Third Circuit: Religious Nonprofits Must Comply With The ACA

On February 11, 2015, the Third Circuit handed down Geneva College v. Sec'y United States HHS. The case was brought by a group of nonprofit organizations that objected to purchasing healthcare plans that cover contraceptives in accordance with the Affordable Care Act. While Geneva College was exempt from providing such healthcare plans, the College argued that the ACA ultimately required it to sanction the use of contraceptives through an “opt out” provision. The Third Circuit, however, ruled the College’s religious beliefs were not substantially burdened by the ACA’s opt out provision.

At first blush this case seems similar to Burwell v. Hobby Lobby Stores, Inc. However, in Burwell the Supreme Court held that Hobby Lobby, a closely held corporation with a religious identity, had to choose between complying with the ACA in violation of its religious beliefs, or refuse to comply and face large fines. The Court held that the law violated the test set forth in RFRA. In relevant part, RFRA states that the “[g]overnment may substantially burden a person's exercise of religion only if it demonstrates that application of the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest."

 Here, under the ACA, religious nonprofits may “opt out” of providing health insurance that covers contraceptives. Under the ACA, nonprofits may submit a form to the government evidencing their religious objection. Once submitted, the nonprofit is exempt from providing the coverage, and the insured is able to obtain coverage for contraceptives elsewhere at no additional cost to the insured. The Geneva College claimed that submitting the exemption form to the government, it is “triggering, facilitating, or making [the appellees] complicit” in providing coverage for contraceptives despite not having to do so directly.

The Third Circuit disagreed, holding that the College’s religious exercise is substantially burdened by the opt out requirement. The Court of Appeals stated that the “[opt out provision] does not necessitate any action that interferes with the appellees' religious activities… [t]he appellees' real objection is to what happens after the form is provided—that is, to the actions of the insurance issuers and the third-party administrators, required by law, once the appellees give notice of their objection.” The Court of appeals went on to say “RFRA does not give the appellee a religious veto against plan providers’ compliance with [ACA regulations].”

Similar challenges to the ACA have been heard by the Fifth, Sixth and District of Columbia circuits, all of which ruling in favor of the government. Some say that this issue will almost certainly be heard by the Supreme Court next term. It should be interesting to see how the Court will decide this case and what it will mean for religious nonprofits.

DAB