Sharpe Holdings, Inc. v. U.S. Dep't of Health & Human Servs.

801 F.3d 927

SHARPE HOLDINGS, INC. a Missouri Corporation; Rita Joanne Wilson, a Missouri resident; Judi Diane Schaefer, a Missouri resident; Charles N. Sharpe, a Missouri resident; CNS Corporation, a Missouri Corporation; Ozark National Life Insurance Company, a Missouri Corporation; N.I.S. Financial Services, Inc. a Missouri Corporation; CNS International Ministries, A Missouri Non-Profit Corporation; Heartland Christian College, A Missouri Non-Profit Corporation, Plaintiffs–Appellees

v.UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; Sylvia Mathews Burwell, in her official capacity as the Secretary of the United States Department of Health and Human Services; United States Department of the Treasury; United States Department of Labor; Jacob J. Lew, in his official capacity as the Secretary of the United States Department of the Treasury; Thomas E. Perez, in his official capacity as the Secretary of the United States Department of Labor

Defendants–Appellants.

American Civil Liberties Union; American Civil Liberties Union of Missouri; Julian Bond ; National Women's Law Center; American Association of University Women; American Federation of State, County and Municipal Employees; Black Women's Health Imperative; Feminist Majority Foundation; Ibis Reproductive Health; Legal Momentum; MergerWatch; NARAL Pro-Choice America; NARAL Pro-Choice Minnesota ; NARAL Pro-Choice Missouri ; NARAL Pro-Choice South Dakota ; National Organization for Women Foundation; National Partnership for Women and Families; Planned Parenthood of the Heartland; Planned Parenthood of Kansas & Mid-Missouri; Planned Parenthood Minnesota, North Dakota, South Dakota ; Planned Parenthood of the St. Louis Region and Southwest Missouri; Population Connection; Raising Women's Voices for the Health Care We Need; Service Employees' International Union; National Health Law Program; American Public Health Association; National Family Planning & Reproductive Health Association ; National Women's Health Network; National Latina Institute for Reproductive Health ; National Asian Pacific American Women's Forum; Asian Americans Advancing Justice ; Asian Americans Advancing Justice-Los Angeles ; Asian & Pacific Islander American Health Forum; Forward Together; Ipas; Sexuality Information and Education Council of the U.S. ; HIV Law Project ; 30 for 30 Campaign; California Women's Law Center, Amici on Behalf of Appellant(s)

Liberty, Life, and Law Foundation; Association of Gospel Rescue Missions; Prison Fellowship Ministries; Association of Christian Schools International; National Association of Evangelicals; Ethics and Religious Liberty Commission of the Southern Baptist Convention; American Bible Society; The Lutheran Church-Missouri Synod; Institutional Religious Freedom Alliance; Christian Legal Society, Amici on Behalf of Appellee(s).

No. 14–1507.

United States Court of Appeals, Eighth Circuit.

Submitted: Dec. 10, 2014.

Filed: Sept. 17, 2015.

Patrick Nemeroff, argued, Washington, DC, (Mark B. Stern, Alisa Beth Klein, Beth S. Brinkmann, Adam C. Jed, Joshua Marc Salzman, Washington, DC, on the brief), for Defendants–Appellants.

Timothy Belz, argued, Saint Louis, MO, (J. Matthew Belz, Saint Louis, MO, on the brief), for Plaintiffs–Appellees.

Anthony E. Rothert, Grant R. Doty, Saint Louis, MO, Gillian Wilcox, Kansas City, MO, Jennifer Lee, Brigitte Amiri, New York, NY, Daniel Mach, Davidow, Andree J. Goldsmith, Karin Dryhurst, Marcia D. Greenberger, Judith G. Waxman, Emily Martin, Gretchen Borchelt, Leila Abolfazli, Washington, DC, Martha Jane Perkins, Dipti Singh, Carrboro, NC, on the brief, for Amici on Behalf of Appellant(s).

Deborah L. Dewart, Swansboro, NC, Kimberlee Wood Colby, Springfield, VA, for Amici on Behalf of Appellee(s).

Before WOLLMAN, COLLOTON, and BENTON, Circuit Judges.

Opinion

WOLLMAN, Circuit Judge.

Contending that the district court² abused its discretion, the Departments of Health and Human Services (HHS), Labor (DOL), and Treasury, as well as their respective Secretaries, (collectively, the government) appeal from the entry of a preliminary injunction enjoining the government from enforcing certain provisions of the Patient Protection and Affordable Care Act (ACA), 42 U.S.C. § 300gg–13, against CNS International Ministries, Inc. (CNS) and Heartland Christian College (HCC), each of which is a nonprofit religious organization that offers healthcare coverage to employees through a self-insured plan.³ We affirm the order granting the preliminary injunction.

