The Federal Contraceptive Coverage Requirement: Past and Pending Legal Challenges

Summary: When Congress enacted the Patient Protection and Affordable Care Act (ACA) in 2010, it required employment-based health plans and health insurance issuers to cover certain preventive health services without cost sharing. Those services, because of agency guidelines and rules, would soon include contraception for women. The "contraceptive coverage requirement," or "contraceptive mandate" as it came to be known, was heavily litigated in the years to follow, and exemptions from the requirement are currently the subject of a pending Supreme Court case.

Summary: The various legal challenges to the contraceptive coverage requirement primarily concerned (1)Â what types of employers and institutions should be exempt from the requirement based on their religious or moral objections to contraception; (2)Â what procedures the government can require for an entity to invoke a religious-based accommodation; and (3) how much authority federal agencies have to create exceptions to the coverage requirement. As originally formulated, only houses of worship and similar entities were exempt from the requirement, but the government later added an accommodation process for certain religious nonprofit organizations. On June 30, 2014, the Supreme Court held in Burwell v. Hobby Lobby Stores, Inc. that the contraceptive coverage requirement violated federal law insofar as it did not also accommodate the religious objections of closely held, for-profit corporations. The law at issue in that caseâthe Religious Freedom Restoration Act of 1993 (RFRA)âprohibits the federal government from "substantially burden[ing] a person's exercise of religion" except under narrow circumstances.

Summary: Since Hobby Lobby , the agencies tasked with implementing the ACA have faced numerous hurdles in their attempts to accommodate the interests of sincere objectors while minimizing disruptions to the provision of cost-free contraceptive coverage to women. The lower courts split on whether the accommodation processâwhich required eligible objecting entities to notify their insurers or the government that they qualified for an exemptionâsubstantially burdened the objectors' exercise of religion. Initially, most circuit courts rejected the view that such an accommodation triggered, facilitated, or otherwise made objectors complicit in the provision of coverage, denying their RFRA claims. After consolidating some of these cases for review, the Supreme Court ultimately vacated and remanded the decisions when the government and the objecting parties suggested that a solution might be reached so that the objectors' insurers could provide the required coverage without notice from the objecting parties.

Summary: Following a change in presidential administration, the implementing agencies reevaluated and reversed their position on the legality of the then-existing accommodation process, concluding that it violated RFRA when applied to certain entities. The agencies opted to automatically exempt most nongovernmental entities that objected to providing coverage for some or all forms of contraception on religious or moral grounds. These expanded exemptions sparked a new round of litigation based on claims that the agencies exceeded their authority under the ACA or violated federal requirements for promulgating new rules. Federal courts, including the U.S. Court of Appeals for the Third Circuit, preliminarily enjoined the government from implementing the expanded exemptions. The Supreme Court is slated to hear arguments on the Third Circuit's decision in May in Little Sisters of the Poor v. Pennsylvania . Meanwhile, the government is largely precluded from relying on the prior accommodation process as a result of a nationwide injunction issued by a federal district court.

Summary: Little Sisters of the Poor marks the fourth Supreme Court term in six years in which the Court has granted certiorari in a dispute about the federal contraceptive coverage requirement. During that time period, the Executive Departments promulgated six different rules concerning the requirement, a change in presidential administration marked a turning point in the Departments' RFRA calculus, and the Supreme Court underwent its own changes with the appointment of two new Justices. A Supreme Court decision in Little Sisters of the Poor could inform Congress's next steps with regard to the contraceptive coverage requirement. From a legal perspective, Congress has several options for clarifying the requirement's scope, including through amendments to the ACA and RFRA. An opinion in Little Sisters may also provide additional direction to lawmakers and federal agencies asked to accommodate the religious and moral beliefs of regulated entities when enacting or implementing laws of broader applicability.

W hen Congress enacted the Patient Protection and Affordable Care Act (ACA) in 2010, it required employment-based health plans and health insurance issuers to cover certain preventive health services without cost sharing. Those services, because of agency guidelines and rules, would soon include contraception for women. The federal contraceptive coverage requirementâsometimes called the "contraceptive mandate" âhas generated significant public policy and legal debates. Proponents of the requirement have stressed a need to make contraception more widely accessible and affordable to promote women's health and equality. Opponents have centrally raised religious freedomâbased objections to paying for or otherwise having a role in the provision of coverage for some or all forms of contraception. The Supreme Court first took up a challenge to the contraceptive coverage requirement in 2014 in Burwell v. Hobby Lobby Stores, Inc. In Hobby Lobby , the Court held that the requirement did not properly accommodate the religious objections of closely held corporations.

After Hobby Lobby , legal challenges to the contraceptive coverage requirement continued. The lower federal courts divided over the legality of an accommodation process instituted in 2013 that shifted the responsibility to provide coverage from an objecting employer to its insurer once the employer certified its religious objections. In 2017, citing the uncertain legal footing of that accommodation, the Trump Administration decided to automatically exempt most nongovernmental entities from the coverage requirement based on their religious or moral objections. However, more than 15 states filed or joined lawsuits challenging the expanded exemptions. Federal courts, including the U.S. Court of Appeals for the Third Circuit, have preliminarily enjoined the government from implementing the expanded exemptions while those challenges proceed. The Supreme Court has agreed to review the Third Circuit's decision. The case, Little Sisters of the Poor v. Pennsylvania , is scheduled for argument in May, paving the way for a decision in summer 2020. Meanwhile, the government is largely precluded from relying on the prior accommodation process as a result of a federal district court's injunction.

