CBEBT and Little Sisters of the Poor Lawsuit Update

Yesterday Christian Brothers Services issued an update on the class action lawsuit that it filed last Fall. It is the same lawsuit in which the Little Sisters of the Poor are plaintiffs. Because a large number of RCRI's subscribers participate in the Christian Brothers Employee Benefit Trust (CBEBT) and have called to ask how the recent rulings affect them, we are re-publishing the informative email so that our members are aware of what effect the recent Supreme Court rulings in the case have on those who participate in the CBEBT.

February 11, 2014

Update on Class Action Lawsuit Challenging the Contraceptive Mandate

 

As many of you may know, in September 2013, Christian Brothers Services (CBS), together with a number of participating employers in the Christian Brothers Employee Benefit Trust (the CBEBT), filed a class action lawsuit in federal court challenging the application of the contraceptive mandate under the Affordable Care Act (ACA) to participating employers in the CBEBT. This lawsuit sought to prohibit the government from applying the mandate to participating employers in the CBEBT, or applying any penalties for failing to comply with the mandate.

On December 28, 2013 the federal trial judge assigned to our case denied our request for a preliminary injunction pending the resolution of the case. We ultimately appealed that ruling to the United States Supreme Court and were granted a temporary injunction by Justice Sotomayor on December 31, 2013. On January 24, 2014, the U.S. Supreme Court granted an injunction to the employer applicants so long as they inform the government that they are "are non-profit organizations that hold themselves out as religious and have religious objections to providing coverage for contraceptive services." That injunction prevents enforcement of the contraceptive mandate against those employer applicants until the 10th Circuit Court of Appeals rules on our request for an injunction.

WHAT THIS MEANS FOR EBT MEMBERS

While the case is pending before the 10th Circuit Court of Appeals, Catholic employers participating in the Christian Brothers Employee Benefit Trust will not be required to provide or arrange for contraceptive coverage.

Because the government agreed at the outset of the case that any preliminary injunction for the named plaintiffs would extend to the entire class, the Supreme Court's order affects nearly 400 Catholic organizations throughout the United States that provide health benefits for their employees through the Trust that are not already exempt from the contraceptive mandate. Our attorneys are currently in discussions with government officials as to exactly what employers participating in the Trust need to do to be covered by the Supreme Court's injunction. We will let you know if the government takes the position that there is anything else that you need to do in order to be protected during the pendency of this case.

CBS is dedicated to providing you with current and up-to-date information on this issue. On February 27, 2014 at 1:00 p.m. Central time, we will be hosting a webinar entitled, "Healthcare Reform Update." Also, within the next few weeks we will be releasing a white paper entitled, "Remaining Faithful: Adhering to Catholic Tenets While Abiding by the Affordable Care Act (ACA)" which will be posted to our website.

CBS supports the basic elements of the ACA and is well aware that dimensions of health care in the United States need improvement. However, we were brought to this action by the federal government, which made numerous exemptions and accommodations as ACA was being implemented, but refused to exempt CBEBT plan participants. Through the Church Alliance, Christian Brothers Services had spent three years attempting to work with government officials on these issues as the regulations under the ACA were being drafted, but the government chose to define a "religious employer" narrowly and to target those employers who do not match their cramped definition. We, together with our fellow litigants, are on the front line in this battle to defend religious liberty for ourselves and our participants.

If you have any questions, please contact John Airola at 800- 807-0100 x 2450 or john.airola@cbservices.org.

Thus, participants in the CBEBT which are not classified as "religious employers" but rather as "eligible organizations" (eligible for an accommodation) should know that they are not required to provide contraception, sterilization, and abortion-inducing drugs to their employees. The injunction protects them (for now) from the $100 per day per employee fine that the ACA imposes upon employers who do not cover all the essential health benefits and are not classified as a religious employer or as eligible for an accommodation.

Indeed, even though a Catholic employer that uses CBEBT may not have an objection to these services or products, Christian Brothers is seeking through this lawsuit to protect its own right to be recognized as a religious organization and to not be required to supply these items. Normally, in situations where there is an accommodation, the insurance company must provide these items to the employees in a separate arrangement. Since Christian Brothers is also a Catholic employer, it also is seeking the same right of refusal. It does not qualify under current ACA provisions as a religious employer nor as eligible for an accommodation.

We will continue to follow the developments in this lawsuit.

EBSA Form 700 and the Contraceptive Mandate

Many religious institutes are reporting that they have received a notice from their insurance companies or their third party administrators asking them to indicate a choice or sign a form immediately with regard to their health care coverage. The form most often being asked about is the EBSA Form 700. Note that not every organization that claims to be religious needs to sign that form.

