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US Supreme Court battle brews over contraception coverage, religious rights

Two years after the U.S. Supreme Court upheld most of the Affordable Care Act, high court drama over the federal health care law continues.

Soon, the justices will be asked to weigh in on an issue that has split the lower courts and decide if the law’s contraception coverage mandate infringes on the rights of some religious employers, employees and nonprofit groups.

The question has been baffling lower courts considering the issue for the first time, largely at the preliminary injunction stage, keeping attorneys litigating the matter on their toes.

“Everybody is closely watching these cases, knowing it will end up at the Supreme Court,” said Jason Miller, an associate at Miller, Johnson, Snell & Cummiskey in Grand Rapids, Mich. Miller represents the Kentwood, Mich.-based company Autocam Corp. in its challenge to the law, which is now pending before the 6th U.S. Circuit Court of Appeals.

The health care law requires most employers’ health care plans to provide contraception coverage to employees without a co-pay or deduction. The law exempts certain religious organizations, such as nonprofit religious hospitals and schools, from the mandate, and the Obama administration issued regulations in July giving other qualifying employers the ability to opt out of providing contraception coverage while still ensuring employees access to contraception with no co-pays and at no cost from other sources.

Still, hundreds of lawsuits over the requirement have been filed by businesses that claim the opt-out provision is not broad enough to cover employers who have strong personal religious objections to the use of contraceptive measures. They claim that being required to provide contraception coverage contrary to their beliefs violates their rights under the Free Exercise Clause of the First Amendment and the Religious Freedom Restoration Act.

Can businesses have beliefs?

Lower courts have been struggling with preliminary legal issues before even getting to the constitutional analysis. The biggest: Can for-profit companies launch such belief-based constitutional challenges at all?

In July, a divided 3rd U.S. Circuit Court of Appeals answered “no.”

“[T]he law has long recognized the distinction between the owners of a corporation and the corporation itself,” Judge Robert Cowen wrote in the 2-1 ruling in Conestoga Wood Specialties Corp. v HHS. “A holding to the contrary — that a for-profit corporation can engage in religious exercise — would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners.”

That ruling conflicts with a 10th Circuit decision issued a month earlier allowing two private businesses to bring religious-based challenges to the law. In Hobby Lobby Stores v. Sebelius, the owners of two Oklahoma City-based chain stores objected to providing contraception coverage to their roughly 13,000 full-time employees nationwide.

The en banc panel sided with the businesses, relying on the underlying reasoning in other cases, including the Supreme Court’s 2010 ruling in Citizens United v. FEC, which held that corporations’ First Amendment rights cannot be limited by laws restricting political speech.

“We see no reason the Supreme Court would recognize constitutional protection for a corporation’s political expression but not its religious expression,” Judge Timothy Tymkovich wrote for the panel.

In February, the 8th Circuit came to a similar conclusion in granting a preliminary injunction to a Minnetonka, Minn.-based business challenging the law in Annex Medical, Inc. v. Sebelius.

The 7th Circuit also has granted preliminary injunctions in pending appeals.

Lower courts across the country are coming to differing conclusions while others are simply treading water and waiting for guidance from above, attorneys say.

“We are seeing sole lower courts sort of drag their feet in deciding so they can wait and see what other courts will do,” said Timothy Belz, a partner at the St. Louis firm Ottsen, Leggat & Belz, who represents businesses and individuals challenging the law, including Missouri state Rep. Paul Wieland.

Issue of first impression

The contraception coverage challenges represent the first time many courts have confronted the issue of whether private employers may assert a religious-based constitutional challenge.

“It’s not a new concept,” Miller said. “There are many cases of corporations claiming a free speech or other First Amendment right. People ask, ‘How can a corporation have a belief?’ Well, how can a corporation not have a belief [if its owners do]? The fact that the owners are operating as a unit doesn’t change the fact that they are expressing something.”

Prior to the enactment of the federal health care law, Belz said, businesses in Missouri were covered by a state law that allowed them to opt out of providing coverage of contraceptives or medical procedures to which they objected due to religious reasons.

“There are a lot of Catholics in Missouri, so contraception is a big issue,” Belz said, noting that the state law “gave a lot of flexibility. But then came Obamacare.”

And while the federal health care law’s employers’ mandate — which requires employers to provide health care coverage to full-time employees or face a penalty — applies only to companies with 50 or more workers, the contraceptive mandate could hit smaller businesses, Belz said.

“If you have five employees, you don’t have to offer insurance under Obamacare,” Belz said. “But if you do offer insurance, you do have to comply with Obamacare rules, including the contraceptives rule.”

Parallel track: employee challenges

Meanwhile, other types of challenges to the law are beginning to take shape. In one, Wieland, the Missouri state lawmaker, is challenging the law not as an employer, but as an employee who objects to having his children covered by the contraception provision through the state.

Wieland and his wife filed suit Aug. 14 in federal court in St. Louis to get a personal exemption from the law based on their religious objection to having a health care plan that would provide contraception coverage to their three daughters.

Belz, his attorney, said that as the employer challenges continue to be filed across the country, more employees may bring similar claims in situations like Wieland’s.

“It’s a parallel claim” to the employer challenges, Belz said. “In each case, it’s a provider objecting to providing this type of coverage. In one situation it’s a business, and in the other case it’s a dad and mom.”

The contraceptive mandate question is one of several issues that likely will cause the Supreme Court to revisit the federal health care law. A petition for certiorari is pending at the court urging the justices to decide whether Congress exceeded its authority in requiring certain employers to provide health care insurance to workers or face a penalty.

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