This report begins by explaining the statutory and regulatory framework for the federal contraceptive coverage requirement. It then recaps the Supreme Court's decision in Hobby Lobby before discussing the agency actions taken in response to that decision and subsequent Supreme Court rulings and executive action. Next, the report discusses significant pending legal challenges to the coverage exemptions and accommodations, including the Supreme Court case, Little Sisters of the Poor . The report concludes with some considerations for Congress, including the broader legal questions that could be answered in Little Sisters of the Poor and options that federal lawmakers have proposed related to the contraceptive coverage requirement.

The federal contraceptive coverage requirement stems from the Patient Protection and Affordable Care Act but was developed and modified by subsequent agency guidelines and rules. Before the ACA, various federal and state requirements dictated whether a health plan needed to cover contraceptive services. Although more than half of the states required plans covering prescription drugs to include contraception, access was typically subject to cost-sharing requirements. The scope of religious exemptions from these state requirements varied. Moreover, each state's law extended "only to insurance plans that [were] sold to employers and individuals in [that] state." It did not apply to self-insured employer-sponsored health plans (also known as self-funded plans) in which nearly 60% of covered workers were enrolled. Self-insured plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that generally did not require coverage for specific preventive services before the ACA. Nevertheless, whether as a matter of law or industry practice, "most private insurance and federally funded insurance programs" offered some form of insurance coverage for contraception before the federal contraceptive coverage requirement.

With the enactment of the ACA, Congress required certain employment-based health plans and health insurance issuers (insurers) to cover various preventive health services without cost sharing. One ACA provision specifically requires coverage "with respect to women" for "preventive care and screenings . . . as provided for in comprehensive guidelines supported by the Health Resources and Services Administration [(HRSA)]" within the U.S. Department of Health and Human Services (HHS). To implement this requirement, HHS commissioned a study by the Institute of Medicine (IOM) "to review what preventive services are necessary for women's health and well-being." In its final report, the IOM recommended that HRSA consider including the "full range of Food and Drug Administration [(FDA)]-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity." Among other reasons, IOM concluded that "[s]ystematic evidence reviews and other peer-reviewed studies provide evidence that contraception and contraceptive counseling are effective at reducing unintended pregnancies," which HHS had identified as a specific national health goal. HRSA adopted the IOM's recommendation, including in HRSA's 2011 Women's Preventive Services Guidelines (HRSA guidelines) "all" FDA-approved contraception "as prescribed."

The HRSA guidelines applied to plan years beginning on or after AugustÂ 1, 2012. However, they exempted certain "religious employers"âhouses of worship and certain related entities that primarily employed and served persons who shared their religious tenets. In 2012, HHS announced a temporary "safe harbor" from government enforcement of the coverage requirement for certain nonexempt, nonprofit organizations with religious objections to covering some or all forms of contraception. Subsequent rules called such nonprofits "eligible organizations."

On July 2, 2013, following a notice and comment period, HHS, the Department of Labor (DOL), and the Department of the Treasury (the Departments) jointly issued a final rule (2013 Rule) to "simplify and clarify the religious employer exemption" and "establish accommodations" for eligible organizations. The rule continued to authorize HRSA to provide an automatic exemption to the coverage requirement for houses of worship. However, it no longer required those employers to have "the inculcation of religious values" as their purpose or to "primarily" employ and serve "persons who share [their] religious tenets" to qualify for the exemption.

The 2013 Rule also established an accommodation process for "eligible organizations" âessentially, nonprofit, religious organizations with religious objections to some or all forms of contraception. The accommodation also extended to student health plans arranged by eligible institutions of higher education. Eligible organizations could comply with the contraceptive coverage requirement by completing a self-certification form provided by HHS and DOL and sending copies of this form to their insurers or third-party administrators (TPAs), as applicable. For insured plans, the rule required the issuers, upon receipt of a certification, to "[e]xpressly exclude contraceptive coverage" (or the subset of objected-to methods) from the applicable plans but separately pay for any required, excluded contraceptive services for the enrolled individuals and their beneficiaries. For self-insured plans, the rule stated that the TPA, upon receipt of a certification, would become the "plan administrator" for contraceptive benefits under ERISA and responsible for providing contraceptive coverage. In addition, the certification provided to the TPA would become "an instrument under which the plan is operated." The rule required the insurer or TPA, rather than the objecting organization, to notify plan participants that separate payments would be made for contraception and that the organization would not be administering or funding such coverage.

Numerous organizations filed lawsuits challenging the contraceptive coverage requirement and the accommodation process. Among other claims, these plaintiffs argued that the requirement violated the Religious Freedom Restoration Act of 1993 (RFRA). RFRA is a federal statute enacted in response to Employment Division v. Smith , a 1990 Supreme Court decision holding that the Free Exercise Clause of the First Amendment does not require the government to exempt religious objectors from generally applicable laws. Except under narrow circumstances, RFRA prohibits the federal government from "substantially burden[ing] a person's exercise of religion even if the burden results from a rule of general applicability." RFRA allows such a burden only if the government shows that applying the burden to the person (1) furthers "a compelling governmental interest"; and (2) "is the least restrictive means" of furthering that interest. This "strict scrutiny" standard, particularly the "least restrictive means" requirement, is "exceptionally demanding." Thus, in challenges by religious objectors to the application of generally applicable laws, RFRA extends "far beyond" what the "Court has held is constitutionally required."

