Friday, January 10, 2014

An explanation of the issue in the Sisters of the Poor case.

Mirror of Justice explains:

This misunderstanding was unfortunate not only because it was incorrect, but also because the incorrect idea the Little Sisters are exempt or exemption-eligible has spread. Both the initial incorrect assertion and its spread are understandable, however, because the government has advanced this incorrect idea before the Supreme Court. 
To be clear: the Little Sisters’ case exists only because their homes are nonexempt organizations under the current regulations. The government has offered what it calls an accommodation. But a key legal feature of this accommodation is that it offers nonexempt organizations an alternative path for compliance rather than an avenue for exemption. This is plain on the pages of the Federal Register, in which the government explains that “an eligible organization is considered to comply with [the ACA’s preventative services for women provision] and the companion provisions in ERISA and the Code if it provides to all third party administrators with which it or its plan has contracted a copy of its self-certification.” Nonexempt organizations who avail themselves of the accommodation remain nonexempt, but they are no longer subject to penalties because they have complied to the government’s satisfaction.

Reporters and commentators on the case may be forgiven for thinking that the government’s regulations actually provide that signing and providing the government-required form counts as opting for an exemption rather than as complying. In its response to the Little Sisters’ emergency application at the Supreme Court, the government has characterized the form at the center of the accommodation for nonexempt groups differently from its regulations—as securing an exemption. The government has asserted, for instance, that “with the stroke of their own pen, applicants can secure for themselves the relief they seek from this Court—an exemption from the requirements of the contraceptive coverage provision.” Resp. at 21 (emphasis added). This matches characterizations elsewhere in the government’s response. See Resp. at 2 (asserting that “the employer-applicants here are eligible for religious accommodations set out in the regulations that exempt them from any requirement ‘to contact, arrange, pay, or refer for contraceptive coverage’”) (quoting 78 Fed. Reg. 39,874, 39,879 (July 2, 2013) (emphasis added)); Resp. at 3 (asserting that this case is “about whether a religious objector can invoke RFRA to justify its refusal to sign a self-certification that secures the very religion-based exemption the objector seeks”) (emphasis added); Resp. at 30 (“[A]pplicants’ religious exercise is not substantially burdened by the requirement that they sign the certification form expressing their religious objection to contraceptive coverage in order to exempt themselves from the contraceptive-coverage provision.”) (emphases added); Resp. at 32 (setting forth allegedly analogous situations in which religious objector need only “sign a certification form in order to secure the religion-based exemption he sought”)(emphasis added).

The distinction between an exemption (which is available to churches and their integrated auxiliaries, but not the Little Sisters of the Poor’s homes) and an accommodation (which is available only to certain nonexempt religious nonprofits) is central to the regulatory structure erected by the Administration. Interestingly, the government’s filings in the lower courts drew a clearer distinction between these two categories of exempt employers and nonexempt but accommodated employers. One wonders how much of the change at the Supreme Court is due to a change in the lawyers doing the writing and how much is due to the lower court analysis.

The distinction between exempt and nonexempt but accommodated employers is not merely semantic. The express purpose of distinguishing the two has been to ensure that employees of the accommodated but nonexempt employers (in contrast with employees of exempt employers) receive the required contraceptive coverage in connection with their employers’ plans. The government declined to extend the religious employer exemption to groups like the Little Sisters of the Poor, but instead created an alternative path to compliance, because it wanted its rules for these organizations to serve “two important policy goals.” 78 Fed. Reg. 39,872. Only one was religious accommodation. The other was to “ provide access to contraceptive coverage without cost sharing.” Id.

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