Obama administration takes Supreme Court hint

Responding to a Supreme Court rebuke, the Obama administration today announced its promised revisions to the many-times revised regulations for nonprofits objecting to the contraceptive and abortifacient mandate. As anticipated, the new regulations follow the guidelines of the recent Supreme Court order granting Wheaton College an injunction against the mandate.

Under the new regulations, which go into effect immediately, an objecting nonprofit can inform the Department of Health and Human Services (HHS) in writing that it objects to the mandate and be absolved from arranging coverage. But the nonprofit must include the name and contact information for its insurer. HHS would then order the nonprofit’s insurer to provide the objectionable drugs to employees at no cost to the nonprofit. If the nonprofit is self-insured, HHS would order the group’s third-party administrator to provide the drugs. That scenario becomes more complicated because all the funding would come from the nonprofit, since it self-insures. The regulations have a complicated process for funding the drugs for self-insured nonprofits.

Under the previous regulations, nonprofits informed their own insurer directly of their objection and authorized the insurer to provide the objectionable drugs. Wheaton College and other nonprofits objected to participating in the process that would ultimately make the drugs available. The Supreme Court agreed that Wheaton did not need to file the form with its insurer, saying it could instead inform HHS of its objection and that HHS was free to arrange provision of the drugs itself. Though orders are unsigned, it appeared that six of the justices, including Justice Stephen Breyer, supported it. The three female justices penned a dissent. The court underlined that its order was not a ruling on the merits of the nonprofit cases, but the federal government took the hint.

HHS also announced a proposal in response to the Supreme Court’s Hobby Lobby ruling to allow closely held corporations who object to the mandate to use the same accommodation process as objecting nonprofits. The Supreme Court in its decision mentioned the nonprofit approach as less restrictive to the religious freedom of the owners of Hobby Lobby and Conestoga Wood.

The new regulation likely will divide those nonprofits that object to the mandate. Some religious freedom lawyers like Carl Esbeck at the University of Missouri School of Law believe this approach is all nonprofits can ask for, legally: They have the right to register their objection to the government, and then the burden is on the government to arrange coverage. Others, like Robert Muise at the American Freedom Law Center, which is handling Priests for Life’s mandate case, think the nonprofits should have a complete exemption from the mandate, like churches do.

But the major litigators were demure on Friday.

“We look forward to reviewing the new rule and its implications,” said the Becket Fund’s Lori Windham, the firm's lead attorney on the mandate cases.

Greg Baylor, an attorney at Alliance Defending Freedom, which is also handling a large number of mandate cases, was equally cautious.

“We will consult with our clients to determine how the government’s actions affect their sincere objections to the mandate,” he said, adding that “the best way of respecting freedom for everyone” would be to extend the full exemption churches received to nonprofits and religious business owners.