A federal appeals court ruled Tuesday that the Little Sisters of the Poor must comply with the Obamacare mandate that requires their health insurance carriers to subsidize contraceptive and some abortion services for employees or face fines from the IRS.
The ruling by a three-judge panel of the 10th Circuit Court of Appeals in Denver is a setback for the Little Sisters, a global Catholic order with U.S. headquarters in Catonsville that has cared for the elderly poor here since 1868.
The order argued that the so-called HHS Mandate, a provision of the Affordable Care Act, infringes on its First Amendment rights by compelling it to support practices that violate its core religious beliefs.
The Becket Fund for Religious Liberty, the Washington firm representing the group, decried the 2-1 decision.
"Today the 10th Circuit ruled that government can force the Little Sisters to either violate their faith or pay massive IRS penalties," lead attorney Mark Rienzi said in a statement. "We're disappointed in today's decision."
Officials at the Department of Health and Human Services did not respond to requests for comment.
The Affordable Care Act, passed by Congress in 2010, requires group health plans and insurance issuers to provide coverage for several preventive services for women.
A year later, the Department of Health and Human Services issued a rule mandating that those services include "all FDA-approved contraception methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity."
Sister Loraine Marie Maguire, the group's mother provincial, said last year that the requirement violates the teachings of the Roman Catholic Church, including its strictures against abortion.
The Little Sisters, she said, "uphold the inviolable dignity of all human life. … [But] the federal government's contraception and abortion mandate forces the Little Sisters to provide services that destroy human life, contradicting their very mission to respect it."
In 2013, HHS added an accommodation meant to alleviate such concerns. The new rules included an exemption for churches and some other religious employers.
For those the rules did not exempt — including universities operated by religious orders and denominations, and nonprofits such as the Little Sisters — they introduced a new protocol: employerswere to inform the government of their religious objections, and the government would require a third party, such as the employer's insurer, to provide the coverage to employees free of charge.
Officials said the new rules would "balance our commitment to helping ensure women have continued access to coverage for preventative services important to their health, with the administration's goal of respecting religious beliefs."
The Little Sisters and other organizations disagreed. Signing the form that allows a third party to provide the services would violate their beliefs, they said.
Becket filed a class-action lawsuit in federal court on behalf of the Little Sisters and about 400 other organizations, including several Christian-aligned universities and colleges.
The Little Sisters' homes in Denver and Baltimore were lead plaintiffs.
The groups all offer health insurance to their employees through Christian Brothers Services, a nonprofit based in New Mexico.
The U.S. Supreme Court granted the plaintiffs an injunction against the mandate last year while their case remained before the 10th Circuit Court.
Under the injunction, the Little Sisters could not be forced to sign the forms that would authorize Christian Brothers to provide contraceptives, sterilization or drugs and devices that can cause early abortions, including the "week-after" pill known as ella.
Tuesday's ruling invalidated the injunction. The judges ruled that the government's accommodation offer provides sufficient relief.
"Although we recognize and respect the sincerity of plaintiffs' beliefs and arguments, we conclude the accommodation scheme relieves plaintiffs of their obligations under the mandate and does not substantially burden their religious exercise … or infringe upon their First Amendment rights," Circuit Judge Scott M. Matheson Jr., wrote in the ruling.
The decision surprised some in light of a 2013 decision by the same court that favored Hobby Lobby Inc., a for-profit corporation that made similar arguments in a separate lawsuit.
Matheson wrote that the two cases are "significantly different." He noted that Hobby Lobby had been granted no accommodation similar to the one Little Sisters and others had received.
"The plaintiff religious nonprofit organizations can avail themselves of an accommodation that allows them to opt out of providing contraceptive coverage without penalty," he wrote.
If they defy the decision, the Little Sisters' 28 U.S. facilities, including their home in Baltimore, face fines between $2,000 per year per employee and $100 per employee per day, an amount that could total in the millions per year, the Becket Fund said.
The Little Sisters, based in France, operate homes in 31 countries, serving a total of more than 13,000 poor and elderly people.
Maguire, the mother provincial, said Tuesday that the order "simply cannot choose between our care for the elderly poor and our faith."
In an email to supporters, the order asked for prayers.
Rienzi said the fact that the federal government already makes contraceptive coverage available through health insurance exchanges and other programs makes him wonder why officials are insisting that the Little Sisters do as well.
"There is no reason the government cannot run its programs without hijacking the Little Sisters and their health plan," he said Tuesday.
Adele Auxier Keim, legal counsel at the Becket Fund, said the Little Sisters were "still digesting" the 100-page opinion and had not decided on a course of action. She said her organization would support the order as long as it chose to pursue the case.
"All the way to the Supreme Court," she said.