The ACA explicitly contemplates an exemption for religious insurance companies, making insurance companies the gatekeepers to a currently-unavailable insurance option that would allow millions of Americans to purchase insurance coverage aligned with their moral beliefs. The little-known exemption should be utilized to ensure Christians and other conscientious objectors receive access to adequate health insurance coverage that does not violate their consciences.

Background

With over 2,000 legal challenges, it is no wonder that the Patient Protection and Affordable Care Act (together with its implementing regulations, the “ACA”) – also known as “Obamacare” – has been called the “most challenged statute in American history”.((The Affordable Care Act’s Litigation Decade)) The legislation was viewed by many as too heavy-handed (some may recall a Supreme Court dialogue comparing the legislation to forcing Americans to buy broccoli).((National Federation of Independent Business v. Sebelius, 567 U.S. 519, 558 (2012))) The so-called “contraceptive mandate” was particularly offensive to Christians, and is one of the statute’s most challenged provisions. The mandate requires all group health plans and health insurance issuers offering group or individual health coverage to provide certain preventive services for women – including contraceptive services and abortifacients – free of cost.((42 U.S.C. § 300gg-13(a)(4); A Statement by U.S. Department of Health and Human Services Secretary Kathleen Sebelius, January 20, 2012)) The law was initially adopted with only a very narrow exemption as well as an accommodation that collectively provided some cover to houses of worship and religious non-profits.((76 FR 46621 (2011).)) The accommodation and the mandate itself were the respective subjects of litigation in the well-publicized Little Sisters of the Poor and Hobby Lobby cases.((Hobby Lobby Stores, Inc. v. Sebelius, 723 F. 3d 1114 (CA10 2013) (en banc); Little Sisters of the Poor Home for the Aged, Denver, Colo. V. Burwell, 794 F. 3d 1151, (CA10 2015). ))

Religious Insurer Exemption

Litigation continued through 2016, at which point an exasperated Supreme Court instructed the Department of Health and Human Services among others (the “Departments”) to come up with a workable solution that respects employers’ religious exercise.((Zubik v. Burwell, 136 S. Ct. 1557 (2016))) After a few failed attempts, in 2018 the Departments finalized rules that substantially broadened the exemption, and extended the exemption to for-profit entities, among others.((83 FR 57536 (2018); 83 FR 57592 (2018)))

For the first time ever, the rule extended the religious exemption to insurance companies who object to payments for contraceptive services based on sincerely held religious beliefs! ¹

But then . . . nothing really happened.

Sleeper or Big Deal?

With the exemption in place, insurers hold the keys to unlock a floodgate, providing millions of Americans with access to health insurance that does not conflict with religious beliefs proscribing payment for contraceptive services and abortifacients. Such access has been unprecedented since the implementation of the ACA. Consider these numbers:

• 155 million nonelderly Americans receive employer sponsored health insurance.² Even with the employer exemption, only relatively large employers have sufficient clout to customize their plans with the level of sophistication required to take advantage of the religious employer exemption. The rest are stuck with more-or-less one-size-fits-all plans designed to comply with the contraceptive mandate, and are unlikely to receive guidance on claiming a religious exemption. Introducing a religious insurer would permit off-the-shelf plans that exclude contraceptive and abortifacient coverage, making such a product accessible to small employers for the first time since the ACA was implemented.
• 15 million Americans receive individual health insurance through ACA products.((See Premium Stabilization Programs (CMS) )) Without a religious insurer, all individual ACA plans cover no-cost contraceptive services and abortifacients.((The 2018 rule gives lip service to objecting individuals and permits insurers to accommodate objecting individuals if the insurer is willing to offer a separate policy, certificate or contract of insurance for such objecting individuals (45 CFR § 147.132(b)). We are aware of no insurers who are willing to make such an accommodation.)) Introducing a religious insurer would allow these 15 million American to shop for ACA-compliant policies that do not fund contraceptive services and abortifacients for the first time since the ACA was implemented.
• 10.9 million Americans are currently uninsured but eligible for ACA subsidies, of which 6 million qualify for free ACA coverage!((A Closer Look at the Uninsured Marketplace Eligible Population Following the American Rescue Plan Act (KFF))) While myriad explanations exist for this enigma – unawareness of available subsidies may be the most plausible – many Americans are still ideologically opposed to ACA coverage, and would rather forego insurance than subscribe to an ACA policy. Introducing a religious insurer offering an ACA-compliant policy that does not fund contraceptive services and abortifacients would relieve the stigma associated with perhaps the most controversial aspect of the ACA (i.e., the contraceptive mandate), and may prove a welcome invitation for this vulnerable, low-income, and uninsured population.

The overwhelming majority of Americans are entirely dependent on a religious insurer extending the 2018 exemption benefits to them. But to date, we are unaware of any health insurance companies that have taken advantage of this exemption.((The Departments noted in 2018 that they were “not currently aware of health insurance issuers that possess their own religious objections to offering contraceptive coverage,” but they thought it was good idea to extend the exemption for consistency! (83 FR 57536, 57566 (2018))) (If you know of one, please write to us!)

Conclusion

Millions of Americans are morally opposed to contraceptive services and abortifacients,((8% of national adults find birth control morally wrong (Americans, Including Catholics, Say Birth Control Is Morally OK (Gallup))) and are completely hamstrung with no option but to purchase health insurance that violates their conscience. The market is ripe for a religious insurance company to claim the religious exemption and extend its benefits to these individuals and their employers. Not only is the target market significant, but extending these benefits is efficacious to ensuring that individuals have morally acceptable options, and would reduce the number of uninsured among perhaps the most vulnerable demographic in America. Presidio HealthCare is working to bring the first explicitly faith-based health insurance option to these families and employers with both non-ACA and ACA-compliant products.

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1. 83 FR 57536 (2018), codified at 45 C.F.R. § 147.132(a)(1)(iv). Note that while the scope of the contraceptive mandate continues to oscillate with administration changes, the issuer exemption may be here to stay. Earlier this year (2023), the Biden Administration proposed to limit the available exemptions, but left the issuer exemption untouched (88 FR 7236). [↩]
2. Health Insurance Coverage of Nonelderly 0-64 (KFF) [↩]