Friday, August 3, 2012

Federal Court Dismisses Challenge to Affordable Care Act’s Contraception Requirement

U.S. District Court Judge Warren K. Urbom dismissed a case brought by attorneys general from Nebraska, Florida, Michigan, Ohio, Oklahoma, South Carolina and Texas that challenged the rule under the Patient Protection and Affordable Care Act (ACA) that requires health care plans to include contraception coverage, even for employees of certain religious institutions. The lawsuit, Nebraska v. HHS, which was joined by three employers associated with the Catholic Church and three employees of similar organizations, claimed that such a requirement violated the rights of non-exempt religious employers who oppose the use of contraception and threatened states’ budgetary stability.
The case was dismissed on July 17, 2012 on the grounds that the plaintiffs did not have standing to sue. The judge explained that the plaintiffs failed to show that they had suffered an injury that is concrete and not merely hypothetical. 

Because the ACA provides that employers who have “grandfather status” are exempt from the rule governing contraception, the decision first examined whether the plaintiff employers would even be required to comply with the rule. The judge did not have to delve farther than this to find that the plaintiff employers and employees did not have standing to sue.

Judge Urbom ruled that because two of the employers did not provide evidence that they were ineligible for grandfather status, they did not show that they were subject to the rule, and thus did not suffer a concrete injury. The third employer admitted that it would be grandfathered, but argued that under the rule it could only maintain its grandfather status if it did not change its current plan. However, the employer did not assert that it was contemplating changes that would threaten its exempt status. As such, this employer also failed to show that it would be required to comply with the rule. The individual plaintiffs’ standing to sue suffered from the same deficiencies. One plaintiff could not show that her plan was not grandfathered, and the other only asserted that her plan (which is grandfathered) might change at some indefinite time in the future.

Finally, the states’ claim failed to meet the standing requirements as well. In short, the state plaintiffs argued that, in an effort to avoid subsidizing contraception, religious employers would drop health insurance coverage for their employees. Those employees would then enroll in state Medicaid programs and cause the states to suffer budgetary strain. In addition, religious employers who continued to provide health coverage for employees would attempt to qualify for an exemption in the law that would result in the termination of charitable services to persons who do not share their religious views. Those underserved people would then rely on state resources. Judge Urbom ruled that this scenario merely recounts hypothetical injuries to the states based on speculation about how individuals, who are not before the court, may react to the rule. Such conjecture is not sufficient to establish standing.


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