By Mark Hamblett, From New York Law Journal

The rights of religious employers are not violated by provisions of the Affordable Care Act that require them to provide contraceptive coverage through third parties, the U.S. Court of Appeals for the Second Circuit ruled Friday.

Reversing Eastern District Judge Brian Cogan, a three-judge panel held the third-party insurance coverage regulations—an accommodation to nonprofits that had objected to the contraception mandate in President Obama’s health care plan—do not, in and of themselves, substantially burden the religious exercise of affiliates of the Catholic Church in New York in violation of the Religious Freedom Restoration Act (RFRA).

Judges Pierre Leval, Rosemary Pooler and Denny Chin made that ruling in Catholic Health Care System v. Burwell, 14-427, a closely watched case in which Cogan granted an injunction blocking the government from requiring the accommodation of nonprofit affiliates of the Roman Catholic Archdiocese of New York who wanted to avoid providing birth control coverage themselves.

Cogan held that forcing the groups, which employ non-Catholics as well as Catholics, to authorize a third party to provide contraceptive care would violate their religious beliefs (NYLJ, Dec. 18, 2013). Cogan found the law doesn’t require third-party administrators to actually do anything once they have the necessary self-certification and “forces plaintiffs to fill out a form which, though it violates their religious beliefs, may ultimately serve no purpose whatsoever.”

“A law that is totally ineffective cannot serve a compelling [government] interest,” Cogan said.

Writing for the court, Pooler said: “If a regulatory scheme that might otherwise violate an objecting individual’s rights under the RFRA allows the objector to exempt himself from compliance via a simple, non-burdensome act of notification, there is no substantial burden.”

Moreover, she said, as the Second Circuit joined other circuits in rejecting similar challenges, “subsequent regulation of non-objecting parties in a manner than an objecting party finds offensive does not transform the act of opting out into a cognizable burden.”

“The rights conferred by the First Amendment and RFRA do not include a right to have the government or third parties behave in a manner that comports with an individual’s religious beliefs.”

The decision was welcomed by Greg Lipper, senior litigation counsel for Americans United for Separation of Church and State, a group that had submitted an amicus brief saying Cogan should be reversed.

“I think the message is getting clearer and clearer and clearer from federal appeals courts that filling out a form seeking exemption from the regulations is very different from providing contraception itself,” Lipper said. “What they’re doing now is trying to prevent women from getting contraception coverage from third parties. It’s a distortion of religious liberty and the courts are seeing right through it.”

On the other side, Mailee Smith, staff counsel for Americans United for Life, submitted an amicus on behalf of the Association of American Physicians and Surgeons urging that Cogan be affirmed.

“While we and our clients are disappointed, we are confident that these cases are going to be heard by the U.S. Supreme Court,” Smith said Friday. “Currently there are at least five petitions pending that involved religious nonprofit organizations and, in other cases that are similar, the court has granted petitions and vacated the decision and remanded in light of Hobby Lobby” [the Supreme Court’s 2014 ruling in Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751] and a companion case.

When those cases are heard by the Supreme Court, Smith said, “the reality of this non-accommodation will come to light.”

At issue were regulations promulgated under the act by the Health Resources and Services Administration of the Department of Health and Human Services. The regulations require non-exempt employers to provide coverage for Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for women.

The mechanism for third-party coverage was intended to address objections from religiously affiliated organizations, such as Cardinal Spellman High School and Catholic Health Services of Long Island, who themselves did not qualify for the religious exemption under the Affordable Care Act (ACA).

The accommodation, Pooler said, “was so named because it allows religious employers to opt out of paying for objectionable medical services without denying those services to employees who may or may not share the religious beliefs of their employer.”

To be relieved of their obligations under the ACA, the affiliates must complete a notification form indicating a religious objection and send a copy to its insurance company or third-party administrator.

Under two Supreme Court decisions in 2014, Little Sisters of the Poor for the Aged, Denver, Colorado v. Sebelius, 134 S.Ct. 1022 and Wheaton College v. Burwell, 134 S.Ct. 2806, a second option is to send an religious objection letter to Health and Human Services, which then takes it upon itself to tell the non-profits’ third-party administrator to provide separate birth control coverage to the non-profits’ employees.

“Importantly,” Pooler said, the regulations that codified the Supreme Court’s alternative notification system, “require the third-party administrator to fully divorce the eligible organization from payments for contraceptive coverage.”

The RFRA, 42 U.S.C. §2000bb, states that the government “shall not substantially burden a person’s exercise of religion” unless it uses the least restrictive means to further a compelling government interest.

The affiliates here said opting out of the coverage requirement was just such a burden because it facilitated access to contraception they found objectionable and left them with the choice of providing birth control coverage, paying fines for noncompliance or forcing them to use an accommodation which violated their religious beliefs—all in the service of a government interest that was less than compelling.

But Pooler said the interest here was indeed compelling and hardly a burden on the affiliates. Since the plaintiffs filed suit in Brooklyn in 2012, six circuits have rejected similar claims either on the merits or through the denial of injunctions.

Pooler said that allowing affiliates to opt out of birth control coverage through either the accommodation or using self-certification “on its face” would “appear to eliminate any substantial burden on plaintiffs’ religious exercise.”

“Although a court accepts a litigant’s sincerely held religious beliefs, it must assess the nature of a claimed burden on religious exercise to determine whether, as an objective legal matter, that burden is ‘substantial’ under the RFRA.”

But that doesn’t mean the court has to accept the plaintiffs allegations as to the “magnitude” of the burden, for “were it otherwise, no burden would be unsubstantial,” she said.

There was no substantial burden here for an accommodation that works in a simple and straightforward manner by requiring only a “single sheet of paper” communicating eligibility and religious objection, the circuit said.

“Once an eligible organization expresses its desire to have no involvement in the provision of contraceptive coverage, the government requires no further action from the organization,” Pooler wrote. “Instead, the regulations effectuate this separation by enlisting other entities to fill the gap.”

The result is that eligible organizations can express their objection to such coverage and escape that provision while “at the same time, insured individuals are not deprived of the benefits of contraception coverage.”

In the end, the circuit said, “the only obligation actually imposed on plaintiffs is identifying themselves as religious objectors.”

Megan Barbero, an attorney with the appellate staff of the U.S. Justice Department, argued the case before the panel on Jan. 22.

Todd Geremia of Jones Day argued for the affiliates.

Joseph Zwilling, spokesman for the New York Archdiocese, said this morning its attorneys are currently reviewing the decision.

For more on this story go to: http://www.newyorklawjournal.com/id=1202734189438/Circuit-Rules-Religious-Rights-Not-Violated-by-ACA#ixzz3iQQNHA30