On July 8, 2020, the Supreme Court issued two rulings that impact employment discrimination and group health plan obligations for certain employers.
In the first set of combined cases,
Our Lady of Guadalupe School v. Morrisey
, the Supreme Court held that the First Amendment’s prohibition against government interference in the free exercise of religion means that religious employers such as parochial schools are largely exempt from anti-discrimination laws. In these cases, employees sued religious schools for alleged violations of the Age Discrimination in Employment Act (“ADEA”) and for disability discrimination where an employee was fired during a leave of absence for breast cancer treatment. The Court expanded the “ministerial exception” and wrote that “[t]he religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.” In view of this ruling, it can be safely said that religious employers are broadly exempted from anti-discrimination laws, with very little exception. Employers should still exercise caution and carefully evaluate any employment determination based on age or disability, and consult employment counsel at TKCK in specific cases.
In the second case,
Little Sisters of the Poor v. Pennsylvania
, the Court upheld Department of Health and Human Services (“HHS”) rules which created religious or moral exceptions to the obligations of certain employers to provide coverage or payments for some or all contraceptive services under the Affordable Care Act (“ACA”). Under the ACA, covered employers are required to offer a group health plan with certain “minimum essential coverage.” Shortly after the ACA was passed, HHS issued rules that made contraceptive coverage part of the minimum essential coverage. In 2017, HHS issued further rules that allowed certain employers to refuse to provide such coverage based on “religious” or “moral” objections. Today, the Supreme Court upheld the constitutionality of such exceptions, thereby clearing the path for certain covered employers to exclude contraceptive coverage from their group health plans on religious or moral grounds. However, the issue may continue to be litigated since the Court is returning the matter to lower courts for evaluation of whether the HHS rule was part of a reasoned decision-making process. Employers and benefit providers should continue to monitor the status of this litigation and consult with the employment attorneys at TKCK to assess the impact upon their benefits practices.