Health Insurance & the U.S. Supreme Court

Why Government Should Not Require Insurance

Insurance is a contract a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event. The Patient Protection and Affordable Care Act (ACA) changes the historical basis of insurance and requires insurers and insurance buyers to buy certain coverages whether they want it or not.

In Zubik v. Burwell, — S.Ct. —-, Supreme Court of the United States, 2016 WL 2842449 (May 16, 2016) the United States Supreme Court was asked to apply the Constitution’s first amendment prohibition upon the government to not impinge upon a persons free exercise of its religion by making religious organizations do something contrary to the free exercise of their religion.


Nonprofit religious employers brought actions against Secretary of Health and Human Services (HHS) and other government officials, challenging under Religious Freedom Restoration Act (RFRA) regulations offering accommodation for religious objections to compliance with regulatory mandate to provide employees with health insurance coverage for contraceptives, which regulatory mandate was imposed in furtherance of requirement in the ACA that employers provide insurance coverage for preventive care for women.

Petitioners are primarily nonprofit organizations that provide health insurance to their employees. Federal regulations require petitioners to cover certain contraceptives as part of their health plans, unless petitioners submit a form either to their insurer or to the Federal Government, stating that they object on religious grounds to providing contraceptive coverage. Petitioners allege that submitting this notice substantially burdens the exercise of their religion, in violation of the Religious Freedom Restoration Act of 1993, 107 Stat. 1488, 42 U.S.C. § 2000bb et seq.

Following oral argument, the Court requested supplemental briefing from the parties addressing “whether contraceptive coverage could be provided to petitioners’ employees, through petitioners’ insurance companies, without any such notice from petitioners.”

Both petitioners and the Government confirmed in their supplemental briefing that such an option is feasible. Petitioners have clarified that their religious exercise is not infringed where they “need to do nothing more than contract for a plan that does not include coverage for some or all forms of contraception,” even if their employees receive cost-free contraceptive coverage from the same insurance company. The Government has confirmed that the challenged procedures “for employers with insured plans could be modified to operate in the manner posited in the Court’s order while still ensuring that the affected women receive contraceptive coverage seamlessly, together with the rest of their health coverage.”

In light of the positions asserted by the parties in their supplemental briefs, the Court vacated the judgments below and remanded to the respective United States Courts of Appeals for the Third, Fifth, Tenth, and D.C. Circuits. Given the gravity of the dispute and the substantial clarification and refinement in the positions of the parties, the parties on remand should be afforded an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans “receive full and equal health coverage, including contraceptive coverage.”

The Court finds the foregoing approach more suitable than addressing the significantly clarified views of the parties in the first instance. Although there may still be areas of disagreement between the parties on issues of implementation, the importance of those areas of potential concern is uncertain, as is the necessity of this Court’s involvement at this point to resolve them.

The Court expresses no view on the merits of the cases. In particular, the Court does not decide whether petitioners’ religious exercise has been substantially burdened, whether the Government has a compelling interest, or whether the current regulations are the least restrictive means of serving that interest.

The unanimous decision of the Supreme Court does only what it says it does: “afford[s] an opportunity” for the parties and Courts of Appeals to reconsider the parties’ arguments in light of petitioners’ new articulation of their religious objection and the Government’s clarification about what the existing regulations accomplish, how they might be amended, and what such an amendment would sacrifice. As enlightened by the parties’ new submissions, the Courts of Appeals remain free to reach the same conclusion or a different one on each of the questions presented by these cases.


When a government gets involved in a private contract between intelligent adults and imposes its will on what must be in the contract litigation will invariably ensue and run all the way up to the U.S. Supreme Court. The parties, by indicating in their supplemental briefs an ability to resolve the disputes by compromise, they gave a court with only eight justices, an opportunity to avoid the issue and allowed the parties plaintiff to continue to protect their right to freely exercise their religion and enter into an agreement with the government that will avoid the issue and gut the coercive portions of the ACA. It would have saved a great deal of money and court time if the act allowed people to insure as they desired realizing that octogenarian nuns have no need for contraceptive coverage.

ZALMA-INS-CONSULT                      © 2016 – Barry Zalma

Barry Zalma, Esq., CFE, practiced law in California for more than 49 years as an insurance coverage and claims handling lawyer.  He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes.

He founded Zalma Insurance Consultants in 2001 and serves as its only consultant.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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