The initial challenges to the contraceptive coverage requirement centered on two emerging issues: (1)Â whether for-profit corporations were "persons" protected by RFRA; and (2)Â whether requiring employers to cover contraception to which they objected on religious grounds violated RFRA. The Supreme Court took up both issues as they related to closely held corporations in Burwell v. Hobby Lobby Stores, Inc . , issuing a decision on June 30, 2014.

The challengers in Hobby Lobby , which included the owners of the "nationwide chain" of arts-and-crafts stores of the same name, objected to providing health insurance coverage for four of the 20 FDA-approved methods of contraception included in the coverage requirement. In their view, "life begins at conception" and "facilitat[ing] access" to methods of contraception that "may operate after the fertilization of an egg" would violate their religious beliefs. The challengers argued that requiring them to provide insurance coverage for such contraception violated RFRA.

The Supreme Court held that Hobby Lobby, though a corporation, was a "person" covered by RFRA. Although RFRA itself did not define "person," the first section of the U.S. Code , commonly known as the Dictionary Act, defined the term to include "corporations" for the purpose of "determining the meaning of any Act of Congress, unless the context indicates otherwise." The Court reasoned that "nothing in RFRA" suggested a meaning other than the Dictionary Act definition. Specifically, the majority rejected HHS's argument that for-profit corporations could not "exercise" religion, reasoning that they could do so through "[b]usiness practices that are compelled or limited by the tenets of a religious doctrine."

The Court then proceeded to analyze whether the contraceptive coverage requirement "substantially burden[ed]" the challengers' exercise of religion. The Court accepted their argument that providing coverage for certain forms of contraception would violate their sincerely held religious beliefs because it might enable or facilitate the "destruction of an embryo." According to the majority, "federal courts have no business addressing" whether "the religious belief asserted in a RFRA case is reasonable." The more limited judicial role, the Court said, is to determine whether the "line drawn" by the religious objectors "reflects 'an honest conviction.'" Because no party disputed the sincerity of the employers' convictions, the Court focused its inquiry on whether the burden imposed by the coverage requirement was substantial. The Court concluded that it was, because the requirement would force the challengers to either violate their religious beliefs or face "severe" economic consequences.

The Court next considered whether the contraceptive coverage requirement nonetheless satisfied RFRA's strict scrutiny standard. The Court assumed, for purposes of its analysis, that applying the coverage requirement to petitioners served a "compelling governmental interest" in "guaranteeing cost-free access to the four challenged contraceptive methods." However, the Court concluded that the least restrictive means standard was not satisfied because HHS had "at its disposal" the accommodation process it provided to nonprofit organizations with religious objections which, in the Court's view, did not "impinge on" the challengers' religious beliefs and "serve[d] HHS's stated interests equally well." Accordingly, the Court held that applying the contraceptive coverage requirement to closely held corporations violated RFRA.

On July 14, 2015, the Departments finalized a rule in response to the Hobby Lobby decision that extended the accommodation previously reserved for religious nonprofits to for-profit entities that are "not publicly traded, [are] majority-owned by a relatively small number of individuals, and object[] to providing contraceptive coverage based on [their] owners' religious beliefs."

Legal Challenges to the Accommodation Process and Agency Responses

When the Court handed down its decision in Hobby Lobby , a separate line of legal challenges to the contraceptive coverage requirement involving the accommodation process remained unresolved by the High Court. In one such case, a Christian college argued that the process, which required objecting entities to submit a certification form called EBSA Form 700 to their insurers or TPAs, itself burdened its exercise of religion in violation of RFRA and the First Amendment. The college believed that submitting the required form would "make it morally complicit in the wrongful destruction of human life."

As shown in Figure 1 , EBSA Form 700 had two pages: the first required the organization to certify compliance with the criteria for obtaining the accommodation and the second contained a notice to TPAs.

After a federal district court denied the college's motion to preliminarily enjoin the enforcement of the contraceptive coverage requirement, the college sought emergency relief from the Supreme Court. On July 3, 2014, three days after deciding Hobby Lobby , the Supreme Court ruled that while the college's case was on appeal to the Seventh Circuit, the college did not need to comply with the contraceptive coverage requirement or complete EBSA Form 700 so long as it "inform[ed] the Secretary of Health and Human Services in writing that it is a non-profit organization that holds itself out as religious and has religious objections to providing coverage for contraceptive services."

On August 27, 2014, "consistent with the Wheaton order," HHS issued an interim rule that provided eligible organizations an alternative to EBSA Form 700. Pursuant to this rule, organizations could opt to notify HHS, rather than their insurers or TPAs, of their eligibility for the exemption and their objections to providing coverage for some or all forms of FDA-approved contraception. This option (the "alternative notice process") required organizations to provide HHS with their insurers' or TPAs' names and contact information. After receiving the notice, those Departments would send a "separate notification" to each issuer or TPA, which, for self-insured plans, would designate the TPA as the plan administrator and constitute "an instrument under which the plan is operated." The model notice that HHS issued with the interim rule appears in Figure 2 .

After these changes in the law, the Seventh Circuit affirmed the district court's decision to deny the college a preliminary injunction. The appellate court reasoned that the college did not have to provide certain forms of contraception in its student benefit plans so long as it notified either its TPA or the government of its objection to providing that coverage. Although the government would designate the college's preexisting TPA to provide the required coverage, the court reasoned that the plan instrument became the "government's plan" rather than the college's plan. The court also rejected the college's argument that complying with the accommodation process would render it "complicit" in providing the contraception to which it objected. Writing for the court, Judge Richard Posner reasoned that "it is the law , not any action on the part of the college," that requires the TPA to provide coverage once the college has registered its objection. Accordingly, the court concluded that the college was unlikely to prevail on its RFRA claim.

