Saturday, May 21, 2016

Parties Ability to Settle in Zubik Will Turn on Their Type of Insurance Plan

Balkanization (May 17, 2016): What to expect from the Zubik remand: a possible solution for "church plans," but otherwise no common ground, by Marty Lederman:

In his post on Balkanization, Marty Lederman considers the possibility of the government and petitioners reaching settlements following the Zubik v. Burwell remand.  The Zubik petitioners had different types of insurance plans, falling in three categories, and their ability to settle will depend on the way that the plans are structured. Lederman writes:

The gist of my preliminary assessment is this: For reasons I have explained before, I think that the cases involving ERISA "church plans" (including the suit brought by Little Sisters of the Poor) can probably be settled below, because there was never much at stake in them to begin with: The government has long conceded that, under its own regulatory accommodation, it cannot require the third-party administrators of such plans to provide contraceptive payments. The plaintiff organizations in such cases thus have the power to preclude such payments, and therefore they have nothing to complain about. When that much becomes clear on remand, it ought to facilitate a quick resolution of those cases. I am not as sanguine as the Court appears to be, however, about the prospects of settlement of the remainder of the cases, involving "insured" plans and "self-insured" plans that are not church plans, because many or all of the plaintiffs in those cases continue to insist that their religious exercise would be substantially burdened unless obstacles are put in the way of the insurance companies' payments to women; and, understandably, the government is unlikely to accept any solution that includes such obstacles.

The ERISA "church plans" are self-insured insurance plans established by churches and maintained by churches or religious organizations.  Insured plan are health care plans purchased by the employer from a third-party insurance company.  In the third-type of plan, self-insured plans the employer pays claims, although a third party may administer the plan.  Lederman's blog post provides in-depth explanation of all three plans and how settlement discussions may play out.

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