Where’s the Contraception Compromise?

The Obama Administration’s January announcement it would not exempt most religious employers from the so-called “contraception mandate” sparked substantial controversy. The policy infuriated many religious groups, including some that have been otherwise supportive of the Administration’s health care reform efforts. In response to public pressure, last Friday the Administration announced a compromise designed to assuage the concerns of some religious groups. Yet this has not yet put the matter to rest. Some groups find the compromise inadequate, characterizing it as a fig-leaf or subterfuge. They might be right, but the truth is we don’t yet know, because the details of the compromise have yet to be drafted, let alone finalized. In fact, on the same day the President announced the compromise, the Department of Health and Human Services (HHS) went ahead and finalized the rule as originally proposed. So for now, the compromise is nothing more than a vague assurance of changes to come.

Here’s some background. Under the Patient Protection and Affordable Care Act, employers are required to provide baseline coverage for preventative care as part of the health insurance plans they provide, and the federal government gets to decide what must be covered. Pursuant to this authority, and based on the recommendation of the Institute of Medicine, HHS concluded that this baseline coverage should include all forms of FDA-approved contraception, including some that are capable of acting as abortifacents. Such coverage is important for women, HHS concluded, and can actually help reduce overall health costs.

Recognizing that some religious groups are staunchly opposed to contraception – and that the First Amendment’s free exercise clause provides some protection for religious institutions against government mandates – HHS proposed a narrow exemption. As explained by HHS Secretary Kathleen Sebelius in January, this exemption would be limited to those religious employers that are primarily focused on the inculcation of religious values and primarily serve and employ those of the same religious faith. In other words, houses of worship are exempt, as are those religious institutions that exclude non-believers. All other religious employers, including schools, hospitals, universities, charities, and welfare organizations that serve the general public, would have to comply or pay fines of approximately $2,000 per employee. The only way to avoid the mandate would be for these institutions to segregate themselves from society at large, confining their services and employment to members of their own faith, or shutting down altogether.

The policy announced by HHS was not only controversial, but potentially illegal as well. Whether or not the contraception mandate violates the First Amendment’s “free exercise” clause (and I doubt it did, at least under current doctrine), it is almost certainly violates the Religious Freedom Restoration Act (RFRA), a law enacted in 1993 to provide additional protection for religious institutions under federal law (for reasons explained by Ed Whelan in these posts). Under RFRA, the federal government is barred from imposing a substantial burden on the free exercise of religion, even if the burden is the result of an otherwise-valid government policy that does not target religious practice, unless the policy satisfies strict scrutiny (i.e. it is the least restrictive means of advancing a compelling governmental interest). This is a substantially more demanding test than is currently imposed under the First Amendment and it is a test the Administration’s policy would have had a hard time satisfying. (Indeed, it’s a test it’s unclear the Administration even considered.)

Such legal concerns may have contributed to the Administration’s decision to offer the compromise announced last week. Under the new policy, religious institutions would no longer have to pay for health insurance plans that cover contraception. Their insurance companies, however, would have to provide such coverage to covered employees free of charge. This shift satisfied some groups, but others see it as an accounting gimmick. After all, when a religious institution contracts with an insurance company to cover its employees, the insurer knows contraception must be provided, even if it is not formally part of the plan. On the other hand, contraception – like some forms of preventative care – can actually lower health care costs in the long run, so it’s not clear the new policy will really cost insurers. But this will not help those religious institutions that self-insure. In such cases, the employer and insurer are effectively one and the same.

The real difficulty in assessing the Administration’s compromise, however, comes from the fact that it has yet to be formally proposed, let alone adopted by HHS, as noted by Cary Coglianese on RegBlog. (See also here.) To the contrary, on the same day the compromise was announced, HHS finalized the rule as it had been originally proposed “without change.” HHS had previously announced that religious employers would be given an extra year before they have to comply with the rule, and this “safe harbor” remains (with some conditions detailed in an accompanying guidance). But the new compromise is nothing more than a promise of a new rule at some point in the future. According to HHS, it will “work with stakeholders” to develop and finalize a new compromise policy before the year is up. This pledge may be comforting to those religious institutions that opposed the mandate, but it has no legal force. Promulgating a new regulation on a controversial subject can be quite time-consuming, and agencies miss regulatory deadlines with some regularity, even when operating under court orders or statutorily required schedules. So there’s no guarantee this compromise will ever be put in place, or that it will achieve the stated goal of preventing religious institutions from having to pay for forms of medical treatment they consider sinful.