Substantial Burden: Religious Accommodations Under the ACA

Author: Brooke Logsdon, Associate Member, University of Cincinnati Law Review         

In Burwell v. Hobby Lobby, the Supreme Court required the government to provide objecting employers with accommodations when their religious beliefs conflict with requirements of the Affordable Care Act.[1] Following the Supreme Court’s decision in Hobby Lobby a number of circuits have held that the government accommodation for non-profit, religious organizations does not substantially burden the non-profits’ religious beliefs.[2] The accommodation allowed for non-profits to give “notice” to the government that they would not be providing contraceptive coverage in their health insurance plans.[3] Once the government received notice, it would provide contraceptives to the objecting non-profit’s employees.

The Eighth Circuit chose to split from the other circuits in Sharpe Holdings v. US Department of Health and Human Service.[4] It determined that it was not necessary for the court to decide if the accommodations actually made the plaintiffs complicit.[5] Because the plaintiffs believed that it made them complicit, the court only had to determine if the penalties in question substantially burdened their sincere beliefs.[6] Since the Supreme Court did not evaluate the reasonableness of Hobby Lobby’s beliefs, Sharpe Holdings is the case that most accurately reflects the Hobby Lobby standard.

Sharpe Holdings: The Outlier

The plaintiffs in Sharpe Holdings were non-profit religious organizations that offered employees health care coverage through a self-insured program. The plaintiffs’ religious beliefs prohibited them from directly or indirectly providing abortifacient devices. The government’s religious contraceptive accommodation required the plaintiffs to either fill out a Form 700 and send it to their third party administrator (TPA) as notice of the organization’s religious objections or self-certify by sending notice of their religious objections to Health and Human Services (HHS), which would then notify the TPA.[7] Once the TPA is aware of the non-profit’s objections, it would be responsible for providing contraceptive coverage to the non-profit’s employees.[8]

In Sharpe Holdings, the plaintiffs argued that by providing this notice either through the Form 700 or through HHS the plaintiffs were triggering the provision of abortifacient methods. They believe that their actions made them complicit in the act.[9] If they chose not to provide notice, they would have to potentially pay a penalty of $2,000 per year per employee.[10] In contrast, the government maintained that the TPAs have an independent legal obligation to provide contraceptive methods and even if the plaintiff’s beliefs were substantially burdened, it is the least restrictive means of effectuating the government’s compelling interest in providing contraceptives to all women.[11]

Ultimately, the court held that it was not their place to determine if the plaintiff’s belief was reasonable or unreasonable.[12] Drawing from the Supreme Court’s reasoning in Hobby Lobby, the court determined that the plaintiffs were entitled to draw the line of what they believed was prohibited conduct and that the court’s responsibility was to determine “whether the line drawn reflects an honest conviction.”[13] The court concluded that the plaintiff’s beliefs were sincerely held and that the penalty, being similar to the penalty in Hobby Lobby, was a substantial burden.[14] Finally, it held that the government did not prove that it had employed the least restrictive means because it failed to show that “it lacks other means of achieving its desired goal without imposing a substantial burden on the exercise of religion.”[15]

Little Sisters of the Poor Home for the Aged v. Burwell: The Trend

The Tenth Circuit’s decision in Little Sisters of the Poor is descriptive of the trend established by the other participating circuits. The plaintiffs in this case were also non-profit religious organizations who had self-insured plans and insured plans. In contrast to the Eighth Circuit, the Tenth Circuit determined that, because the accommodation relieves the plaintiff’s responsibility to provide contraceptive coverage, the accommodation was not a substantial burden.[16] Since the Affordable Care Act requires contraceptive coverage from all companies, the court determined that the companies’ employees are already entitled to coverage and therefore would receive coverage whether or not the company does anything.[17] This means that the decision to opt out of providing contraceptives only relieves the Little Sisters of the Poor’s responsibility to provide coverage and does not actually trigger coverage.[18] The employees’ entitlement to contraceptives is already present, therefore not triggered by the actions of the non-profit. Ultimately, the court did not defer to the plaintiff’s religious beliefs and focused on the accommodation instead of the penalty in deciding whether there was a substantial burden.[19] The court explained that “the [p]laintiffs misstate their role in the accommodation scheme. RFRA does not require us to defer to their erroneous view about the operation of the ACA and its implementing regulations.”[20]

The Holding in Sharpe Holdings is the Most Accurate Interpretation of Hobby Lobby

In holding that closely held, for-profit corporations’ beliefs were substantially burdened by the Affordable Care Act’s contraceptive mandate, the Supreme Court declined to evaluate whether the Hobby Lobby plaintiffs’ beliefs were reasonable or not. The Court stated that “the Hahns and Greens and their companies sincerely believe that providing the insurance coverage demanded by the HHS regulations lies on the forbidden side of the line, and it is not for us to say that their religious beliefs are mistaken or insubstantial.”[21] The Eighth Circuit was the first circuit to choose to refrain from evaluating whether the non-profit’s religious convictions were reasonable. The Tenth Circuit determined that, while the Little Sisters of the Poor’s beliefs were sincerely held, the accommodation did not actually cause or trigger the contraceptive coverage, which meant that the plaintiffs were not actually complicit in the matter.

