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Sharpe Holdings v HHS

Sharpe Holdings v HHS

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Published by Howard Friedman

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Published by: Howard Friedman on Jan 01, 2013
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 SHARPE HOLDINGS, INC., et al., ))Plaintiffs, ))v. ) No. 2:12-CV-92-DDN)UNITED STATES DEPARTMENT OF )HEALTH AND HUMAN SERVICES, et al., ))Defendants. )
This action is before the court on the motion of plaintiffs for a temporary restrainingorder and a preliminary injunction under Federal Rule of Civil Procedure 65. The partieshave consented to the exercise of plenary authority by the undersigned United StatesMagistrate Judge pursuant to 28 U.S.C. § 636(c). The court heard oral arguments onDecember 31, 2012.
On December 20, 2012, plaintiffs Sharpe Holdings, Inc., Charles N. Sharpe, JudiDiane Schaefer, and Rita Joanne Wilson commenced this action against defendants UnitedStates Department of Health and Human Services, Kathleen Sebelius in her officialcapacity as Secretary of Health and Human Services, the United States Department of theTreasury, Timothy Geithner in his official capacity as Secretary of the Treasury, the UnitedStates Department of Labor, and Hilda Solis in her official capacity as Secretary of Labor.Defendants are the departments and officials responsible for adopting, administering, andenforcing the federal laws and regulations at issue.By their pending motion, plaintiffs seek immediate injunctive relief prohibitingdefendants from applying and enforcing against plaintiffs certain portions of the PatientProtection and Affordable Care Act, Pub. L. 111-148 (March 23, 2010), and the HealthCare and Education Reconciliation Act, Pub. L. 111-152 (March 30, 2010) (collectively theAffordable Care Act” or the “Act”). Defendants oppose the issuance of injunctive relief.At this initial, pre-discovery stage of the case, plaintiffs’ entitlement to immediateinjunctive relief depends upon the allegations of their complaint and their pending motion
Case: 2:12-cv-00092-DDN Doc. #: 20 Filed: 12/31/12 Page: 1 of 10 PageID #: 298
and the affidavits submitted in support. At the December 31, 2012 hearing, neither partyoffered evidence.The Affordable Care Act, enacted in March 2010, regulates the national healthinsurance market by directly regulating group health plans and health insurance issuers.The Act contains a preventive services coverage provision which states:A group health plan and a health insurance issuer offering group orindividual health insurance coverage shall, at a minimum provide coveragefor and shall not impose any cost sharing requirements for[,] with respect towomen, such additional preventive care and screenings . . . as provided forin comprehensive guidelines supported by the Health Resources andServices Administration for purposes of this paragraph.42 U.S.C. § 300gg–13(a)(4).The Health Resources and Services Administration has issued guidelines requiringcoverage for “[a]ll Food and Drug Administration approved contraceptive methods,sterilization procedures, and patient education and counseling for all women withreproductive capacity.” Women's Preventive Services: Required Health Plan CoverageGuidelines, Health Resources and Services Administration,http://www.hrsa.gov/womensguidelines/ (last visited Dec. 31, 2012). The FDA hasapproved several contraceptive methods, including Plan B, Ella, and copper intrauterinedevices (IUDs).
Birth Control Guide, FDA Office of Women's Health,www.fda.gov/downloads/ForConsumers/ByAudience/ForWomen/FreePublications/UCM282014.pdf.The government issued a regulation (ACA mandate) that adopted the HealthResources and Service Administration guidelines as final. 77 Fed.Reg. 8725. Grouphealth plans and health insurance issuers are required to provide coverage consistent withthe guidelines, without cost sharing, in plan or policy years beginning on or after August1, 2012. Id. at 8725-26.Employers failing to meet the requirements of the Act and ACA mandate subjectthemselves to a number of liabilities. First, failure to provide an employee healthinsurance plan is penalized with a fine in the amount equal to one-twelfth of $2000multiplied by the number of full-time employees on a monthly basis. 26 U.S.C. § 49890H.Further, failure to meet the group plan health requirements is penalized in the amount of 
Plaintiffs refer to these particular contraceptive methods as abortifacients. Thisappellation is supported by the cited Birth Control Guide which indicates for each of thePlan B, Ella, and copper intrauterine devices that, among the ways the respective devicemay work is to prevent attachment or implantation of the fertilized egg to the uterus wall.Defendants do not deny this assertion.
Case: 2:12-cv-00092-DDN Doc. #: 20 Filed: 12/31/12 Page: 2 of 10 PageID #: 299
$100 per day for each affected employee. 26 U.S.C. § 49890D. Additionally, 29 U.S.C. §1132 authorizes private enforcement suits for failure to meet the requirements of the Act.The ACA mandate is subject to several exceptions. First, the Department of Healthand Human Services issued a regulation that exempts religious employers from therequirement of providing contraceptive services. 76 Fed.Reg. 46621-01. The regulationdefines religious employer as an employer that meets all of the following criteria:(1) The inculcation of religious values is the purpose of the organization.(2) The organization primarily employs persons who share the religioustenets of the organization.(3) The organization serves primarily persons who share the religioustenets of the organization.(4) The organization is a non-profit organization as described in the[Internal Revenue Code].Id.; 45 C.F.R. § 147.130(a)(1)(iv)(B).Next, individuals are not required to terminate group health plans or healthinsurance coverage if they enrolled in such plans or for such coverage by March 23, 2010.
42 U.S.C. § 18011. More specifically, these grandfathered plans are not subject to therequirements of 42 U.S.C. § 300gg13(a) or the ACA mandate. Id. Additionally, employerswith fewer than 50 full-time employees are not subject to penalties and fines for failure toprovide minimum essential coverage under an eligible employer-sponsored plan. 26U.S.C. §§ 4980D, 4980H. Finally, members of a recognized religious sect or division thatconscientiously objects to the acceptance of public or private insurance funds andmembers of health care sharing ministries are exempt from the requirement to obtainminimum essential coverage. 26 U.S.C. §1402(d)(1); 26 U.S.C. § 5000A(d)(2).Plaintiff Sharpe Holdings, Inc. is a Missouri corporation that employs more than 50full-time individuals in industries including farming, dairy, creamery, and cheese-makingand offers health insurance to employers through a self-insured program. (Doc. 4-2 at ¶¶6,11.) Plaintiff Charles N. Sharpe is the founder, owner, chairman of the board, and chief executive officer of Sharpe Holdings and sets all policies governing the business conduct of Sharpe Holdings. (Id. at ¶ 4.) By their unopposed affidavits, plaintiffs Judi Diane Schaeferand Rita Joanne Wilson are employed by Sharpe Holdings and pay a portion of therequired premiums and enjoy the benefits of the self-insured program.In accordance with their sincerely held religious beliefs and practices, theindividual plaintiffs oppose the use, funding, provision, or support of abortion on demandand believe that the use of Plan B, Ella, and copper IUDs constitutes abortion on demand.(Doc. 4-2 at ¶¶ 13,14,17; Doc. 4-3 at ¶¶ 4-7; Doc. 4-4 at ¶¶ 4-7.) At the hearing held onDecember 31, 2012, counsel for plaintiffs stated that they are not contesting the merely
Case: 2:12-cv-00092-DDN Doc. #: 20 Filed: 12/31/12 Page: 3 of 10 PageID #: 300

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