Analysis: Obamacare’s religious winners and losers

In January 2012, Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, ordered that health care plans include free contraceptives, abortion-inducing drugs and devices, sterilization and related counseling (the “CASC mandate”).

Because evangelical Protestant ministries conscientiously oppose abortifacients and the Catholic Church conscientiously opposes the entire CASC mandate, a historic number of religious employers – more than 200 – sued the United States seeking freedom to practice what they preach. The Supreme Court has now agreed to hear two of those cases – Hobby Lobby and Conestoga Wood Specialties. Each involves a for-profit employer operating according to its owners’ religious values. The issue is not whether corporations have standing to invoke the Religious Freedom Restoration Act, or RFRA. Church and ministry corporations routinely receive such standing. The issue is whether corporations lose such protection when they are privately owned and profit oriented. Thirty-three of the 39 (85 percent) lower courts hold they do not.

This is the first wave of religious liberty lawsuits. The second wave – well underway – will include more nonprofit ministry employers like the Little Sisters of the Poor. As before, many will invoke RFRA. Some will also raise Establishment Clause objections because Obamacare includes a seldom noted system of discriminatory religious classifications.

In its 1982 Larson v. Valente decision, the U.S. Supreme Court said that “(t)he clearest command of the Establishment Clause” is that the government cannot prefer one religious group over another. It struck down a Minnesota statute that imposed a charitable solicitation registration requirement only on religious groups receiving more than 50 percent of their income from nonmember donors. In 2008, the 10th Circuit similarly struck down a Colorado law that gave scholarships to college students attending “sectarian” colleges but not if the college was “pervasively sectarian.”

Classifying ‘religious’ groups
Obamacare’s religious classifications are far more extreme. It creates four classes of those religiously opposed to the CASC mandate: (1) those excused; (2) those “accommodated” if they hire surrogates to provide CASC benefits; (3) those eligible to plead for RFRA protection; and (4) those that must provide the coverage or pay fines up to $36,500 per employee annually.

The first class is created by statute and regulation. The statute excuses two religious groups from the individual mandate – Anabaptists and those in health care sharing ministries. Anabaptists include Amish, Brethren, Hutterites, Mennonites and the Bruderhof. The statute also exempts members of health care sharing ministries formed before Dec. 31, 1999. Only three Protestant groups qualify: Medi-Share, Christian Healthcare Ministries and Samaritan Ministries. Members of identical programs formed after 1999 need not apply.

By regulation, the administration also exempts “churches,” “their integrated auxiliaries,” “conventions or associations of churches” and “the exclusively religious activities of any religious order.” If a ministry of a church separately incorporates, it loses its exemption. An unincorporated parish social ministry is exempt. An incorporated one is not, even though its work is identical. The Little Sisters of the Poor religious order is exempt. Its separately incorporated nursing homes are not, even though they are staffed and run by the Little Sisters because of their religious calling.

The classification scheme also distinguishes “integrated auxiliaries” from nonintegrated ones. The primary test for “integration” is that the sponsoring church provides a majority of the funds. This is the same criteria violating the Establishment Clause in Larson.

Court entanglement
Determining whether the activities of religious orders are “exclusively religious” or “partially religious” has an additional constitutional infirmity because such analysis inevitably entangles the courts in religious doctrine.

Second-class religious employers include separately incorporated ministries like schools and colleges; faith-based charities; religious hospitals; and parachurch ministries. Under Obamacare, these do not merit full exemption from the CASC mandate. Instead, they are required to enter agreements and give notices to their insurers or third-party administrators obligating those contractors to provide CASC benefits to the ministries’ employees. This no more alleviates their religious consciences than the Civil War draft alleviated Christian pacifists’ consciences by exempting them if they hired surrogates to fight.

The lowest class of religious employers is for-profit corporations owned by religious individuals and operated with religious values. They are further sub-classified. In her 10th Circuit argument in Hobby Lobby, the Department of Justice attorney allowed that, if the for-profit employer was a sole proprietorship or general partnership, it had standing to invoke RFRA. But if the same business was a limited partnership or a corporation, it could not.

There is a word for this classification system: discrimination. It is government choosing religious winners and losers – a practice discredited by 1,600 years of Western history and forbidden in America as an establishment of religion.

L. Martin Nussbaum is a First Amendment attorney.