You've got those basically correct, Doug: In order to prevail, an employer with a self-insured plan would have to demonstrate a substantial burden on religious exercise as to *each* of the following, all of which are legally available options:
1. Declining to provide a plan 2. Using an insured plan 3. "self-insuring" without a TPA (this is mostly in response to several briefs that argued -- incorrectly -- that the government *requires the organization to contract with a TPA*, something the government has expressly rejected) 4. invoking the accommodation 5. offering contraception coverage in its plan On Fri, Aug 22, 2014 at 6:07 PM, Douglas Laycock <dlayc...@virginia.edu> wrote: > Marty, could you elaborate on your point 6? > > > > Not using an insurer or a third-party administrator presumably means not > only self insuring, but processing all the claims yourself. Is that right? > That would be expensive, difficult, and as a practical matter, probably > impossible for most employers. I suppose that with sufficient > determination, large employers could set up an internal claims-processing > unit and hire folks from insurance companies to staff it. > > > > And then the option of not providing insurance at all. Is this your > longstanding position that employers can drop their insurance plans, pay > the fines, an give their employees a pay increase to cover the cost of > insurance on the exchanges? Or is it something different? > > > > > > > > Douglas Laycock > > Robert E. Scott Distinguished Professor of Law > > University of Virginia Law School > > 580 Massie Road > > Charlottesville, VA 22903 > > 434-243-8546 > > > > *From:* religionlaw-boun...@lists.ucla.edu [mailto: > religionlaw-boun...@lists.ucla.edu] *On Behalf Of *Marty Lederman > *Sent:* Friday, August 22, 2014 5:45 PM > > *To:* Law & Religion issues for Law Academics > *Subject:* Re: "Administration to ‘Augment’ ACA Contraceptive Rules" > > > > An updated version of my post ( > http://balkin.blogspot.com/2014/08/the-augmented-contraception-coverage.html > ): > > > > *The Augmented Contraception Coverage Regulations (and an NPRM on > extension of the accommodation to some for-profit employers)* > > Marty Lederman > > As promised > <http://balkin.blogspot.com/2014/07/confirmation-that-supreme-courts.html>, > the federal government today issued an an interim final rule > <http://www.ofr.gov/OFRUpload/OFRData/2014-20252_PI.pdf> in which it has > augmented the secondary accommodation for nonprofit religious employers > that have religious objections to including contraceptive coverage in their > employee (or student) insurance plans. The augmented regulation responds > directly to the Supreme Court's suggestion in its *Wheaton College *order > <http://www.supremecourt.gov/opinions/13pdf/13a1284_ap6c.pdf> that the > Government might "rely[] on [a nonprofit employer's] notice [to HHS of its > religious objection] . . . to facilitate the provision of full > contraceptive coverage under the Act,” and in so doing guarantee that the > employees of that objecting organization would continue to receive > cost-free access to contraceptive services while at the same time > eliminating any religious objection that such organizations might have had > to the requirement that they file "Form 700 > <http://cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/cms-10459-certification.pdf>" > in order to opt out. > > The government has simultaneously issued a *proposed* rule > <https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-20254.pdf>, > as to which it is soliciting comments for 60 days (until October 21), on > how it might extend to certain closely held *for-profit *entities, such > as Hobby Lobby, the same accommodation that is available to non-profit > religious organizations--something that the Court in *Hobby Lobby *described > as a less-restrictive means of advancing the government's compelling > interests *without *any significant harm to the employees and students of > objecting employers and schools. Under the proposed rule, covered > companies would not have to contract, arrange, pay or refer for > contraceptive coverage to which they object on religious grounds, even if > they retain employee health plans. The proposal offers two possible > definitions of covered, closely held for-profit companies, and seeks > comments on those and other possible definitions, and whether other steps > might be appropriate to implement this policy. > > > > * * * * > > > > *The new interim final rule for nonprofit organizations* > > This is, in sum, how the accommodation would now work as to a nonprofit > employer (or school) that offers its employees (or students) a > "self-insured" insurance plan. (See this post > <http://balkin.blogspot.com/2014/07/unpacking-forthcoming-rfra-challenges.html>for > explanation of the distinction between insured and self-insured plans.) > Under the augmented rule, such an employer or school would have two, > alternative means of opting out of coverage. It can continue to use Form > 700, as many organizations have done. Or, in the alternative: > > > 1. An objecting organization that has an objection to submitting Form 700 > to the plan's third-party administrator need only inform the Department of > Health and Human Services that it has a religious objection to offering > contraception coverage. The organization must also