The biggest problem with the Court’s proposed accommodation is that the law does not permit a Third-Party Administrator for a self-insured plan to provide contraceptive coverage unless the employer certifies their objection in writing. The form–or written objection–creates a new contractual relationship–and a new plan instrument. This understanding was made clear during arguments by both Paul Clement and S.G. Verrilli.
The S.G. explains that under the current regulations, what triggers the insurers’ obligation to provide the insurance is the written certification–it in effect becomes a plan document. (This seems to be an unwitting concession about the petitioner’s “triggering” argument). An oral notification does not suffice.
Insurers have an independent statutory obligation to provide contraceptive coverage. 42 U.S.C. 300gg- 13(a)(4). Under the accommodation, an insurer must satisfy that obligation by providing separate payments for contraceptive services outside the employer’s plan, instead of by including contraceptive coverage in the group insurance policy for the plan. 45 C.F.R. 147.131(c). That change in the insurer’s legal obliga- tions currently arises when the insurer receives a self- certification form or a notification that an employer has opted out by contacting HHS. Ibid. In theory, however, the government could provide that the same legal obligations arise following any request by an eligible employer with an insured plan for an insur- ance policy that excluded contraceptives to which the employer objects on religious grounds.7
The government’s designation of the TPA must be reflected in a written plan instrument. 29 U.S.C. 1002(16)(A)(i) [ERISA]. To satisfy that requirement, the ac- commodation relies on either (1) a written designation sent by the government to the TPA, which requires the government to know the TPA’s identity, or (2) the self-certification form, which the regulations treat as a plan instrument in which the government designates the TPA as a plan administrator. Gov’t Br. 16 n.4. There is no mechanism for requiring TPAs to provide separate contraceptive coverage without a plan in- strument; self-insured employers could not opt out of the contraceptive-coverage requirement by simply informing their TPAs that they do not want to provide coverage for contraceptives. As we have explained, however, any employer that objects to a feature of the accommodation unique to self-insured plans can switch to an insured plan. Gov’t Br. 39 n.16.
In other words, ERISA does not permit what the Court wants, because there is no valid plan instrument. (This was the crux of Justice Alito’s questions). The challenger’s brief explains the process:
Because the government seeks to make the TPA a “plan administrator” of the petitioner’s own plan for the limited purpose of ensuring the provision of contraceptive coverage, it needs some sort of written document from the petitioner that it can deem sufficient to empower the TPA to provide or arrange for the provision of contraceptive coverage to beneficiaries of the petitioner’s plan. See Resp.Br.16 n.4. Moreover, a TPA does not have the same authority as an insurer to use plan beneficiary information; as a “business associate,” not a “covered entity,” under HIPAA, a TPA generally is limited to using that information in ways that its contractual relationship with the covered entity permits—i.e., in ways that the objecting self-insured petitioner or the objecting church plan authorizes. See 45 C.F.R. §164.504(e). Accordingly, in the context of self-insured plans, requiring either the “insurer” or the petitioner’s TPA to provide or arrange for the contraceptive coverage necessarily would require something above and beyond the petitioner’s decision not to include contraceptive coverage in its plan.
It would require a written plan instrument.
The S.G. argues that the accommodation could be modified in the manner the Court described, but in light of the underlying statutory regime, it would come at a “real cost.”
Because insurers have an independent statutory obligation to provide contraceptive coverage, the accommodation for employers with insured plans could be modified to operate in the manner described in the Court’s order—but only at a real cost to its effective implementation. . . . If, however, the Court determines that the existing process for invoking the accommodation must be mod- ified in some respect in light of petitioners’ religious objections, it should make clear that the government may continue to require the relevant insurers to pro- vide separate contraceptive coverage to petitioners’ employees in accordance with the other provisions of the current regulations. A decision requiring a modi- fication to the accommodation while leaving open the possibility that even the arrangement as so modified might itself be deemed insufficient would lead to years of additional litigation, during which tens of thousands of women would likely continue to be denied the cov- erage to which they are legally entitled.
