Court Opinion

ID: 2959689
Source: CourtListenerOpinion
Date Created: 2015-09-17 16:01:02.522012+00
Date Added: 2024-06-11T11:42:11.998249
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 14-2726
                         ___________________________

                      Dordt College; Cornerstone University

                       lllllllllllllllllllll Plaintiffs - Appellees

                                           v.

   Sylvia M. Burwell, in her official capacity as Secretary of the United States
Department of Health and Human Services; Thomas Perez, in his official capacity
 as Secretary of the United States Department of Labor; Jack Lew, in his official
  capacity as Secretary of the United States Department of the Treasury; United
 States Department of Health and Human Services; United States Department of
                 Labor; United States Department of the Treasury

                     lllllllllllllllllllll Defendants - Appellants

                              ------------------------------

 Americans United For Separation of Church and State; American Civil Liberties
               Union; American Civil Liberties Union of Iowa

                  lllllllllllllllllllllAmici on Behalf of Appellant(s)

    Association of American Physicians & Surgeons; American Association of
 Pro-Life Obstetricians & Gynecologists; Christian Medical Association; Catholic
     Medical Association; The National Catholic Bioethics Center; Alabama
Physicians for Life; National Association of Pro Life Nurses; National Association
                                of Catholic Nurses

                  lllllllllllllllllllllAmici on Behalf of Appellee(s)
                                       ____________
                     Appeal from United States District Court
                   for the Northern District of Iowa - Sioux City
                                  ____________

                           Submitted: December 10, 2014
                             Filed: September 17, 2015
                                  ____________

Before WOLLMAN, COLLOTON, and BENTON, Circuit Judges.
                       ____________

WOLLMAN, Circuit Judge.

      The Departments of Health and Human Services (HHS), Labor (DOL), and
Treasury, as well as their respective Secretaries, (collectively, the government) appeal
from the district court’s1 order granting a motion for a preliminary injunction that
enjoins the government from enforcing certain provisions of the Patient Protection
and Affordable Care Act (ACA), 42 U.S.C. § 300gg-13(a)(4), and its implementing
regulations against Dordt College and Cornerstone University, each of which is a
nonprofit religious educational institution that offers healthcare coverage to its
employees—Dordt through a self-insured plan and Cornerstone through an insured
plan.2 The district court’s order also enjoined the government from enforcing the

      1
      The Honorable Mark W. Bennett, United States District Judge for the
Northern District of Iowa.
      2
       A self-insured employer bears the financial risk of paying its employees’
health-insurance claims and often hires a third-party administrator to manage
administrative functions like processing insurance claims. An insured employer, by
contrast, contracts with a separate insurance company to provide healthcare coverage,
bear the financial risk of insurance claims, and manage related administrative
functions. See, e.g., 1A Steven Plitt, et al., Couch on Insurance § 10:1 n.1 (3d ed.
2013).

                                          -2-
challenged provisions against “any insurance provider (including insurance issuers
and third-party administrators) offering health insurance to Dordt or Cornerstone.”
D. Ct. Order of May 21, 2014, at 8. Dordt and Cornerstone raised objections to the
ACA and its implementing regulations that are substantially similar to those
addressed by this court in the opinion issued today in Sharpe Holdings, Inc. v. U.S.
Department of Health and Human Services, No. 14-1507, slip op. (8th Cir. Sept. 17,
2015). For purposes of this opinion, we provide only a brief discussion of the
legislative and administrative background of the ACA and its implementing
regulations, as well as an abbreviated summary of the arguments raised by the parties.
For a more detailed examination, we direct readers to our opinion in Sharpe Holdings.

