Last Thursday, the U.S. Court of Appeals for the Fourth Circuit issued the first major ruling on the constitutionality of the employer mandate in Obamacare since the U.S. Supreme Court upheld most of the law last year, holding that Congress had clear authority to impose the requirement that larger employers provide adequate health insurance for their employees or face financial penalties for failing to do so, and holding that the contraception benefit does not violate religious freedoms. It’s a significant win for supporters of health-care reform and one that takes the issue of the constitutionality of the contraception mandate closer to Supreme Court review.
Liberty University, an evangelical Christian college, lost a federal suit filed in 2010 that argued the Affordable Care Act’s employer mandate was unconstitutional because Congress didn’t have the power to issue the employer mandate, and that it would be required to subsidize abortions in violation of the university’s religious beliefs. A U.S. district court judge in Virginia initially ruled that both provisions of the Affordable Care Act (ACA) were constitutional. Liberty University appealed, and the Fourth Circuit court vacated the ruling, holding that the court lacked authority, under the Anti-Injunction Act, to hear a challenge to the law’s constitutionality until the law was fully implemented in 2014. The Supreme Court momentarily got involved, initially dismissing Liberty University’s claim after its own ACA ruling. But, in November, the Supreme Court changed course and sent the case back to the Fourth Circuit court for a decision on the employer mandate. That decision was issued last week.
In its unanimous decision, the Fourth Circuit court outright rejected both of Liberty University’s arguments. On the issue of whether Congress had the power to enact the mandate, the court ruled that the mandate is permitted by the Commerce Clause, since Congress has a “rational basis for finding that employers’ provision of health insurance coverage substantially affects interstate commerce.” The Fourth Circuit court said:
[T]he employer mandate is no monster; rather, it is simply another example of Congress’s longstanding authority to regulate employee compensation offered and paid for by employers in interstate commerce. … All employers are, by their very nature, engaged in economic activity.
Additionally, as was said by the court, the employer mandate does not require firms’ management to buy an unwanted product. They can self-insure instead of buying coverage elsewhere, which many do, as noted by the court.
On the issue of the financial penalty employers face, the Fourth Circuit court was unmoved by Liberty University’s claims of financial hardships. According to the court, the financial penalty that employers who fail to provide health insurance for their workers is like the financial penalty for individuals under the individual mandate, a form of tax that the Supreme Court already upheld as constitutional.
Importantly, the Fourth Circuit court rejected claims by Liberty University that both the individual and employer mandates violate the First Amendment religious freedom rights of the university and of its workers and violates their rights under the Religious Freedom Restoration Act. Contrary to Liberty University’s claims, the mandates do not impose a significant burden on the challengers’ religious views, said the court.
Plaintiffs present no plausible claim that the Act substantially burdens their free exercise of religion, by forcing them to facilitate or support abortion or otherwise. The Act specifically provides individuals the option to purchase a plan that covers no abortion services except those for cases of rape or incest, or where the life of the mother would be endangered.
The court also rejected an argument that, because the mandates have some exceptions, their application to Liberty University and its employees discriminates against them. Plaintiffs contend that the act somehow affects a “religious gerrymander.” But it does no such thing.
News of the decision got lost in a related announcement that the Obama administration would put off, for a year, the employer mandate. Employers with more than 50 employees now have until January 1, 2015 to provide insurance coverage for their employees or face penalties of up to $2,000 for each employee.
Meanwhile, challenges to the contraception mandate, and the creation of the federal exchanges, continue to wind through the federal courts, guaranteeing at least a couple more years of litigating over health-care reform. Lawyers for Liberty University have already said that they plan on asking the Supreme Court to intervene again, and given the initial cases on the docket for next term, it’s clear the Roberts Court wants to re-imagine the scope of religious liberties in the country. Evangelicals appear more than happy to help in that cause.