By Ben Conley, Sam Schwartz-Fenwick and Amanda Sonneborn

The Obama administration’s Affordable Care Act experienced a potential setback on Monday when the Supreme Court vacated a Seventh Circuit ruling denying a preliminary injunction requested by the University of Notre Dame against the Affordable Care Act’s contraceptive mandate. The Court remanded the matter to the Seventh Circuit for reconsideration in light of the Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751 (2014).

As a non-profit faith-based institution, the University of Notre Dame could seek an exemption from the ACA’s free contraceptive mandate.  To obtain this exemption, however, the University would be required to submit to HHS a one-page form requesting the accommodation.  Upon receipt and verification of this notice, HHS arranges for employees of the non-profit faith-based institute to obtain cost-free contraceptive coverage elsewhere (through an insurer or a third-party health plan administrator).

The University objected to filling out the notice, as it deemed the notice obligation to be effectively the same as offering the contraceptives. The University claims that this violates the University’s fundamental religious beliefs. The University sought a preliminary injunction.  The U.S. District Court for the Northern District of Indiana denied the injunction request in January of 2014, and the Seventh Circuit Court of Appeals affirmed the decision in February of 2014.

Since that time, the Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751 (2014) created a new, narrow exemption from the contraceptive mandate for certain privately held, for-profit organizations.  (The Supreme Court’s decision in Hobby Lobby did not create an exemption to the alternative to the contraceptive mandate — the HHS notification requirement — for such organizations.)  Even so, the Supreme Court’s remand will require the Seventh Circuit to reconsider its previous injunction denial in light of the Hobby Lobby decision.  The ensuing ruling will be significant for employers and plan sponsors, to the extent it provides insight into how broadly lower courts are willing to allow a claim of religious freedom to exempt entities (non-profit or otherwise) from generally applicable laws.