Tuesday, February 5, 2013

Thoughts on Friday's proposed new version of the HHS mandate - Updated 2/7

(Update, 2/7 - Here's the expected response from Cardinal Dolan and the USCCB.) 

After sitting on the egg for the past nine months or so, the HHS Dept on Friday (2/1) released a new "notice of proposed rule-making" (full PDF here) regarding the much-contested implementation of the HHS mandate.  (For those keeping score, here are a few of our posts from last year on this issue.)  I've slogged through most of the new document, and have to agree (again) with Archbishop Chaput's brief analysis.

The White House has made no concessions to the religious conscience claims of private businesses, and the whole spirit of the “compromise” is minimalist.

And here, his conclusion:

The scholar Yuval Levin has stressed that the new HHS mandate proposal, “like the versions that have preceded it, betrays a complete lack of understanding of both religious liberty and religious conscience.”  In reality, despite the appearance of compromise, “the government has forced a needless and completely avoidable confrontation and has knowingly put many religious believers in an impossible situation.”
One of the issues America’s bishops now face is how best to respond to an HHS mandate that remains unnecessary, coercive and gravely flawed.  In the weeks ahead the bishops of our country, myself included, will need both prudence and courage – the kind of courage that gives prudence spine and results in right action, whatever the cost.  Please pray that God guides our discussions. [emphasis added]

Here's some of the key language from the full document:

On the exemption:

The Departments agree that the exemption should not exclude group health plans of religious entities that would qualify for the exemption but for the fact that, for example, they provide charitable social services to people of different faiths or employ people of different faiths when running a parochial school.... Accordingly..., the Departments propose to amend the [March 2012] definition of religious employer that was adopted in the 2012 final rules by eliminated the first three prongs of the definition and clarifying the fourth.  Under this proposal, an employer that is organized and operates as a non-profit entity and referred to in section 6033(a)(3)(A)(i) or (iii) of the [Internal Revenue] Code would be considered a religious employer for purposes of the religious employer exemption. (p. 19)

St. Andrew's, Roanoke, VA
Those two articles are regarding the exemption from filing even an information return (Form 990) with the IRS for certain tax-exempt non-profits of religious character:

"(i) Churches, their integrated auxiliaries, and conventions of associations of churches;" and
"(iii) the exclusively religious activities of any religious order."

Thus, the religious exemption has not been substantially broadened at all.  It still excludes most if not all Catholic and other religious colleges, universities, health care institutions, charitable institutions like Catholic Charities, charitable fund-raising foundations, etc.  It does now clearly  include, in addition to parishes, most parish-owned institutions like schools, and possible cemeteries.

For these non-exempt religious employers, there is also very little change in the "accommodation" being offered.  Note first this rather revealing bit of rationalization about the distinctions being made:

In proposed [new rules]..., the Departments propose policies relating to the accommodation of certain group health plans and group health insurance coverage with respect to the contraceptive coverage requirement.  The Departments propose a comparable accommodation with respect to student health insurance coverage arranged by eligible organizations that are religious institutions of higher education.  The Departments believe these proposed accommodation, as opposed to the exemption that is provided to religious employers, are warranted given that participants and beneficiaries in group health plans established by eligible organizations, as well as student enrollees and their covered dependents in student health insurance coverage arranged by eligible organizations, may be less likely than participants and beneficiaries in group health plans established or maintained by religious employers to share such religious objections of the eligible organizations. (p. 21, emphasis added)

I think it's rather alarming that the HHS feels capable of asserting that the diversity of employees at one Catholic (or other religious) institution makes that institution's Catholic (or other) identity less valuable than the Catholic identity of a less diverse institution.  This is, first, a dramatic example of the "tyranny of relativism."  And second, it betrays core principles of the right to private property - the fact that the Church owns a hospital, and therefore is entitled to define the mission and scope of the hospital's policies etc. (within reasonable bounds of what is consistent with the common good, certainly), is ignored, and the assertion of a newly invented "greater good" is used to violate more than only (only!) religious freedom rights.

