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October 15, 2015
  Sharpe Holdings, Inc. v. U.S. Department of Health and Human Services - Eighth Circuit
Headline Eighth Circuit panel upholds preliminary injunction enjoining the government from enforcing certain provisions of the Patient Protection and Affordable Care Act against certain nonprofit religious organizations

Area of Law Affordable Care Act

Issue(s) Presented Whether the district court properly entered a preliminary injunction enjoining the government from enforcing certain provisions of the Patient Protection and Affordable Care Act against nonprofit religious organizations that object to some forms of contraceptive coverage.

Brief Summary Plaintiffs CNS International Ministries, Inc. ("CNS") and Heartland Christian College ("HCC") are Missouri nonprofit corporations that provide residential and educational services, respectively. Both CNS and HCC offer healthcare coverage to employees through self-insured group plans. Christian belief and practice are integral to their identities. As such, CNS and HCC object to providing healthcare coverage for certain forms of contraceptives they view as akin to abortion.

The Patient Protection and Affordable Care Act (the "ACA"), requires that all group health plans and health insurers must provide coverage for all Food and Drug Administration approved contraceptive methods. Employers that fail to comply with the contraceptive mandate face monetary penalties. The ACA does provide an exemption for health plans that existed at the time of its passage, and for group health plans sponsored by narrowly defined religious employers, such as churches. The statute also provides an "accommodation" for religious organizations that have religious objections to the contraceptive mandate but do not qualify for the religious-employers exemption. After self-certifying that it meets the criteria for the accommodation, the organization's third-party administrator ("TPA") must provide or arrange payments for contraceptive services for the employees covered by the organization's healthcare plans. As such, women employed by organizations which seek the accommodation are still provided with contraceptives coverage. CNS and HCC meet the criteria to be eligible for this accommodation.

CNS and HCC filed suit against the U.S. Departments of Health and Human Services, Treasury, and Labor, along with their respective Secretaries (collectively "HHS"), challenging certain provisions of the ACA. They argue that both the contraceptive mandate and the accommodation process impose a substantial burden on their exercise of religion in violation of the Religious Freedom Restoration Act (RFRA) and the Free Exercise Clause of the First Amendment. Specifically, CNS and HCC argue that through the contraceptive mandate the government is coercing them to violate their religious beliefs by threatening monetary penalties unless they either directly provide contraceptive coverage, or indirectly provide the same coverage through the accommodation process. With respect to the accommodation process, CNS and HCC claim that by submitting a document to self-certify that they are eligible for an accommodation, they trigger contraceptive coverage by a TPA. Thus, CNS and HCC argue, their actions lead to the provision of contraceptives they object to on religious grounds.

The District Court granted injunctive relief, relying on an earlier order enjoining enforcement of ACA contraceptive mandate regulations against certain for-profit plaintiffs. HHS appealed, arguing that the TPAs have a separate and independent obligation under the ACA to provide contraceptive coverage to CNS and HCC's employees. HHS further argued that, even assuming there was a substantial burden on the exercise of religion, the accommodation process is the least restrictive means possible to accomplish its compelling interest in ensuring access to no-cost contraceptive coverage.

The Eighth Circuit rejected HHS's arguments, and affirmed the District Court's order granting a preliminary injunction. It did not address the First Amendment claims because it concluded that CNS and HCC were entitled to relief based on the RFRA claims. The Eighth Circuit found that by imposing monetary penalties should CNS and HCC adhere to their religious beliefs and refuse to comply with the contraceptive mandate or the accommodation process, the government placed a substantial burden on the organizations' exercise of religion. The Court rejected precedent from other courts that sided with the government in concluding that, as a matter of law, the accommodation process did not trigger or otherwise make religious organizations complicit in the provision of contraceptive coverage. Instead, the Eighth Circuit stressed that, in light of Burwell v. Hobby Lobby, 134 S. Ct. 2751 (2014), it must accept CNS and HCC's assertions that self-certification under the accommodation process would violate their sincerely held religious beliefs by facilitating provision of a form of abortion. The Eighth Circuit stated that "[t]he question here is not whether CNS and HCC have correctly interpreted the law, but whether they have a sincere religious belief that their participation in the accommodation process makes them morally and spiritually complicit in providing abortifacient coverage. Their affirmative answer to that question is not for us to dispute." As such, the Eighth Circuit concluded that in light of these sincerely held religious beliefs, compelling participation in the accommodation process under threat of monetary penalties substantially burdened CNS and HCC's exercise of religion.

Finally, the Eighth Circuit assumed for purposes of its analysis that the government had a compelling interest in guaranteeing cost-free contraceptive coverage in examining whether the accommodation process is the least restrictive means possible for achieving that compelling interest. It determined that the accommodation process is not the least restrictive means, and provided a number of examples of less restrictive options through which the government could provide free contraceptive coverage.

The full text of the opinion may be found at

Panel Circuit Judges Benton, Colloton, and Wollman

Date of Issued Opinion September 17, 2015

Decided Affirmed

Docket Number 14-1507

Counsel Patrick Nemeroff for Appellants and Timothy Belz for Appellees

Author Circuit Judge Wollman

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 10/15/2015 10:41 AM     8th Circuit  

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