CNS, a Missouri nonprofit corporation with more than fifty employees, provides full-time residential services to men, women, and children with behavioral problems or who suffer from alcohol or drug dependencies, and it operates a school that serves the children of individuals in its recovery program, as well as its employees' children. HCC, also a Missouri nonprofit corporation but with fewer than fifty employees, provides post-secondary higher education to employees and residents of CNS and their dependents. Christian belief and practice are integral to the identities of both CNS and HCC, and they strive “to promote certain moral and ethical standards in their employees, including ... a belief in the sanctity of life which precludes abortion on demand.” As part of their religious mission to promote the well-being and health of their employees, both CNS and HCC offer healthcare coverage to employees through self-insured group health plans, although HCC, with fewer than fifty employees, is not required by the ACA to offer healthcare coverage.

Under authority granted by the ACA, HHS promulgated regulations requiring “group health plan[s]” and “health insurance issuer[s] offering group or individual health insurance coverage” to cover, “[w]ith respect to women, ... preventive care and screenings provided for in binding comprehensive health plan coverage guidelines supported by the Health Resources and Services Administration.” 45 C.F.R. § 147.130(a)(1)(iv). At the recommendation of the Institute of Medicine, HHS adopted guidelines providing that nonexempt employers generally must provide “coverage, without cost sharing, for ‘[a]ll Food and Drug Administration [ (FDA) ] approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity’ ” (the contraceptive mandate). 77 Fed.Reg. 8725, 8725 (Feb. 15, 2012) ; see 29 C.F.R. § 2590.715–2713(a).⁴ Contraceptive methods approved by the FDA include intrauterine devices (IUDs), levonorgestrel (Plan B), and ulipristal acetate (ella), each of which “may have the effect of preventing an already fertilized egg from developing any further by inhibiting its attachment to the uterus.” Burwell v. Hobby Lobby, ––– U.S. ––––, 134 S.Ct. 2751, 2762–63, 189 L.Ed.2d 675 (2014). In general, any employer that offers employees a group health plan must comply with the contraceptive mandate or face penalties of $100 per day per affected “individual.” 26 U.S.C. § 4980D(b). An employer with more than fifty employees that fails to provide employees with a group health plan is generally subject to penalties of $2,000 per year per full-time employee. Id. § 4980H(a), (c).

The ACA provides an exemption from the contraceptive mandate for “grandfathered” health plans, i.e., those in existence at the time of the ACA's adoption. 42 U.S.C. § 18011 ; 29 C.F.R. § 2590.715–1251. The ACA also provides an exemption from the contraceptive mandate for group health plans sponsored by religious employers. 45 C.F.R. § 147.131(a)(HHS). The term “religious employer” is defined narrowly by reference to the Internal Revenue Code to include “churches, their integrated auxiliaries, and conventions or associations of churches,” as well as “the exclusively religious activities of any religious order.” Id. (citing the Internal Revenue Code, 26 U.S.C. § 6033(a)(3)(A)(i), (iii) ). Under these exemptions, employers with grandfathered plans and religious employers may continue to offer their employees healthcare coverage that does not include contraceptives.

The regulations also provide an “accommodation” for certain religious organizations that have religious objections to the contraceptive mandate but do not qualify for the religious-employer exemption.⁵ 78 Fed.Reg. 39,870, 39,871 (July 2, 2013) ; see also 29 C.F.R. § 2590.715–2713A. The accommodation is intended to protect religious organizations “from having to contract, arrange, pay, or refer for” contraceptive coverage. 78 Fed.Reg. at 39,872. It is available for a religious organization that (1) has religious objections to providing healthcare coverage for some or all contraceptive services, (2) “is organized and operates as a nonprofit entity,” (3) “holds itself out as a religious organization,” and (4) complies with a self-certification process. 29 C.F.R. § 2590.715–2713A(a). A self-insured⁶ religious organization, after “contract[ing] with one or more third party administrators,” 29 C.F.R. § 2590.715–2713A(b)(1)(i), complies with the self-certification process in one of two ways.

The organization may self-certify by completing and submitting directly to its third-party administrator (TPA) an EBSA Form 700—Certification (Form 700), certifying that it is a religious nonprofit entity that has religious objections to providing coverage for some or all of the contraceptives required by the mandate. 29 C.F.R. § 2590.715–2713A(a) –(b). The organization may also self-certify by providing notice to HHS stating the organization's name; the basis on which it qualifies for an accommodation; its religious objections to providing coverage for some or all contraceptives, including the specific contraceptives to which it objects; its insurance plan name and type; and its TPA's name and contact information (HHS Notice).⁷ See 79 Fed.Reg. 51,092, 51,094 –95 (Aug. 27, 2014); 80 Fed.Reg. 41,318, 41,323 (July 14, 2015) ; 29 C.F.R. § 2590.715–2713A(b)(1)(ii)(B). The religious organization must also update...