by Professor Timothy Jost (Washongton & Lee; Institute of Medicine, National Academy of Sciences)
Implementing Health Reform. On March 24, 2016, the Supreme Court heard oral arguments in Zubik v. Burwell, the case through which religious organizations are challenging the requirement that they provide contraceptives as a woman’s preventive service. On March 29, 2016 in a highly unusual move, the Supreme Court ordered supplemental briefing on the question of:
. . . whether and how contraceptive coverage may be obtained by petitioners’ employees through petitioners’ insurance companies, but in a way that does not require any involvement of petitioners beyond their own decision to provide health insurance without contraceptive coverage.
The Court suggested, for example, that the petitioners could inform their insurers of their objection to contraceptive coverage and their insurers could provide the coverage for free to employees or students without any further involvement of the petitioners.
The issue in the case is, of course, whether the Religious Freedom Restoration Act (RFRA) requires a further accommodation of religious organizations’ objections to providing contraceptives to their employees and students beyond that the government is already offering. Under the current accommodation, the organizations must notify the government of their objection to coverage. The government then requires the insurers and third party administrators that administer the organizations’ health plans to provide contraceptive coverage without further involvement by the organizations.
The petitioners argue that the current arrangement substantially burdens their religious freedom and is not the least restrictive means of furthering a compelling governmental interest, as required by RFRA. The oral argument indicated that Justices Kagan, Ginsburg, Breyer, and Sotomayor were prepared to reject their claim while Justices Alito, Roberts, and Thomas were sympathetic, with Kennedy undecided. The request for further briefing is likely an attempt to find a compromise position acceptable to at least five of the justices.
A first round of the requested briefs were filed by both the petitioners and the government on April 12. The petitioners’ brief indicates that they are open to an accommodation where they would contract for insurance coverage that did not cover contraceptives but their insurers would independently provide contraceptive coverage to their enrollees, without cost but with separate enrollment processes, insurance cards and contracts, payment sources, and communication streams. They suggest, for example, that their insurers could mail out cards allowing enrollees to opt in to contraceptive coverage through a process like activating a credit card.
The government in its brief pointed out that the process the Court described was very close to the accommodation already offered. The one difference is that the religious organizations would notify their insurers rather than the government. The government contended that this arrangement was problematic but potentially workable. The government’s brief concludes with an extended plea to settle this issue once and for all so that the hundred or so cases it has been fighting can finally get resolved.
The parties may be close to offering the Court a compromise, therefore, with respect to insured plans, which is what the Court requested. They remain miles apart, however, with respect to self-insured plans, with the petitioners steadfastly resisting offering contraceptive coverage through their self-insured plans and the government resisting an accommodation that leaves women enrolled in self-insured plans without seamless coverage.
It may be noteworthy, however, that the Court only requested further briefing with respect to insured coverage. It is perhaps the case that there is no less restrictive alternative with respect to self-insured coverage that would both accommodate petitioners’ religious beliefs and the need for their employees and students to access seamless coverage of contraceptives.
If the Court accepts the compromise with respect to insured coverage to which the parties seem to agree, the religious organizations would have the option of either purchasing insurance for their employees or students or arranging self-insured coverage through a church plan. The government admits that church plans, which are not subject to The Employee Retirement Income Security Act of 1974 (ERISA), are not directly subject to the mandate. (The Little Sisters petitioners in fact cover their employees through a church plan and are thus not subject to the mandate they are challenging). The petitioners would not have the option, however, of providing self-insured coverage through a conventional third party administrator, except through the present accommodation.
Although many employers offer self-insured coverage, many also offer insured coverage. Indeed, one third of workers are employed by firms that offer insured coverage. Perhaps a resolution where religious organizations that want to offer their employee contraceptive-free coverage must do so through insured (or church) plans is the least restrictive solution to a seemingly intractable controversy.
New ACA Affordability Thresholds
The Internal Revenue Service (IRS) has updated several indices used for calculating eligibility for Affordable Care Act benefits or exemptions from ACA penalties for 2017. For 2017, employer-sponsored coverage will only be considered unaffordable, thus rendering an employee eligible for premium tax credits, if its cost to the employee exceeds 9.69 percent of the employee’s household income. This percentage was 9.50 in 2014 and 9.66 in 2016.
For 2017, available minimum essential coverage will be considered unaffordable for purposes of the individual responsibility affordability exemption if its cost exceeds 8.16 percent of household income, after the application of employer contributions and available premium tax credits. This amount compares to 8 percent in 2014 and 8.13 percent in 2016.
Finally, the IRS released the applicable percentage table for 2017. This is the table that determines what proportion of household income an individual or family must spend on health insurance premiums before premium tax credit assistance becomes available.
These indices are increased each year to reflect the excess in the rate of premium growth in the previous year over the rate of income growth. The procedure for making these adjustments was established by a 2014 Revenue Procedure.
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