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July 27, 2015 Practice Points

Feds Finalize Birth-Control-Mandate Opt-Out

The HHS issued an order spelling out detailed policies for religious nonprofits and closely held for-profit corporations to avoid covering contraceptives for employees.

By Alexi Layton

On July 10, 2015, the U.S. Department of Health and Human Services (HSS) finalized the process to allow religious nonprofits to opt out of the Affordable Care Act’s birth-control mandate. The HHS issued an order spelling out detailed policies for religious nonprofits and closely held for-profit corporations to avoid covering contraceptives for employees.

Religious nonprofits can now notify the HHS, instead of their insurers, in writing, of their religious objections to the mandate. The notice must only include: the name of the organization and why it qualifies for an accommodation, its objection to the mandate based on sincerely held religious beliefs, the plan name and type (whether student health plan or church plan), and contact information. The HHS says this notice represents the “minimum information necessary” to determine which entities are covered by the accommodation.

This process was created in response to a 2014 U.S. Supreme Court order shielding the Christian university, Wheaton College, from notifying its insurance plan of objections to the mandate. Before the Wheaton College ruling, entities were required to fill out a government form to apply for the exemption. With these new guidelines, entities can fill out the form or simply send their request in writing.

Four circuit courts—Third, Fifth, Seventh, and D.C.—have all ruled that the opt-out process is permissible under the Religious Freedom Restoration Act and does not overly burden religious groups. Regulators acknowledged hearing opposition to the new guidelines but said there is no less intrusive way to enforce the mandate. Four certiorari petitions are currently pending to the U.S. Supreme Court.

The majority in the Wheaton College case, issued three days after Burwell v. Hobby Lobby, relied on Hobby Lobby to exempt religious nonprofits from submitting the government form. The dissent in the case argued that the form itself was simple and did not burden the school’s religious exercise.

These new guidelines extend the same accommodations to closely held for-profit corporations, which won leeway to be exempt from laws its owners religiously object to after last year’s Hobby Lobby decision. The new guidelines also set out criteria that apply to for-profit corporations.

Based on the number of entities challenging the mandate in litigation, the HHS and related departments estimate at least 122 nonprofits and 87 closely held for-profits will seek the exemption, but the departments admit that these numbers are likely an underestimation.

Alexi Layton, Snell & Wilmer, Las Vegas, NV

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