Real Alternatives, Inc. v. Sec'y Dep't of Health & Human Servs.

867 F.3d 338

REAL ALTERNATIVES, INC. ; Kevin I. Bagatta, Esq.; Thomas A. Lang, Esq.; Clifford W. McKeown, Appellants

v.SECRETARY DEPARTMENT OF HEALTH AND HUMAN SERVICES; Secretary United States Department of Labor; Secretary United States Department of the Treasury; United States Department of Health and Human Services; United States Department of Labor; United States Department of Treasury

No. 16-1275

United States Court of Appeals, Third Circuit.

Argued November 3, 2016

Opinion Filed: August 4, 2017

Matthew S. Bowman (Argued), David A. Cortman, Alliance Defending Freedom, 440 First Street, NW, Suite 600, Washington, DC 20001, Counsel for Appellants Real Alternatives, Inc.; Kevin I. Bagatta, Esq.; Thomas A. Lang, Esq.; Clifford W. McKeown

Kevin H. Theriot, Elissa M. Graves, Alliance Defending Freedom, 15100 N. 90th Street, Scottsdale, AZ 85260, Randy Wenger, Independence Law Center, 23 North Front Street, Harrisburg, PA 17101, Counsel for Appellants Real Alternatives, Inc.; Kevin I. Bagatta, Esq.; Thomas A. Lang, Esq.; Clifford W. McKeown

Benjamin C. Mizer, Peter J. Smith, Mark B. Stern, Alisa B. Klein, Patrick G. Nemeroff, Megan Barbero, Joshua M. Salzman (Argued), United States Department of Justice, Civil Division, 950 Pennsylvania Avenue, NW, Washington, DC 20530, Counsel for Appellees Secretary Department of Health and Human Services; Secretary United States Department of Labor; Secretary United States Department of the Treasury; United States Department of Health and Human Services; United States Department of Labor; United States Department of Treasury

Richard B. Katskee, Natacha Y. Lam, Americans United for Separation of Church and State, 1901 L Street, NW, Suite 400, Washington, DC 20036, Seth M. Marnin, David L. Barkey, Anti-Defamation League, 605 Third Avenue, New York, NY 10158, Counsel for Amici Curiae Americans United for Separation of Church and State; Anti-Defamation League; Central Conference of American Rabbis; Hadassah, The Women's Zionist Organization of America, Inc.; National Council of Jewish Women; People for the American Way Foundation; Union for Reform Judaism; Women of Reform Judaism

Before: JORDAN, GREENAWAY, JR., and RENDELL, Circuit Judges

OPINION

RENDELL, Circuit Judge:

One of the many provisions of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), requires employer-provided health insurance plans to cover an array of preventative services, including FDA-approved contraceptives, at no cost to participating employees. Employees have the option of seeking out covered medical providers and using their services, in which case they are reimbursed, or they can choose not to use them. The particular provision that includes contraceptive coverage is commonly referred to as the "Contraceptive Mandate," and it includes a limited exemption for houses of worship and their integrated auxiliaries. See 45 C.F.R. § 147.131(a) ; 77 Fed. Reg. 8,725, 8,726 (Feb. 15, 2012). A wider set of religious non-profit and for-profit employers may receive an accommodation whereby they opt out of providing contraceptive coverage, with the Government then arranging for their employees to receive the coverage through third parties at no cost to, and with no participation of, the objecting employers. See 45 C.F.R. § 147.131(b)–(c) ; 78 Fed. Reg. 39,870, 39,874–39,875 (July 2, 2013) ; Zubik v. Burwell , ––– U.S. ––––, 136 S.Ct. 1557, 1559, 194 L.Ed.2d 696 (2016).

Two years after we upheld this opt-out accommodation in Geneva College v. Secretary United States Department of Health and Human Services , 778 F.3d 422, 427 (3d Cir. 2015), vacated and remanded sub nom. Zubik , 136 S.Ct. at 1561, we now confront the house-of-worship exemption. This appeal presents two primary questions that again derive from the purported intersection of the Contraceptive Mandate and religion: (1) whether the Contraceptive Mandate must exempt a secular anti-abortion group with no religious affiliation, and (2) whether an employee's religious beliefs are substantially burdened by the law's requirement that his or her employer's insurance plan cover contraceptives. After careful review, but without any hesitation, we answer both questions in the negative.

