Religion & Liberty Online

The FAQs: Obamacare’s Contraceptive-Abortifacient Mandate

On Friday the Obama administration proposed a rule that it says will appease the concerns religious organizations have about the controversial abortion/contraceptive mandate issued last year by the Department of Health and Human Services. Here’s what you should know about the mandate and the proposed changes.

the-pillWhat is this contraception mandate everyone keeps talking about?

As part of the universal health insurance reform passed in 2010 (often referred to as “Obamacare”), all group health plans must now provide—at no cost to the recipient—certain “preventive services.” The list of services includes sterilization, contraceptives, and abortifacient drugs.

If this mandate is from 2010, why are we just now talking about it?

On January 20, 2012, the Obama Administration announced that that it would not expand the exemption for this mandate to include religious schools, colleges, hospitals, and charitable service organizations. Instead, the Administration merely extended the deadline for religious groups who did not already fall within the existing narrow exemption so that they will have one more year to comply or drop health care insurance coverage for their employees altogether and incur a hefty fine. For example, Hobby Lobby, a Christian-owned company that is opposing the mandate, is facing fines up to $1.3 million per day.

Is there a religious exemption from the mandate? If so, who qualifies for the exemption?

In the original rule, the definition of a religious employer is one whose purpose is “the inculcation of religious values,” and which both primarily employs and primarily serves people who share its religious faith.” The narrow definition excluded a number of faith-based employers, including Christian colleges, religious hospitals, and religious charities. In the new proposal, the administration removed the language about serving and employing mostly people of the same faith and so has defined a religious employer by just referring to the IRS definition. As Yuval Levin notes,

This makes the rule less insulting to the American tradition of faith-based civil-society institutions, but as far as I can see it doesn’t actually exempt from the rule’s requirements any employers who weren’t already eligible to be exempted. In fact, HHS says so plainly in today’s rule: “this proposal would not expand the universe of employer plans that would qualify for the exemption beyond that which was intended in the 2012 final rules.” It is still the case that essentially only houses of worship are exempted.

Additionally, to qualify for the proposal, an organization must self-certify that it “holds itself out as a religious organization,” according to HHS. As the Baptist Press points out, “Ironically that could mean that many of the nation’s leading pro-life organizations—despite being non-profits—won’t qualify for the accommodation because they’re technically not religious organizations.”

“Not even Jesus’ ministry would qualify for this exemption,” the Becket Fund for Religious Liberty noted, “because He fed, healed, served, and taught non-Christians.”

What changes has the Obama administration proposed to make to the mandate?

Under the proposed revision, the main change is that religious organizations will be allowed to offer employees a plan that does not directly cover contraceptives. According to the Washington Post, their health insurer will then automatically enroll employees in a separate individual policy, which stands apart from the employer’s larger benefit package and only covers contraceptives. The religious organization would not “have to contract, arrange, pay or refer for any contraceptive coverage to which they object on religious grounds.”

With this change insurance companies, instead of religious institutions, will be required to cover abortifacients and contraceptives at no cost in their insurance policies. In other words, the insurer would be required to provide the services “free of charge” and pay for them out of their own pocket.

For organizations that self-insure, the revisions states:

With respect to self-insured group health plans, the eligible organization would notify the third party administrator, which in turn would automatically work with a health insurance issuer to provide separate, individual health insurance policies at no cost for participants.  The costs of both the health insurance issuer and third party administrator would be offset by adjustments in Federally-facilitated Exchange user fees that insurers pay.

In other words, the American taxpayer will pay for the contraceptive-abortifacient policy for organizations that self-insure.

What’s wrong with that compromise plan?

Opponents of the mandate consider the change an “accounting gimmick,” arguing that the premiums they pay to a health insurer could ultimately end up paying for the contraceptives they opposed.

As economist Steve Landsburg explains, the proposed compromise does not really change the fact that the religious employers are still being forced to pay for the contraceptives-abortifacients:

[A]ll economists (and I hope everyone who’s successfully completed a Principles course) understands that transferring the responsibility from employers to insurers amounts to transferring the cost from insurance buyers to insurance providers, which is to say that it’s not a change in policy. One of the first and most important lessons we teach our students is well summarized by a slogan: “The economic burden of a tax is independent of the legal burden”. Ditto for a mandated insurance purchase. It is not the law, but the underlying price-sensitivities of buyers and sellers, that determines where the burden ultimately falls.

Your president knows this. He’s banking that you don’t.

What meaningful protections to religious liberty does the proposal offer?

