The Eighth Circuit Court of Appeals recently published a decision holding that the accommodation process for religious organizations regarding the contraceptive mandate of the Affordable Care Act (ACA) may itself violate religious freedom. The decision contributes to a growing split among federal courts, which will likely end up before the U.S. Supreme Court.
In Sharpe Holdings, Inc. et al. v. U.S. Department of Health and Human Services, a number of nonprofit religious organizations argued that the accommodation process for the ACA’s contraceptive mandate violated their First Amendment religious freedoms as well as the Religious Freedom Restoration Act (RFRA). No. 14-1507 (8th Cir. Sep. 17, 2015). Under the ACA, covered employers are generally required to provide health insurance to their employees, including insurance for approved contraceptive methods. However, the ACA also creates an accommodation process, which allows religious organizations to notify the third-party administrators of their health insurance plans of their religious objections. The third-party administrator is then obligated to provide the contraceptive coverage for employees instead of the religious organization.
The intended purpose of the ACA’s contraceptive-mandate accommodation was to allow religious organizations to avoid providing contraceptive coverage in violation of their religious beliefs. But the Plaintiffs in Sharpe Holdings, Inc. argued that even the accommodation process made them complicit in providing contraception and, therefore, violated their religious beliefs.
A number of circuit courts – including the Second, Fifth, Tenth, and D.C. Circuits – have rejected the argument that complying with the ACA’s accommodation process makes a religious employer complicit in providing contraception. These courts primarily reasoned that it was federal law, rather than the accommodation process, that triggered the third-party administrator’s duty to provide contraception. These courts also determined that it was the courts’ role to determine whether the asserted burden on religious liberty was sufficiently substantial to trigger the protections of RFRA and that the challenger’s assertions were too attenuated to meet that standard.
The Eighth Circuit disagreed. Relying heavily on the U.S. Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc., the Eighth Circuit reasoned that it was required to accept the sincerity of the Plaintiffs’ contention that the accommodation process would substantially violate their religious beliefs. The court explained that:

The question here is not whether CNS and HCC have correctly interpreted the law, but whether they have a sincere religious belief that their participation in the accommodation process makes them morally and spiritually complicit in providing abortifacient coverage. Their affirmative answer is not for us to dispute.

Concluding that the court had no authority to question the Plaintiffs’ conclusion that the accommodation process substantially burdened their religious beliefs, the Eighth Circuit then proceeded to analyze whether there were less restrictive alternatives to accomplishing the government’s objectives in providing contraceptive care. The Eight Circuit held that the Plaintiffs were likely to prevail on their argument that less restrictive alternatives existed.
Specifically, the Eighth Circuit agreed with the Plaintiffs’ arguments that the government could accomplish the same objectives by assuming the costs of providing contraceptive coverage itself, by providing subsidies, reimbursements, or tax credits to employees for contraceptive care, or by paying for the distribution of contraceptives at community health centers, public clinics, or hospitals with income-based support. Because less restrictive alternatives were likely available, the court held that the Plaintiffs were likely to prevail on their claims. As a result, the Eighth Circuit affirmed the lower court’s entry of an injunction prohibiting the government from imposing monetary penalties against the Plaintiffs for refusing to either provide contraceptive coverage or participate in the ACA’s accommodation process.
Takeaway: Given the split among federal circuit courts, the issue of whether the ACA’s accommodation process for the contraceptive mandate violates religious freedom is likely headed to the U.S. Supreme Court.