Notre Dame's Contraceptive Coverage and the Need for Notice and Comment
On October 31, 2017, the University of Notre Dame terminated contraceptive coverage for employees and graduate students. The school’s announcement was immediately criticized, and a week later, the school reversed its decision. To understand Notre Dame’s flip-flop, it is important to interrogate the underlying rationale for the school’s decision to terminate coverage in the first place: the Trump Administration’s recent rollback of the Affordable Care Act’s (ACA) mandate that employers provide contraceptive coverage as part of its health insurance policy.
In early October, the Internal Revenue Service, the Employee Benefits Security Administration, and the Centers for Medicare & Medicaid Services issued interim rules expanding the religious and moral exemptions to the ACA’s contraceptive coverage mandate.
In response to the new rules, the American Civil Liberties Union (ACLU) filed suit in the Northern District of California, and the National Women’s Law Center and Americans United for Separation of Church and State filed suit in the Northern District of Indiana. Among other arguments, both complaints allege that the procedures used to implement the interim rules violated the Administrative Procedure Act (APA) in that the rules were promulgated without first providing an opportunity for notice and comment.
The APA requires an agency to provide a notice of proposed rulemaking and an opportunity for interested parties to file comments before promulgating a substantive rule, or a rule that has the force and effect of law. In General Electric Co. v. EPA (2002), the D.C. Circuit held that an agency must comply with notice and comment procedures when the agency pronouncement appears on its face to have a binding effect on regulated parties. Similarly, in evaluating the procedures used by the Obama Administration in implementing Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA), the Fifth Circuit held in Texas v. United States (2015) that when a legislative rule “modifies substantive rights and interests,” it must be preceded by a notice and comment period.
The complaints filed by the ACLU, the National Women’s Law Center, and Americans United for Separation of Church and State operate against the backdrop of the Supreme Court’s statement in Zubik v. Burwell (2016), urging the parties to strive to find “an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans ‘receive full and equal health coverage, including contraceptive coverage.’” By refusing to follow the notice and comment procedures required by the APA when issuing the interim rules expanding the religious and moral exemptions to contraceptive coverage, it appears that the agencies did not follow the Court’s recommendation. Providing a notice and comment period before promulgating a revision or interim rule “allows an agency to determine whether the initial rule was in fact invalid—and if so, what to do about it.” This communicative process likely would have been fruitful in this case considering the immediate effect of the interim rules and the six-year brainstorm that culminated in the mandate in the first place. There will likely be questions about the parties’ standing and ability to seek judicial review of the agencies’ decisions. It would be unsurprising, however, given recent precedent and the apparent benefit a comment period would have before the interim rules took effect, for the courts to tell the agencies to try again.
While Notre Dame’s fluctuating policy choices appear confusing at first, the circumstances underlying the school’s decision are not entirely stable. The rules on which the school based its decision are in flux and are currently being challenged. While the courts consider these cases in California and Indiana, one should keep a watchful eye on recent legislative reactions to the agencies’ interim rules. Bills have been introduced in the House and the Senate proposing nullification of the agencies’ decision, and some states have responded to this unpredictable climate by initiating legislative efforts to require contraceptive coverage independent of the ACA’s mandate. Parties interested in submitting comments to the agencies concerning the interim rules expanding the religious and moral exemptions to contraceptive coverage may do so until January 8, 2018.