         Dordt and Cornerstone challenged provisions of the ACA and its implementing
regulations requiring them either to provide their employees with healthcare coverage
for “[a]ll Food and Drug Administration [(FDA)] approved contraceptive methods,
sterilization procedures, and patient education and counseling for all women with
reproductive capacity” (the contraceptive mandate), or to apply for an
accommodation excusing them from providing such coverage. 77 Fed. Reg. 8725,
8725 (Feb. 15, 2012); see 29 C.F.R. § 2590.715-2713(a). Although the ACA
provides an exemption from the contraceptive mandate for “grandfathered” health
plans, i.e., those in existence at the time of the ACA’s adoption, 42 U.S.C. § 18011;
29 C.F.R. § 2590.715-1251, and for health plans sponsored by “religious employers,”
i.e., “churches, their integrated auxiliaries, and conventions or associations of
churches,” as well as “the exclusively religious activities of any religious order,” 45
C.F.R. § 147.131(a) (citing the Internal Revenue Code, 26 U.S.C. § 6033(a)(3)(A)(i),
(iii)), it does not provide a similar exemption for nonprofit religious organizations
like Dordt and Cornerstone.

      Instead, the ACA provides an “accommodation” for nonprofit religious
organizations that have religious objections to the contraceptive mandate but do not

                                         -3-
qualify for the religious-employer exemption.3 78 Fed. Reg. 39,870, 39,871 (July 2,
2013); see also 29 C.F.R. § 2590.715-2713A. The accommodation is intended to
protect religious organizations “from having to contract, arrange, pay, or refer for”
contraceptive coverage. 78 Fed. Reg. at 39,872. It is available for a religious
organization that (1) has religious objections to providing healthcare coverage for
some or all contraceptive services, (2) “is organized and operates as a nonprofit
entity,” (3) “holds itself out as a religious organization,” and (4) complies with a self-
certification process. 29 C.F.R. § 2590.715-2713A(a). A religious organization may
self-certify by completing and submitting directly to its insurance issuer or third-party
administrator (TPA) an EBSA Form 700–Certification (Form 700), certifying that it
is a religious nonprofit entity that has religious objections to providing coverage for
some or all of the contraceptives required by the mandate, 29 C.F.R. § 2590.715-
2713A(a)-(b), or by providing notice to HHS stating the organization’s name; the
basis on which it qualifies for an accommodation; its religious objections to providing
coverage for some or all contraceptives, including the specific contraceptives to
which it objects; its insurance plan name and type; and its insurance issuer’s or TPA’s
name and contact information (HHS Notice),4 see 79 Fed. Reg. 51,092, 51,094-95

      3
        After the Supreme Court’s decision in Burwell v. Hobby Lobby, 134 S. Ct.
2751 (2014), the government revised the relevant regulations effective September 14,
2015, to extend this accommodation to certain closely held for-profit entities that
have a religious objection to providing coverage for some or all of the FDA-approved
contraceptive methods. See 80 Fed. Reg. 41,318 (July 14, 2015).
      4
        Self-certification using HHS Notice was included in the regulations after the
Supreme Court’s order in Wheaton College v. Burwell, 134 S. Ct. 2806 (2014).
Wheaton College, a religious organization, challenged the accommodation process,
arguing that completing Form 700 and forwarding the Form to its insurance issuer
made it complicit in the provision of contraceptive coverage in violation of its
religious beliefs. The Supreme Court granted injunctive relief, enjoining the
government from enforcing the contraceptive mandate while the college’s challenge
to the accommodation process was pending, provided that the college inform HHS

                                           -4-
(Aug. 27, 2014); 80 Fed. Reg. 41,318, 41,323 (July 14, 2015); 29 C.F.R. § 2590.715-
2713A(b)(1)(ii)(B). After HHS receives the Notice, it provides the information to
DOL, which sends a separate notification to inform the religious organization’s
insurance issuer or TPA of the organization’s objections to certain coverage. See id.

       Once an insurance issuer or TPA receives Form 700 from the religious
organization or the separate notification from DOL it must “provide or arrange
payments for contraceptive services” for beneficiaries of the organization’s group
health plan either by providing those payments itself or by arranging for another party
to do so. 29 C.F.R. § 2590.715-2713A(b)(2) (TPA); 45 C.F.R. § 147.131(c)(1)(i)
(insurance issuer). With respect to TPAs, Form 700 or HHS notice also designates
the TPA “plan administrator and claims administrator for contraceptive benefits” for
the religious organization. 78 Fed. Reg. at 39,879; see also 29 C.F.R. § 2510.3-16(b)
(providing that Form 700 becomes “an instrument under which the plan is operated
[and is] treated as a designation of the [TPA] as the plan administrator under section
3(16) of ERISA[, 29 U.S.C. § 1002(33),] for any contraceptive services required to
be covered”); 79 Fed. Reg. at 51,095 (providing that DOL’s notification to the TPA
under HHS Notice also operates to “designate” the TPA “as plan administrator” under
ERISA for contraceptive benefits). The insurance issuer or TPA must provide
separate notice regarding contraceptive services to participants and beneficiaries
enrolled in the religious organization’s group health plan. 29 C.F.R. § 2590.715-
2713A(b)(2).