None. “Today’s proposed rule does nothing to protect the religious freedom of millions of Americans. For instance, it does nothing to protect the rights of family businesses like Hobby Lobby,” said Kyle Duncan, General Counsel for the Becket Fund for Religious Liberty.  “The administration obviously realizes that the HHS mandate puts constitutional rights at risk.  There would have been an easy way to resolve this—expanding the exemption—but the proposed rule expressly rejects that option.”

The Becket Fund says the proposed rule fails to fix the HHS mandate’s fundamental problems:

  • The proposed rule provides no coverage for family businesses like Hobby Lobby.
  • The proposed rule does not meaningfully expand the “church-only” exemption – which is the real relief that our clients are entitled to under our constitution.
  • For other religious non-profits, HHS proposes a convoluted “accommodation” that may not resolve religious organizations’ objections to being coerced into providing contraceptives and abortifacients to their employees.
  • Finally, the long-awaited rule provides no concrete guidance for religious groups that are self-insured.

Doesn’t the mandate only apply to religious organizations that receive federal funding?

No. The mandate applies to religious employers even if they receive no federal funding.

When did the government begin requiring employer-insurance programs to pay for contraceptives?

According to the Becket Fund, the trend toward state-mandated contraceptive coverage in employee health insurance plans began in the mid-1990s and was accelerated by the decision of Congress in 1998 to guarantee contraceptive coverage to employees of the federal government through the Federal Employees Health Benefits Program (FEHBP).

After FEHBP—the largest employer-insurance benefits program in the country—set this precedent, the private sector followed suit, and state legislatures began to make such coverage mandatory.

When did the mandate take effect?

As of August 1, 2012, employers are required to offer abortion-inducing drugs, contraception, and sterilization for their employees. Employers are obligated to provide these services at no cost to their employees through their company’s health insurance.

I thought Obamacare didn’t begin until 2014?

The Patient Protection and Affordable Care Act (PPACA), often referred to informally as “Obamacare”, began on March 23, 2010. Most major provisions are being phased in by January 2014 with the remaining provisions phased in by 2020.

If employers don’t comply, what happens to them?

If employers don’t change their plans, they will be hit with fines of up to $100 per employee per day. But if they stop providing health coverage, employers with more than 50 employees could be hit with an alternative fine of $2,000 per employee per year.

As the Heritage Foundation has noted, for many companies, the level of these fines would mean going out of business. Applying the $100 per employee per day fine to Hercules Industries—a family-owned business with 265 employees that is challenging the mandate in Colorado—would mean a fine of $795,000 per month  ($100 per day x 30 days x 265 employees)—over $9.5 million per year.

However, if Hercules were to drop its health coverage, forcing its employees into government-run exchanges under Obamacare, it would face a fine of approximately $2,000 per employee per year ($2,000 x 265 employees), for a total of $530,000 per year.

Didn’t a federal court put a stop to the mandate?

To date, of the 14 for-profit plaintiffs that have obtained rulings touching on the merits of their claims against the Mandate, 10 have secured injunctive relief against it.

Are legislators doing anything to overturn the mandate?

Republicans in Congress have vowed to undo the rule, and the Republican-led House has voted numerous times to overturn the Obamacare provisions. Senate Republicans also attempted to hold a vote to repeal the entire health care law, but Democrats objected and the legislation has stalled.

Why is the federal government dictating that contraceptives should be covered by insurance?

In 2000, the EEOC issued an opinion stating that the refusal to cover contraceptives in an employee prescription health plan constituted gender discrimination in violation of the Pregnancy Discrimination Act (PDA). That law was added by Congress in 1978 in response to a Supreme Court decision holding that an employer’s selective refusal to cover pregnancy-related disability was not sex discrimination within the meaning of Title VII, the primary federal law addressing employment discrimination.

As the Beckett Fund notes, “Although this opinion is not binding on federal courts, it is influential, since the EEOC is the government body charged with enforcing Title VII. This opinion led to many lawsuits against non-religious employers who refused to cover prescription contraceptives.” The federal district courts have split over the issue of whether the PDA requires employers to provide contraception, the only federal court of appeals to reach the issue held that the PDA did not include a contraceptive mandate.

But what about the First Amendment protections? Isn’t such a requirement inherently unconstitutional?

In Employment Division v. Smith, the Supreme Court announced that the First Amendment’s free exercise clause “does not relieve an individual of the obligation to comply with a ‘valid and neutral law of general applicability,'” simply because “the law proscribes (or prescribes) conduct that his religion prescribes (or proscribes).” According to the Becket Fund this means that the fact that an act infringes on the religious beliefs or regulates the religiously motivated policies of a religious institution does not necessarily make the law unconstitutional.

Isn’t this just a Catholic issue?

