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Media Alerts - Real Alternatives Inc v. Secretary, Department of Health and Human Services--Third Circuit
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August 19, 2017
  Real Alternatives Inc v. Secretary, Department of Health and Human Services--Third Circuit
Headline: The RFRA only provides relief from substantial government burdens on religious exercise, and passive eligibility for reimbursement of optional contraceptive services is not a substantial burden.

Area of Law: Constitutional

Issues Presented: (1) Whether the Contraceptive Mandate must exempt a secular anti-abortion group with no religious affiliation, and (2) whether an employee's religious beliefs are substantially burdened by the law's requirement that his or her employer's insurance plan cover contraceptives.

Brief Summary:
A single-isssue non-profit company is not similarly situated with a religion because they are different in structure, aim, purpose, and function. Such organizations do not qualify for religious exemptions, which are reserved for houses of worship based on the longstanding government principle of noninterference.

The substantial burden test, not strict scrutiny, is applied to RFRA claims brought by an individual. Such claimants must show that a penalty or benefit be more than incidental in order to amount to a substantial injury, and here the burden is not direct. Employee actions under the ACA are mediated by an insurance company, and any link between the decision to sign up for insurance on the one hand and the provision of contraceptives to a particular individual on the other is far too attenuated to rank as substantial. The fact that the Government may require insurers to offer coverage for certain services that some might find objectionable on religious grounds cannot form the basis of requiring the Government to adjust its programs on behalf of all employees.

Extended Summary:
The Contraceptive Mandate is a specific part of a larger provision in the Affordable Care Act that requires employer-provided health insurance plans to cover an array of preventative services at no cost to participating employees. The service covered by the mandate is FDA-approved contraceptives, and it includes a limited exemption for houses of worship and their integrated auxiliaries.

Appellant, Real Alternatives, is a non-profit, non-religious, anti-abortion organization. While the company does not hold itself out as a religious entity, it considers contraceptives morally wrong and categorically opposes their use; it only hires employees who share the company's stance on contraceptives and abortion.

Appellant alleged that the mandate violates Equal Protection Clause of the 5th Amendment by exempting religious employers but not secular entities that oppose the mandate. The organization contended that it is identically situated to houses of worship because all of its employees by definition oppose contraceptive coverage. This position posits that if churches receive a religious exemption, then so too must non-religious entities receive religious exemptions.

The Third Circuit rejected this argument because Appellant is not similarly situated to a religious employer, but rather mirrors a single-issue interest group instead of a comprehensive belief system. Real Alternatives is an employer with a single mission statement and it cannot guide believers comprehensively through life in a way similar to religion. Based on the company's limited structure and singular purpose, the court found Appellant to be a completely different type of entity than a religion.

After deciding that Appellant was not similarly situated to a religion, the court warned against the far-reaching consequences of permitting such an organization to qualify for the exemption. Framing the exemption so broadly as to encompass any employer who disagrees with any aspect of an underlying law lies in direct contradiction of the judiciary's refusal to broaden religious exemptions in similar contexts. Further, it would conflict with the body of legislative protections for religious freedom that intentionally exclude mere moral philosophy. Finally, it would ignore the historic governmental recognition of a particular sphere of autonomy for houses of worship.

The Court stated that finding all single-issue non-profit organizations to be similarly situated with houses of worship based on their adherence to a shared position on one issue would expand religious exemptions - a legitimate purpose of the highest order - beyond what is constitutionally required. If the mandate was a violation of Real Alternatives' equal protection rights, any law implicating religion would be rendered moot because the exemption would be too easy to invoke. Drawing upon all the foregoing reasons, the Third Circuit ruled Appellant's Equal Protection claim failed as a matter of law.

The employees of Real Alternatives brought a claim under the Religious Freedom and Restoration Act because their religious beliefs prohibit them from using, supporting, or otherwise advocating the use of abortifacients, and from participating in a health insurance plan that covers them. The insurance plan at issue makes employees eligible to be reimbursed for various optional services. The mandate increases the number of choices an employee has when he or she purchases the plan, but it is still up to the employee to decide what to do with those options.

