A wave of recent court decisions is creating uncertainty about the obligations of religious employers and healthcare providers to offer or pay for the healthcare needs of gay and transgender individuals under the Affordable Care Act (ACA). This litigation illustrates the conflicts between the Religious Freedom Restoration Act (RFRA) and policies that promote nondiscrimination under the ACA. Ongoing appeals and conflicting decisions may result in the U.S. Supreme Court eventually addressing the issue.
For instance, in Franciscan Alliance v. Becerra, the U.S. Court of Appeals for the Fifth Circuit upheld a permanent injunction barring the federal government from requiring various religious medical providers to perform abortions and gender-reassignment surgeries or cover certain healthcare procedures for transgender employees. The appellate court reasoned that since the federal government had interpreted the ACA’s bar on sex discrimination as inclusive of discrimination based on gender identity or termination of pregnancy, the medical providers’ rights under RFRA were at risk.
Braidwood Management v. Becerra is another case the federal government will likely appeal to the Fifth Circuit. In that case, a Texas federal district court judge has ruled that a business is not required to cover HIV prevention medication for its workers because it violates the business owners’ Christian religious beliefs.
Likewise, in the U.S. Court of Appeals for the Eighth Circuit, Catholic healthcare providers and employers have asked the court to follow the lead of the Fifth Circuit in affirming a block on the requirement for them to provide healthcare procedures for transgender individuals. The Religious Sisters of Mercy et al. v. Becerra et al., case number 21-1890, remains pending as of this date.
A three-judge panel of the Eighth Circuit heard oral arguments in the case last December after the federal government appealed an injunction blocking federal agencies from requiring religious businesses to cover or offer health care procedures for transgender individuals. While the religious entities are urging the Eighth Circuit to adopt the Fifth Circuit’s reasoning in Franciscan Alliance, the Department of Justice (DOJ) is arguing that the Fifth Circuit case is unusual and very procedurally distinct from the Sisters of Mercy case. The DOJ also claims that the religious groups lack standing to challenge the federal government’s policy, which, when finalized, will accommodate their concerns.
Another issue creating uncertainty in this area of the law is the federal government’s recent issuance of new policy guidance on the ACA in terms of nondiscrimination and preventative healthcare. Much of the current litigation centers on the nondiscrimination policy issued in 2016 during the Obama administration. The U.S. Department of Health and Human Services (HHS) issued a new rule revoking that policy during the Trump administration. In turn, the Biden administration revoked the new rule and replaced it with this new guidance.
The Biden administration has issued other policies that further guide this issue. For example, based on the U.S. Supreme Court’s decision in Bostock v. Clayton County, Biden issued an executive order directing all federal agencies to prohibit discrimination based on gender identity. The HHS Office on Civil Rights also has issued guidance on gender-affirming care, civil rights, and patient privacy, explicitly stating that gender identity discrimination is illegal. A Texas federal district judge recently vacated that guidance. (See Texas v. EEOC, Case No. 2:21-CV-194-Z, U.S. District Court for the Northern District of Texas.)
HHS and the Centers for Medicare and Medicaid Services have issued proposed regulations on preventative services coverage requirements under the ACA to the White House for final review. Although the Fifth Circuit has rejected these forms of policy guidance as instructive, other courts may consider them in reaching their decisions on similar issues.
Finally, the conflicts arising from these cases could impact the types of health insurance benefit policies that insurance companies offer. For example, if insurers are not required to offer some types of preventative care, such as medications that prevent HIV, questions may arise as to whether insurers may sell policies that omit some or all optional preventative services.
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