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
> ************************************************
>
>
>
>
>
> _______________________________________________
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>
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