The Seventh Circuit was not the only appellate court to uphold the accommodation process amid requests for injunctive relief. Appellate courts in eight circuits in total concluded (at least as a preliminary matter while litigation proceeded on the merits) that the process did not impose a substantial burden on the challengers' exercise of religion. They rejected the view that providing notice to insurers or TPAs, or to HHS, "triggered" the provision of contraception, making the plaintiffs partially responsible for an act that violated their beliefs. Like the Seventh Circuit, they reasoned that the ACA, not the transmission of EBSA Form 700 or the notice to HHS, was the reason the applicable plans provided coverage for contraception without cost sharing. Some appellate judges dissented from their panel's decision or a denial of rehearing by the full circuit court, including nowâSupreme Court Justices Neil Gorsuch and Brett Kavanaugh.

The Eighth Circuit was the first appellate court to hold that the accommodation process violated RFRA. In that case, the district court had preliminarily enjoined the government from enforcing the contraceptive coverage requirement against two nonprofit employers that offered self-insured plans. The Eighth Circuit read Hobby Lobby to require it to "accept [the plaintiffs'] assertion that self-certification under the accommodation processâusing either [EBSA] Form 700 or HHS Noticeâwould violate their sincerely held religious beliefs." And it reasoned that providing the notice resulted in the provision of contraceptive coverage even if the plaintiffs did not have to arrange for or subsidize that coverage. The court then concluded that the process was not the least-restrictive means of serving the government's interest in providing women with access to cost-free contraception. In particular, it observed that the government could require objecting organizations to notify HHS of their objections without providing "the detailed information and updates" required under the alternative notice process. The court also found that the government failed to demonstrate why it could not reimburse employees for their purchase of contraceptives directly or pursue other ways to make contraception more widely available.

After the Eighth Circuit rendered its decision but before the government sought the Supreme Court's review, the Supreme Court consolidated and granted certiorari in seven other cases involving RFRA challenges to the accommodation process under the caption Zubik v. Burwell . However, on MayÂ 16, 2016, the Supreme Court vacated the Zubik decisions and remanded the cases to the circuit courts in light of the "significantly clarified view of the parties." The Court explained that in response to its request for additional briefing after oral argument, the government confirmed that "contraceptive coverage could be provided to petitioners' employees, through petitioners' insurance companies" without requiring the petitioners to notify their insurers or HHS in the manner previously required. The petitioners, in turn, confirmed that an insurer's independent provision of contraceptive coverage to the petitioners' employees would not burden the petitioners' religious exercise. The Court instructed the appellate courts on remand to afford the parties "an opportunity to arrive at an approach going forward that accommodates petitioners' religious exercise while at the same time ensuring that women covered by petitioners' health plans 'receive full and equal health coverage, including contraceptive coverage.'" It also enjoined the government from taxing or penalizing the petitioners based on a failure to provide notice, reasoning that the petitioners apprised the government of their religious objections through the litigation itself. The Court expressly declined to opine on whether the existing accommodation process substantially burdened the petitioners' religious exercise or nonetheless complied with RFRA's strict scrutiny standard.

Following the Supreme Court's remand, the executive branch took additional actions on the contraceptive coverage requirement. The Departments solicited and reviewed public comments on options to further revise the process. However, as of January 9, 2017, the Departments had not identified a "feasible approach . . . [to] resolve the concerns of religious objectors, while still ensuring that the affected women receive full and equal health coverage, including contraceptive coverage." At that time, the Departments maintained that the existing accommodation process was "consistent with RFRA."

Following a change in presidential administrations, on May 4, 2017, President Donald J. Trump issued an executive order directing the Departments to "consider issuing amended regulations, consistent with applicable law, to address conscience-based objections to the preventive-care mandate promulgated under [42 U.S.C. Â§] 300gg-13(a)(4)"âthe ACA provision that refers specifically to preventive care for women and pursuant to which HRSA included contraceptive coverage.

On October 6, 2017, the Departments reversed their position on the legality of the accommodation process and issued two interim final rules (IFRs) that made that process "optional." The first rule (the Religious Exemption IFR) expanded the automatic exemption formerly available only to houses of worship and related entities to include any nongovernmental organization that objected to providing or arranging coverage for some or all contraceptives based on "sincerely held religious beliefs." The second rule (the Moral Exemption IFR) extended the same exemption to certain nongovernmental organizations whose objections were based on "sincerely held moral convictions," rather than religious beliefs. Pursuant to these rules, "an eligible organization [that] pursue[d] the optional accommodation process through the EBSA Form 700 or other specified notice to HHS" would "voluntarily shift[] an obligation to provide separate but seamless contraceptive coverage to its issuer or [TPA]." However, if an employer or institution chose to rely on the automatic exemption rather than the accommodation process, neither the objecting entity nor its insurer or TPA would need to provide coverage for the objected-to contraceptive methods. The Departments also added an "individual exemption" that allowed willing employers and issuers, both governmental and nongovernmental, to provide alternative policies or contracts that did not offer contraceptive coverage to individual enrollees who objected to such coverage based on sincerely held religious beliefs or moral convictions.