The Court's review of the RFRA claim presented a question of first impression and served as the basis of its precedential holding. The Court framed the issue to be: whether employees who oppose contraceptives on religious grounds but work for secular employers experience a substantial burden on their religious exercise when the Government regulates group health care plans and providers by requiring them to offer coverage for services the employees find incompatible with their religious beliefs.

As a threshold matter to this issue, the Court held that the RFRA only provides relief from substantial government burdens on religious exercise, and that such substantiality may be determined as a matter of law. A substantial burden on the exercise of religion exists only where the Government demands that an individual engage in conduct that seriously violates his or her religious beliefs. The Court very specifically articulated the contours of this rule; it did not want to improperly conflate the determination that a religious belief is sincerely held with the determination that a law or policy substantially burden religious exercise. The Court's review only evaluated the burden itself, not the reasonableness of the religious belief.

Examining the act performed and not the effect of that act, the Court decided as a matter of law that the burden placed on Real Alternatives employees was not substantial. The act complained of was filling out a form that triggers eligibility for reimbursement of services the employee chooses to use. This action was not changed by the mandate nor does it amount to a substantial burden under the RFRA. The possibility that others might avail themselves of objectionable services is no more burdensome than filling out the form. The Court reasoned that checking off a box to gain eligibility for reimbursement does not indicate support or advocacy for any particular service when the actual selection and use is left entirely to the discretion of the employee.

The Court held that there is a material difference between employers arranging or providing an insurance plan that includes contraception coverage and becoming eligible to apply for reimbursement for a service of one's choosing. Passive eligibility for reimbursement of optional services requires no real participation, and that payment for the ability to have coverage does not give an employee an active role in the underlying plan. Thus, the connection between the conduct and the religious belief was too attenuated to create a substantial burden.

The Third Circuit also found the Appellants' position unworkable. The employee's actions under the ACA are mediated by the insurance company and individuals cannot use the RFRA to compel the Government to structure its relations with a third party in a certain way. Medical treatments that some may view as objectionable are as varied as they are numerous, and finding that coverage for one set of objectionable services constitutes a substantial burden would imply that coverage for all such services impose a substantial burden - rendering the health care system totally unworkable.

For Real Alternatives' APA claims, it alleged that the mandate infringes on Constitutional and federal laws - namely, the Affordable Care Act ("ACA"), the Weldon Amendment, and the Church Amendment. Appellant argued that the mandate violates the ACA by requiring coverage of abortion services, but the court found this argument unsubstantiated and largely based on semantics; it found the Weldon Amendment claim failed for the same reasons. The Church Amendment prohibits an individual from being required by the government to assist in any part of a health service program if his assistance would be contrary to his religious beliefs. This count failed for lack of standing, because the employees at issue purchase their health insurance from a company in the health insurance market, not from the Department of Health and Human Services.

Judge Jordan filed a lengthy dissent on the RFRA claim.


Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/161275p.pdf

Panel: Judges Jordan, Greenaway, Jr., and Rendell

Argument Date: November 3, 2016

Date of Issued Opinion: August 4, 2017

Docket Number: No. 16-1275

Decided: Affirmed

Case Alert Author: Kevin P. McGilloway

Counsel: Matthew S. Bowman, David A. Cortman, Kevin H. Theriot, Elissa M. Graves, Randy Wenger, counsel for Appellants; Benjamin C. Mizer Peter J. Smith Mark B. Stern Alisa B. Klein Patrick G. Nemeroff Megan Barbero Joshua M. Salzman (Argued), counsel for Appellees; Richard B. Katskee, Natacha Y. Lam, Seth M. Marnin David L. Barkey, counsel for Amici Curiae Americans United for Separation of Church and State; Anti-Defamation League; Central Conference of American Rabbis; Hadassah, The Women's Zionist Organization of America, Inc.; National Council of Jewish Women; People for the American Way Foundation; Union for Reform Judaism; Women of Reform Judaism.

Author of the Opinion: Judge Rendell

Circuit: Third

Case Alert Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/19/2017 01:51 PM     3rd Circuit  

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