Monday, December 2, 2013

Zelinsky: Use of HSAs and HRAs as Compromise to ACA Contraceptive Mandate Dispute

Zelinsky_edEd Zelinsky (Cardozo) has an interesting post on his OUP blog discussing a possible compromise to the on-going dispute between for-profit religious corporations, like Hobby Lobby, and the Obama administration's Affordable Care Act's (ACA's) contraceptive coverage mandate.

Here's a taste:

This entire controversy is unnecessary. The tax law contains devices for reconciling the religious concerns of employers like Hobby Lobby with the policy of expanding medical coverage: health savings accounts (HSAs) and health reimbursement arrangements (HRAs). The current regulatory exemption from the contraception mandate should be amended to include for-profit employers and to exempt from the federal contraception mandate employers (both non-profit and profit-making) who maintain HSAs or HRAs for their respective employees. Compromise along these lines would respect the genuinely-held views of religious minorities while implementing the federal policy of broadening access to health care.

An HSA/HRA compromise would eliminate the complicity of religious employers in the provision of contraception methods to which they object while enabling such employers’ employees to obtain on a pre-tax basis any medicines or devices such employees want, including contraception to which their employers object. Employers’ payments into their employees’ HSAs and HRAs would be the equivalent of the cash wages paid to such employees, wages which the employees are free to spend as they choose.

Personally, I do not see a RFRA or free exercise problem with ACA's mandate because it is not a law that targets religion or otherwise substantially burdens religious rights of individuals, for-profit corporations do not and should have have free exercise rights, and the exemption from the law for for-profit religious employers would permit them to inappropriately interfere with the personal health care decisions of their employees.  I also do not know what "religious minorities" Ed is referring to, since corporations like Hobby Lobby seek to impose their very much dominant Christian religious practices on their employees (Christian and non-Christian alike).

All that being said, Ed should be given credit for thinking outside of the box and coming up with a compromise which might satisfy both sides of the debate.  The likelihood of this suggestion being taken up in the short-term now that the Supreme Court has granted cert. in the Hobby Lobby case is unlikely.  However, if Hobby Lobby and similar religiously-oriented corporations should prevail (a real possibility with the current make up of the court), then this proposal might be a way in which this type of much needed health care coverage could be provided to employees of for-profit religious employers.


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Under this proposal, any employer that can offer an HSA, religious or not, non-profit or for-profit, can get out of the contraception mandate. Buying contraception through an HSA, even with pre-tax dollars, is worse than receiving it through a plan with no cost-sharing. Right? (Assuming premiums don’t go up, which is a fair assumption as I understand it, because in straight cost terms contraception is always cheaper than the alternatives). So this proposal would destroy what the ACA/regs set out to accomplish, unless it’s only a very small group of (presumably religious) employers that use the HSA route. Essentially, it’s relying on health insurers to charge the same whether there’s contraception coverage in the plan or not. Could be a safe assumption. And if the alternative is no coverage for the employees of for-profit religious employers, because of RFRA or Congress, getting to buy contraception with pre-tax dollars is better than nothing. But there are factors that could change the picture – how widespread HSAs currently are/will soon be, how much it actually costs to include contraception coverage, and how much competition there will be among insurers for employer business. If changes in those (or something else) would cause more non-religious employers to take the HSA route, this proposal deteriorates pretty quickly.

Posted by: Alek Felstiner | Dec 3, 2013 1:25:23 PM

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