Friday morning, the Department of Health and Human Services released the final version of the regulations requiring employers to provide insurance that includes coverage for contraceptive and abortive drugs and sterilization procedures. The rules, which are part of the implementation of Obamacare’s employer mandate, have of course been a focus of controversy for quite a while, as they put many religious employers in an impossible situation, and would seem to violate the Religious Freedom Restoration Act and to fly in the face of America’s tradition of religious toleration.
This final version does not involve any meaningful changes to the circumstances in which the rule would put religious employers. The details will, I’m sure, be thoroughly scoured in the coming days, but in my reading of the rule at this point, the only two changes that I can see actually make things marginally worse. They are not, I think, the result of the administration intentionally trying to make things even worse for religious employers (and for the administration’s own attorneys in federal court), but of the fact that two of the ways in which the last version of the rule tried to mask its effects on religious employers have turned out not to be tenable.
First, the last version of this rule, which was released in February in the form of a Notice of Proposed Rulemaking, suggested that insurers working on behalf of employers who objected to the contraceptive and abortive coverage would provide employees with a separate insurance policy exclusively for that coverage, which would have no premiums, no co-pays, and no deductibles and would cover those services. That way, they reasoned, people could pretend that this separate insurance policy had nothing to do with the employer-provided coverage (even though, of course, the separate insurance policy would not have been provided if not for the employer-provided coverage). But even that, it seems, cannot be done.
The final rule states that HHS has concluded that this procedure wouldn’t be practical because state laws could not treat such policies as enforceable contracts and because, in places where employees might live in one state but work in another, the insurer would effectively have to provide each employee with individual coverage (governed by the person’s state of residence) in addition to the group coverage (governed by the employer’s state of licensure) that the employer offers them, which is not generally possible. This means that part of the fig leaf that the administration wanted to create will be abandoned. HHS tries to present its alternative to this as unproblematic:
These final regulations achieve the same end by requiring that a health insurance issuer providing group health insurance coverage in connection with a group health plan established or maintained by an eligible organization assume sole responsibility for providing separate payments for contraceptive services directly for plan participants and beneficiaries, without cost sharing, premium, fee, or other charge to plan participants or beneficiaries or to the eligible organization or its plan.
In other words, the insurer is required to cover contraceptive and abortive drugs through the same policy that covers everything else in the employer-provided plan, but just not list that coverage where it lists everything else and draw the money it uses to pay claims for the disputed services from a separate account (for which insurers would be reimbursed by getting discounts on the fees they have to pay to participate in Obamcare’s exchanges).
The mechanism is based on the administration’s apparent assumption that religious people approach their religious obligations the way HHS lawyers approach the law. So the idea is to create a financial chain of custody so that employers inclined to dance on the head of a pin could imagine their money was not being used to pay for contraception and abortion-drug coverage. But of course, even for them the problem would go far beyond money. The employer’s decision to provide health coverage would be the only reason the employee would get the abortive and contraceptive coverage—so the employer would face a choice between expressly facilitating that coverage or denying workers health insurance (and paying a large fine). The various fig leaves covering assorted financial transactions cannot mask that simple fact, and this final rule has even fewer of those fig leaves than the last version. Even for those people desperately searching for a technicality to avoid a conflict between religious opposition to contraception or abortion and this mandate, this just offers nothing.
The second change has to do with self-insured employers who object to contraceptive or abortive coverage (like the University of Notre Dame, and many other religious institutions). In the prior version of this rule, HHS proposed to require the third-party administrators who manage such plans to manage the provision of the disputed abortive and contraceptive coverage without involving the employer. Obviously this would be meaningless, since the only reason these administrators would do so would be because they have have an insurance contract with the employer, but perhaps HHS hoped it might offer, again, some way to pretend that the employer was not facilitating that coverage. In this final rule, HHS acknowledges that the federal law governing self-insured plans (known as ERISA) requires the employer to explicitly authorize everything that the third-party administrator does, so the only way to have the administrator offer contraceptive and abortive coverage is to have the employer authorize it. Amazingly, they actually propose having the very document by which the employer informs the plan administrator of an objection to abortive or contraceptive coverage (the so-called “self-certification” document) serve as the means by which exactly that coverage is authorized:
The self-certification will afford the third party administrator notice of obligations set forth in these final regulations, and will be treated as a designation of the third party administrator(s) as plan administrator and claims administrator for contraceptive benefits.
So how is the employer not thereby expressly designating someone to provide his employees with coverage of contraception and abortion drugs? Again, even the pretense of a fig leaf seems to be gone.
But the fact is that the pretense was always nonsense. This is a rule that requires some employers to face a choice between violating their religious convictions or paying a huge fine. It is a brazen and intolerant abuse of power. It willfully creates a conflict between people’s religious obligations and their legal obligations, and it does so without a good reason. Even if you accept the notion that this mandate serves a worthwhile or important public purpose, that purpose could be (and is) served by other means and there is just no excuse for the infringement of religious liberty that this rule involves.
Religious believers and our government both have a responsibility to avoid needless conflicts between religion and the state, and in this case the government is failing to uphold that responsibility. It is also failing to uphold the law, and it now looks reasonably likely that the federal courts will therefore throw out this mandate. I think this final rule makes that all the more likely by making the pretense of a religious exemption even harder to sustain.