Obama Mandate Could Fine Religious Groups $2,000 Per Employee

National   |   Steven Ertelt   |   Mar 6, 2012   |   1:12PM   |   Washington, DC

The new Obama mandate that requires religious groups to pay for birth control and drugs that may cause abortions for their employees could result in fines as much as $2,000 per employee or $100 each day if they refuse to comply.

Recently, Republicans in Congress asked the Congressional Research Service to examine the new mandate and the consequences for employers that do not want to follow it because it would violate their consciences and CRS issued a document finding noncompliant employers could face federal fines of $100 per day per employee.

“If a group health plan or health insurance issuer failed to provide contraceptive services pursuant to guidelines authorized by ACA, it seems possible … that a plan participant could be able to bring a claim for that benefit,” the memo states.

The report indicates the IRS is empowered to levy a tax penalty on noncompliant religious employers of $100 per day for each employee in their health plan.

“A group health plan that fails to comply with the pertinent requirements in the IRC may be subject to a tax of $100 for each day in the noncompliance period with respect to each individual to whom such failure relates. However, if failures are not corrected before a notice of examination for tax liability is sent to the employer, and these failures occur or continue during the period under examination, the penalty will not be less than $2,500. Where violations are considered to be more than de minimis, the amount will not be less than $15,000.”

Commerce Committee Republicans, according to Politico, are not happy with the findings.

“Implementing a federal mandate that violates the conscience of an individual or organization, regardless of their religious affiliation or organizational purpose, is in direct violation with the First Amendment,” the committee said in a release announcing the report. “Imposing a fine on these individuals pours salt in the wound.”

They said, according to Politico, that a charity or hospital with 100 employees “chooses to exercise its religious rights instead of complying with the Obamacare mandate, it could be subject to a $3.65 million annual fine. [related]

Hannah Smith, Senior Legal Council of the Becket Fund for Religious Liberty, spoke with Zenit yesterday about the fines and said most religious employers would not be exempt from the mandate:

Back in August, the Department of Health and Human Services issued the mandate which requires all group health plans in the United States to pay for contraception, sterilization, and certain drugs that can cause an abortion. That mandate contains a very narrow exemption, and the exemption would permit a very few number of churches and religious orders to be exempted from its requirements.

The exemption from the mandate has four prongs: the religious employer must (1) have the primary purpose of inculcating religious values, (2) primarily employ people of its own faith, (3) primarily serve people of its own faith, and (4) fall within a certain tax-code provision (that it’s tax exempt, and it doesn’t have to file tax returns in the United States). So, it is a very narrow exemption that basically means very few religious entities will be exempted from the mandate.

Most faith-based institutions, like schools, universities, colleges, soup kitchens, homeless shelters, or other social service organizations would not be exempt from the mandate. That’s why the mandate has set off such a public outcry, because there are so many religious organizations that, because of their religious mission, could not cover these kinds of drugs and services, but under the mandate there is no opportunity for them to opt out.

It’s important to remember that religious institutions that do not comply with this mandate will be fined roughly $2,000 per employee, which means that for most of our clients they will pay hundreds of thousands of dollars per year if they do not comply with this mandate. That kind of substantial burden on religious exercise is impermissible in the American legal system.

The subject of fines for religious groups come up last week at a Congressional hearing on the mandate.

Asma Uddin, an attorney with The Becket Fund for Religious Liberty, told the Judiciary Committee of the United States House of Representatives, “For example, a charitable organization with 100 employees will have to pay the federal government $140,000 per year for the “privilege” of not underwriting medical
services it believes are immoral.”

“Given these coercive burdens on the religious freedom of organizations and individuals that hold religious beliefs against contraception and/or abortion, the Becket Fund for Religious Liberty has brought several lawsuits. The lawsuits, each of which make the same claims, are on behalf of (1) Belmont Abbey College (BAC), a Catholic liberal arts college founded by Benedictine monks; (2) Colorado Christian University (CCU), an interdenominational Christian college; (3) Eternal Word Television Network (EWTN), a television network that serves to spread Catholic teachings; and (4) Ave Maria University, a Catholic University dedicated to transmitting authentic Catholic values to students,” she continued. “For failing to comply by the Mandate, BAC would pay approximately $340,000 annually, CCU would pay $500,000; EWTN would pay $620,000; and Ave Maria close to $340,000.”