The Departments estimated that the Religious Exemption IFR "would affect the contraceptive costs of approximately 31,700 women" based on information derived from the litigating positions of various objecting entities and notices the agency received pursuant to the previous accommodation process. They further estimated that the total costs potentially transferred to those affected women would amount to "approximately $18.5 million." However, to "account for uncertainty" in its estimate, the agencies also examined the "possible upper bound economic impact" of the Religious Exemption IFR. Applying a different methodology, the Departments arrived at a figure of approximately 120,000 women, with potential transfer costs totaling $63.8 million. The Departments projected a smaller effect with respect to the Moral Exemption IFR, estimating that it could affect the contraceptive costs of 15 women, an aggregate effect of approximately $8,760.

The Departments finalized the Religious and Moral Exemption IFRs on November 15, 2018, with effective dates of January 14, 2019 (collectively, the 2019 Final Rules). The 2019 Final Rules amended the regulatory text "to clarify the intended scope of the language" but retained the substance of the IFRs. The Departments increased their upper-bound estimate of the number of women that the expanded Religious Exemption could affect from 120,000 women to 126,400 women, yielding potential transfer costs of $67.3 million.

Little Sisters of the Poor and Other Pending Legal Challenges

The expanded exemptions generated a new set of legal challenges from states concerned with the fiscal burdens of the revised rules and the Departments' authority to promulgate them. In addition, some private parties (including a nationwide class of employers) successfully obtained injunctions against enforcement of the prior accommodation process after the government stopped defending the process on RFRA grounds. This section discusses some of the key pending legal challenges, beginning with a summary of the procedural history and arguments before the Supreme Court in Little Sisters of the Poor v. Pennsylvania .

Little Sisters of the Poor v. Pennsylvania

In late 2018, Pennsylvania and New Jersey asked a federal court to block the 2019 Final Rules, alleging, among other claims, that the rules (1)Â "failed to comply with the notice-and-comment procedures" required by the Administrative Procedure Act (APA) and (2) were "'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law' in violation of the [APA's] substantive provisions." The U.S. District Court for the Eastern District of Pennsylvania ruled that the states were "likely to succeed" on both of their APA claims and preliminarily enjoined the rules on a nationwide basis.

On appeal, the Third Circuit affirmed the district court's decision. The appellate court ruled that the Departments committed a procedural APA violation in issuing the IFRs by "dispensing with" the statute's notice and comment requirement without "good cause." In the court's view, the Departments' solicitation of comments before issuing the Final Rules did not remedy this defect because the agency's action did not give the public a "meaningful opportunity" to comment on the rules during their formulation, or demonstrate that the agency showed "any real open-mindedness" to amending the IFRs.

The court next considered whether the 2019 Final Rules were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"âgrounds for a reviewing court to "set aside" the rules under the APA. The Third Circuit concluded that the ACA did not authorize the Departments to "exempt actors" from the preventive services requirement. Reciting the statutory language, the court observed that group health plans and insurers "shall" cover "such additional preventive care . . . as provided for in comprehensive guidelines supported by [HRSA]." The appellate court reasoned that the "authority to issue 'comprehensive guidelines' concerns the type of services that are to be provided and does not provide authority to undermine Congress's directive"âexpressed with the command shall â"concerning who must provide coverage for these services."

The Third Circuit also disagreed with the Departments' argument that the expanded Religious Exemption in the 2019 Final Rules was necessary to bring the contraceptive coverage requirement into compliance with RFRA. Recognizing that RFRA authorized courts to determine, through "individualized adjudication," whether a particular law burdens a person's religious exercise, the court concluded that it need not defer to the Departments' assessment of the necessity of a broader religious exemption. Additionally, the court concluded that RFRA could not have required the expanded exemption because the prior accommodation process itself complied with RFRA. And the Third Circuit reasoned that making compliance with the accommodation process optional for religious objectors "would impose an undue burden on nonbeneficiariesâthe female employees who will lose coverage for contraceptive care."

Finally, the circuit court upheld the district court's decision to issue a nationwide preliminary injunction. The court reasoned that the injunction would ensure that the "likely" unlawful 2019 Final Rules would not take effect in some states only to be invalidated in full after further judicial proceedings. The court also concluded that a nationwide remedy was "necessary to provide the States complete relief," because individuals may reside or attend college in Pennsylvania or New Jersey but obtain their health insurance from an employer-sponsored or a parent's plan in a state that was not part of the lawsuit. If those individuals lost contraceptive coverage on an out-of-state plan, they might turn to state-sponsored services in Pennsylvania or New Jersey, placing fiscal burdens on those states.

Two parties filed petitions for certiorari with the Supreme Court seeking to appeal the Third Circuit's ruling: the federal government and the Little Sisters of the Poor Saints Peter and Paul Home (Little Sisters), a religious nonprofit organization that was permitted to intervene in the litigation in defense of the interim final rules, but later denied standing to challenge the 2019 Final Rules on appeal. On JanuaryÂ 17, 2020, the Supreme Court granted both petitions and consolidated the appeals. Over 50 amicus briefs have been filed by organizations, individuals, states, and localities. Some Members of Congress have also filed briefs in opposition to or support of the Third Circuit's ruling.

