The Center for Law & Religious Freedom

HHS Mandate in the Executive Branch

August 2011 proposed definition of religious employer 

The Patient Protection and Affordable Care Act of 2010 (“PPACA”) requires all employers to provide employees with insurance coverage of certain drugs and procedures identified as women’s “preventive care” with no cost sharing.  Congress left to HHS the task of identifying the specific drugs and procedures to be deemed “preventive care.”  

July 2011:  HHS announces that “preventive services” include, inter alia, all FDA-approved contraceptives (including Plan B and ella), sterilization procedures, and reproductive education and counseling.  Many persons consider Plan B and ella to be abortifacients.

August 2011:  Suspending normal rulemaking procedures, HHS announces an interim final rule, now known as the “HHS Mandate,” that requires employers to provide the above drugs and procedures without cost sharing.  The Mandate includes an extraordinarily limited exemption for a small set of “religious employers.”  HHS proposed an exemption for a small subset of religious employers.  To qualify, a religious employer must:  1) inculcate values as its purpose; 2) primarily employ members of its own faith; 3) serve primarily members of its own faith; and 4) be a nonprofit organization as defined in Internal Revenue Code § 6033(a)(1) or § 6033(a)(3)(A)(i) or (iii).  Interim Final Regulation, 76 Fed. Reg. 46621 (Aug. 3, 2011), finalized 77 Fed. Reg. 8725, 8729 (Feb. 15, 2012). In releasing the rule in August, 2011, HHS informed the public that the rule was too important to receive comments on.

This definition of “religious employer” arbitrarily redefined the majority of religious employers to be nonreligious employers.  Religious colleges failed to qualify as “religious employers” under the Mandate and even many houses of worship seemed not to fit the Mandate’s procrustean bed.  For example, many religious employers did not qualify as I.R.C. § 6033 organizations.  Many hire outside their faith community for a variety of religious reasons.  And many choose not to “serve primarily members of [their] own faith,” but instead concentrate their mission on serving others regardless of their faith.  See Part III.A, infra.

Diverse religious groups, including some amici, immediately informed HHS that its proposed definition of “religious employer” was too narrow.  For example, some amici joined with forty-four Protestant, Jewish, and Catholic organizations on a letter to the Administration that explained why the religious exemption was too narrow.

January 2012 Criticism of Diverse Religious Groups & Temporary Safe Harbor 

January 2012:  In response to the sustained outcry from the Catholic, Evangelical Christian, and Orthodox Jewish communities against the Mandate and its too-narrow definition of “religious employer,” on January 20, 2012, HHS Secretary Sebelius announces that religious employers who do not qualify for the exemption will have an additional year to come into compliance with the Mandate, if they qualify for a “temporary enforcement safe harbor” -- but only if the religious employer takes affirmative action to certify that it meets all of the following criteria:

1)  It is organized and operated as a non-profit entity;

2)  It has not provided contraceptive coverage as of February 10, 2012, because of its religious beliefs; 

3) It provides notice to its employees that contraceptive coverage is not provided; and 

4)  By the first day of its plan year, it self-certifies that the first three criteria have been met. 

A religious employer could invoke the “temporary enforcement safe harbor” only if it:  1) was organized and operated as a non-profit entity; 2) had not provided contraceptive coverage as of February 10, 2012, because of its religious beliefs; 3) provided notice to its employees that contraceptive coverage would not be provided for the plan year beginning on or after August 1, 2012; and 4) self-certified by the first day of its plan year that the first three criteria had been met.  The government’s announcement of this “temporary enforcement safe harbor” merely intensified many religious employers’ objections.  The government seemingly had calculated that religious employers would abandon their religious convictions if given an additional year to ponder their plight.  

