Free Exercise and Employee Health Care Under the ACA

While the Affordable Care Act (ACA) has been in the news for a number of reasons lately, one story that largely fell by the wayside involved a Pennsylvania cabinet company that took issue with the ACA’s requirement that health plans provide coverage for certain types of oral contraceptives. A federal appellate decision in the case has contributed to a growing split among the appeals courts that is likely to ultimately go to the Supreme Court.

In Conestoga Wood Specialties Corp. v. Sebelius, a closely held corporation owned by a Pennsylvania Mennonite family asserted that the ACA’s requirements that employee health plans cover certain contraceptives infringed on the corporation’s right to free religious exercise under the First Amendment as well as its rights under the Religious Freedom Restoration Act (RFRA). After losing in the U.S. District Court for the Eastern District of Pennsylvania, a divided panel of the U.S. Court of Appeals for the Third Circuit also denied Conestoga’s claim.

While acknowledging that the recent Citizens United decision from the U.S. Supreme Court had demonstrated that corporate entities can assert free speech rights, the Third Circuit found it inconceivable that a secular corporation could engage in religious exercise. Instead, the court held, such religious ideals were purely personal.

This is not the first time the issue has come before a federal court:

• In 2012, a group of Catholic dioceses and organizations sued the Department of Health and Human Services over the ACA’s contraception requirements. The case, filed in the U.S. District Court for the District of Columbia, was ultimately dismissed. Other such cases also were dismissed.

• In 2013, the Sixth Circuit upheld a district court’s denial of a corporation’s request for an injunction against enforcement of the same provision of the ACA.

• In 2013, the Tenth Circuit found that secular corporations could challenge the contraception provisions of the ACA on free exercise grounds.

The split among the circuits makes this issue a likely candidate for Supreme Court consideration. Employee rights attorneys will closely watch to see how this controversy could affect employee benefits.