However, the Supreme Court explicitly rejected this approach. In Hobby Lobby, the Court discussed Thomas v. Review Bd. Of Indiana, in which a metalworker asserted a religious objection when his employer changed his job.[22] Instead of making the metal for the guns, he was required to make the weapons themselves.[23] Even though the state court had difficulty determining whether his religious objection was reasonable, the Supreme Court held that, under the standard established by the Religious Freedom Restoration Act (RFRA), it was not the Courts’ place to determine this.[24] Similarly, in Little Sisters of the Poor the court also had trouble evaluating whether the line the plaintiffs drew was reasonable. The plaintiffs believed that by notifying the HHS or their TPA of their objections, they were shifting their legal responsibility from themselves to someone else, which would make them complicit in the provision of contraceptives. Regardless of whether the notice actually triggers contraceptive coverage, the plaintiffs are still involved in the contraceptive distribution process (which they believe is morally objectionable) and the only way to remove the burden would be to remove the requirement of any action. According to the Supreme Court, a court’s only function is to determine whether the religious belief is a sincere one.

The RFRA was passed to ensure broader protections for religious liberty after the Supreme Court, in Employment Div., Dept. of Human Resources of Ore. v. Smith, determined that a lesser standard was all that the Constitution required.[25] In keeping with this reasoning, it would be risky for the courts to evaluate religious beliefs and decide whether they are reasonable, logical, or correct. Although there may be some debate about whether courts are evaluating a belief verses the application or effect of a law on that belief, the end result is the same. If a court is deciding whether a law actually does what the religious objector says it does, it is still evaluating whether the religious objector’s belief is correct.

Even though a court may think that a religious belief is not affected by the law in question, the religious objector may still feel that the law substantially burdens their faith. For instance, in Little Sisters of the Poor, the plaintiffs felt complicit in an immoral activity when they gave notice to a third party. However, the court determined that the non-profit’s actions caused or triggered nothing because the beneficiaries of the non-profit’s plan were already entitled to the benefit. If courts were responsible for evaluating whether the religious objectors beliefs were reasonable, the court would effectively be telling persons that what they thought was a violation of their moral code was wrong or illogical. The courts would be basically deciding which religious beliefs have merit under the guise of deciding whether they legally make sense. This would possibly force religious objectors to decide between their faith and paying steep penalties.

The other circuits have held that they do not have to accept the legal conclusion that the plaintiffs’ religious beliefs are substantially burdened. The circuits contend that they must evaluate how the law being challenged actually operates and affects the non-profits’ religious exercise. Therefore, those circuits evaluate whether the law actually affects the plaintiff’s beliefs in the way that the plaintiffs assert instead of evaluating the actual penalty that the law imposes. The Supreme Court in Hobby Lobby addressed a similar issue to the moral dilemma posed in Sharpe Holdings and Little Sisters of the Poor. It stated that the plaintiff’s moral issue was with enabling the immoral actions of others.[26] However, the government argued that the action of providing health care coverage and the effect of someone possibly using a pill to have an abortion is too far attenuated to be a substantial burden.[27] The Court responded by saying:

This argument dodges the question that RFRA presents (whether the HHS mandate imposes a substantial burden on the ability of the objecting parties to conduct business in accordance with their religious beliefs) and instead addresses a very different question that the federal courts have no business addressing (whether the religious belief asserted in a RFRA case is reasonable).[28]

The Court rebuked the government for trying to evaluate the religious beliefs of Hobby Lobby. Instead, it focused on whether the law imposed a substantial burden on the companies’ ability to do business without violating their religious beliefs. It ultimately decided that the penalty constituted a substantial burden on Hobby Lobby’s religious beliefs because the plaintiffs had to either pay the penalty or violate their religious beliefs. The Court concluded that “[b]ecause the contraceptive mandate forces them to pay an enormous sum of money…if they insist on providing insurance coverage in accordance with their religious beliefs, the mandate clearly imposes a substantial burden on those beliefs.”[29] This supports the notion that courts must ask whether this religious belief is sincerely held and, if so, whether this law forces the plaintiff to choose between violating that belief and facing an enormous penalty. If the answers to those questions are affirmative, then the law does substantially burden the religious beliefs of the plaintiff.


            In Hobby Lobby, the Supreme Court set a precedent against courts evaluating the religious beliefs of persons. Allowing courts to determine whether religious beliefs are “reasonable” gives courts too much power. Under RFRA and the Hobby Lobby precedent, the only question courts may ask is if religious beliefs are sincerely held and if the penalty imposed on religious objectors is severe enough to be a substantial burden. The Supreme Court has determined the religious protection standard required from the Constitution, but Congress felt the need to raise that standard to protect religious liberty. Ultimately, the holding of the Eighth Circuit in Sharpe Holdings is the most accurate interpretation of the Supreme Court’s substantial burden standard set forth in Hobby Lobby.

[1] Burwell v. Hobby Lobby, 134 S.Ct. 2751 (2014).

[2] Little Sisters of the Poor Home for the Aged v. Burwell, 794 F.3d 1151, 1176 (10th Cir. 2015).

[3] Id. at 1163-1165.

[4] Sharpe Holdings, Inc. v. U.S. Dept. of Health and Human Services, 2015 BL 30098, *11-13 (8th Cir. Sept. 17, 2015).

[5] Id. at *8-9.

[6] Id. at *9.

[7] Id. at *4-6.

[8] Id.

[9] Id. at *8.

[10] Id. at *4.

[11] Id. at *7.

[12] Id. at *9.

[13] Id.

[14] Id. at *12.

[15] Id. at *15-16.

[16] Little Sisters, 794 F.3d at 1187.

[17] Id. at 1182-84.

[18] Id.

[19] Id.

[20] Id. at 1192.

[21] Burwell v. Hobby Lobby, 134 S.Ct. 2751, 2779 (2014).

[22] Id. at 2778.

[23] Id.

[24] Id.

[25] Id. at 2760.

[26] Id. at 2778.

[27] Id. at 2777.

[28] Id. at 2778.

[29] Id. at 2779.

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