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Administration broadens exemption from contraceptive mandate, creates flurry of litigation activity
By Heather Mehta on October 24, 2017 at 10:15 AM

Exempt spelled out in block lettersThe federal agencies charged with administering the Affordable Care Act released interim final regulations Oct. 6, 2017, that extended the exemption from providing contraceptive coverage to more employers and individuals effective immediately. Days later, the government settled dozens of lawsuits filed by organizations challenging the so-called “contraceptive mandate.” But several new cases challenging the expanded exemption were filed.

The regulations

Previously, only “religious employers” — churches and their integrated auxiliaries — were exempt from the requirement to provide a variety of women’s contraceptive services at no cost sharing. The government applied the rule on an employer-by-employer basis. The interim final regulations broaden the group eligible for an exemption based on sincerely held religious beliefs to include the plans of (1) nonprofit organizations; (2) closely held for-profit entities; (3) for-profit entities that are not closely held; (4) any other non-governmental employer; and (5) student health insurance provided by institutions of higher education. By applying the exemption to health plans, the agencies have eliminated the employer-by-employer test. The health plans of “objecting entities” are exempt regardless of whether they are insured or self-insured.

The new regulations also provide an exemption based on “sincerely held moral convictions” for: (1) any group health plan and health insurance coverage provided to a non-governmental plan sponsor that is (a) a non-profit organization or (b) a for-profit entity that is not publicly traded; (2) student health insurance provided by institutions of higher education; or (3) health insurance issuers offering group or individual coverage.

The broadened exemption also allows individuals to request coverage that does not include contraceptive services.

The litigation

Following the release of the interim final regulations, more than 40 organizations represented by Jones Day settled their long-standing cases with the U.S. Justice Department. The plaintiffs include several Catholic dioceses and Catholic colleges. More than 70 plaintiffs engaged in five years of litigation, claiming the contraceptive mandate caused them to be complicit in a moral wrong. The Department of Justice announced Oct. 23, 2017, that it had settled all of the cases.

While these cases settled, new litigation began. The American Civil Liberties Union and the Service Employee International Union-United Health Care Workers West filed suit against the administration, claiming the new exemptions violate the Establishment Clause and the Equal Protection Clause of the Constitution. The attorney generals of Massachusetts, California, Washington, and Pennsylvania filed lawsuits challenging the exemption as well.

On Oct. 19, 2017, a group of Democratic senators introduced legislation that would nullify the new interim final regulations.

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