UPDATE 5:27 p.m.  The proposed new rules have now been published by the government.  The revisions for for-profit businesses are here, and for non-profit organizations are here.

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The Obama administration, planning to change its health insurance rules to satisfy the Supreme Court’s ruling in June limiting the federal birth-control mandate, proposed on Friday that for-profit companies with publicly traded stock will not qualify for a new exemption.  A government fact sheet giving background and summarizing the proposed changes can be read here.

The new rules appear to have two purposes:  to keep the mandate under the Affordable Care Act within the new limits required by the Court’s decision in Burwell v. Hobby Lobby Stores, but also to make sure that women who work for employers who object to the mandate for religious reasons would continue to have access to that coverage.  The revisions would apply to both for-profit businesses and non-profit groups like religiously oriented charities, hospitals, schools, and colleges.

In its June 30 decision, the Court by a five-to-four vote gave businesses formed as “closely held corporations” a new exemption from the requirement that most businesses must provide a variety of pregnancy-preventive health care coverage for their female workers, if the firm’s owners have religious objections to those services.

Before that ruling, government rules did not allow for-profit firms any exemption from that mandate, and it limited the exemption that did exist for non-profit groups of a religious nature.  The Hobby Lobby decision required a new exemption for some for-profit firms based on a federal law that protects religious freedom, and a separate action the Court took after that ruling — in a case involving Wheaton College in Illinois – ordered the U.S. Department of Health and Human Services (HHS) to ease the mandate for that college (and, by implication, for some other non-profit groups).

In Friday’s action, HHS issued a new set of birth-control rules in interim form and sought comments from the public to help shape the final rules.  The proposed rule for for-profit businesses is not yet in effect, but the change for non-profit religious groups is to take effect almost immediately.

Here, in summary, is what HHS is proposing for for-profit businesses whose owners object to the mandate:

* An exemption from the mandate would only exist for a for-profit business organized as a “closely-held corporation.”

* Two alternative definitions for such a corporation were offered for comment, but in both, the corporation would not be eligible for an exemption based on its religious objections if it had stock that is publicly traded.

* One way to define such a corporation would be by specifying a maximum number of owners that it could have — with the public urged to help spell that out.  The alternative way would be by specifying a minimum percentage of a total number of owners who had actual ownership concentrated among them — with the public again asked help to spell that out.

* HHS is not committed to either of those approaches, and asked for suggestions for alternatives.

* The public was invited to make suggestions on how a for-profit firm could be required to prove that its owners have established that they do have religious objections to the mandate.

* If a corporation’s governing structure takes action, in keeping with state law governing corporations, to claim a religious exemption, and then lets the government know of its objection (by official form or by a simple letter), that would be enough to put the government on notice of the objection, and it would then lead the government to take steps to take over providing access to the services independently of the owners and at no cost to them or to the workers.

* The public was given sixty days to submit comments on the proposal, which is not yet in effect.

Here, in summary, is what HHS is proposing for non-profit groups of a religious nature that object to the mandate:

* Instead of having to formally notify the organization’s health plan administrator of the religious objection, the organization need only write to HHS to claim the exemption.  That would trigger HHS to take over to provide contraceptive services, independently of the organization and at no cost to the organization or its workers.

* The public was invited to make comments on the non-profit proposal, but HHS said that this change would go into effect as soon as it is formally published — in the next issue of the government’s Federal Register.  The expanded exemption opportunity for non-profits followed precisely the approach that the Supreme Court had ordered in the Wheaton College case on July 3.

(NOTE TO READERS: The actual text of the proposed new rules is not yet available.  The only document available on Friday was the HHS fact sheet.  UPDATE: The text of the proposed rules are now available, and are linked at the top of this post.)

Posted in Burwell v. Hobby Lobby Stores, Conestoga Wood Specialties Corp. v. Burwell, Featured, Health Care, Merits Cases

Recommended Citation: Lyle Denniston, Rules for birth-control mandate after Hobby Lobby (UPDATED), SCOTUSblog (Aug. 22, 2014, 3:22 PM), http://www.scotusblog.com/2014/08/rules-for-birth-control-mandate-after-hobby-lobby/