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Multistate Attempt to Block Health Care Reform Contraception Provisions Rejected

Nebraska U.S. District Judge Warren Urbom dismissed the lawsuit, declaring that none of the plaintiffs' arguments had sufficiently demonstrated the level of plausible direct impact needed to establish standing to challenge the requirement.

July 18, 2012
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A federal judge in Nebraska rejected a multistate attempt to block controversial health care reform provisions requiring employer-sponsored health plans to include contraception coverage.

Republican attorneys general from seven states—and several Christian-affiliated organizations named as co-plaintiffs—sued the federal government in February, arguing that the contraception requirements under the Patient Protection and Affordable Care Act would violate religious employers' right to exercise their beliefs, as well as place an undue financial burden on the states in the form of higher enrollment in Medicaid and other public assistance programs.

On July 17, Nebraska U.S. District Judge Warren Urbom dismissed the lawsuit, declaring that none of the plaintiffs' arguments had sufficiently demonstrated the level of plausible direct impact needed to establish standing to challenge the requirement.

"The states' theory of standing is based on layers of conjecture," Urbom said. "It merely offers guesses about how independent actors will respond to the rule and speculation that these responses could cause people to qualify for, and obtain, state benefits that they would not otherwise seek, which will then strain the states' budgets."

Urbom said the three Nebraska-based Catholic nonprofit organizations—Catholic Social Services, Pius X Catholic High School and the Catholic Mutual Relief Society of America—had similarly failed to establish a plausible adverse impact resulting from the rule.

More specifically, he said, none of the organizations were able to affirmatively demonstrate how the reform act's contraception rule would apply to their group health plans.

In their arguments, Catholic Mutual admitted their group health plan qualified for "grandfathered" status and therefore would not be subject to the contraception rule. Pius X and Catholic Social Services alleged their plans are not grandfathered but failed to provide any explanation of their positions, Urbom said.

"Legal conclusions are not entitled to the benefit of the tenet that a court must accept as true all of the allegations contained in a complaint," Urbom said. "To meet their burden, the plaintiffs must plead facts showing that the Pius X and Catholic Social Services plans are not grandfathered."

It is unclear whether the plaintiffs will appeal Urbom's ruling. The lawsuit's lead plaintiff, Nebraska Attorney General Jon Bruning, said in a statement July 17 that his office would "consult with our co-plaintiffs to assess our next steps."

"Yesterday's decision completely disregards the federal government's continued shell game when it comes to this rule," said Bruning. "Essentially, this decision asks millions of Americans to watch and wait for their religious liberties to be violated."

Even if the plaintiffs had been able to establish standing to challenge the reform act's contraception requirements, Urbom said he likely still would have thrown out the lawsuit, noting that the rule already includes several exemptions and accommodations for religious employers, and that federal officials indicated during their arguments that further exemptions could be forthcoming.

"Although the rule settles the definition of 'religious employer' for the purposes of the contraceptive coverage exemption, it also states that the contraceptive coverage requirements will not be enforced until the (government considers) whether to adopt additional, broader religious accommodations," Urbom said. Trying the case before those determinations are made "would deny the government a full opportunity to modify their positions, and undermine the interests of judicial economy."

Matt Dunning writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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