In response to a year of protests and lawsuits, the HHS released a new set of proposed rules today.
There is good and bad here; mostly bad. The administration backs off from the narrow designation of who is and isn’t a religious organization. But the method that the HHS directs to provide abortion-inducing drugs and contraception to employees of religious organizations is an accounting gimmick. Finally, the administration re-emphasizes that secular business don’t have religious freedom.
Comments on the rules are possible. These are not final yet. Comments are due 60 days from now.
A quick review of the highlights of the proposed changes reveals that there are two key changes.
First, the proposed rules would amend the criteria for the religious employer exemption to ensure that an otherwise exempt employer plan is not disqualified because the employer’s purposes extend beyond the inculcation of religious values or because the employer serves or hires people of different religious faiths. Second, the proposed rules would establish accommodations for health coverage established or maintained by eligible organizations, or arranged by eligible organizations that are religious institutions of higher education, with religious objections to contraceptive coverage.
Criteria for the religious employer exemption now has a four-prong test (serve those of the same faith, purpose is to inculcate the faith, employ those of the same faith, and complicated tax rules). Here is the new definition.
…the Departments propose to amend the definition of religious employer that was adopted in the 2012 final rules by eliminating the first three prongs of the definition and clarifying the application of the fourth. Under this proposal, an employer that is organized and operates as a nonprofit entity and referred to in section 6033(a)(3)(A)(i) or (iii) of the Code would be considered a religious employer for purposes of the religious employer exemption.
By eliminating the first three prongs of the current definition, there no longer would be any question as to whether group health plans of houses of worship that provide educational, charitable, or social services to their communities qualify for the exemption.
For purposes of these proposed rules only, the Departments propose to define an eligible organization as an organization that meets all of the following criteria:
• The organization opposes providing coverage for some or all of the contraceptive services required to be covered under section 2713 of the PHS Act on account of religious objections.
• The organization is organized and operates as a nonprofit entity.
• The organization holds itself out as a religious organization.
• The organization self-certifies that it satisfies the first three criteria, as described later in this section.
So it seems as if they are backing off their very narrow definition of religious employer, and using the standard IRS definition. I think this is a good thing. The fact that the administration is doing this shows that pressure does work!
OK, how about the “accommodation?” The “eligible organization” in the explanation below is an organization that meets the requirements above.
…these proposed rules would provide that, in the case of an insured group health plan established or maintained by an eligible organization, the health insurance issuer providing group coverage in connection with the plan would assume sole responsibility, independent of the eligible organization and its plan, for providing contraceptive coverage without cost sharing, premium, fee, or other charge to plan participants and beneficiaries.
The eligible organization would provide the issuer with a copy of its self-certification. If the plan uses a separate issuer for certain coverage, such as prescription drug coverage, the eligible organization may also need to provide a copy of its self-certification to the separate issuer. Nothing more would be required of the eligible organization to qualify for the accommodation.
So, insurance companies will be required to furnish abortion-inducing drugs, contraceptives, and sterilization free of charge. I think we all know that this is an accounting gimmick.
What about people in secular business?
The Departments do not propose that the definition of eligible organization extend to for-profit secular employers. Religious accommodations in related areas of federal law, such as the exemption for religious organizations under Title VII of the Civil Rights Act of 1964, are available to nonprofit religious organizations but not to for-profit secular organizations. Accordingly, the Departments believe it would be appropriate to define eligible organization to include nonprofit religious organizations, but not to include for-profit secular organizations.