The U.S. Supreme Court (SCOTUS) agreed to review provisions within the Affordable Care Act (ACA) by granting petitions for writs of certiorari yesterday, November 26, 2013. Specifically, SCOTUS will review the provisions that require large employers to offer insurance coverage for birth control and other reproductive health services. 

The ACA requires certain large employers to provide their employees with a minimum level of health insurance. The ACA requires non-exempt group plans to provide coverage without cost-sharing for preventative care and screening for women in accordance with guidelines created by the Health Resources and Services Administration (HRSA), an agency within the U.S. Department of Health and Human Services (HHS). HRSA delegated the creation of guidelines on this issue to the Institute of Medicine (IOM). HRSA adopted the IOM’s recommendation to require non-exempt group plans to cover “[a]ll Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity.” On February 15, 2012, HHS, the U.S. Department of the Treasury, and the U.S. Department of Labor (collectively, the Departments) published final rules memorializing the guidelines. Then, on July 2, 2013, the Departments released additional final rules clarifying the religious employer exemption.

In Sebelius, et al. v. Hobby Lobby Stores, Inc. the question presented to SCOTUS states: “[t]he Religious Freedom Restoration Act of 1993 (RFRA), 42 U.S.C. 2000bb et seq., provides that the government ‘shall not substantially burden a person’s exercise of religion’ unless that burden is the least restrictive means to further a compelling governmental interest. 42 U.S.C. 2000bb-1(a) and (b). The question presented is whether RFRA allows a for-profit corporation to deny its employees the health coverage of contraceptives to which the employees are otherwise entitled by federal law [the ACA], based on the religious objections of the corporation’s owners.”  Similarly, Conestoga Wood Specialties v. Sebelius, et al., presented the following question: “[w]hether the religious owners of a family business, or their closely-held, for-profit corporation, have free exercise rights that are violated by the application of the contraceptive-coverage [m]andate of the ACA.”

SCOTUS consolidated these two cases that produced differing results in federal circuit courts. The Tenth Circuit held in favor of Hobby Lobby on this issue by upholding its right to challenge the ACA on RFRA grounds. In contrast, the Third Circuit ruled in favor of the government by holding that Conestoga Wood Specialties could not assert an RFRA claim to challenge the ACA.

Industry stakeholders should monitor this consolidated case and consider the potential implications on their businesses.

Posted by Jennifer K. Shanley

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