| 29 April 2012
On March 16th, the federal government released an "Advanced Notice of Proposed Rulemaking" (ANPRM) on the controversial health-insurance contraceptives mandate with its very narrow exemption for religious organizations. The ANPRM was hailed by some as showing the administration’s solution to the religious freedom concerns of faith-based service organizations—which are not eligible for the exemption. In fact, the ANPRM is only a request for comments on a set of ideas—it contains no actual new regulations.
The ANPRM has been published in the Federal Register. It is a set of possible actions and a request for comments. It does not establish any new policy at all. Even its few passages of regulation-like language are introduced with phrases such as "the Departments are considering proposing new language . . ." (italics added). In short, the actual rules related to the contraceptives mandate have not changed, although the ANPRM does contain some positive ideas.
What's most important.
The ANPRM does not create or change policy. The administration remains committed to its fundamental framework of two classes of religious organizations: churches are exempt from the mandate; parachurch organizations, such as religious colleges, charities, and hospitals are second-class religious organizations, only eligible for an "accommodation," not an actual exemption from the contraceptives mandate. The "accommodation" is still built on the administration's determination to compel someone else--the insurance company or, in the case of a self-insured employer, the third-party administrator--to pay for the contraceptives and to offer them to a dissenting organization's employees.
The administration will take comments until June 19, 2012, on the APRM. To comment, go to www.regulations.gov, enter “CMS-9968-ANPRM” in the search box, and click on the “Submit a comment” link in the right-hand column. The next step is a notice of proposed rulemaking that proposes an actual regulation. Comments will be taken on this draft regulation. Only after that can an actual regulation be put into the Code of Federal Regulations. The new regulation may be issued as late as July, 2013, after the crucial November presidential and congressional elections and long after the contraceptives mandate comes into effect for many religious organizations.
The law now.
The mandate requires employee health plans to cover the full range of FDA-approved contraceptives, including sterilization and abortion-inducing drugs such as Plan B and ella, as of plan years beginning on or after August 1, 2012.
- Churches and religious orders are exempt from the mandate.
- Grandfathered plans that do not include contraceptives are exempt until they lose their grandfathered status.
- The law currently provides no "accommodation" for non-exempted religious organizations--for faith-based service organizations (parachurch organizations).
- Parachurch organizations whose plans as of Feb. 10, 2012, for religious reasons did not include contraceptives are eligible for a "temporary enforcement safe harbor" shielding them from the mandate for one year.
- Parachurch organizations whose plans did include contraceptives on Feb. 10, 2012, are subject to the mandate as of the plan year that begins August 1, 2012, or later.
- Religious owners of secular businesses, secular nonprofits with a pro-life commitment, and individuals with a conscience who must buy their own health insurance--no exemption or accommodation at all has been suggested.
ANPRM Problem Areas.
(A) Two (or three!) classes of religious organizations. The most serious problem remains the creation of two classes of religious organization, or even three. Churches, seminaries, and religious orders are exempt from the mandate--that exemption has been written into the Code of Federal Regulations. However, the ANPRM reiterates that parachurch organizations--religious organizations that have a purpose beyond the "inculcation of religious values" and that serve people beyond only those who "share [their] religious tenets"--are not exempted from the mandate. Instead, their religious objections will only be "accommodated" through some mechanism that guarantees that their employees can get the mandated contraceptives. That mechanism, the administration says, is intended to distance the objecting organization from the contraceptives--it will "effectively exempt" the organization from having to cover the contraceptives by requiring some other entity to bear the costs of the contraceptives and to offer the contraceptives to the employees.
The ANPRM actually suggests that there may be three, not two, classes of religious organization: (1) "religious employers," that is churches, which are exempt; (2) non-exempt nonprofit organizations that as of Feb. 10, 2012, did not, for religious reasons, have contraceptives in their health plan and are thus eligible for the one-year temporary enforcement safe harbor; and (3) "religious organizations"--the non-church religious entities that are eligible for the "accommodation" that the administration promises to put into the federal regulations later. According to the ANPRM, the accommodation will apply to "some or all" organizations eligible for the safe harbor, "and possibly to additional organizations." In short: some parachurch organizations that get a pass for a year might end up fully subject to the mandate, and some parachurch organizations that were not eligible for the safe harbor--because their insurance, perhaps without their consent or even knowledge, included contraceptives--might not be eligible for the "accommodation" but instead will be fully subject to the mandate!
