicine, Clinical Preventive Services for Women: Closing the Gaps 102–03 (2011), www. nap. edu/ catalog. php? record—id= 13181; Lawrence B. Finer & Mia R. Zolna, “Shifts in Intended and Unintended Pregnancies in the United States, 20012008,” 104 Am. J. Pub. Health S43, S44 (2014). Many of the unintended pregnancies are teen pregnancies; contraceptive use has been found to be positively correlated with decreased teen pregnancy. John S. Santelli & Andrea J. Melnikas, “Teen Fertility in Transition: Recent and Historical Trends in the United States,” 31 Ann. Rev. Pub. Health 371, 375–76, 379 (2010). Because out-of-pocket expenditures on female contraceptives can be substantial for many women, see Su–Ying Liang et al., “Women's Out–of–Pocket Expenditures and Dispensing Patterns for Oral Contraceptive Pills Between 1996 and 2006,” 83 Contraception 528, 531 (2011), the provision of such contraceptives without cost to the user can be expected to increase contraceptive use and so reduce the number both of unintended pregnancies and of abortions. See Jeffrey F. Peipert et al., “Preventing Unintended Pregnancies by Providing No–Cost Contraceptives,” 120 Obstetrics & Gynecology 1291, 1295–96 (2012). Furthermore, “women who can successfully delay a first birth and plan the subsequent timing and spacing of their children are more likely than others to enter or stay in school and to have more opportunities for employment and for full social or political participation in their community.” Susan A. Cohen, “The Broad Benefits of Investing in Sexual and Reproductive Health,” 7 Guttmacher Rep. on Public Policy, March 2004, pp. 5, 6; see also Martha J. Bailey et al., “The Opt-in Revolution? Contraception and the Gender Gap in Wages,” pp. 19, 26 (National Bureau of Econ. Research Working Paper No. 17922, 2012), www. nber. org/ papers/ w 17922. pdf.

Like other universities, the University of Notre Dame provides health benefits to both its employees and its students. It self-insures its employees' medical expenses, but has hired Meritain Health, Inc. to administer the employee health plan without providing any insurance coverage (Meritain is therefore what is called a “third-party administrator” of a health plan). To take care of its students' medical needs, Notre Dame has a contract with Aetna (which happens to be Meritain's parent) that gives the students the option of obtaining health insurance from Aetna. Meritain administers coverage for some 4600 employees of Notre Dame (out of a total of 5200) and 6400 dependents of employees. Aetna insures 2600 students and 100 dependents; Notre Dame has about 11,000 students. But many of them have coverage under their parents' health insurance policies.

Because Catholic doctrine forbids the use of contraceptives (the “rhythm” method of avoiding pregnancy, which is permitted, is a form of abstention, not of contraception), Notre Dame has never paid for contraceptives for its employees or permitted Aetna to insure, under the Aetna Notre Dame Health Plan, Notre Dame students for the expense of contraceptives. Cognizant of the religious objections of Catholic institutions to contraception, and mindful of the dictate of the Religious Freedom Restoration Act, 42 U.S.C. §§ 2000bb–1(a), (b), that “Government shall not substantially burden a person's exercise of religion even if the burden results from a rule of general applicability,” unless “it demonstrates that applicationof the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest,” the government, some months after the enactment of the Affordable Care Act, created by administrative regulation a religious exemption from the guidelines. See “Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services,” 76 Fed.Reg. 46621, 46626 (Aug. 3, 2011) (codified at 45 C.F.R. § 147.130(a)(1)(iv)); see also 77 Fed.Reg. 8725, 8727–29 (Feb. 15, 2012). But at first it was narrowly drafted and as a result excluded Catholic institutions that, like Notre Dame, are incorporated as nonprofit rather than religious institutions. That precipitated the filing in 2012 of a federal suit by Notre Dame against the government, claiming that the contraceptive regulations infringed rights conferred on the university by both the First Amendment and the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb–1. That suit was dismissed on standing and ripeness grounds, the government having promised that Notre Dame wouldn't have to comply with the regulations for one year, during which time new regulations would be issued. University of Notre Dame v. Sebelius, 2012 WL 6756332, at *3–4 (N.D.Ind. Dec. 31, 2012); see “Certain Preventive Services Under the Affordable Care Act,” 77 Fed.Reg. 16501, 1650203 (Mar. 21, 2012).

The new regulations were issued as promised—and, as expected, they enlarged the exemption. See “Coverage of Certain Preventive Services Under the Affordable Care Act,” 78 Fed.Reg. 39870, 39875–90 (July 2, 2013); 29 C.F.R. § 2590.715–2713A(a); 45 C.F.R. § 147.131(b). As a result, Notre Dame now came within its scope. To exercise its right thus conferred to opt out of having to pay for coverage for contraceptives, either directly or through a health insurer, such as Aetna, the university had to fill out “EBSA Form 700—Certification.” See 45 C.F.R. § 147.131(b)(4). The form (www. dol. gov/ ebsa/ pdf/ preventive services eligible organization certification form. pdf) is short, its meat the following sentence: “I certify that, on account of religious objections, the organization opposes providing coverage for some or all of any contraceptive services that would otherwise be required to be covered; the organization is organized and operates as a nonprofit entity; and the organization holds itself out as a religious organization.” The form states that “the organization or its plan must provide a copy of this certification to the plan's health insurance issuer (for insured health plans) or a third party administrator (for self-insured health plans) in order for the plan to be accommodated with respect to the contraceptive coverage requirement.” So Notre Dame was required to give copies both to Aetna and to the employee plan's third-party administrator, Meritain.

The Affordable Care Act requires providers of health insurance (including third-party administrators of self-insured health plans, even though they are conduits rather than ultimate payors of plan benefits) to pay for contraceptives for women, see 45 C.F.R. §§ 147.131(c)(2)(i)(B), (ii); 29 C.F.R. § 2590.715–2713A(b)(3); the form alerts Aetna and Meritain that since Notre Dame is not going to pay, they will have to pay. The companies have neither religious objections to paying for contraception nor financial objections. The government will reimburse at least 110 percent of the third-party administrator's (Meritain's) costs, 45 C.F.R. § 156.50(d)(3), and Aetna can expect to recoup its costs of contraceptive coverage from savings on pregnancy medical care, since there will be fewer pregnancies if contraception is more broadly available, at no cost, to Notre Dame's female employees and students, as well as from other regulatory offsets. See “Coverage of Certain Preventive Services Under the Affordable Care Act,” supra, 78 Fed.Reg. at 39877–78.

The regulations require Aetna and Meritain, but not Notre Dame, to inform the university's female employees and students that those companies will be covering their contraceptive costs. See 26 C.F.R. § 54.9815–2713A(d); 29 C.F.R. § 2590.715–2713A(d). The companies may either “provide payments for contraceptive services” themselves or,...

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