Hobby Lobby and the Notre Dame Disappointment

In 2014, the Supreme Court handed down a major opinion in response to the Affordable Care Act in a case called Burwell v. Hobby Lobby Stores[1]. This concerned the contraceptive mandate provided in the act that required companies to provide coverage for contraceptives for employees. At issue in this case, was the religious freedom interest of a largely closely-held corporation, Hobby Lobby, that is owned and managed by the Greens, a devout Christian family that refused to provide abortifacient contraceptives to their employees. As a result of not providing the additional abortifacient coverage, the company would have been subject to excessive monetary penalties. Justice Samuel Alito wrote a brilliant majority opinion finding in favor of the closely-held corporation in finding that the mandate was not the least restrictive way to ensure access to contraceptives for employees.

The center of Justice Alito’s argument focuses on the Religious Freedom and Restoration Act (RFRA) test that states:

“A government action that imposes a substantial burden on religious exercise must serve a compelling government interest, and we assume that the HHS regulations satisfy this requirement. But in order for the HHS mandate to be sustained, it must also constitute the least restrictive means of serving that interest.”

The contraceptive mandate did not satisfy the least restrictive means prong of the test because the government did not use the accommodation method provided to religious nonprofit organizations that exempted the organizations from facilitating abortifacient contraceptive coverage to employees.

He explained:

“In fact, HHS has already devised and implemented a system that seeks to respect the religious liberty of religious nonprofit corporations while ensuring that the employees of these entities have precisely the same access to all FDA-approved contraceptives as employees of companies whose owners have no religious objections to providing such coverage. The employees of these religious nonprofit corporations still have access to insurance coverage without cost sharing for all FDA-approved contraceptives; and according to HHS, this system imposes no net economic burden on the insurance companies that are required to provide or secure the coverage.”

A key element to the exemption provided to religious nonprofits was the concept of cost-sharing.  Churches would receive a full exemption from having to offer that coverage and religious nonprofits would need to complete Form 700 or provide written notice to the government of their intention to not provide.  The government would not impose a cost-sharing burden on that employer, but would find an alternate way to provide the contraceptive coverage to an employee through third-parties or the government itself upon the notice from the employer. This was the system that the government had refused to carve out for-profit closely held corporations that was under hands-on ownership from the religious objector, the Green family.

Justice Alito concluded:

“Although HHS has made this system available to religious nonprofits that have religious objections to the contraceptive mandate, HHS has provided no reason why the same system cannot be made available when the owners of for-profit corporations have similar religious objections. We therefore conclude that this system constitutes an alternative that achieves all of the Government’s aims while providing greater respect for religious liberty. And under RFRA, that conclusion means that enforcement of the HHS contraceptive mandate against the objecting parties in these cases is unlawful.”

Overall, the Hobby Lobby decision was a step in the right direction for the Supreme Court in protecting religious liberty interests.  Justice Alito’s majority opinion was rooted in the tradition of this nation that considered the views of people of faith worthy of some form of enhanced protection. It should be noted, however, that although Justice Alito pointed out the alternate options the government had provided, he stopped short of a full endorsement of those options. He was just recognizing the fact that those options existed and provided a less restrictive means for entities identifying with a faith mission to comply with the government regulations on contraceptive coverage.

As an aside, before reaching the topic of Notre Dame’s shocking betrayal to the religious liberty lobby with its “compromise”, we first look at an excerpt from Hobby Lobby when it was still at the Circuit Court level before reaching the Supreme Court. Then judge on the 10th Circuit Court of Appeals and current U.S. Supreme Court Justice Neil Gorsuch provided strong insight into the scope of religious freedom in his concurring opinion.

He stated:

“As they understand it, ordering their companies to provide insurance coverage for drugs or devices whose use is inconsistent with their faith itself violates their faith, representing a degree of complicity their religion disallows. In light of the crippling penalties the mandate imposes for failing to comply with its dictates — running as high as $475 million per year — the Greens contend they confront no less than a choice between exercising their faith or saving their business.”

“No doubt, the Greens’ religious convictions are contestable. Some may even find the Greens’ beliefs offensive. But no one disputes that they are sincerely held religious beliefs. The [RFRA] Act doesn’t just apply to protect popular religious beliefs: it does perhaps its most important work in protecting unpopular religious beliefs, vindicating this nation’s long-held aspiration to serve as a refuge of religious tolerance.”