The S.G. elaborates on this point later, explaining that in the absence of the self-certification, the insurer may not provide the contraceptive coverage, out of fear of potential liability. If insurers understanding anything, they understand risk–and will not provide benefits unless the law is crystal clear that they can do so:
Second, the use of a simple and standard certification form eliminates the risk of intrusive back-and- forth between insurers and employers. When an in- surer receives a self-certification, it “may not require any further documentation” to establish the employ- er’s eligibility for the accommodation. 45 C.F.R. 147.131(c)(1)(i). An insurer that “relies reasonably and in good faith” on a self-certification to provide separate contraceptive coverage is therefore deemed to comply with its legal obligations even if it turns out that the employer was not eligible for the accommoda- tion. 45 C.F.R. 147.131(e)(1). By contrast, if employ- ers were permitted to opt out simply by informally re- questing policies excluding contraceptives, insurers concerned about their own obligations could demand additional information to verify the employers’ sincer- ity and their eligibility for an exemption.
Third, the self-certification procedure clearly doc- uments an employer’s decision to opt out. The em- ployer must “make the self-certification available for examination upon request so that regulators, issuers, * * * and plan participants and beneficiaries may verify that [the] organization has qualified for an accommodation.” 78 Fed. Reg. at 8462; see 45 C.F.R. 147.131(b)(3). That procedure ensures that the reli- gious employer is not held legally responsible if the insurer fails to provide the required coverage or an employee disputes a particular coverage decision.
Let me unpack what is going on here. The government took the position during oral arguments that ERISA would not provide the statutory authority to support the workaround the Court suggested in its order. Insurers, afraid of liability, could argue that they do not have the appropriate authorizations to provide the coverage. If the government went ahead and did what the Court said, the insurers may not provide the coverage. Alternatively, the challengers would simply bring suit under ERISA, challenging that the insurers lack the appropriate plan instruments to take such action. As a result, the SG is asking the Court to “make clear that the government may” do what it otherwise lacks the authority to do–and by extension make clear to the insurance companies that they can legally comply.
The government doesn’t quite say it outright, but the implication is that RFRA allows the Court to interpret ERISA in a looser manner to permit this.
If the Court determines that some aspect of the present process for opting out renders the accommo- dation inadequate to meet petitioners’ objections to the contraceptive-coverage requirement, it should hold that the Departments may not require compli- ance with the relevant requirements as a condition to invoking the accommodation . . . . Alternatively, if the Court were to conclude that objecting employers may not be required to communi- cate their objections in writing at all, it should hold unenforceable those portions of the regulations that require an employer to provide a written notice to HHS or a self-certification to its insurer, and to maintain a copy of the notice or self-certification in its records. See 45 C.F.R. 147.131(b)(3) and (c)(1).9
This is a remarkable statement. The S.G. is basically asking the Court to vest them with–shall we say–prosecutorial discretion not to enforce provisions of ERISA and its implementing regulations. Justice Alito raised this point during arguments, noting “Could the Executive say, as a matter of our enforcement discretion, we are not going to take any action against insurers who offer contraceptive only policies.” Here, the S.G. wants the Court’s blessing not to enforce ERISA and its implementing regulations. For (what seems like) the first time, the Obama administration has found that it lacks discretion to take executive action! If only the Treasury Department’s strict construction of ERISA would bleed over in DHS’s loosey-goosey construction of the Immigration and Nationality Act.
But the challengers make clear that this is not at all how RFRA works. If the government action imposes a substantial burden on free exercise, and there exists a least-restrict means to achieve the same interest–such as providing free contraceptive policies on the Obamacare exchanges–then the mandate fails.
There are many ways in which the employees of a petitioner with an insured plan could receive cost-free contraceptive coverage through the same insurance company that would not require further involvement by the petitioner, including the way described in the Court’s order. And each one of those ways is a less restrictive alternative that dooms the government’s ongoing effort to use the threat of massive penalties to compel petitioners to forsake their sincerely held religious beliefs. Moreover, so long as the coverage provided through these alternatives is truly independent of petitioners and their plans—i.e., provided through a separate policy, with a separate enrollment process, a separate insurance card, and a separate payment source, and offered to individuals through a separate communication—petitioners’ RFRA objections would be fully addressed.