“in writing that it is a nonprofit organization that holds itself out as religious and has
religious objections to providing coverage for contraceptive services.” 134 S. Ct. at
2807. The college was not required to self-certify using Form 700. Id. The Court
also stated, “Nothing in this order precludes the Government from relying on this
notice, to the extent it considers it necessary, to facilitate the provision of full
contraceptive coverage under the” ACA to Wheaton College’s employees and
students. Id.

                                           -5-
       Dordt and Cornerstone, in accordance with their sincerely held religious
beliefs, oppose the use, funding, provision, or support of abortion, and they believe
that certain contraceptives required under the contraceptive mandate—Plan B, ella,
and copper IUDs—are functionally equivalent to abortion. See Burwell v. Hobby
Lobby, 134 S. Ct. 2751, 2762-63 (2104) (noting that these forms of contraceptive
“may have the effect of preventing an already fertilized egg from developing any
further by inhibiting its attachment to the uterus”). They brought suit against the
government, arguing that both the contraceptive mandate and the accommodation
process impose a substantial burden on their exercise of religion in violation of the
Religious Freedom Restoration Act of 1993 (RFRA), 42 U.S.C. § 2000bb-bb4. They
contend that the government is coercing them to violate their religious beliefs by
threatening to impose severe monetary penalties unless they either directly provide
coverage for objectionable contraceptives through their group health plans or
indirectly provide, trigger, and facilitate that objectionable coverage through the
accommodation process. As stated above, the district court granted their request for
a preliminary injunction to enjoin enforcement of the contraceptive mandate and the
accommodation regulations against them.

       The government raises arguments for reversal of the district court’s order that
are substantially similar to those asserted by the government in Sharpe Holdings.
Specifically, the government argues that the contraceptive mandate and
accommodation process do not substantially burden Dordt and Cornerstone’s exercise
of religion, that it has compelling interests in safeguarding public health and ensuring
equal access to health care for women, and that the contraceptive mandate and
accommodation process are the least restrictive means to further those compelling
interests. For the reasons set forth in Sharpe Holdings, we conclude that by coercing
Dordt and Cornerstone to participate in the contraceptive mandate and
accommodation process under threat of severe monetary penalty, the government has
substantially burdened Dordt and Cornerstone’s exercise of religion. Also for the

                                          -6-
reasons set forth in Sharpe Holdings, we conclude that, even assuming that the
government’s interests in safeguarding public health and ensuring equal access to
health care for women are compelling, the contraceptive mandate and accommodation
process likely are not the least restrictive means of furthering those interests.5 Thus,
based on our reasoning in Sharpe Holdings, we affirm the order granting injunctive
relief.
                        ______________________________

      5
        Dordt and Cornerstone argue that the government’s asserted “compelling
interests” are fatally undermined in light of the exemptions to the contraceptive
mandate and accommodation process granted to grandfathered healthcare plans and
religious employers—exemptions that result in thousands of women without access
to contraceptive coverage through their employers’ healthcare plans. Because we
affirm the district court’s grant of injunctive relief on the basis that the government
has failed to establish that the contraceptive mandate and accommodation process are
the least restrictive means to accomplish their stated compelling interests, we decline
to address Dordt and Cornerstone’s assertions regarding the insufficiency of the
government’s compelling interests. See Hobby Lobby, 134 S. Ct. at 2780 (“We will
assume that the interest in guaranteeing cost-free access to the four challenged
contraceptive methods is compelling within the meaning of RFRA . . . .”).

                                          -7-