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On July 8, 2020, the United States Supreme Court issued its ruling in Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, Case No. 19-431, addressing the regulatory exemption to the mandate for health plans to provide birth control.

The Affordable Care Act (“ACA”) requires employers with 50 or more employees to provide a health insurance plan that, among other things, provides women with “preventive care and screenings,” but does not specify exactly what that preventive care must include.  Instead, it delegates the specific requirements to the Health Resources and Services Administration (“HRSA”), an agency of the Department of Health and Human Services (“HHS”).  HRSA requires plans to provide birth control.  After extensive prior litigation on the issue of whether such a requirement impinges upon the Constitutional rights of employers with religious objections to birth control, HRSA promulgated a new exemption for any employer with sincerely held moral objections.

The States of New Jersey and Pennsylvania challenged the moral exemption to the contraceptive mandate in the District Court, which issued a nationwide injunction to prevent it from taking effect, and the Third Circuit Court of Appeals affirmed.

In an opinion authored by Justice Thomas and joined by Justices Roberts, Alito, Gorsuch, and Kavanaugh, the Supreme Court overruled the Third Circuit.  First, the Court rejected the contention that the ACA does not empower HRSA to promulgate the moral exemption to the contraceptive mandate.  The Court noted that this “asserted limitation is found nowhere in the [ACA]…;” rather, the ACA “grants sweeping authority to the HRSA to craft a set of standards defining the preventive care that applicable health plans must cover.”  Thus, “HRSA has virtually unbridled discretion to decide what counts as preventive care and screenings.”

The Supreme Court also rejected the argument that the moral exemption is procedurally invalid.  The Court found that it “contained all of the elements of a notice of proposed rule making as required by the [Administrative Procedure Act].”  The Court also refused to apply an “open-mindedness test” as urged by respondents.  “We have repeatedly stated that the text of the APA provides the ‘“maximum procedural requirements”’ that an agency must follow in order to promulgate a rule.”

Justice Alito, joined by Justice Gorsuch, concurring in the result, would have gone further and held that the Religious Freedom Restoration Act requires the moral exemption to the contraception mandate.

Justice Kagan, joined by Justice Breyer, concurring in the result, would have upheld HRSA’s authority to promulgate the moral exemption, but would have remanded on the issue of whether HRSA followed the procedural requirements in implementing the exemption.

Justice Ginsburg, joined by Justice Sotomayor, dissenting, would have reversed on the ground that the ACA does not permit HRSA to promulgate the moral objection.