And this can be designed in a simple manner:
Like activating a credit card, it could be as simple as having the insurance company send each eligible employee a contraceptive coverage card with a sticker attached providing a telephone number to call or website portal to use should she wish to activate the coverage. That would be much less burdensome than the process through which individuals enroll in separate dental or vision care plans—or in the employer-sponsored plan itself, as that, too, typically requires some affirmative act on the employee’s part.
However unlikely it is that Congress would have to pass a new law to achieve that goal, a least-restrictive means is still possible. As the Chief Justice noted during oral arguments:
CHIEF JUSTICE ROBERTS: So you could have a separate health coverage product sold on the Exchanges. You, in fact, do it already.
GENERAL VERRILLI: You couldn’t do it under current law, Your Honor.
CHIEF JUSTICE ROBERTS: Well, the way constitutional objections work is you might have to change current law.
Of course the Chief didn’t mean “constitutional,” as RFRA is a statute, but the point stands. RFRA provides that the current accommodation is unlawful, and does not allow the Court to reinterpret ERISA.
On a related note, At SCOTUSBlog, Lyle writes:
Seven groups of religious non-profit hospitals, charities, and colleges on Tuesday evening gave their full endorsement to the Supreme Court’s new compromise proposal for deciding the legality of the Affordable Care Act’s birth-control mandate, saying that the idea would keep them from violating their faiths. They also argued that the mere suggestion of an alternative makes it clear that the existing ACA regulations on contraceptives are illegal under the Religious Freedom Restoration Act.
Respectfully, I don’t think this is a fair characterization of the Petitioner’s brief. They didn’t endorse the Court’s proposal. Rather, they said the fact that such an accommodation exists is proof that the exiting accommodation is not the least restrictive means. The brief specifically indicates that they do not endorse any alternative:
To be clear, that is not to say that petitioners endorse such an approach as a policy matter. Many of them most emphatically do not, as they sincerely believe that the use of some or all forms of contraception is immoral, and they are hardly indifferent to efforts to encourage or facilitate that use. For that reason, petitioners may disagree as a policy matter with government programs, such as Title X, that make contraceptives or abortifacients more widely available to their own employees or anyone else. And petitioners certainly have the right, protected by the First Amendment, to make that disagreement known. At the same time, however, petitioners do not object under RFRA to every regulatory scheme in which the employees of a petitioner with an insured plan can obtain contraceptive coverage from the same insurance company with which the employer has contracted to provide a health plan. Petitioners simply object to having to play a morally impermissible role in the process through which those insurance companies (or anyone else) might provide contraceptive coverage to their employees. If the coverage can be provided in a way that eliminates that role, then it can be provided in a way that satisfies RFRA.
The petitioners only accept it for argument’s sake for purposes of the RFRA least-restrictive means analysis.
Update: Lyle repeats the same erroneous point at the National Constitution Center Blog:
Even so, there was some “give” on the government’s side, even on points that it would prefer not to forfeit, and there was, in fact, an almost enthusiastic acceptance of the court’s idea on the other side, by religious non-profit hospitals, charities and colleges that object to contraceptives, at least in some forms. …
The non-profits’ brief argued that the federal government could easily adapt to a regime in which the non-profit institutions with religious objections would simply be granted the equivalent of a total exemption from the ACA contraceptives mandate. And, they said, there were other available alternatives that would also keep them completely out of the process – such as the government setting itself up as the direct provider of birth-control devices and birth-control health coverage, or making contraceptives available through the new ACA health insurance exchanges, or marketplaces..
It was clear from the non-profits’ filing that they thought the court, in seeking reaction to its own suggestion, had sent a signal that it was ready to give them what they were seeking through the multitudes of lawsuits challenging the ACA mandate for contraceptives.
As Greg Lipper–who filed a brief in support of the government noted on Twitter last night–this is not right.
@JoshMBlackman Yep, Lyle got that wrong.
— Greg Lipper (@theglipper) April 13, 2016