Appeals Court Rules Against ACA's Contraceptive Mandate

Author: David B. Weisenfeld, XpertHR Legal Editor

September 21, 2015

The 8th Circuit Court of Appeals has ruled that forcing religiously-affiliated employers to offer contraceptive coverage to their employees, even indirectly, would violate those employers' religious freedoms. The decisions in these two related cases could set up another Supreme Court challenge involving the Affordable Care Act (ACA) as they conflict with all other federal appellate court decisions on the issue.

In general, all employers that offer employees a group health plan must comply with the ACA's contraceptive mandate or face penalties of $100 per day per affected individual. However, the ACA provides an exemption from the contraceptive mandate for group health plans sponsored by religious employers.

The ACA also allows employers that do not qualify for the religious-employer exemption to seek an accommodation that requires their insurance providers to pay for birth control coverage.

The employers in these cases did not qualify for the exemption but claimed that the government's accommodation was no accommodation at all because it still burdened their free exercise of religion. The employers argued that their religious beliefs dictated that they abstain from any conduct that provides their employees and plan beneficiaries with objectionable contraceptives.

Writing for the three-judge panel in St. Louis, Circuit Judge Roger Wollman agreed. In light of the employers' sincerely held religious beliefs, he said, "Compelling their participation in the accommodation process by threat of severe monetary penalty is a substantial burden on their exercise of religion."

The decision echoes the Supreme Court's 2014 ruling in Burwell v. Hobby Lobby. In that case, the Court held 5-4 that some private employers do not have to comply with the ACA's contraceptive coverage mandate, if doing so would violate the employer's religious beliefs. But in Hobby Lobby, unlike the two present cases, the government did not offer an accommodation to the employers.

Other federal appellate courts, such as the DC Circuit Court of Appeals, have held that that the government's accommodation of allowing employers, such as religious nonprofits, to opt out and have a third party provide contraceptive coverage is sufficient.

The Departments of Health and Human Services (HHS), Labor and Treasury recently issued final rules regarding coverage for contraceptive services under the ACA. These rules became effective September 14, and relate to the process an eligible organization uses to provide notice of its religious objection to contraceptive coverage.