While the case raises a number of legal issues, the central question presented in Little Sisters of the Poor is whether the Departments "had statutory authority under the ACA and [RFRA] to expand the conscience exemption" to the contraceptive coverage requirement through the 2019 Final Rules. The federal government advances three main arguments in defense of its substantive authority to issue the rules. First, the government argues that HRSA has "ample authority to develop guidelines" for women's preventive services "that account for sincere conscience-based objections" because, among other reasons, ACA's "plain text" requires coverage "' as provided for in comprehensive guidelines supported by [HRSA].'" Second, the government contends that RFRA required it to extend automatic exemptions to "certain employers with conscientious objections" because the prior accommodation process, which may have sufficed for Hobby Lobby, did "not eliminate the substantial burden" that the coverage requirement placed on those employers. Third, the government argues that RFRA authorizes, even if it does not require, the expanded Religious Exemption because it applies to "the implementation" of "all Federal law." In support of its interests, Little Sisters argues that in light of the "substantial burden" mandatory contraceptive coverage places on religious exercise recognized in Hobby Lobby , the government was "duty-bound to change its rules and stop forcing religious objectors to comply via the accommodation." Little Sisters described the certification process as "the stingiest of accommodations" that amounted to "merely another means of complying with the contraceptive mandate." The state-respondents ask the Supreme Court to affirm the Third Circuit's ruling. They frame the case as more than a dispute over "the appropriate balance between the health and autonomy of women and the religious and moral views of their employers," because it concerns "the power of federal agencies to resolve such questions by relying on power never explicitly granted by Congress nor recognized by the courts." The states argue, inter alia , that Congress, through the ACA, "delegated HRSA authority to oversee guidelines defining what preventive services for women must be covered, not who must cover them." In the states' view, "RFRA does not grant federal agencies broad rulemaking authority to create exemptions from mandatory laws absent a violation," which was not present under the prior regulatory framework because "the accommodation 'effectively exempt[s]' an employer." And they remind the Court that "[n]o party claims that RFRA authorizes the moral rule" and its exemption.

Pennsylvania and New Jersey were not the only states to challenge the expanded exemptions. A lawsuit by the Commonwealth of Massachusetts to block the enforcement of the interim rulesâand later the final rulesâwas initially barred on standing grounds. But on May 2, 2019, the First Circuit reversed the district court's ruling, holding that Massachusetts had shown an "imminent" fiscal harm "fairly traceable" to the expanded exemptions, sufficient to confer standing. The appellate court remanded the case to the district court to consider the Commonwealth's substantive arguments that the 2019 Final Rules violated the APA, the First Amendment's Establishment Clause, and the "equal protection guarantee" of the Fifth Amendment's Due Process Clause. The parties' motions for summary judgmentâasking the court for a ruling on the legal issues prior to (and ultimately instead of) a trialâwere pending before the district court when the parties and the court agreed to stay the proceedings in light of a potential Supreme Court ruling in Little Sisters of the Poor .

An action in the U.S. District Court for the Northern District of California proceeded alongside the Pennsylvania and Massachusetts cases. In 2018, 14 states moved to enjoin enforcement preliminarily of the 2019 Final Rules. A subset of these states had already obtained a nationwide injunction against enforcement of the IFRs, which the Ninth Circuit then modified to apply only in the states that were plaintiffs in the action. In renewing their challenge to the 2019 Final Rules, the states advanced APA, Establishment Clause, and Equal Protection Clause claims similar to the Massachusetts action. As with its first ruling on the IFRs, the district court decided the motion for injunctive relief on statutory grounds. The court concluded that the final rules likely violated the APA because they were "not in accordance with" the ACA and were not required, and potentially not even authorized, by RFRA. Rather than issue a nationwide injunction, this time the court issued a preliminary injunction against enforcement in the plaintiff states alone.

On appeal, the Ninth Circuit ruled that "the district court did not err in concluding that the agencies likely lacked statutory authority under the ACA to issue the final rules," engaging in a textual analysis similar to the Third Circuit's in the Pennsylvania action. The appellate court also shared the district court's reservations that RFRA did not permit, let alone require, the Religious Exemption, citing three reasons. First, RFRA does not explicitly "delegate[] to any government agency the authority to determine violations and to issue rules addressing alleged violations." Second, the Religious Exemption "contradicts congressional intent that all women have access to appropriate preventative care." And third, a "blanket exemption for self-certifying religious objectors" was "at odds with the careful, individualized, and searching review mandate[d] by RFRA." While the Ninth Circuit affirmed the district court's decision, it emphasized that its "disposition [was] only preliminary," preserving "the status quo until the district court renders judgment on the merits based on a fully developed record."

While the Pennsylvania and California actions resulted in preliminary injunctions against the 2019 Final Rules, the Departments are also enjoined from enforcing the prior accommodation process in key respects as a result of a nationwide injunction issued by the U.S. District Court for the Northern District of Texas. In DeOtte v. Azar , the court certified two classes of objectors to the contraceptive coverage requirements. The "Employer Class" consisted of the following:

Every current and future employer in the United States that objects, based on its sincerely held religious beliefs, to establishing, maintaining, providing, offering, or arranging for: (i)Â coverage or payments for some or all contraceptive services; or (ii) a plan, issuer, or third-party administrator that provides or arranges for such coverage or payments.

The "Individual Class" consisted of the following:

All current and future individuals in the United States who: (1) object to coverage or payments for some or all contraceptive services based on sincerely held religious beliefs; and (2) would be willing to purchase or obtain health insurance that excludes coverage or payments for some or all contraceptive services from a health insurance issuer, or from a plan sponsor of a group plan, who is willing to offer a separate benefit package option, or a separate policy, certificate, or contract of insurance that excludes coverage or payments for some or all contraceptive services.

