Since the enactment of the Patient Protection and Affordable Care Act (ACA) in 2010, religious institutions have raised concerns regarding the applicability of certain statutory provisions that would require the coverage of health services to which religious organizations may object. Departments of Health and Human Services (HHS), Labor, and Treasury issued interim final regulations that required coverage for a range of preventive services. However, the controversy has intensified over the scope of the exemption, which appears to apply to churches, but potentially not other religiously affiliated institutions such as universities, hospitals, and social service providers. It also examines proposed legislative options and examples of religious exemptions in existing state and federal law. A definition for the term "religious employer" was added by the interim final rule:
[A] "religious employer" is an organization that meets all of the following criteria:
(1) The inculcation of religious values is the purpose of the organization;
(2) The organization primarily employs persons who share the religious tenets of the organization;
(3) The organization serves primarily persons who share the religious tenets of the organization; and
(4) The organization is a nonprofit organization as described in section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as amended. Both constitutional and statutory rules govern whether an exemption would be required and what the scope of that exemption may be. The Religious Freedom Restoration Act of 1993 (RFRA) requires that federal actions that substantially burden religious exercise must have a compelling governmental interest and be narrowly tailored to meet that interest. Courts have generally held that religious exemptions are not constitutionally required for laws and regulations that do not specifically target religious exercise. Thus, religious exemptions to requirements for health benefits coverage are generally regarded as permissible, but not required. Although federal courts have never considered the constitutionality of requirements to cover contraceptives and related health services, at least two state courts have considered challenges to religious exemptions to similar rules at the state level. Each state includes an exemption for religious employers that is essentially identical to the federal exemption. RFRA provides that a statute or regulation of general applicability may substantially burden a person's exercise of religion only if it (1) furthers a compelling governmental interest and (2) uses the least restrictive means to further that interest. Public Health and Gender Equity as Compelling Interests

Among the stated goals and benefits of the preventive services requirements at issue are the improvement of public health and the equitable distribution of costs for preventive services. Accommodating Religious Exercise to Achieve the Government's Interest

Even if the government has a compelling interest in requiring coverage of contraceptives, it must use the least restrictive means to achieve that interest in order for the requirement to be upheld consistent with RFRA. Under this standard, a court may find that an accommodation is possible without undermining the program, but that the exemption may need to be drawn narrowly. Potential Consequences for Non-Compliance with Requirements for Contraceptive Coverage

Employers that object to contraceptives coverage requirements and do not qualify for an exemption may refuse to offer the required coverage. Furthermore, employers who do not cover contraceptives may face potential liability under Title VII of the Civil Rights Act of 1964, as some courts have indicated that denying coverage may constitute sex discrimination. As discussed above, with respect to the preventive health services requirements in ACA, health plans and health insurance coverage established or maintained by a "religious employer" could be exempt from providing contraceptive services, and certain organizations with religious objections to contraceptive coverage are not to be subject to an enforcement action under a temporary enforcement safe harbor. However, ERISA does not generally apply to governmental or church plans. In 2000, the U.S. In other words, even if a religious employer qualifies for an exemption from the requirements for contraceptive coverage under ACA and even if the employer qualifies for Title VII's religious discrimination exemption, the employer must still comply with Title VII's ban on sex discrimination. 3897/S. H.R. 1179/S.
Since the enactment of the Patient Protection and Affordable Care Act (ACA) in 2010, controversy has surrounded the applicability of requirements for health plans and health insurers to cover certain recommended preventive health services, including a range of contraceptive services, without cost sharing. The U.S. Departments of Health and Human Services, Labor, and Treasury have issued regulations that provide an exemption from ACA for certain religious employers who have religious objections to contraceptives. The exemption appears to cover churches and church associations, but potentially does not extend to other religiously affiliated employers, such as universities and hospitals. The scope of the exemption has been the subject of intense debate and has raised questions of the legal protections for religious institutions.
Both constitutional and statutory rules govern whether a religious exemption from the coverage requirement is required and what the scope of that exemption may be. Courts have generally held that exemptions to legal mandates that conflict with religious beliefs are permissible, but not required under the First Amendment. The U.S. Supreme Court has indicated in several decisions that a religious exemption is not required for neutral laws of general applicability, and state courts have applied the Court's analysis to state contraceptive requirements. The Court has explicitly noted, however, that an exemption may be included or broadened at the discretion of Congress.
As a statutory protection, the Religious Freedom Restoration Act of 1993 (RFRA) requires that any federal action that substantially burdens religious exercise must (1) further a compelling interest and (2) use the least restrictive means to further that interest. Because the contraceptive coverage requirement is a federal action subject to RFRA, a court must find that the requirement serves a compelling interest and is implemented to burden as few religious objectors as possible without undermining that interest. Courts, including state courts considering challenges to similar provisions in state law, have recognized at least two of the stated purposes of the requirement—public health and gender equity—as compelling interests. State courts have also upheld exemptions that are essentially identical to the one included in the federal rule as sufficient accommodations which use the least restrictive means to avoid undermining that interest.
Employers with health plans that fail to offer the required coverage of contraceptives and do not qualify for an exemption may be subject to penalties or other liability. With respect to the preventive health services requirement, ACA does not expressly include a means of enforcing the provision. However, if a health plan or health insurer does not provide contraceptive coverage, it is possible that enforcement mechanisms found in the Employer Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code could be applied. Furthermore, employers who do not cover contraceptives may be subject to liability for sex discrimination under Title VII of the Civil Rights Act of 1964, even if the employer qualifies for the religious exemption.
This report provides an overview of the preventive health services requirements and the exemption for religious employers. It analyzes the legal protections for religious organizations with objections to the requirements and examines state court decisions upholding similar requirements. The report also discusses the implications of non-compliance for organizations that do not qualify for the exemption and fail to provide the required coverage. Finally, the report analyzes several legislative proposals for statutory exemptions (H.R. 3897/S. 2043; H.R. 1179/S. 1467) and provides examples of religious exemptions in other federal laws and in state contraceptive coverage laws.