Litigation Update: ACA Contraceptive Mandate

March 25, 2013

Authored by: benefitsbclp

Courts have recently seen a flurry of activity from for-profit corporations challenging the Affordable Care Act’s contraceptive mandate, which became effective January 1. These employers claim providing female employees with certain types of FDA-approved contraceptives violates the owners’ right to free exercise of religion.

Do for-profit corporations have a right to free exercise of religion, at least with respect to providing controversial contraceptives to employees? While we’re waiting for that issue to make its way to the Supreme Court, which it most certainly will, federal circuit courts are divided with respect to issuing temporary injunctions until the substantive issues are decided. The Supreme Court weighed in on the Hobby-Lobby case in December 2012, denying its request for an injunction while the company’s general challenge was pending, but it did not address the underlying, controversial issues, such as whether a corporation can even exercise religion in the first place. Circuits courts are left facing a number of injunction requests and the results vary by circuit. The Third, Sixth, and Tenth Circuits have generally denied injunction requests, while the Seventh and Eighth Circuits seem open to issuing temporary injunctions. See Conestoga Wood Specialities Corp. v. Sebelius (3d Cir., February 7, 2013); Autocam Corp. v. Sebelius (6th Cir., December 28, 2012); Grote v. Sebelius (7th Cir., January 1, 2013); Annex Med. v. Sebelius (8th Cir., February 1, 2013); Hobby Lobby Stores, Inc. v. Sebelius (10th Cir., December 20, 2012; aff’d December 26, 2012).

The general standard for granting a temporary injunction in this type of case is whether the plaintiff has a reasonable likelihood of success on its claim, here, the standard being whether the mandate violates an employer’s right to free exercise of religion under the First Amendment or Religious Freedom Restoration Act. Since no circuit court has considered these claims, whether an employer has a reasonable likelihood of success is unclear. One of the key differences between circuits is whether courts accept at face value an employer’s claim that the mandate constitutes a substantial burden on its right to free exercise of religion or whether the court should delve deeper and decide if the employer has a reasonable likelihood of success on the underlying claims. The Autocam court pointed out that the divergence of district courts on this issue establishes the possibility of success. However, since the employer did not demonstrate more than a possibility of success, the court denied the injunction. The Annex Med. court, however, stated that an employer shows a substantial burden on its right to free exercise of religion simply by saying so, and thus granted the injunction.

Topping off the debate, a bill to repeal the portion of the mandate requiring employers to provide emergency contraception was introduced in the U.S. House of Representative on March 5. One of the sponsors argued that Americans were being forced to choose between religious convictions or breaking the law. While the legislation has little chance of being passed, it demonstrates that the contraceptive mandate is still an important issue for many employers and the debate is unlikely to be settled until the Supreme Court addresses the complex, underlying issues.

We thank our Intern, Will Kim, for his help in preparing this post.