U.S. Supreme Court Gives Blessing to Rules Allowing Employers to Exclude Insurance Coverage for Birth Control

The recent U.S. Supreme Court decision in Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania upheld federal regulations allowing employers with religious or moral  objections to opt out of providing contraceptive coverage under their group health plans.

The Mandate

The case related to a mandate in the Affordable Care Act of 2010 (ACA) requiring health plans to cover birth control on a no co-pay basis.  A narrow exemption was granted to houses of worship; other religious organizations could exercise an “opt out” which then would let plan participants obtain such coverage directly from an insurer.

Subsequently, in the Hobby Lobby decision from 2014, the Supreme Court ruled that for-profit family-owned businesses could also opt out of paying for employees’ birth control in company-sponsored group health plans if they had similar religious or moral objections.

In 2017, the Trump administration rolled back the birth control coverage rules, allowing more employers to deny such coverage.  The states of New Jersey and Pennsylvania sued and the new rules were enjoined from being enforced.  The federal Third Circuit Court of Appeals affirmed this ruling, leading to the appeal before the Supreme Court.

The Decision and Its Impact

The Supreme Court reversed the decision by a 7-2 vote, ruling essentially that if the federal government has the authority to issue rules interpreting the ACA, they also have the same authority to modify those rules. As a result, employers who object to providing coverage for birth control based on a sincerely held religious belief or moral principle may now decline to do so, and employees seeking such coverage will have to look elsewhere.

The impact of this decision remains to be seen.  Will employers actually decide to exercise their right to decline such coverage?  Will such a decision affect recruitment and retention of employees who are used to receiving such coverage? Will a possible change in administration in November bring about yet another revision of these rules?

Bottom Line

Employers who do not wish to deny coverage for birth control need not do anything to their plans – this decision has no effect upon them.  Employers who do wish to alter their coverage based on religions or moral objections may now do so.