By Stuart Gerson

In the wake of the Hobby Lobby ruling with respect to the Affordable Care Act’s contraceptive coverage mandate, the Administration (which already has taken steps to fund contraception for employees affected by their employers’ exemption) is attempting also to deal with the issue by a recently-published DHHS regulation setting forth the procedures that “religious” employers might follow to gain exemption from having to provide contraceptive coverage in their sponsored health plans. The proposed rule covers both religious not-for-profits and closely held religious for-profits.

The not-for-profit element has been spawned by religious employers, particularly Notre Dame University and the Little Sisters of the Poor Order, who have challenged the requirement that the ACA allows them to sign a form indicating their objection under a process that allows their employees to obtain contraceptives without the employer paying. These plaintiffs object even to signing the form, which they claim aids and abets the employees’ getting coverage.  The 7th Circuit ruled against them and they have petitioned for cert. The proposed reg would seem to moot the case as it provides that all the non-profit has to do is notify DHHS in writing and the government will do the rest.  One guesses that the plaintiffs won’t accept even this but that the Supreme Court will.

In the Hobby Lobby context  of closely held religiously motivated corporations, the proposed reg would treat them in the same way that non-profits would be treated, which the government believes would be the less-restrictive manner that the Supreme Court’s opinion would allow. The significant open question that remains is how to define how closely held such a company must be to qualify for the exemption. The proposed reg sets forth several possible definitions.

The public comment period runs until October 21.