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Federal Appeals Court: Employers Can't Opt out of Obamacare Birth Control Mandate

By Christopher Coble, Esq. on July 17, 2019

Most people haven't heard of the Administrative Procedures Act, but it's become a legal thorn in the Trump administration's side. The Act provides minimum procedural standards that federal agencies must follow when creating or changing rules, and federal courts have ruled against the president and his executive orders in over 90 percent of cases where the law comes into play.

And yet another federal appeals court has blocked a Trump administration rule. This time it was the Third Circuit Court of Appeals finding that the Department of Health and Human Services did not abide by the APA when it decided to provide employers with religious exemptions to the Affordable Care Act's requirement to provide insurance coverage for contraception.

Rulemaking Rules

In 2017, the Trump administration issued an executive order to expand exemptions to the Obamacare requirement that group health insurance plans cover contraceptive services as a form of women's preventive health care. HHS and the Departments of Labor and Treasury complied, issuing the Religious Interim Final Rule and the Moral IFR, which made compliance with the rule voluntary, and offered protections to organizations with moral objections to birth control.

But, according to the Third Circuit, the agencies failed to abide by the APA's requirement to engage in "notice-and-comment" rulemaking. "[T]he Agencies' desire to address the purported harm to religious objections does not ameliorate the need to follow appropriate procedures," the court ruled, concluding, "The notice and comment exercise surrounding the Final Rules does not reflect any real open-mindedness toward the position set forth in the IFRs."

Rules and Rulings

The Third Circuit also ruled that employers could not claim exemptions under the Religious Freedom Restoration Act, a law that was designed to protect Native American religious practices but has been used to defend discrimination based on religious beliefs:

In short, the status quo prior to the new Rule ... did not infringe on the religious exercise of covered employers, nor is there a basis to conclude the Accommodation process infringes on the religious exercise of any employer. For these reasons, RFRA does not demand the Religious Exemption.

And, in blocking the government from enforcing the new rule, the court decided that "a nationwide injunction is necessary to provide the States complete relief." So, for now, employers covered under the Affordable Care Act have the same obligation to provide coverage for contraception for their employees as they did after the Supreme Court's decision in Hobby Lobby.

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