Judge Gorsuch touches on some very interesting points in his concurrence at the 10th Circuit that found in favor of Hobby Lobby. Judge Gorsuch recognized the devout and sincere faith of the Greens and how they should not be punished for holding the closely-held corporation that they own and operate to remain consistent with this belief system. The structure of this closely-held corporation allows for a more hands on approach to operation of the business as opposed to a larger corporation that has in place many layers and a mass amount of shareholders who hold a diverse set of beliefs. Hobby Lobby is a more centralized entity as a closely-held corporation, thus there is a stronger link between the ownership and operation of its mission.

 Notre Dame Breakdown:

The Opening Salvos of Litigation

Notre Dame, as a religious nonprofit university, had challenged the contraceptive mandate for its employees.  It sought a preliminary injunction prohibiting the government from compelling the Notre Dame health insurer and health plan administrator from providing contraceptive coverage to university’s students and employees.  The employees of Notre Dame are self-insured for medical expenses, but Meritain Inc. acts as a Third-Party Administrator (TPA) for the university health plan that is provided by Meritain’s parent company, Aetna.[2]  For students, Notre Dame provides them with an option of obtaining health insurance from Aetna at rates negotiated by Notre Dame.[3]

Notre Dame self-certified as a religious nonprofit by completing Form 700 to avoid paying penalties for not providing coverage, but the employees and students still had a means through the companies to obtain contraceptives even if Notre Dame was not directly financially supporting it.  Notre Dame argued that this burden was still too great because the completion of the form opened the process for the alternate means for the companies to provide coverage.   The court disagreed and explained that, “Although Notre Dame is the final arbiter of its religious beliefs, it is for the courts to determine whether the law actually forces Notre Dame to act in a way that would violate those beliefs.”[4]  The court found the exemption mechanism was suitable to properly disconnect the university from providing coverage.  The administration of the coverage though the companies without Notre Dame cost-sharing was an acceptable method to avoid the burden.

Economic interests of Meritain and Aetna were also weighed by the court.  It challenged Notre Dame for its attempt to exclude Aetna and Meritain from “possibly a lucrative chunk of their business” by attempting to gain an injunction against dispensing the coverage.[5]  The court was also not satisfied with the exemption alternatives that Notre Dame offered which centered on the employees and students directly appealing to the government for coverage of contraceptive services without Notre Dame’s involvement.  It found the administrative burden on the employees, students, and government too great.[6]  Injunctive relief was denied.

                     A Retreat?

Elizabeth Kirk of National Review explained  Notre Dame’s shocking decision to backtrack from its original stance and instead pursue a compromise in which Notre Dame would not contest the insurance company providing simple contraceptives to its employees and students upon request. This unfortunate development calls into questions its identity as a Catholic institution of higher learning.

This situation worsens when one considers the fact that the Trump administration recently enacted a  policy  revoking Obama era doctrine that mandated the contraceptive coverage if a religious institution did not qualify for a full exemption. As of December 31, 2017, all birth control coverage in university plans would no longer be mandated and the institutions would not be forced to require coverage if it did not meet government standards. Even with the new provision that has taken into account the religious interests of people of faith, Notre Dame still chose to move forward with a compromise within its institution that would allow coverage for practices outside Catholic teaching.

Yes, it is acknowledged that Notre Dame will fund Natural Family Planning which is in accordance with church teaching in this compromise, but the decision to succumb to the pressure of societal forces for the sake of “pluralism” to allow for simple contraceptives to remain in plans is troubling. Institutions of higher learning should not be afraid of their faith tradition and the beliefs that set them apart from other entities. Providing contraceptives in insurance plans is a valid expectation in a state school that is not affiliated with a faith tradition, not in a Catholic school that claims communion with the church and markets itself as such.

Conclusion

Overall, the Hobby Lobby litigation and Notre Dame compromise are interesting developments in the legal debate about the contraceptive mandate. The Supreme Court took a step in the right direction by carving out an exception for closely-held corporations that operate their company with a faith mission. The excessive penalties for not providing the coverage were an undue burden on faith. The least restrictive means that is cited by the court, however, still carries questions in its own right. One could argue that the indirect provision that would still allow for contraceptives to be covered through the actions of a religious nonprofit entity is still troublesome. The administration has rendered the matter largely moot when it comes to universities with its new declaration, but, the actions of Notre Dame to still allow coverage provide valid reason to be concerned. It threatens the identity of a Catholic institution of higher learning.

[1] 134 S.Ct. 2751

[2] Univ. of Notre Dame v Burwell, 786 F3d 606, 608 (7th Cir 2015).

[3] Id.

[4] Id. at 612.

[5] Id. at 613.

[6] Id. at 617.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s