provide HHS with the > name and contact information for any of the plan’s third party > administrators and health insurance issuers. HHS has provided a "model > notice > <http://www.cms.gov/cciio/resources/Regulations-and-Guidance/index.html#Prevention>" > that eligible organizations may, but are not required to, use. > > 2. At that point, HHS would inform the Department of Labor of the > organization's opt-out. > > 3. DOL would, in turn, inform the plan's third-party administrator (TPA), > if any, that it is obliged to offer contraceptive coverage--initially from > its own resources--to the organization's employees (and/or > students) without imposing any cost-sharing requirements on the eligible > organization, its insurance plan, or its employee beneficiaries. > (Moreover, the TPA must provide notice of this separate treatment to the > plan beneficiaries, and do so separate from materials distributed in > connection with the eligible organization’s group health coverage. The > notice to employees must make clear that the objecting organization is > neither administering nor funding the contraceptive benefits.) > > 4. The notice from DOL to the TPA -- rather than any form signed or > submitted by the objecting organization -- will then become a "plan > instrument" that designates the TPA as an ERISA "plan administrator" for > purposes of contraception coverage.* > > 5. The federal government would then reimburse the TPA for its payments > in the form of an adjustment to the TPA’s assessed user fees for the ACA > exchanges. In other words, the cost of the contraceptive coverage in the > self-insured setting is ultimately borne by the government itself, rather > than by the organization *or by *the plan TPA. > > 6. In a hypothetical case in which the objecting organization does not > use either an issuer or a third-party administrator, the government will > not have any way of guaranteeing that the organization's employees are > eligible for contraceptive coverage. In addition to the option of (i) not > using a third-party administrator, an organization also has the options of > (ii) using an insured rather than a self-insured plan; or (iii) not > providing employer (student) health insurance in the first instance.** > > 7. The earlier regulation had provided that eligible organizations that > establish or maintain self-insured group health plans “must not, directly > or indirectly seek to interfere with a third party administrator’s > arrangements to provide or arrange for separate payments for contraceptive > services” and “must not, directly or indirectly, seek to influence a third > party administrator’s decision to make any such arrangements.” Although > the Departments had interpreted this solely as prohibiting the use of > bribery, threats, or other forms of economic coercion in an attempt to > prevent a third party administrator from fulfilling its independent legal > obligations to provide or arrange separate payments for contraceptive > services, these provisions nevertheless had caused some confusion and > disputation in the courts. Accordingly, and because such conduct is > generally unlawful and is prohibited under other state and federal laws in > any event, the augmented regulation deletes the prohibitions in question. > > * * * * > > This *should* take care of any religious objections that eligible > organizations might assert, almost all of which I described in this post > <http://balkin.blogspot.com/2014/07/unpacking-forthcoming-rfra-challenges.html> > (and > most of which were based on mistakes of law even before this > augmentation). For example, under this regulation: > > *-- **The objecting organization would not be obliged to direct (or > require, or instruct) the TPA to provide contraception coverage.* > > > > *-- The objecting organization would not be obliged to inform the TPA that > it is opting out of providing coverage.* > > > > *-- The objecting organization would not be obliged to inform or “notify” > the TPA of the TPA’s obligation to provide contraception coverage.* > > > > *-- The TPA would not be an “agent” of the objecting organization for > purposes of contraception coverage.* > > > > *-- The objecting organization would not be required to take any steps to > help administer the TPA’s provision of contraceptive coverage.* > > > > *-- The objecting organization would not be required to enter into, or > sustain, a contract with a TPA that provides its employees with > contraceptive coverage, or to “identify” a TPA to contract with if it has > no such contract already.* > > > > *-- The objecting organization need not refrain from objecting to the > TPA’s provision of contraceptive coverage to its employees.* > > > > *-- The objecting organization would not be required to act hypocritically > by not "practicing what it preaches," or to do anything else that a > reasonable observer might view as approval or endorsement of contraception > use or coverage.* > > > > *-- **The objecting organization would not be required to confer a legal > status upon the TPA, such as "plan administrator."