New Legal Challenges to the ACA: Understanding the Current Landscape August 19, 2014 Download the slides & materials at www.hivhealthreform.org/blog
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Today s Agenda Robert Greenwald, JD, Faculty Director and Clinical Professor of Law, Center for Health Law and Policy Innovation, Harvard Law School Introduction Katerina Souliopoulos, Summer Clerk and JD Candidate, BU School of Law Part One: Challenges to the Contraceptive Mandate Spenser Benge, Summer Clerk and JD Candidate, IU McKinney School of Law Part Two: Challenges to the Availability of Premium Tax Credits in Federally Facilitated Marketplaces Download the slides: www.hivhealthreform.org/blog
New Legal Challenges to the ACA: Understanding the Current Landscape Part One: Challenges to the Contraceptive Mandate Part Two: Challenges to the Availability of Premium Tax Credits in Federally Facilitated Marketplaces Presented by the Center for Health Law and Policy Innovation of Harvard Law School Robert Greenwald, JD Faculty Director and Clinical Professor of Law Katerina Souliopoulos Summer Clerk and JD Candidate, BU School of Law Malinda Ellwood, JD Clinical Instructor of Law Spenser Benge Summer Clerk and JD Candidate, IU McKinney School of Law
Part One Hobby Lobby, Inc., et al: Challenges to the Contraceptive Mandate Katerina Souliopoulos Summer Clerk, Center for Health Law and Policy Innovation, Harvard Law School JD Candidate, BU School of Law
ACA Contraceptive Mandate Health plans must provide coverage (without cost-sharing) of all USPSTF A and B recommended services, as well as all additional services recommended by HRSA Examples: Screening for gestational diabetes, cervical cancer and mammographies Counseling for women at higher risk breast cancer, for breast feeding support, for domestic violence Routine HIV testing Required services also include coverage of all FDA approved contraception, sterilization procedures, and patient education and counseling. Currently, there are 20 FDA-approved contraceptives covered under the ACA This requirement does not include coverage of abortifacient drugs (as prescribed)
Religious Exemptions to the Contraceptive Mandate 1. Purely religious employers (i.e. nonprofit houses of worship or religious orders) are exempt from the mandate 2. Non-profit organizations with a religious purpose may certify their objection to providing contraceptive coverage and request an accommodation: In that case, the insurer or third-party administrator (TPA) must provide the coverage to their employees
Exceptional Plaintiffs! Plaintiff Spotlight: Hobby Lobby Stores, Inc. Only Christian music within stores Begin meetings with prayer Closed on Sunday for worship Closely-Held corporations Tax law distinction Five or fewer individuals control corporation by owning more than 50% of stock 56% of US businesses are closely-held
The Contraceptives At Issue Hobby Lobby only objected to 4 out of the 20 FDAapproved contraceptives: In particular, they objected to those that prevent the implantation of a fertilized egg into the uterus as this is tantamount to abortion in their religious opinions
Questions Before the Court 1. Do Hobby Lobby Stores Inc. and other closely-held corporations have religious exercise protection under the Religious Freedom Restoration Act of 1993 (RFRA)? 2. If so, does the contraceptive mandate substantially burden those rights? 3. If yes, does the government have a compelling reason for doing this? 4. If yes, is the burden the least restrictive means of achieving that purpose?
What the Court Found 1. Closely-held for-profit corporations are persons and can bring religious exercise claims under RFRA 2. Hobby Lobby et al. have a genuine religious belief in opposition to contraceptives and the requirement substantially burdens that belief 3. The Court assumed that wanting to ensure access to contraception for women was a compelling government interest 4. But, the Court determined that there were other less burdensome ways of achieving this purpose (such as the accommodation currently available for non-profit religious organizations)
The Bottom Line The Court did not hold that employees do not need to have access to birth control Rather, the Court determined that closely held corporations like Hobby Lobby that certify a religious objection now have the right to request an accommodation from the ACA s birth control mandate The federal government must decide what that accommodation will be Could be very similar to the accommodation that currently exists for some religious non-profits
Where Do Things Stand Now? Existing accommodation being challenged in lower courts Rationale: filing the religious objection form entangles the organizations in providing contraception and violates First Amendment rights While the Court maintains that the ruling is a narrow one, there are concerns that this decision potentially opens the door for closely-held corporations to challenge other government mandates under religious exercise
What Can Advocates Do? Critical to ensure that ALL women understand they have a right to contraception, so education will continue to be important As well, there are other critical women s health services that are NOT affected by this ruling- services like screening for domestic violence and HIV Continue to educate legislators, government officials, and others about the critical importance of access to contraceptives Continue to fight for the importance of programs like Title X!! The Administration may release regulations discussing potential accommodationsit will be important for advocates to comment on these This decision comes at a time when there is currently a war on women s health it is critical that we continue to fight that war
Part Two Halbig & King: Challenges to the Availability of Premium Tax Credits in Federally Facilitated Marketplaces Spenser Benge Summer Clerk, Center for Health Law and Policy Innovation, Harvard Law School JD Candidate, IU McKinney School of Law
Accessing Affordable Insurance Through Online Marketplaces Marketplaces- online portals created by the ACA through which people purchase health insurance plans Designed specifically to: Increase accessibility to health insurance Increase ease comparability among plans Provide a means of regulating plans Three Types of marketplaces: State-run Federally-facilitated State-Federal Partnership
The Marketplaces
The ACA s Individual Mandate Requires all individuals with incomes above 100% FPL to have health coverage or pay a tax penalty. Affordability Exemption: If the premium for insurance (minus any premium tax credits) exceeds 8% of an individual s income, that person is exempt from paying the penalty. Critical part of the ACA because it ensures that insurance rates can stay affordable in light of new anti-discrimination requirements and other market reforms (e.g. no pre-existing condition exclusions). Upheld as constitutional tax under National Federation of Independent Businesses v. Sebelius (same Supreme Court case that determined Medicaid expansion would be optional) Bottom line: some people are still trying to undermine the mandate
Premium Tax Credits Premium Tax Credits Tax credits to subsidize insurance premiums for low-income and middle-income individuals who buy insurance on the marketplace ACA s Premium Tax Credit Provision (at issue in these cases): Calculates the annual premium tax credit amount by adding up the premium assistance amounts from each coverage month. A coverage month is one in which an individual is enrolled in a qualified health plan through an exchange established by the state. What the IRS did: Created a rule that provides that these premium tax credits are available regardless of whether a person purchases insurance through a state-run or federally-facilitated marketplace.