No. Although the Catholic Church has been the most vocal opponent of the mandate, many Protestant, Jewish, and Muslims also oppose the mandate. In fact, several evangelical leaders have called on evangelicals to stand with Catholics in civil disobedience to this law.

I don’t oppose contraceptives, so why should I care about this issue?

There are two reasons that all Christians, regardless of their view on contraceptives, should be concerned about this mandate.

The first is because it forces Christians to pay for abortion-inducing drugs. The policy currently requires coverage of Ulipristal (“Ella”), which is chemically similar to the abortion drug RU-486 (mifepristone) and has the same effect (to prevent embryos from being implanted or, if already implanted, to die from lack of nutrition). Additionally, RU-486 is also being tested for possible use as an “emergency contraceptive.” If the FDA approves it for that purpose, it will automatically be included under the mandate.

The second is that it restricts religious liberty by forcing religious institutions to pay for contraceptives and abortifacients even if the employer has a religious or moral objection to such practices.

Okay, while it may be a pro-life concern, it isn’t a religious liberty issue for me since I support the use of contraception, right?

If the mandate is allowed to stand it will set a precedent that the government can not only force citizens to violate their most deeply held beliefs but that we can be sanctioned for refusing to do so.

As John Leo notes, today it is contraceptives and abortifacients, but “down the road it will be about suicide pills, genetic engineering, abortion and mandatory abortion training, transgender operations, and a whole new series of morally problematic procedures about to come over the horizon.”

Indeed, as Leo notes in his column, a Catholic-run California hospital was sued because it refused to perform breast-enlargement surgery on a transgendered patient. The state court ruled the hospital had violated  the state’s anti-discrimination laws. (Caving under litigation, the hospital paid $200,000 to the transgendered man.)

And as Yuval Levin explains,

This [proposed revision to the mandate], like the versions that have preceded it, betrays a complete lack of understanding of both religious liberty and religious conscience. Religious liberty is an older and more profound kind of liberty than we are used to thinking about in our politics now. It’s not freedom from constraint, but recognition of a constraint higher than even the law. It’s not “the right to define one’s own concept of existence, of meaning, of the universe, and of the mystery of human life” but the right to answer to what you are persuaded is the evident and inflexible reality of existence, of meaning, of the universe, and of the mystery of human life. It’s not the right to do what you want; it is the right to do what you must.

Governments have to recognize that by restricting people’s freedom to live by the strictures of their faith they are forcing them to choose between the truth and the law. It is therefore incumbent upon the government of a free society to seek for ways to allow people to live within the strictures of their consciences, because it is not possible for people to live otherwise.

There are times, of course, when the government, in pursuit of an essential public interest, simply cannot make way for conscience, and in those times religious believers must be willing to pay a heavy price for standing witness to what they understand to be the truth. But such moments are rare, and our system of government is designed to make them especially so. Both the government and religious believers should strive to make them as rare as possible by not forcing needless confrontations over conscience. And in this case, I think it is just perfectly clear that the government has forced a needless and completely avoidable confrontation and has knowingly put many religious believers in an impossible situation.

Why the HHS is fighting so hard to enforce the anti-conscience mandate?

One possible reason is crony capitalism—when government shows favoritism to specific favored businesses and industries. As David Catron says,

An answer is suggested by the President’s recent nomination of William B. Schultz to head the legal team at Health & Human Services. Never heard of Mr. Schultz? He is an attorney and long-time lobbyist for the pharmaceutical industry. He has been acting general counsel for HHS since last year. What has this to do with the contraception mandate? Well, as Tim Carney of the Washington Examiner has pointed out, Schultz’s biggest client was “Barr Laboratories, maker of the morning-after contraception pill known as Plan B.”

Contraception is big business, and the HHS mandate promises to turn it into a cash cow for companies like Barr Laboratories. How? Avik Roy explains: “Under the current system, drug companies have an incentive to compete on price.… Under the new mandate, this price incentive disappears.” Insurance policies that covered contraception prior to the mandate encouraged patients to forego pricey products by charging higher co-pays than for generic equivalents. The HHS mandate forbids such co-pays, so there is no incentive to choose “Brand X.”

Roy goes on as follows: “Drug companies will be able to market ‘branded’ contraceptives at premium prices, knowing that women are free to choose the most expensive, designer product because it will cost them the same as the cheapest generic.” In other words, the contraception mandate is a license to steal for Big Pharma. Does that explain why President Obama and his Commissar of HHS, Kathleen Sebelius, are willing to endure another round of legal battles? Yep. The fix was obviously in at least as far back as 2009.


Other posts in The FAQs series:

School Choice

Right to Work Laws and Economic Freedom

The Fiscal Cliff Proposals

What is the Fiscal Cliff?


Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).