Court Strikes Down 2017 Rules Expanding Contraceptive Mandate Exemptions

On August 13, 2025, a federal trial court vacated the 2017 rules that expanded employer exemptions from the ACA’s contraceptive mandate. Employers who relied on those exemptions can no longer do so and must either comply with existing accommodation processes or seek legal guidance.

What Happened

The Affordable Care Act (ACA) requires non-grandfathered medical plans to cover preventive services, including women’s sterilization and contraceptives, without cost-sharing.

In 2017, new rules allowed most employers with sincere religious or moral objections to be exempt from providing contraceptive coverage. These rules were upheld by the Supreme Court in 2020.

However, on August 13, 2025, in Pennsylvania v. Trump, a trial court ruled the 2017 rules were arbitrary and capricious, failing to meet the Administrative Procedures Act’s requirement for “reasoned decision-making.” As a result, those expanded exemptions are no longer valid.

Why the Court Struck Them Down

The court found that:

1. The religious exemption was too broad, extending to almost any employer, including public companies, without sufficient justification.

   
   

2. The moral exemption relied on factors not authorized by Congress.

   
   

3. The government failed to reasonably explain why prior narrow exemptions were reversed and expanded so widely.

Current Rules for Employers

With the 2017 rules vacated, employers are left with only the pre-2017 exemptions and accommodations. Only available to churches, their integrated auxiliaries, church conventions or associations, and exclusively religious activities of religious orders.

Available to religious nonprofits and certain closely held for-profits. Employers must self-certify their objection using EBSA Form 700 or submit a notice to the Department of Labor (DOL) or Health and Human Services (HHS). In both cases, the insurer or TPA must provide contraceptive coverage directly.

Other Employers cannot exclude contraceptive or sterilization coverage.

What Employers Should Do Now

• Employers who relied on the 2017 exemptions must act quickly:

• Review plan design to ensure compliance.

• Consider whether the accommodation process applies.

• Consult with legal counsel for alternatives.

• Monitor ongoing litigation, as the ruling may be appealed.

Broker Action Steps

Brokers should advise clients to:

• Identify employers affected by the loss of the 2017 exemptions.

• Explain the accommodation process and provide EBSA Form 700 if applicable.

• Encourage employers to seek legal counsel where necessary.

• Prepare clients for possible further changes depending on appeals.

Final Thoughts

The August 13, 2025 ruling significantly narrows the options for employers objecting to contraceptive coverage. While appeals are expected, employers should operate under the current rules, which limit outright exemptions and require most to either provide coverage or navigate the accommodation process. Staying informed and proactive is essential as litigation and regulatory developments continue to unfold.

FAQs

Q: What happened to the 2017 contraceptive mandate exemption rules?

A: A federal court struck them down on August 13, 2025, ruling they were arbitrary and capricious.

Q: Can employers still claim religious or moral exemptions?

A: Only narrow religious exemptions remain. The broader 2017 religious and moral exemptions are no longer valid.

Q: Which employers qualify for outright exemption?

A: Churches, their integrated auxiliaries, church conventions, and religious orders engaged exclusively in religious activities.

Q: What is the accommodation process?

A: Eligible nonprofits and certain closely held for-profits can self-certify objections, shifting responsibility for contraceptive coverage to insurers or TPAs.

Q: What should employers do now?

A: Employers must either comply with the ACA contraceptive mandate, use the accommodation process if eligible, or consult legal counsel for options.