Insurance Created by Government Needs Nine Years of Court Decisions to Make Sense

The Little Sisters of The Poor Establish Why Government Should Not Be Involved in Insurance

The Patient Protection and Affordable Care Act of 2010 (Obama Care or the ACA), an attempt to legislate health insurance brought about more than nine years of litigation over some of its requirements that demanded that religious people and religious organizations do something – providing for contraceptive insurance coverage – that violated the religious beliefs and raised litigation to gain an exemption from the mandate in violation of the First Amendment to the U.S. Constitution.

In Little Sisters Of The Poor Saints Peter And Paul Home Pennsylvania, et al. Donald J. Trump, President Of The United States, et al. v.  Pennsylvania, et al., No. 19-431, No. 19-454, Supreme Court Of The United States  (July 8, 2020) in a set of consolidated cases, Justice Thomas, writing for the Supreme Court, decided whether the Government created lawful exemptions from a regulatory requirement implementing the ACA, 124 Stat. 119.

The requirement at issue obligates certain employers to provide contraceptive coverage to their employees through their group health plans. Though contraceptive coverage is not required by (or even mentioned in) the ACA provision at issue, the Government mandated such coverage by promulgating interim final rules (IFRs) shortly after the ACA’s passage. This requirement is known as the contraceptive mandate.


The Departments had the authority under the ACA to promulgate the religious and moral exemptions. The pivotal phrase, “as provided for,” granted sweeping authority to HRSA to define the preventive care that applicable health plans must cover. That same grant of authority empowers it to identify and create exemptions from its own Guidelines.


After six years of protracted litigation, the Departments of Health and Human Services, Labor, and the Treasury (Departments)—which jointly administer the relevant ACA provision—exempted certain employers who have religious and conscientious objections from this agency-created mandate. The Third Circuit concluded that the Departments lacked statutory authority to promulgate these exemptions and affirmed the District Court’s nationwide preliminary injunction. This decision was erroneous.

Shortly after the Departments promulgated the 2013 final rule, two religious nonprofits run by the Little Sisters of the Poor (Little Sisters) challenged the self-certification accommodation. The Little Sisters “are an international congregation of Roman Catholic women religious” who have operated homes for the elderly poor in the United States since 1868. They feel called by their faith to care for their elderly residents regardless of “faith, finances, or frailty.”

Consistent with their Catholic faith, the Little Sisters hold the religious conviction that deliberately avoiding reproduction through medical means is immoral. The Little Sisters were far from alone in raising RFRA challenges to the self-certification accommodation. Religious nonprofit organizations and educational institutions across the country filed a spate of similar lawsuits, most resulting in rulings that the accommodation did not violate RFRA. In Zubik v. Burwell, 578 U. S. ___, ___ (2016) (per curiam), the Supreme Court opted to remand the cases without deciding the question.

Within a week of the 2017 IFRs’ promulgation, the Commonwealth of Pennsylvania filed an action seeking declaratory and injunctive relief. Among other claims, it alleged that the IFRs were procedurally and substantively invalid under the APA. The District Court held that the Commonwealth was likely to succeed on both claims and granted a preliminary nationwide injunction against the IFRs. The Federal Government appealed. The Third Circuit affirmed.

Congress could have limited HRSA’s discretion in any number of ways, but it chose not to do so. Justice Thomas explained that it is a fundamental principle of statutory interpretation as it is a fundamental principle of insurance interpretation that “absent provision[s] cannot be supplied by the courts.” Rotkiske, 589 U. S., at ___ (slip op., at 5). This principle applies not only to adding terms not found in the statute, but also to imposing limits on an agency’s discretion that are not supported by the text.  It is not for the Supreme Court to rewrite the statute nor the policies written in accordance with the ACA requirements, so that it covers only what it thinks is necessary to achieve what it thinks Congress really intended.

The only question before the court was what the plain language of the statute authorizes. Justice Thomas, and six other justices including the Chief, concluded that the plain language of the statute clearly allows the Departments to create the preventive care standards as well as the religious and moral exemptions.

Because the court held that the Departments had authority to promulgate the exemptions, unless a statutory exception applies, here, the Departments issued an IFR that explained its position in fulsome detail and provided the public with an opportunity to comment on whether the regulations should be made permanent or subject to modification. The object of notice and comment, in short, is one of fair notice and respondents certainly had such notice.

For over 150 years, the Little Sisters have engaged in faithful service and sacrifice, motivated by a religious calling to surrender all for the sake of their brother. They commit to constantly living out a witness that proclaims the unique, inviolable dignity of every person, particularly those whom others regard as weak or worthless. But for the past seven years, they—like many other religious objectors who have participated in the litigation and rulemakings leading up to the decision—have had to fight for the ability to continue in their noble work without violating their sincerely held religious beliefs.

After two decisions from this Court and multiple failed regulatory attempts, the Federal Government has arrived at a solution that exempts the Little Sisters from the source of their complicity-based concerns—the administratively imposed contraceptive mandate.

The Departments had the statutory authority to craft that exemption, as well as the contemporaneously issued moral exemption. The rules promulgating these exemptions are free from procedural defects.

Therefore, the Supreme Court reversed the judgment of the Court of Appeals and remanded the cases for further proceedings consistent with the opinion.

The dissent by Justice Ginsberg concluded that the blanket exemption for religious and moral objectors to contraception formulated by the IRS, EBSA, and CMS is inconsistent with the text of, and Congress’ intent for, both the ACA and RFRA contending that neither law authorizes it. The original administrative regulation accommodating religious objections to contraception appropriately implemented the ACA and RFRA consistent with Congress’ staunch determination to afford women employees equal access to preventive services, thereby advancing public health and welfare and women’s well-being.


The ACA (Obamacare) is not insurance but a law mandating all heath insurance issued in the U.S. comply with the statute’s requirements. The ACA then gives regulators the ability to set rules and requirements for such policies. One such requirement was that every policy provide coverage for contraception for female insureds. Originally, there were no exceptions to the rule and the Little Sisters and many others sued to protect them from being ordered to violate their religious beliefs. After nine years of litigation and multiple appeals, the US, with regulations providing for exemptions, tried to protect the religious only to be sued by the state of Pennsylvania who had a court issue a nationwide injunction against the exemption. Justice Thomas and the other six justices in the majority found the exemption proper and enforced it by reversing the injunction. Insurers must learn from  this case, the same lesson learned by the government, that a court should not, and should always, refuse to rewrite a statute or policy when its language is clear.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  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 practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

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