What if Supreme Court is not done with health reform law?

Justices tell a lower court to reconsider a plaintiff’s argument that the requirement for employers to provide insurance covering abortions violates its religious freedoms.

By — Posted Dec. 10, 2012

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Legal analysts said a revived legal challenge against the Affordable Care Act by a Christian university could put the health system reform law back in the hands of the U.S. Supreme Court, even after the high court upheld the bulk of the statute as constitutional.

In a rare move, the Supreme Court on Nov. 26 ordered a federal appeals court to reconsider a constitutional challenge against the ACA that focuses on whether the measure’s employer insurance coverage mandate violates religious freedoms. The 4th U.S. Circuit Court of Appeals previously had dismissed the lawsuit, brought by Liberty University in Virginia, without considering the suit’s merits.

Liberty alleges that the reform law unconstitutionally forces employers to pay for abortion coverage for employees. The employer mandate requires companies with 50 or more employees either to offer minimum health insurance coverage to workers starting in 2014, or pay a penalty based on the number of workers that obtain federally subsidized private coverage through upcoming health insurance exchanges.

The Supreme Court’s decision to vacate its earlier denial to hear the case and send it back to the appeals court “is a bit unusual, but only because of the particular procedural posture of the case,” said Daniel O. Conkle, a law professor at Indiana University Maurer School of Law. “The Supreme Court’s action merely returns the case to the 4th Circuit & to consider issues not addressed by the Supreme Court in its decision last June. & It is difficult to say how these religious liberty claims will be resolved, but the issues might eventually take the ACA back to the Supreme Court.”

Liberty University sued the Dept. of Health and Human Services in 2010 shortly after the ACA was signed into law. A three-judge appeals panel in 2011 dismissed the case, saying the university did not have grounds to sue. Specifically, appellate judges said the federal Anti-Injunction Act prevented consideration of the case. That act prohibits plaintiffs from suing over a tax they have not yet been required to pay. The Supreme Court ultimately ruled that the Anti-Injunction Act did not bar courts from deciding the ACA’s constitutionality even though the health reform law’s tax-based penalties attached to the employer and individual insurance mandates do not take effect until 2014. The high court voted 5-4 to uphold the ACA’s individual mandate as a valid exercise of Congress’ taxing power.

Liberty filed a petition to the high court in July for a rehearing. Among its claims, the university argues that Congress exceeded its authority by mandating that private employers enter into third-party contracts and provide to employees “a vaguely defined health insurance product.” The plaintiffs allege that this provision compels them to violate their religious beliefs against “facilitating, subsidizing, easing, funding or supporting abortions.” In addition, the law prohibits the university from providing health care choices that do not conflict with the school’s mission and core Christian values, the plaintiffs said.

“If the court rules that Congress had the authority to pass the employer mandate, then our argument is that [the mandate] violates free exercise of religion because it forces religious employers to fund abortion,” said attorney Mat Staver, founder and chair of Liberty Counsel, which represents the university. “We believe it’s unconstitutional because Congress doesn’t have the authority to force employers to provide a particular kind of health insurance.”

A spokesman for the Justice Dept. declined to comment. But in an October brief to the Supreme Court, the Obama administration said it did not object to remanding the case to the appeals court for reconsideration, although the brief said the university’s claims were “without merit.” The plaintiffs’ religion-based accusations are “insubstantial,” the Justice Dept. wrote in a separate 2011 court brief.

“Plaintiffs assert that the minimum coverage provision violates their free exercise rights by requiring that they pay for procedures that ‘are antithetical to their religious beliefs,’ ” the Justice Dept. said. “The only such procedures identified in the complaint are abortion procedures, and plaintiffs fail to allege how any payments required under the act, whether fines, fees, taxes or the cost of the policy, would be used to fund abortion.”

If the employer mandate ultimately is struck down over the objections, fewer people probably would have employer coverage and more of them potentially would have to go into health insurance exchanges, said Timothy S. Jost, a law professor at Washington and Lee University School of Law in Virginia. He also is a member of the Institute of Medicine.

However, Jost does not believe it’s probable the appeals court or Supreme Court will overturn the employer mandate. He said decades of case law have backed the ability of Congress to regulate employee benefits under the Commerce Clause of the U.S. Constitution.

“I don’t see any chance of this going anywhere unless the Supreme Court or the 4th Circuit is willing to throw out 80 years of law,” including the National Labor Relations Act and the Employee Retirement Income Security Act, he said.

Most lawsuits against ACA thrown out

The Liberty lawsuit is one of only a few legal challenges against the health reform law left standing after the Supreme Court’s June decision.

Most of the other suits were dismissed by lower courts after the high court’s ruling. This includes a lawsuit challenging a provision of the ACA that restricts the expansion of physician-owned hospitals. In that case, Physician Hospitals of America, a trade group, sued HHS in 2010 over the provision, saying it was unconstitutional.

The ACA effectively bans the construction of new physician-owned hospitals by barring them from Medicare certification and significantly restricts expansion of doctor-owned facilities. In an Aug. 16 opinion, the 5th U.S. Circuit Court of Appeals dismissed the lawsuit, saying the district court never had proper jurisdiction over the case. Before suing, the plaintiffs first must have exhausted available administrative remedies with the government, which they failed to do, the court said.

Another suit, which challenges the constitutionality of the Medicare Independent Payment Advisory Board, has been allowed to proceed. The IPAB was developed as a reviewing body that will authorize spending cuts when the Medicare program exceeds certain growth targets. In Coons v. Geithner, a small-business owner and Arizona legislators argue that the IPAB violates the rights to medical autonomy and privacy guaranteed by the U.S. Constitution. The ACA also unconstitutionally delegates legislative authority to the unelected IPAB members, they said.

A federal court on Aug. 31 issued an order granting in part and denying in part the government’s motion to dismiss. The U.S. District Court for the District of Arizona disagreed that the Obama administration inappropriately provided legislative authority to the IPAB. However, the court gave the plaintiffs the opportunity to argue further how the ACA denies the plaintiffs substantive due process, requesting additional briefs on this claim. At this article’s deadline, the case was in the brief-writing stage.

Dozens of cases challenging the ACA’s contraceptive coverage mandate are making their way through lower courts. That mandate requires all new insurance policies to include birth control coverage. Plaintiffs argue that the requirement violates religious freedom by forcing faith-based employers to provide coverage for services that are against their moral beliefs. Lower courts have reached differing conclusions on the issue.

At this article’s deadline, no rehearing date in the Liberty case had been scheduled. However, Liberty Counsel’s Staver said oral arguments probably will take place in early 2013, with an appeals court decision expected that spring. The case probably will be back before the Supreme Court in the fall of 2013, he said.

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External links

Liberty University, Michele G. Waddell and Joanne V. Merrill v. Timothy Geithner et al., U.S. Supreme Court, July (link)

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