The court granted these classes summary judgment on their RFRA claims. Similar to the Eighth Circuit's pre- Zubik reasoning, the district court concluded with respect to the Employer Class that the court could not question the lead plaintiff's position "that the act of executing the accommodation forms is itself immoral." As for the Individual Class, the court accepted the plaintiffs' argument that purchasing plans that cover certain forms of contraception substantially burdens their religious exercise because it makes them "complicit" in the provision of contraception to which they object. Having found that the requirement imposed a substantial burden on these groups, the court then concluded that the requirement was insufficiently tailored. It reasoned that "[i]f the Government has a compelling interest in ensuring access to free contraception, it has ample options at its disposal that do not involve conscripting religious employers" or requiring the participation of objecting employees.

The district court permanently enjoined the government from enforcing the contraceptive coverage requirement against any member of the Employer Class to the extent of its objection. It further enjoined the government from preventing a "willing" employer or insurer from offering Individual Class members plans that do not include contraceptive coverage. In its final order specifying the terms of its nationwide, permanent injunction, the court included a "safe harbor" allowing the Departments to (1)Â ask employers or individuals whether they are sincere religious objectors; (2)Â enforce the contraceptive coverage requirement with respect to employers or individuals who "admit" they are not sincere religious objectors; and (3)Â seek a declaration from the court that an employer or individual falls outside the certified classes if the government "reasonably and in good faith doubt[s] the sincerity of that employer or individual's asserted religious objections." Before entering final judgment, the district court denied the State of Nevada's motion to intervene (supported by 22 additional states) in the litigation. Nevada appealed that denial and the court's injunction to the Fifth Circuit, which has stayed the appeal pending a decision in Little Sisters of the Poor .

Although the contraceptive coverage requirement remains in effect, the injunctions discussed above leave its implementation and enforcement in an uncertain posture. In combination, these rulings affect the regulatory frameworks that existed both before and after the promulgation of the expanded exemptions. The injunctions entered in the Pennsylvania and California actions do not bar entities that qualified for an exemption or an accommodation before the Religious or Moral Exemption IFRs from availing themselves of those options. Accordingly, it appears that (1)Â qualifying institutions (e.g., houses of worship) can still invoke the exemption for religious employers; and (2)Â "eligible organizations"âincluding closely held corporations as defined in the 2015 ruleâcan still use the accommodation process. However, as a result of the injunctions entered in DeOtte and other cases concerning the accommodation, the government is more limited in its ability to enforce the requirement against entities that choose not to notify their insurers or HHS of their objections. For example, regardless of an entity's compliance with the accommodation process, the government may not enforce the requirement against employers that object to providing or arranging for contraceptive coverage based on sincerely held religious beliefs, at least to the extent of those employers' objections. And the government may not prevent employers or insurers from offering plans without contraceptive coverage to individuals who oppose that coverage based on sincere religious beliefs.

A Supreme Court decision in Little Sisters of the Poor could clarify the validity of the 2019 Final Rules and the scope of the exemptions going forward. A ruling affirming the nationwide injunction or remanding with instructions to issue a narrower preliminary injunction would likely result in invalidation of the 2019 Final Rules in at least some states, which could prompt the Department to issue new regulations or guidance. In contrast, a ruling reversing the Third Circuit's decision and holding that the 2019 Final Rules do not violate the APA could pave the way for the expanded exemptions to take effect, leaving the question of further amendments to the federal contraceptive coverage requirement to the Departments and to Congress.

The litigation from Hobby Lobby to Little Sisters of the Poor reflects an ongoing public policy debate over the extent to which the government should accommodate entities with religious or moral objections to contraception, particularly when those accommodations may compromise their employees' or students' access to the full range of contraceptive services covered for other women. As a legal matter, a Little Sisters of the Poor decision could help to clarify whether RFRA allows or requires federal agencies to exempt entities from generally applicable laws that the agencies conclude will burden the religious exercise of those groups. The decision could also clarify whether, in making this determination, agencies may or must account for the interests of third parties, such as the women who otherwise would receive contraceptive coverage under the ACA. Other issues, such as the Departments' authority to exempt objecting universities or employers fromâin the words of one courtâ"existing and future " contraceptive coverage requirements through private settlement agreements, allegedly without the involvement of students or employees, may be the next phase of litigation.

Amicus briefs filed by some Members of Congress in Little Sisters of the Poor highlight differing views of what RFRA requires of federal agencies. In a brief filed by 161 Members of Congress, the amici argue that RFRA "is far more than a backward-facing statute enacted to address prior wrongs," setting "forth an affirmative mandate that, when carrying out official duties, each member of the federal government (including federal administrative agencies) ' shall not substantially burden a person's exercise of religion,' absent a compelling interest and use of the least restrictive means." In contrast, a group of 186 Members of Congress argue that "RFRA did not, and was not intended to, grant authority to federal agencies to craft exemptions to laws enacted by Congressâand thereby to negate Congress's own legislative intent." That brief further maintains that RFRA was not "intended to allow some individuals' religious liberties (or agencies' own perceptions about those religious liberties) to be used as a sword to limit the rights of others."