February 2012 Religious Employer Definition 

Over the sustained protest of wide swaths of the religious community, on February 15, 2012, the restrictive definition of “religious employer” became law.  77 Fed. Reg. 8725, 8730 (Feb. 15, 2012).  To be a religious employer, an organization must:  1) inculcate values as its purpose; 2) primarily employ members of its own faith; 3) serve primarily members of its own faith; and 4) be an organization as defined in Internal Revenue Code § 6033(a)(1) or § 6033(a)(3)(A)(i) or (iii).  Interim Final Regulation, 76 Fed. Reg. 46621, 46626 (Aug. 3, 2011), codified at 45 C.F.R. § 147.130(a)(1)(iv)(B).   However many religious employers do not qualify as I.R.C. § 6033 organizations and many hire outside their faith community for a variety of religious reasons and/or choose not to “serve primarily members of [their] own faith,” but instead concentrate their mission on serving others regardless of their faith.  

With this definition, the government arbitrarily transformed the majority of religious employers into nonreligious employers.  As the government acknowledged, many quintessential religious employers, such as religious schools, may no longer qualify as “religious employers” under the Mandate.  77 Fed. Reg. 16501, 16502 (Mar. 21, 2012) (implicitly acknowledging that some religious schools may not be covered by the Mandate’s definition of “religious employer”).  Even many houses of worship failed to fit the Mandate’s procrustean bed.  Advance Notice of Proposed Rulemaking (hereinafter ANPRM), 77 Fed. Reg. 16501, 16502 (Mar. 21, 2012).

The President also announced that HHS will propose, at a future date, an undefined accommodation for some additional, unspecified religious employers.  The Administration claims that religious employers’ insurance issuers, or third-party administrators, will furnish free contraceptive coverage to employees without any cost to the employer or the employees.  

Advanced Notice of Rulemaking 77 Fed. Reg. 16501 (March 21, 2012)

In March of 2012, the Administration issued an Advance Notice of Proposed Rulemaking that put forth no specific accommodation language but sought comments on how to structure an accommodation that provides free contraceptives to employees of religious employers without any cost sharing or cost to the employer.  The ANPRM asks two basic questions: 1) who among religious employers should be given an accommodation, and 2) which third-party should be required to pay for the accommodation.  77 Fed. Reg. 16501 (Mar. 21, 2012). Contemporaneous with announcement of the Temporary Enforcement Safe Harbor, the government announced that it would propose, at some unknown future time, a possible accommodation for some of the religious employers excluded from the Mandate’s definition of “religious employer.”  

By recognizing religious liberty protections for “churches,” yet denying the same religious liberty protection to religious charities, the Mandate’s definition of “religious employer” creates an unprecedented two-class bifurcation among religious organizations.  In a letter to the HHS Secretary, one hundred twenty-five Christian organizations, mostly Protestant, explained their objections to the government’s attempt to divide the religious community into two classes:  “churches – considered sufficiently focused inwardly to merit an exemption and thus full protection from the mandate; and faith-based service organizations -- outwardly oriented and given a lesser degree of protection.”  The letter continued:

[B]oth worship-oriented and service-oriented religious organizations are authentically and equally religious organizations.  To use Christian terms, we owe God wholehearted and pure worship, to be sure, and yet we know also that ‘pure religion’ is ‘to look after orphans and widows in their distress’ (James 1:27).  We deny that it is within the jurisdiction of the federal government to define, in place of religious communities, what constitutes both religion and authentic ministry. 

May 2012:  Beginning in November, some Catholic and Evangelical institutions and individuals file lawsuits seeking injunctive relief from the Mandate.  The  number of lawsuits cascades in May when numerous Catholic organizations simultaneously file a dozen lawsuits nationwide.  By August, 26 separate lawsuits against the Mandate have been filed in federal court.  

June 2012:  The United States Supreme Court upholds the constitutionality of the PPACA’s Individual Mandate as a legitimate exercise of Congress’ power to tax.  The ruling does not address the HHS Mandate’s constitutionality.

On June 19, 2012, CLS submitted a comments letter to HHS on 77 Fed. Reg. 16501 

Mandate Takes Effect (August 1, 2012)

Beginning August 1, 2012, the Mandate takes effect for most religious organizations.  A religious employer may avoid the Mandate only if it 1) has a grandfathered plan, 2) qualifies for the too-narrow exemption for religious employer, or 3) qualifies for the temporary safe harbor.  

