Seventh Circuit stays contraception insurance mandateBy
By Sheri Qualters
The National Law JournalFebruary 4, 2013
A federal appeals court has issued a second ruling staying the health care reform law’s requirement that health insurance plans cover contraception and related services.
The contraception mandate has been a particularly controversial part of President Barack Obama’s Patient Protection and Affordable Care Act. On Friday, the Obama administration proposed a new compromise in an effort to address the concerns of religious nonprofit organizations to the law, which requires employers to provide health insurance that includes artificial contraception, including sterilization, as a free preventive service.
The compromise is a work-around for religious nonprofits and would provide their employees with contraceptive services outside of the employers’ health insurance plan.
Early reports on the compromise plan did not appear to affect the rules for employers who are not part of religious organizations but object to providing contraception on the basis of personal religious beliefs of company owners. Recent U.S. Court of Appeals cases have involved several such companies.
In the latest ruling, on Jan. 30, a split U.S. Court of Appeals for the Seventh Circuit panel in Grote v. Sebelius granted the plaintiffs’ injunction motion while their appeal is pending. The injunction bars U.S. government agencies from enforcing the law’s contraception mandate against the Grote family and its company, Grote Industries. The Grote family is Catholic and claims those regulations violate its religious freedoms.
Judges Joel Flaum and Diane Sykes joined the order. Judge Ilana Diamond Rovner filed a dissent.
On Dec. 28, 2012, the same panel issued a similar order with the same split in Korte v. U.S. Department of Health and Human Services. That ruling barred the government from enforcing the disputed mandate against the Korte family and its construction company, Korte & Luitjohan Contractors Inc.
In addition, in a one-sentence split order on Nov. 28, 2012, the Eighth Circuit granted a similar preliminary injunction motion in O’Brien v. U.S. Department of Health and Human Services.
The cases are among several challenges to the Patient Protection and Affordable Care Act at the district and appellate courts.
The contraception mandate applies during the first health plan year after Aug. 1, 2012.
The most recent order consolidated the Grote case with the Korte case. The Seventh Circuit stated that the two cases are “materially indistinguishable.”
The Grote parties sued the federal government in the Southern District of Indiana in October 2012. Their Madison, Ind.-based company makes vehicle safety systems with 1,148 full-time employees.
Their constitutional claims included the free exercise, establishment and free speech clauses of the First Amendment, the due process clause and violations of the Religious Freedom Restoration Act and the Administrative Procedure Act.
Judge Sarah Evans Barker denied the Grotes’ injunction motion last December. Barker rejected their various claims and wrote, “we are not persuaded that the mandate imposes a substantial burden on Plaintiffs’ free exercise of religion.”
The Seventh Circuit majority concluded that the Grote parties, like the Kortes, have established a reasonable likelihood of success on their Religious Freedom Restoration Act claim.
“And as in Korte, the government has not, at this juncture, made an effort to satisfy strict scrutiny. In particular, it has not demonstrated that requiring religious objectors to provide cost-free contraception coverage is the least restrictive means of increasing access to contraception,” said the majority.
Rovner’s dissent noted that Grote Industries “is a secular, for-profit business.”
“As such, I cannot imagine that the company, as distinct from the Grotes, has any religious interests or rights to assert here,” Rovner wrote.
Rovner observed, “The Grotes … are, in both law and fact, separated by multiple steps from both the coverage that the company health plan provides and from the decisions that individual employees make in consultation with their physicians as to what covered services they will use.”
The Kortes’ Highland, Ill. company offers a group health insurance plan to its 20 non-union employees. In October 2012, they filed suit in the Southern District of Illinois, bringing the same claims as the Grotes. Judge Michael J. Reagan denied their preliminary injunction motion in December.
The O’Brien parties filed suit in March 2012 in the Eastern District of Missouri over insurance for 87 employees at St. Louis-based O’Brien Industrial Holdings. District Judge Carol Jackson dismissed the case in September.
The Grote plaintiffs’ co-counsel, Matt Bowman, a senior legal counsel at Alliance Defending Freedom, said “The court delivered a message to the Obama administration that religion cannot be denied to families who are trying to earn a living in business.”
The Health and Human Services and Treasury Departments, defendants on both Seventh Circuit cases, did not respond. The Labor Department referred questions to its counsel at the Justice Department. Justice Department spokesman Charles Miller said the department has no comment.