(B) Definition problems. Which religious organizations ought to be "accommodated"? the ANPRM asks. It seeks comments, but offers pernicious ideas of its own. A definition might be adopted from some other law or regulation, it suggests, but then overlooks any robust federal concept such as the religious exemption in Title VII of the 1964 Civil Rights Act (which protects the freedom of religious organizations to consider religion when hiring). Instead, it says that language might be adopted from a state contraception law--which is where the administration's own narrow and constitutionally defective definition of exempt religious organizations came from! (Other state definitions are better, broader--and so the ANPRM promises that such exemptions will be subordinated to the narrower federal exemption "because this will help more consumers," though it will harm more religious organizations.)
The ANPRM has one other suggestion: to classify as "accommodated" religious organizations those organizations "that are controlled by or associated with a church or a convention or association of churches" (the reference is to section 414(e) of the Internal Revenue Code and section 3(33) of ERISA). And yet many parachurch organizations are not controlled by a church but rather are independently religious organizations or have multi-denominational connections. This kind of definition would leave many parachurch organizations wholly unprotected from the mandate to cover drugs and procedures to which they have deep religious objections--their conscience claims not even "accommodated."
(C) Only paper protection. Many religious freedom advocates and religious organizations have protested the administration's two-class definition of religious organizations not only because it exempts only a small set of religious organizations from the mandate but also because it creates a pernicious precedent in federal law: many religious organizations deserve only minimal religious freedom protection--only an "accommodation," not an actual exemption. In response, the ANPRM declares in several places that the classifications are designed only for the purposes of the contraceptives mandate and are not intended to set a broader federal precedent. Whether an organization is defined as an exempt "religious employer" "is not intended as a judgment about the mission, sincerity, or commitment of the employer."
This is a worthy gesture, but it is only language. If the ANPRM's concepts end up in the Code of Federal Regulations next to the Feb. 10th final rule defining only churches as exempt, then there will in fact be a federal precedent: two classes of religious organization with differential government treatment. This in fact will be a damaging concept available to future federal legislators and regulators, a damaging concept even closer at hand than the original narrow exemption, which was plucked from state law.
(D) The accommodation mechanism. Parachurch organizations will not be exempt from the mandate but their religious concerns will be accommodated, the ANPRM promises, yet again. A non-exempt religious organization (or some of them) can tell its insurance company that contraceptives and abortifacients must be kept out of its health plan. If so, then the insurer will be required to offer a plan without those drugs and services to the employer. And the insurer will also be required to give to the employees separate contraceptives coverage, at no cost to the employer or the employee. Can the federal government require insurers to offer contraceptives without charge to employers or employees? The administration can only promise to require it.
And in the ANPRM the administration promises to devise a similar mechanism for employers that self-insure. For them, the government will require their third-party administrator (or some other entity) to take over the responsibility of offering and paying for the contraceptives. Is that legally possible? The ANPRM proposes several ways the third-party administrator might be able to fund the contraceptives--which apparently do cost something after all. It is not obvious that all of these ways are workable or legal. None of them have been worked out in actual regulations. And note this: self-insuring, in the past, was one way that religious organizations could avoid a state contraceptives mandate. Now it is only a different path to "accommodation" rather than "exemption."
ANPRM Positive Notions.
Although none of the ideas may end up in actual regulations, the ANPRM offers some positive considerations. (1) It suggests that a parachurch organization might qualify for the temporary enforcement safe harbor even if, as of Feb. 10, 2012, its health plan excluded for religious reasons only some, but not necessarily all, contraceptives. And it entertains the possibility that an organization might be eligible for the "accommodation" even though it does cover some kinds of contraceptives. (2) It entertains, or at least does not reject, the possibility that some for-profit religious organizations might be made eligible for the "accommodation." And it solicits comment on "whether an exemption or accommodation should be made for certain religious health insurance issuers or third-party administrators." Possibly even an exemption for these non-church entities?! (3) It suggests that if a parachurch organization is related to a church and insures its employees through the same plan as the church uses, then the parachurch organization might be exempt from the mandate. Note that this is only language in the ANPRM and it is not worked out in detail. One possible problem: if a church has such a close tie to the parachurch organization that they share the same insurance plan, does not the church fall outside the definition of an exempt religious employer because the combined organizations have broad purposes beyond inculcating religious values and/or serve people beyond the church's membership?
The ANPRM has some interesting ideas. Working within the confines of the framework the administration has committed itself to, it offers a number of promising concepts. And yet it is that framework itself that is deeply problematic. Moreover, the ANPRM is not a regulation nor even a proposed regulation. Rather, "[t]his document serves as a request for comments in advance of proposed rulemaking . . . ." It may be a statement of intentions, or only a statement of questions and possibilities. It is not a second regulation that creates an actual "accommodation" for parachurch organizations to accompany the now-final regulation that exempts only a narrow set of religious organizations.