Because Little Sisters of the Poor involves a statutory rather than a constitutional challenge to the 2019 Final Rules, the Court's ruling is unlikely to preclude Congress from amending the coverage requirement, its exemptions, or RFRA itself, if Congress disagrees with the Court's decision. Individual Members of Congress have proposed a number of approaches over the years that would recalibrate the legal framework for contraceptive coverage, including those that would have the government take a more active role in facilitating access to contraception and others that would attempt to clarify the responsibilities of the government in accommodating those with genuine religious objections to a coverage requirement. Some lawmakers have proposed amendments to the ACA's preventive services coverage requirements "with respect to women" to explicitly require coverage of contraception. For example, a bill introduced in the last Congress would have amended the preventive services requirement in subsection (a)(4) to include "contraceptive care," including "the full range of [FDA-approved] female-controlled contraceptive methods" and "instruction in fertility awareness-based methods . . . for women desiring an alternative method." Other proposals, including a bill introduced in the 116th Congress, would direct the Departments to include certain forms of contraception at the regulatory level.

In general, legislation specifying that contraception is among the required preventive health services may help tip the scales on the government interest prong of the RFRA analysis toward a compelling interest in providing cost-free coverage for contraception through employer-sponsored health plans. In Hobby Lobby , the Supreme Court assumed that the government had a compelling interest in "guaranteeing cost-free access" to the objected-to contraceptive methods. However, the majority noted that "there are features of ACA that support" the opposing view, in particular, the inapplicability of the requirement to grandfathered plans. The Departments went a step further in the 2019 Final Rules, suggesting that the government did not have a compelling interest in contraceptive coverage because Congress left the decision of whether to include it to the agencies. Codifying the requirement may respond to arguments of this nature. However, proposals to expand contraceptive coverage, standing alone, could still be susceptible to challenge by religious objectors who might still assert that laws mandating coverageâeven if they include some exemptionsâimpose a substantial burden on their religious exercise and are not narrowly tailored under RFRA.

RFRA applies by default to all federal statutes adopted after its enactment (November 16, 1993) "unless such law explicitly excludes such application by reference to this Act." Some legislation concerning contraception includes language excepting those provisions from RFRA or excluding RFRA claims. A pair of bills introduced in the wake of Hobby Lobby would have prohibited an "employer that establishes or maintains a group health plan for its employees" from "deny[ing] coverage of a specific health care item or service . . . where the coverage of such item or service is required under any provision of Federal law or the regulations promulgated thereunder," notwithstanding RFRA. Lawmakers have also proposed amendments to RFRA itself. Similar bills introduced in both chambers this Congress would provide that RFRA's strict scrutiny standard does not apply to certain types of laws, including "any provision of law or its implementation that provides for or requires . . . access to, . . . referrals for, provision of, or coverage for, any health care item or service."

Laws that make RFRA inapplicable to the contraceptive coverage requirement would not foreclose challenges based on the Free Exercise Clause. However, as previously noted, Free Exercise claims are potentially subject to a less stringent standard of review than RFRA-based objections because of the Supreme Court's holding in Employment Division v. Smith that the Free Exercise Clause typically does not require the government to provide religious-based exemptions to generally applicable laws.

Other approaches to contraceptive coverage have focused on accommodating the interests of religious objectors. Some courts and objecting employers have suggested that Congress could avoid or minimize burdens on religious objectors by funding separate contraceptive coverage or expanding access to programs that provide free contraception instead of requiring employers to provide this coverage. Along these lines, the Departments separately issued a rule authorizing the directors of federally funded family planning projects to extend contraceptive services to some women whose employers do not provide coverage for such services because of a religious or moral exemption. While the efficacy of such proposals in maintaining or increasing access to contraception is beyond the scope of this report, alternatives that do not involve requiring private parties to provide contraceptive coverage or otherwise take an action that results in the provision of coverage by a third party could reduce the potential for both RFRA and Free Exercise challenges.

Other proposals seek to codify exemptions to the contraceptive coverage requirement for entities with religious or moral objections. For example, the Religious Liberty Protection Act of 2014 would have prohibited HHS from "implement[ing] or enforc[ing]" any rule that "relates to requiring any individual or entity to provide coverage of sterilization or contraceptive services to which the individual or entity is opposed on the basis of religious belief." That bill also would have included a "special rule" in the ACA stating that a "health plan shall not be considered to have failed to provide" the required preventive health services "on the basis that the plan does not provide (or pay for) coverage of sterilization or contraceptive services becauseâ(A) providing (or paying for) such coverage is contrary to the religious or moral beliefs of the sponsor, issuer, or other entity offering the plan; or (B) such coverage, in the case of individual coverage, is contrary to the religious or moral beliefs of the purchaser or beneficiary of the coverage." Enacting statutory exemptions to the contraceptive coverage requirement might avoid future litigation over the Departments' authority under the ACA to create categorical exemptions. In addition, broader exemptions could reduce the potential for RFRA or Free Exercise challenges. At the same time, they could increase the prospect of Establishment Clause challenges like those brought in response to the expanded exemptions in the 2019 Final Rules. While the Supreme Court has said that "there is room for play in the joints" between the Free Exercise Clause and the Establishment Clause, it remains to be seen whether broad accommodations like the Religious Exemption and the Moral Exemption fit comfortably in that space.

Little Sisters of the Poor marks the fourth Supreme Court term in six years in which the Court has granted certiorari in a dispute about the federal contraceptive coverage requirement. During that time period, the Departments promulgated six different rules concerning the requirement, a change in presidential administration marked a turning point in the Departments' RFRA calculus, and the Supreme Court underwent its own changes with the appointment of two new Justices. While the Court has the next opportunity to weigh in on the coverage requirement in Little Sisters of the Poor , Congress and the executive branch continue to have a role in defining the interests at stake and the balance to be achieved in the years ahead.