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Courts provide guidance on contraceptive coverage

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Two federal appeals court rulings are delving into whether an employer's religious beliefs can exempt the company from providing insurance covering emergency contraceptives — an issue that recently has been taken up in West Virginia's federal court system.

In their June 27 ruling, 10th Circuit Court of Appeals judges held that Hobby Lobby, the Christian bookstore chain Mardel and the companies' owners were allowed to bring claims under the Religious Freedom Restoration Act.

The suit, brought in September 2012 by the companies and owners, David Green, Barbara Green, Mart Green, Steve Green and Darsee Lett, sought an exception from an Affordable Care Act provision requiring certain contraceptive services as part of the health care plan.

The owners took issue with emergency contraception or what they call "abortifacients," saying it is against their religion.

The owners moved for preliminary injunction on the basis of the Religious Freedom and Restoration Act and Free Exercise Claims, the ruling notes, but the federal court denied the motion.

The appeals court remanded the case back to an Oklahoma federal court, asking the court to address whether plaintiffs get the desired preliminary injunction.

Wide-ranging Effects?

Jill Rice, a partner in Dinsmore & Shohl's Morgantown office, said this case could very well affect a similar case going in West Virginia, where the owner of a South Charleston car dealership said his religious freedom will be violated if the federal court does not intervene. 

"This is the first U.S. court of appeals that has opined on the issue of whether or not the Affordable Care Act and its provision relating to whether or not a corporation has religious beliefs that can be protected in the space of requirements in the Affordable Care Act," Rice said. "We have not before had that. So, if I am a district court judge in West Virginia looking at the West Virginia case, I will look for all the guidance I can find and authority to help guide me in this decision. … This may not be binding in West Virginia court, but it could be persuasive authority."

Brought by The Family Policy Council of West Virginia and the Liberty Institute on behalf of Joseph Holland Jr. and Joe Holland Chevrolet, the suit seeks relief against the U.S. Department of Health and Human Services, Kathleen Sebelius, the U.S. Department of Labor, the U.S. Department of Treasury, Seth Harris and Jacob Lew.

The suit, filed in federal court for the southern district of West Virginia, asserts the provision that provides coverage for emergency contraceptives and what he calls "abortion-related counseling" is unconstitutional.

Holland seeks the court to declare the government mandate unconstitutional and enter a temporary restraining order.

Last year, the U.S. Department of Health and Human Services mandated employers and insurance companies to cover contraceptive and sterilization methods.

The department did, however, propose amendments a few months ago to exempt nonprofit religious organizations — such as Catholic charities — to avoid a direct payment of that contraceptive coverage. Instead, their insurance companies would separately provide free coverage.

Holland Chevrolet provides health insurance to 150 full-time employees and would thus be required to implement a plan with this government mandate.

Holland said since he is president of the company and chairman of its board of directors, he would be responsible for implementing a plan with the provision in which he does not support.

In his suit, Holland explains he is a "born-again Christian" and practices his business in accordance with his beliefs, such as closing his business on Sundays.

Like Holland, the owners of Hobby Lobby and Mardel say their stores also are run according to religious beliefs, such as the fact that it is closed on Sundays.

The court ruling also notes that Hobby Lobby and Mardel have more than 13,000 employees under the insurance plan, which would mean a fine of $1.3 million per day or $475 million per year.

The appeals court determined that under the Religious Freedom Restoration Act, the definition of "person" would include corporations, regardless of whether they are for-profit or nonprofit.

"No one disputes in this case the sincerity of Hobby Lobby and Mardel's religious beliefs. And because the contraceptive-coverage requirement places substantial pressure on Hobby Lobby and Mardel to violate their sincere religious beliefs, their exercise of religion is substantially burdened within the meaning of RFRA," the ruling states.

Rice said the important thing to remember about the 10th circuit is that it didn't just remand the case back to the district court for further proceedings.

"It didn't just say Hobby Lobby, you can challenge the federal health care law. It also really gave it a nudge that it may have a valid case under federal law or under constitutional law."

"That was a significant ruling in that case," Rice later added. "It said for-profit corporations do qualify as people and therefore do have rights of free speech and rights of political expression."

Argument Against 10th Circuit

The federal government recently filed a memorandum in opposition to Holland's motion for temporary restraining order, citing the Hobby Lobby ruling.

Government defendants also said regulations challenged were issued two years ago, so Holland should not be given an injunction.

The memorandum in opposition takes issue with Holland's assertion that for-profit corporations can exercise freedom of religion, saying "this cannot be."

"To hold otherwise would permit for-profit, secular companies and their owners to become laws unto themselves," the memorandum of opposition states. "Because there are an infinite variety of alleged religious beliefs, such companies and their owners could claim countless exemptions from an untold number of general commercial laws designed to protect against unfair discrimination in the workplace and to protect the health and well-being of individual employees and their families."

The memorandum also says, "Such a system would not only be unworkable, it would also cripple the government's ability to solve national problems through laws of general application."

The memorandum also cited the 10th Circuit's opinion, saying the ruling was incorrect that the RFRA would cover corporations.

Government defendants argued the court relied on the Dictionary Act's definition of a person, saying the question isn't whether corporations are people but whether for-profit, secular corporations are people within the meaning of the RFRA.

A Second Opinion

A Virginia case, Liberty University v. Jacob Lew, recently taken before the 4th Circuit Court of Appeals also brought this question to light.

In addition to challenging the individual mandate and the employer mandate, Liberty University plaintiffs also argued they are Christians who have sincere religious beliefs that abortions, "except where necessary to save the life of the pregnant mother, are repugnant.'" It argues it shouldn't have to pay, facilitate or subsidize abortions.

Judges with the 4th Circuit ruled plaintiffs' assertion that the act violates their free exercise of religion under the RFRA fails.

The court said the act provides individuals the option to purchase a plan that covers no abortion services, except for cases of rape or incest, the opinion states. The opinion also said the act does not prevent employers from offering such a plan as well.

However, the court noted the complaint does not mention contraceptives that Liberty University labeled as "abortifacients," saying the federal appellate court would not address the challenge on the new regulations, since it was not addressed in a lower court.

The court also held the employer mandate is a valid exercise of Congress' authority under the Commerce Clause and rejected Liberty's argument that the employer mandate is a penalty and not a tax. The court affirmed the district court's judgment, dismissing the complaint for failure to state a claim upon which relief can be granted.