Obama Stays Course on HHS Mandate Fight, Despite Hobby Lobby Ruling

Analysts say that the administration’s new ‘interim final rule’ will take time to interpret, but the early judgment is that it does little to accommodate religious liberty.

WASHINGTON — Earlier this summer, the U.S. Supreme Court ruled that Hobby Lobby, a craft-store chain owned by a Christian family, possessed free exercise rights and could not be forced by the government to violate its beliefs by complying with the Health and Human Services contraceptive mandate.

The landmark decision led Mark Rienzi, the Becket Fund for Religious Liberty lawyer who represents Hobby Lobby, to hope that the White House would finally reassess its strategy for fighting legal challenges to the mandate and approve a broad exemption for family-run businesses and religious nonprofits that objected to the law on moral grounds.

But on Aug. 22, more than two years since the first legal challenge to the mandate was filed in court, the White House issued a new “interim final rule” that left the federal law’s narrow religious exemption intact, dashing hopes for an end to the church-state dispute that has spawned over 300 lawsuits.

“The hope was that … the government would get it right: exempt religious employers and use its own [health insurance] exchanges to provide these services,” Rienzi told the Register, in a reference to the federal and state exchanges established under the Affordable Care Act.

Instead, the White House modified a previous rule, which required such employers to sign a form that “triggered” coverage by their insurance carriers, and was strongly opposed by the U.S. bishops and other HHS plaintiffs.

The new rule asks religious nonprofits seeking to opt out of the law to inform the government directly of their objections. HHS administrators would then direct the employer’s insurance company or a third-party administrator to provide the mandated coverage.  The White House has said the mandated services would be provided by the carriers without any charge to the objecting employers.

Further, the Obama administration has proposed that Hobby Lobby could also take advantage of “the same accommodation that is available to nonprofit religious organizations.” The government has asked for formal comments suggesting how that might be accomplished.

“The proposal seeks comment on how to define a closely held for-profit company and whether other steps might be appropriate to implement this policy,” read the HHS statement accompanying the latest rulemaking.


Archbishop Kurtz

Archbishop Joseph Kurtz of Louisville, Ky., the president of the U.S. Conference of Catholic Bishops, also expressed “disappointment” with the latest iteration of government regulations dealing with the HHS mandate.

“On initial review of the government’s summary of the regulations, we note with disappointment that the regulations would not broaden the ‘religious employer’ exemption to encompass all employers with sincerely held religious objections to the mandate,” stated Archbishop Kurtz.

“Instead, the regulations would only modify the ‘accommodation,’ under which the mandate still applies and still requires provision of the objectionable coverage.”

Archbishop Kurtz noted that the White House’s decision to extend the same accommodation to for-profit employers, like Hobby Lobby, appeared to be a step backwards from the Supreme Court’s Hobby Lobby ruling.

“[By] proposing to extend the ‘accommodation’ to the closely held for-profit employers that were wholly exempted by the Supreme Court’s recent decision in Hobby Lobby, the proposed regulations would effectively reduce, rather than expand, the scope of religious freedom.”

Archbishop Kurtz said the U.S. bishops would “provide more detailed comments at a later date. In keeping with our practice, we will evaluate the regulations according to the principles set forth in ‘United for Religious Freedom,’ a March 2012 statement of the USCCB Administrative Committee that was later affirmed unanimously by the body of bishops at the general assembly of June 2012.”

Michael Warsaw, the CEO of the Eternal Word Television Network (EWTN), expressed regret that the administration had not fully addressed the concerns of HHS plaintiffs, who have dismissed the White House “accommodation” as an “accounting gimmick” that still leaves objecting employers responsible for providing the mandated coverage.

“Instead of broadening the criteria for organizations that should be completely exempt from these rules, it appears that the government has simply changed the flow of paperwork and done little else,” Warsaw said in an Aug. 22 statement.

The Becket Fund for Religious Liberty also represents EWTN in its legal challenge to the HHS mandate, and Warsaw said he would consult with Becket Fund lawyers before issuing a definitive response to the new rules. The Register is a service of EWTN.


HHS Secretary Burwell

However, Sylvia Burwell, the new secretary of Health and Human Services, defended the government’s latest proposal as a proper attempt to balance free-exercise rights with the need to expand access to essential health-care services.

In a statement released on Aug. 22, Burwell said that the rules will protect access to free contraception, “while respecting religious considerations raised by nonprofit organizations and closely held for-profit companies.”

Meanwhile, the administration and its allies have continued to stress the need to pass legislation in Congress that would reverse the Hobby Lobby decision.

“While the Obama administration is working hard to protect women’s access to birth control in the face of harmful Supreme Court decisions, today’s notice also serves as a stark reminder of what is at stake for women in this country when it comes to affordable, basic health care,” said Cecile Richards, president of Planned Parenthood Action fund, in a statement.

Gerard Bradley, an expert on constitutional law at the University of Notre Dame Law School, challenged the administration’s insistence that the modified regulations struck the right balance between competing rights.

“It will take time to fully digest the new regulations. But even now it is apparent that the administration has not gone as far as it needs to go in order to respect the religious liberty of both religious nonprofits and those closely held for-profit companies like Hobby Lobby,” Bradley told the Register.

“The new ‘accommodation’ for self-insured nonprofits, which would include Notre Dame and many other Catholic institutions, is a special cause for concern, and whether it makes any material difference to the moral situation of these self-insured entities remains to be seen,” said Bradley.


‘Disappointing Reality’

Rienzi, for his part, said he was surprised that the White House had issued a modified version of a previous accommodation, despite the fact that religious plaintiffs had repeatedly challenged such proposals in court.

Indeed, Rienzi had already won a temporary reprieve from the Supreme Court for the Little Sisters of the Poor and for Wheaton College, an evangelical institution. Both employers had refused to sign the 700 Form that was designated by the government as a workaround for HHS plaintiffs.

“After three losses at the Supreme Court and seven or eight versions of [HHS] rules, the disappointing reality is that they seem to do everything the hard way,” said Rienzi, in a reference to the Hobby Lobby, Little Sisters and Wheaton rulings, as well as the string of White House proposals that have been rejected as “unacceptable” by the U.S. bishops.

Whether by the previous accommodation, which directed employers to use an insurance form, or through the new rule, which allows HHS plaintiffs to inform the government of their objections to the mandate, the outcome, said Rienzi, remains the same: HHS plaintiffs’ insurance carriers, not the government, will provide the coverage.

Still, Rienzi cautioned that the new regulations require further study before he can advise HHS plaintiffs on their options. Said Rienzi, “It may solve some people’s problems, but it will not solve everyone’s.”

Joan Frawley Desmond is the Register’s senior editor.