The U.S. Supreme Court got a mixed reaction from the Obamaadministration and religious groups to its unusual proposal toresolve a clash over employee insurance coverage for contraceptives.

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In a court filing Tuesday, U.S. Solicitor General DonaldVerrilli said the government had already gone far enough toaccommodate religious groups’ objections to providing coverage forsome forms of birth control. He said the alternative proposalsuggested by the court last month, while feasible, would "imposereal costs."

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Faith-based groups didn’t directly say whether the court’sproposal was acceptable, though they said it showed the governmentcould do more to accommodate their beliefs. They said anybirth-control coverage must be "truly separate" from their ownhealth-care plans. The groups, including the Little Sisters of thePoor, say the government is hijacking their plans to providesomething they equate with abortion.

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The dispute stems from Obamacare’s requirement thatcontraceptive coverage be included in employee and student healthplans. The court’s March 29 order suggested that at least one justicewas looking to find a middle ground in the case -- and avert theprospect of a 4-4 deadlock. Arguments lastmonth suggested a likely divide on the court, which has beenshorthanded since the Feb. 13 death of Justice Antonin Scalia.

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The court’s four liberal justices suggested during argumentsthat the administration had adequately accommodated faith-basedemployers and universities by letting them opt out and have theirinsurer provide the required birth-control coverage, with thegovernment ultimately paying the cost. Justice Anthony Kennedy, theadministration’s best prospect for a fifth vote, appearedskeptical.

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Two options

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The administration currently gives objecting nonprofits twooptions: They can shift responsibility onto their insurer byproviding it with a “self-certification” form, or they can notifythe U.S. Department of Health and Human Services of their objectionand provide contact information for their insurer. The religiousgroups say they shouldn’t have to play even that limited role.

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The March 29 Supreme Court order suggested a third possibility.It asked whether objecting employers could merely tell theirinsurer that they object to contraceptive coverage and don’t wantto include it. They wouldn’t have to submit any separate, writtennotice to the insurer or the government.

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Under the court’s proposal, the insurer then would notify theemployees that it would provide birth control coverageseparately.

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The order asked the two sides to address “whether and howcontraceptive coverage may be obtained” through the groups’insurance plans “but in a way that does not require any involvementof petitioners beyond their own decision to provide healthinsurance without contraceptive coverage to their employees.”

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‘Very similar’

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Verrilli said the court’s proposal was "very similar to theexisting accommodation," differing primarily by not requiring thatthe employer put its objections in writing. He said the writingrequirement "provides clarity and certainty for all parties whoserights and duties are affected by the accommodation."

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The faith-based groups said contraceptive coverage must comefrom separate insurance policies with "separate enrollmentprocesses, insurance cards, payment sources, and communicationstreams."

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The religious groups have been at a disadvantage since Scalia’sdeath. Scalia was in the majority in a 5-4 ruling in a 2014 caseinvolving the craft-store chain Hobby Lobby, when the court saidclosely held corporations can refuse to provide birth controlcoverage to employees. The current case involves religiousnonprofits, rather than for-profit companies.

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A 4-4 split would leave the issue in an uncertain state. Eightof the nine federal appeals courts that have ruled on the issuehave said the administration is adequately protecting religiousrights, while the ninth appeals court ruled for the religiousgroups. A deadlock would leave all of those decisions in place,meaning the law would vary depending on the part of thecountry.

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The court could also hold the case and schedule a new argumentafter a ninth justice is confirmed.

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The lead case is Zubik v. Burwell, 14-1418.

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Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

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