For purposes of these proposed rules only, the Departments propose to define an eligible organization as an organization that meets all of the following criteria:
  • The organization opposes providing coverage for some or all of the contraceptive services required to be covered [under ACA] on account of religious objections;
  • The organization is organized and operates as a non-profit entity;
  • The organization holds itself out as a religious organization;
  • the organization self-certifies that it satisfies the first three criteria...
This proposed definition is intended to allow health coverage established or maintained or arranged by non-profit religious organizations... to qualify for an accommodation. (p. 22)

The actual "accommodation" is thus largely unchanged from its original proposal last February.  The health insurance provider assumes the obligation, directly or indirectly, to provide the coverage to which the religious organization which is contracting with the provider objects morally:

...these proposed rules would provide that, in the case of an insured group health plan established or maintained by an eligible organization, the health insurance issuer providing group coverage in connection with the plan would assume sole responsibility, independent of the eligible organization and its plan, for providing contraceptive coverage without cost sharing, premium, fees, or other charge to plan participants and beneficiaries. (p. 24)

The proposed rules would direct the issuer receiving the copy of the self-certification [fourth point of eligibility, above] to ensure that the coverage for those contraceptive services identified [as objectionable] in the self-certificate is not included in the group policy, certificate, or contract of insurance; that such coverage is not reflected in the group health insurance premium; and that no fee or other charge in connection with such coverage is imposed on the eligible organization or its plan.

The huge question, of course, is how to guarantee this?  On the surface, it seems impossible that the insurance provider would not include the costs of this additional coverage in its normal business expenses, and assign cost-values to all its plans and customers accordingly.

The proposed rules would further direct the issuer... to provide contraceptive coverage under individual policies, certificates, or contracts of insurance... for plan participants and beneficiaries without cost sharing, premium, fee, or other charge.  The coverage would not be offered through a group health plan... The issuer would automatically enroll plan participants in a separate individual health insurance policy that covers recommended contraceptive services... The eligible organization would have no role in contracting, arranging, paying for, or referring for this separate contraceptive service. (p. 24-25)

Two huge questions here.  First, if this individual plan is to be offered to all those enrolled in a given group health plan, how is it more than a merely conceptual difference to call it an "individual" plan?  Second, if all this could be solved by the issuing of individual plans, why is the entire mandate needed at all - why not simply have the HHS provide such individual plans directly, levy a clear tax for it, and avoid the whole First Amendment morass entirely?  And note, furthermore, the "automatic" enrollment.  Apparently even those employees who do, somehow, share the religious employer's religious objections are not permitted to act on their principles, either.

The Departments believe that, in the case of insured group health plans, this proposed arrangement would alleviate the need for eligible organizations to contract, arrange, pay, or refer for contraceptive coverage while providing contraceptive coverage while providing contraceptive coverage to plan participants and beneficiaries at no cost.  Actuaries, economists, and insurers estimate that providing contraceptive coverage is at least cost neutral, and may result in cost savings when taking into account all costs and benefits for the insurer. (fn 12)  (p. 26)

But there are huge problems with this assertion: First, the claim itself is contestable, and fact that the paper linked above in footnote 12 was written by an HHS staff researcher doesn't inspire confidence in its accuracy.  Second, in the same paragraph, there is this admission that the costs of these individual plans are simply not separable from the employer's costs of contracting for health insurance: "The Departments believe that issuers generally would find that providing such contraceptive coverage is cost-neutral because they would be insuring the same set of individuals under both policies..." (p. 26, emphasis added)  And third, the document later admits that cost-neutrality is indeed an illusion, offering to off-set those costs with equal rebates to the fees associated with participating in the soon-to-be-imposed "Federally Facilitated Exchanges." (see pp. 27, 28, 33, 34, etc.)

Almost as an afterthought, the same approach is proposed for self-insured plans, with the same reimbursement of expenses from off-set FFE fees.  The "third party administrator" of the self-insured plan will assume the responsibility, with other details remaining again unchanged.  Again, there is no examination of any effective, practical separation of costs associated with the individual plans, merely the assertion that this saves the religious employer from complicity.

We are still waiting from official word from the leadership of the USCCB in response to this proposal. 


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