This request from insurers is coming now because insurance providers need to know whether they are on the hook under the Affordable Care Act (ACA) for providing contraceptives, sterilization, and abortion-inducing drugs for employees of your organization. As you hopefully know, the ACA requires all insurance coverage to provide "essential health benefits," which includes "women's preventive care." This is where the objectionable coverage for contraceptives, sterilization, and abortion-inducing drugs comes into play, which is the subject of dozens of lawsuits across the United States. We at RCRI have held two webinars on the subject this year to inform our members of what is happening with the "contraceptive mandate," as it has come to be known.

Back to the form that you may be asked to sign by your insurance company. There are two main ways that you may be exempt from having to provide these women's preventive services. First is if your plan is grandfathered. You should know if this applies to your employee plan already, and your insurance company should know, so I won't go into any detail on grandfathered plans here.

The second way to be exempt is if you qualify as a either a "religious employer" or as an "eligible organization." (Some would say this is two ways because they have different results.) The final regulations on the contraceptive mandate define a "religious employer" as "an employer that is organized and operates as a nonprofit entity and is referred to in section 6033(a)(3)(A)(i) or (iii) of the Code." Section 6033(a)(3)(A)(i) and (iii) of the Code refers to churches, their integrated auxiliaries, and conventions or associations of churches, as well as to the exclusively religious activities of any religious order. The italicized  phrases are the ones that are most likely to apply to religious orders and some of their sponsored ministries.

The religious institute itself most likely will qualify as a "religious employer." However, any of its ministries beyond those activities that are "exclusively religious" must be examined to see if they qualify as "integrated auxiliaries" of a church (in this case, the Catholic Church). A full explanation of what an integrated auxiliary is is beyond the scope of this blog post, but religious institutes should familiarize themselves with the criteria. (It is a similar analysis to the one conducted to determine whether a ministry is required to file a Form 990, and often hinges on whether the organization is "internally supported.") [Note: Donna Miller can provide more on this topic and how to conduct an analysis if you request it from her at dmiller@trcri.org.]

If your organization does not qualify as a "religious employer" and is not exempt outright from having to provide the contraceptive coverage, you may be an "eligible organization"-- that is, qualified for an "accommodation." This means that you do not have to pay premiums for the employees to be covered for contraception, sterilization and abortion-inducing drugs, but your insurance provider or third-party administrator DOES have to cover these items for your employees.

Although intended to be a solution to the outcry that the original definition religious employer was too narrow, this provision remains controversial for many employers who have religious objections. You can read a letter entitled "Unacceptable" dated February 10, 2012, signed by dozens of Catholic university personnel and multi-denominational theologians at this link. This letter summarizes the continuing objection that these individuals and organizations have over the amended contraceptive mandate final rules. A statement of similar content was also made by the USCCB this past summer, and that statement can be found here. On the other hand, despite its initial objection to the narrow definition of "religious employer" contained in the proposed rules, Catholic Health Association announced that it could "live with" the accommodation provision in the amended rules and would not challenge the mandate any further. Its statement can be found at the end of this NCR article.

So what is an "eligible organization"?

[A]n eligible organization is an organization that: (1) opposes providing coverage for some or all of the contraceptive services required to be covered [...] on account of religious objections; (2) is organized and operates as a nonprofit entity; (3) holds itself out as a religious organization; and (4) self-certifies that it satisfies the first three criteria (as discussed in more detail later in this section). (https://www.federalregister.gov/articles/2013/07/02/2013-15866/coverage-of-certain-preventive-services-under-the-affordable-care-act#h-13)

So, in order to be an eligible organization, your organization must oppose the coverage requirements due to religious objections, be a nonprofit, hold yourself out as a religious organization, and sign certification to that effect. Notice that this is the only one of the two provisions (religious employer and eligible organization) that requires a certification to be signed. However, it is quite understandable that insurers and third-party administrators would request that religious employers also sign a form indicating their status so that they can justify not providing coverage for the objectionable women's services.

In Summary, the EBSA Form 700 is to be signed by organizations that qualify as an "eligible organization" (eligible for an accommodation). Religious employers should not sign the same form because it indicates that an accommodation should be made for the employees, and no such accommodation is required under the contraceptive mandate. An adapted Form 700 can be drafted using language that expresses that a complete exemption from the contraceptive mandate, rather than an accommodation, is being claimed.

Confusion Surrounds Implementation of ACA

If you are finding yourself confused over what lies ahead as we quickly approach deadlines in the implementation of the Affordable Care Act, you are not alone. The employer mandate has been delayed for a year, but not the individual mandate. People all over the country are expressing mixed emotion and mixed levels of understanding about what to expect.

Recently at our National Conference in Anaheim we had two experts speak at our pre-Conference workshop on the ACA. Many religious institutes remain concerned over the requirement that essentially all health insurance policies (for men and for women alike) cover women's preventive services that include contraceptives, sterilization, and abortion-inducing drugs. We have a webinar scheduled for mid-November that will address in part the latest on the status of the contraceptive mandate and the ongoing litigation in courts across the United States. Watch for emails and check our website in the next few weeks when we open the webinar for registrations.