* > > > > As I explained several weeks ago > <http://balkin.blogspot.com/2014/07/confirmation-that-supreme-courts.html>, > however, it appears that at least some of the objecting organizations will > continue to raise purported religious objections to this further > accommodation--indeed, that they would continue to make RFRA claims for > exemptions no matter what the government does, as long as the government > continues to require plan issuers or TPAs to offer contraceptive coverage > to the objecting employer's employees when the employer opts out. > > > > These organizations will continue to object to the accommodation because > (in the words of counsel for some of them > <http://justsecurity.org/wp-content/uploads/2014/07/PFL.Jonesdayltr.pdf>) > it allegedly requires them to "offer[] health plans through an insurance > company or third-party administrator" at a time when that same issuer > company or TPA is also providing contraceptive coverage to the > organization's employees. > > > > As I explained, this is *not* a claim that the organization itself is > offering coverage, or paying for it, or facilitating it. Nor is it even a > claim that the organization's action is a "but-for" cause of the employees' > access to such coverage or eventual use of contraception: As I've stressed > on several occasions, the employees will receive the coverage in any > event--that's the whole point of the "preventive services" provision of the > ACA--and these plaintiffs presumably would not conclude that they were > complicit if their opting out caused *the government itself* to offer the > coverage to those same employees. > > > Instead, the residual theory of complicity, as I understand it, is that > the accommodation requires the organization to contract with an issuer or a > TPA, and that the organization's choice of contractor, together with its > employee hiring decisions, will be responsible for the fact that a > *particular *insurance company offers contraceptive coverage to a > *particular* set of employees. As the brief for Thomas Aquinas College > puts it: "Plaintiffs’ insurance company or TPA will provide the > objectionable coverage to Plaintiffs’ employees only by virtue of > their enrollment in Plaintiffs’ health plans and only 'so long as [they] > are enrolled in [those] plan[s].'” For example, if Thomas Aquinas College > had contracted with Aetna, rather than with Benefits Allocation Systems, to > be the plan's third party administrator, then it would be Aetna, rather > than BAS, that would offer coverage to Aquinas employees under the > accommodation. And if any one of those employees left Thomas Aquinas > College employment next month, they would then receive coverage from > another party, other than BAS. > > > The premise of this argument is mistaken: The regulation does not require > the organizations to contract with an issuer or a TPA--and if they do not > do so, then the government currently has no way of ensuring contraceptive > coverage for their employees. But even if that were not the case--i.e., > even if federal law coerced the organizations to contract with such an > issuer or TPA--Thomas Aquinas College and the other plaintiffs haven't > offered any explanation for why, according to their religion, the College's > responsibility for this particular *match* between TPA and employees > would render the College itself morally responsible for the employees' > eventual use of contraceptives, when (i) such employees would have the same > coverage if Aquinas had contracted with a different TPA; (ii) such > employees would continue to have coverage if they left the College; and > (iii) the College itself does not provide, subsidize, endorse, distribute, > or otherwise facilitate the provision of, its employees' contraceptive > services. > > Be that as it may, it appears that this will now be the primary (if not > the only) argument the courts will have to contend with in light of the > government's newly augmented accommodation. > > > > > > *The proposed extension of the accommodation to some closely held > for-profit companies* > > > > The new proposed rule > <https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-20254.pdf>, > subject to notice-and-comment review, accepts the *Hobby Lobby*Court's > invitation: It would extend to certain closely held *for-profit *entities, > such as Hobby Lobby itself, the same accommodation that is available to > non-profit religious organizations. > > > > The agencies offer up two possible definitions of covered, closely held > for-profit companies: > > > > -- Under the first proposed approach, "a qualifying closely held > for-profit entity would be an > entity where none of the ownership interests in the entity is publicly > traded and where the entity has fewer than a specified number of > shareholders or owners." > > -- Under the second, alternative proposed approach, a qualifying, closely > held entity would be "a for-profit entity in which the ownership > interests are not publicly traded, and in which a specified fraction of the > ownership interest is concentrated in a limited and specified number of > owners." > > According to the preamble, these approaches "might serve to identify > for-profit entities controlled and operated by individual owners who likely > have associational ties, are personally identified with the entity, and can > be regarded as conducting personal business affairs through the entity. > These appear to be the types of entities the Court sought to accommodate > in *Hobby Lobby*." The preamble further suggests that there may also be > "useful definitions or principles in state laws governing close > corporations, or other areas of law" that could be employed. > > The agencies are seeking comments on those and other possible definitions, > and whether other steps might be appropriate to implement the policy. > > ______________________________ > > > > * That's what is said to afford the government the statutory authority > under ERISA to compel the TPA to be the intermediary. As for DOL's > statutory authority, the Preamble states that "[i]n establishing and > implementing this alternative process, DOL is exercising its broad > rulemaking authority under Title I of ERISA, which includes the ability to > interpret and apply the definition of a plan administrator under ERISA > section 3(16)(A)." > > > > ** The regulation further confirms that because "church plans" are exempt > from ERISA pursuant to ERISA section 4(b)(2), a third party administrator > of a self-insured church plan "cannot become the plan administrator by > operation of 29 CFR 2510.3-16, although such third party administrators may > voluntarily provide or arrange separate payments for contraceptive services > and seek reimbursement for associated expenses under the process set forth > in 45 CFR 156.50." Thus, as I've explained > <http://balkin.blogspot.com/2014/01/little-sisters-state-of-play.html>, > there is nothing at stake--and thus no valid RFRA claim--in cases such as > *Little > Sisters*, where a church plan TPA will not voluntarily offer > contraceptive coverage if and when the employer opts out. > > > > > > *Compendium of posts on Hobby Lobby and related cases* > <http://balkin.blogspot.com/2014/02/compendium-of-posts-on-hobby-lobby-and.html> > > > > On Fri, Aug 15, 2014 at 12:05 PM, Marty Lederman <lederman.ma...@gmail.com> > wrote: > > I blogged about it here: > > > > http://balkin.blogspot.com/2014/07/confirmation-that-supreme-courts.html > > > > DOJ has now told the 10th Circuit that the new reg will be issued no later > than a week from today (Aug. 22). > > > > On Fri, Aug 15, 2014 at 11:54 AM, Conkle, Daniel O. <con...@indiana.edu> > wrote: > > This is old news, but I hadn’t seen it and so pass it along in case others > missed it as well. > > > > Administration to ‘Augment’ ACA Contraceptive Rules > > > > July 24 — The Obama administration intends to issue interim final rules > within a month regarding the “accommodations” granted to religious > nonprofit organizations that object to providing contraceptive coverage > under the Affordable Care Act, according to a government brief > <http://www.bloomberglaw.com/public/document/Little_Sisters_of_the_Poor_et_al_v_Burwell_et_al_Docket_No_130154> > filed July 22 (Little Sisters of the Poor v. Burwell, 10th Cir., No. > 13-1540, brief filed 7/22/14). > > > > . . . . . > > > > “The Wheaton College injunction does not reflect a final Supreme Court > determination that RFRA requires the government to apply the accommodations > in this manner,” the July 22 DOJ brief said. “Nevertheless, the Departments > responsible for implementing the accommodations have informed us that they > have determined to augment the regulatory accommodation process in light of > the Wheaton College injunction and that they plan to issue interim final > rules within a month. . . .” > > “The administration believes the accommodation is legally sound, but in > light of the Supreme Court order regarding Wheaton College, the departments > intend to augment their regulations to provide an alternative way for > objecting non-profit religious organizations to provide notification, while > ensuring that enrollees in plans of such organizations receive separate > coverage of contraceptive services without cost sharing,” a senior > administration official told reporters in a briefing July 22. The official > spoke on condition of anonymity. > > > > > > Bloomberg BNA, U.S. Law Week (subscription required) > > > > > http://news.bna.com/lwln/LWLNWB/split_display.adp?fedfid=50879221&vname=lw1notallissues&fcn=56&wsn=498320000&fn=50879221&split=0 > > > > > > Daniel O. Conkle > ************************************************ > Daniel O. Conkle > Robert H. McKinney Professor of Law > Indiana University Maurer School of Law > Bloomington, Indiana 47405 > (812) 855-4331 > fax (812) 855-0555 > e-mail con...@indiana.edu > ************************************************ > > > > > > _______________________________________________ > To post, send message to Religionlaw@lists.ucla.edu > To subscribe, unsubscribe, change options, or get password, see > http://lists.ucla.edu/cgi-bin/mailman/listinfo/religionlaw > > Please note that messages sent to this large list cannot be viewed as > private. Anyone can subscribe to the list and read messages that are > posted; people can read the Web archives; and list members can (rightly or > wrongly) forward the messages to others. > > > > > > _______________________________________________ > To post, send message to Religionlaw@lists.ucla.edu > To subscribe, unsubscribe, change options, or get password, see > http://lists.ucla.edu/cgi-bin/mailman/listinfo/religionlaw > > Please note that messages sent to this large list cannot be viewed as > private. Anyone can subscribe to the list and read messages that are > posted; people can read the Web archives; and list members can (rightly or > wrongly) forward the messages to others. >
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