Appellant Real Alternatives urges that, pursuant to the Equal Protection Clause of the Fifth Amendment, if a religious organization may be exempted from the Contraceptive Mandate, then non-religious entities with an identical stance on contraceptives must be exempted as well. Real Alternatives additionally challenges the Contraceptive Mandate and the criteria for the exemption as not only arbitrary and capricious under the Administrative Procedures Act but also contrary to federal law.

The other appellants, three employees of Real Alternatives, bring individual challenges to the Contraceptive Mandate. They argue that the Contraceptive Mandate violates the Church Amendment, 42 U.S.C. § 300a–7(d). They also argue that maintaining a health insurance plan that covers contraceptives through their employer violates their religious rights under the Religious Freedom Restoration Act, 42 U.S.C. §§ 2000bb to 2000bb-4 ("RFRA").

The District Court denied Appellants' motion for summary judgment in its entirety and granted the Government's cross-motion for summary judgment in its entirety. Because we agree with the District Court's rulings on all of the issues raised, we will affirm.

I. BACKGROUND

A. Statutory and Regulatory Framework

1. The Affordable Care Act and the Contraceptive Mandate

In 2010, Congress passed the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), and the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) (collectively, the "ACA"). The ACA requires non-grandfathered group health plans and insurance providers to cover four categories of preventative health services, without cost-sharing, as provided for in guidelines supported by the Health Resources and Services Administration ("HRSA"), an arm of the Department of Health and Human Services ("HHS").¹ One of these four categories is "preventative care and screenings" for women.

HHS requested assistance from the Institute of Medicine ("IOM"), a non-profit division of the National Academy of Sciences, to develop guidelines on the specific preventative services for women to be covered under the ACA (none existed at the time the ACA was passed). The IOM recommended that HRSA endorse a list of services that included "[FDA]-approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity." Institute of Medicine, Clinical Preventative Services for Women: Closing the Gaps 10 (2011). Examples of FDA-approved contraceptive methods are diaphragms, oral contraceptives, intrauterine devices, and emergency contraceptives. Id. at 105–06. HRSA adopted the IOM's guidelines in full. Health Resources & Service Administration, Women's Preventative Service Guidelines, available at https://www.hrsa.gov/womensguidelines/ (last visited Jan. 27, 2017). In doing so, HRSA required every group health plan and health insurance plan to include coverage for these preventative care services to employees working at non-exempt employers (the "Contraceptive Mandate"). It did not require anything from the employee.

2. Exemption to the Contraceptive Mandate

At the same time as HRSA adopted IOM's recommended guidelines, an exemption from the Contraceptive Mandate for certain religious employers was proposed as an interim final regulation (the "Exemption"). 76 Fed. Reg. 46,621 (Aug. 3, 2011). Commenters to the proposed guidelines had suggested that requiring religious employers to sponsor group health plans that provide contraceptive services could impinge on those employers' religious freedom. Id . at 46,623. In light of those comments, HHS and the Departments of Labor and Treasury (collectively, the "Departments"), the agencies named in Real Alternatives's underlying lawsuit, authorized HRSA to exempt certain religious employers from the Contraceptive Mandate. The Departments specified that they sought "to provide for a religious accommodation that respects the unique relationship between a house of worship and its employees in ministerial positions" and that "[s]uch an accommodation would be consistent with the policies of States that require contraceptive services coverage, the majority of which simultaneously provide for a religious accommodation."² Id .

The Departments originally defined a religious employer as an employer that:

(1) has as its purpose the inculcation of religious values;

(2) primarily employs persons who share its religious tenets;

(3) primarily serves persons who share its religious tenets; and

(4) is a non-profit organization under Section 6033(a)(1) and Section 6033(a)(3)(A)(i) or (iii) of the [Internal Revenue] Code.³

Id . The Departments also noted that HRSA's "discretion to establish an exemption applies only to group health plans sponsored by certain religious employers and group health insurance offered in connection with such plans," and thus "health insurance issuers in the individual health insurance market would not be covered under any such exemption." Id. at 46,623 –24 (emphasis added). The Departments formally adopted the four-part definition for exempted employers in 2012. They also created a one-year safe harbor for non-exempted, non-profit organizations with religious objections, and announced that they would develop and propose changes to the regulation that "would meet two goals—providing contraceptive coverage without cost-sharing to individuals who want it and accommodating non-exempted, non-profit organizations' religious objections to covering contraceptive services...." 77 Fed. Reg. at 8,727.

The final rules regarding the Exemption went into effect in 2012. The Departments replaced the multifactor religious employer test with one definition,...