On August 15, 2012 HHS releases “revised” guidance on the “temporary enforcement safe harbor,” which successfully moots the Wheaton College challenge to the Mandate.  The revised guidance extends the temporary enforcement safe harbor to otherwise qualified “non-profit organizations with objections to some but not all contraceptive coverage,” a matter which had been in some doubt.  It also extends temporary protection to group health plans that took some action to try to exclude or limit contraceptive coverage before February 10, 2012, even if unsuccessful.

78 Fed. Reg. 8456, 8467 (Feb. 6, 2013).

On February 6, 2013, the government announced a proposed rule that would amend the hastily codified definition of “religious employer” by dropping three of the four criteria. 78 Fed. Reg. 8456.  A religious organization would not need to inculcate values, or hire or serve primarily those of its own faith, if it was not required to file a Form 990 under I.R.C. §§ 6033(a)(1) or § 6033(a)(3)(A)(i) or (iii).  Only a church, association or convention of churches, integrated auxiliary, or religious order’s religious activities could qualify for the amended religious employer exemption.   

The government also announced that it would offer non-exempted, non-profit religious employers an “accommodation” by which the objecting non-profit religious organization tells its insurers and third party administrators that they object to drugs and the third-party insurance company or administrator would be compelled, at least in theory, to bear the economic costs of contraceptives coverage for religious organizations’ employees, without any cost-sharing by the employees or the employers.  78 Fed. Reg. 8456.  But the NPRM makes it obvious that the government has no credible plan for providing contraceptives coverage for which employers do not pay.  Id. at 8462-63.  The government’s insistence that religious organizations are not buying objectionable insurance simply because the government posits contraceptive coverage to be costless does not accord with economic or legal reality.  Nor did the NPRM realistically explain how self-insured religious employers can provide the coverage without paying for it.  Id. at 8463-64.  The proposed amendment would protect only religious ministries that are integrated auxiliaries of a church. It was in response to the HHS Mandate as well as the limited exemption that religious employers as well as churches and non-profits and for-profits with religious objections filed federal suits in the various circuits.  A record more than 400,000 comments are submitted to the government’s proposed rule. 

On April 8, 2013, CLS submitted a comments letter to HHS on 78 Fed Reg 8456.  Click here to read it

78 Fed. Reg. at 39,886 (July 2, 2013).

On July 2, 2013 the government issued a regulation that narrows the “religious employer” exemption even further.  Under the February 2012 exemption, a church could plausibly include church-affiliated religious organizations, such as schools and other ministries that did not otherwise qualify for the exemption, in the church’s insurance plan.  77 Fed. Reg. 16501, 16502.  But the July 2013 regulation foreclosed that option by restricting the exemption solely to the qualifying religious employer and not to any affiliated organizations that are covered by its plan.  78 Fed. Reg. at 39,886 (July 2, 2013); see also 78 Fed. Reg. at 8456, 8467 (Feb. 6, 2013) (“This approach would prevent what could be viewed as a potential way for employers that are not eligible for the accommodation or the religious employer exemption to avoid the contraceptive coverage requirement by offering coverage in conjunction with an eligible organization or religious employer through a common plan.”)

To justify its differential treatment between churches and other religious organizations, the government asserts that employees of religious non-profit organizations are less likely to share their employers’ religious beliefs than are the employees of a church.  Yet no evidence is given for this bald assertion.  Given the pay differential between most religious non-profits and other employers, it seems highly likely that employees of religious non-profits share their employers’ religious beliefs.  That is, persons choose to work for religious non-profits because they agree with their employers’ mission and are willing to make the necessary financial sacrifices.  For example, teachers at religious schools often accept a lower salary compared to their public school counterparts in order to teach in a school whose mission aligns with their religious beliefs.  

Under the Mandate, religious organizations that ease government’s burden by providing food, shelter, education, and health care for society’s most vulnerable are rewarded in return by a government mandate that assails their conscience rights.