The Halbig and King Cases The Halbig and King courts were asked to determine if the IRS had exceeded the authority given to it by the ACA when it created a rule that provided for tax credits in federally-facilitated marketplaces in addition to state-run marketplaces. In other words, does the ACA in fact limit the availability of premium tax credits only to individuals in state-run exchanges?
Plaintiffs in the Halbig and King Cases Plaintiffs are individuals residing in states with federally-facilitated marketplaces who qualify for premium tax credits under the IRS rule Without the availability of tax credits, plaintiffs would qualify for the affordability exemption. Plaintiffs want to be exempt from the mandate They allege that the plain language of the ACA permits the IRS to create a rule allowing for tax credits only in state-run exchanges and not in federally-facilitated marketplaces.
Plaintiffs Arguments Plaintiffs argue that this particular section of the ACA should be interpreted literally: tax credits for individuals are calculated based on the cost of a qualified health plan enrolled in through an Exchange established by the State. This particular section on how to calculate tax credits only refers to marketplaces established by the State, and there s no provision to calculate premium tax credits in federally facilitated marketplaces Therefore, the ACA was actually designed so that people in federally facilitated marketplaces couldn t get tax credits
The Government s Arguments This particular provision must be read in context of the other parts of the ACA which clearly allow for tax credits in all types of exchanges Examples: 1. One section provides that when a state refuses to create its own exchange, the federal government establishes such exchange for the state. Therefore, the government argues, federally-facilitated exchanges are exchanges established by the state for purposes of tax credits. 2. Another section specifically requires federally-facilitated exchanges to report tax credit amounts to the government. This would be nonsensical if Congress did not intend for tax credits to be available in federally-facilitated exchanges.
How the Courts Figure This Out: Two Part Test Part One: They look to the plain meaning of the statute to determine if the agency (IRS) rule is an appropriate exercise of the authority that it was given. If the statute is clear and unambiguous, the intent of Congress has been shown and the agency rule must strictly follow it. Part Two: If the statute is ambiguous, the intent of Congress has not clearly been shown, and the court must give deference to the agency s interpretation of the law and uphold the rule it created as long as it is a permissible construction of the statute.
The Halbig Court Found that the section at issue is clear and unambiguous : tax credits are only available for individuals with plans from an exchange established by the state federally-facilitated exchanges are not in fact established by the state. If Congress had meant to refer to both, the text would just read enrolled in through an Exchange without specifically referring to established by the state, regardless of whether the federal government is permitted to create the exchange for a state that did not create one itself Court also looked at legislative history and determined that there was nothing to suggest that the ACA was meant to provide tax credits to everyone in any kind of exchange
The King Court Found that because each interpretation (literal reading as well as a contextual reading) had some degree of merit, the statute was clearly ambiguous. Therefore, the court deferred to the IRS interpretation that tax credits should be available in all types of exchanges. This interpretation was within the bounds of reasonableness given the purpose of the ACA (to increase access to health coverage for all Americans,) and the other parts of the statute.
Bottom Line The Halbig Court found that the plain meaning of the ACA only permitted tax credits in exchanges established by the state. The King Court upheld the IRS rule because it acknowledged that the language of the ACA was ambiguous because it was susceptible to multiple interpretations, and upheld the IRS interpretations.
What Happens When Courts Disagree? King Case Halbig Case
Possible Next Steps The Halbig decision will likely be heard by the full 11 judge panel of the U.S. Court of Appeals for the District of Columbia on en banc appeal. The Supreme Court could choose to hear the King appeal from the 4 th Circuit, but will more likely wait for the decision on the Halbig appeal. If there is ultimately no disagreement, the Supreme Court will not need to intervene.
What Should Advocates Do In the Meantime? Make sure to educate consumers: for now, premium tax credits are safe- neither of these decisions affects access to tax credits for the current year (2014). Make your voice heard! ensure that your state and federal legislators know how important premium tax credits are to you and/or your clients. Collect and share stories of positive experiences of how premium tax credits have affected the lives of residents. Educate people in your state about the importance of premium tax credits and what might be at stake. This is particularly important in states with federally facilitated marketplaces Stay tuned and be vigilant!
Further Resources SCOTUS (Supreme Court of the United States) Blog: http://www.scotusblog.com/ National Health Law Program (NHeLP): http://www.healthlaw.org/ Health Reform GPS: http://healthreformgps.org/ Health Affairs Blog: http://www.healthaffairs.org/ National Women s Law Center (NWLC): http://www.nwlc.org/ This webinar was funded in part through the generous support of: Janssen Therapeutics The M A C AIDS Fund The Ford Foundation Thank you!
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