Some Thoughts in Response to Rob

I started to post this as a response to some of Rob's thoughtful questions, but the comment became long, so I am posting here.  I am as puzzled by the new arrangement as is Rob.  Rob says: "If the insurer did not pass on any increased cost for contraceptive coverage to the objecting employer (either because there is no increased cost or because the insurer was required to spread the costs among all non-objecting insureds)..."

I do not think one gets to this difficult question, for several reasons.

1.  Why would a non-objecting employer or a non-objecting insured ever agree to foot the bill for other people not on its employment roll?  Or for employers with whose beliefs it may vehemently disagree (and might not that, in turn, give rise to a possible conscience objection?), and in a situation where the objecting employer was paying nothing? That seems wildly unlikely to me.  Non-objecting employers using the same insurance company as the objecting employers would almost certainly object strenuously to this.  If their objections were not heeded, wouldn't they seek other insurers?  I suppose this may depend on a cost/benefit assessment, but it seems implausible to think that the cost would be borne only by non-objecting employers.  And how could the government compel that sort of arrangement, even if that's what it intended (also, in my opinion, not likely)?

2.  It also seems implausible that the insurer would provide the services "for free."  Let's put aside the canard about whether the coverage of contraceptive services is "revenue neutral," as this is an irrelevancy about whether the insurer will in the end make money from covering these services.  I think Bob Hockett in one of his posts below suggested that one possibility is that the insurer might make a separate insurance "contract" with the insured, for providing these services.  That seems unlikely to me, for two reasons.  (A) A contract in which one side provides products for free to the other side doesn't seem to me to be a contract at all, as there is no consideration.  It's a gift and therefore unenforceable.  (B) Nobody has suggested that a separate contract between insurer and insured is an option.  What we are talking about is that the religious employer pays for a policy in which products as to which it has a conscientious objection are included as part of what it is paying for, even if (now) not listed on the terms of the policy that it provides to the employee.

3.  On the last point, I cannot see my way through to any other conclusion than that the religious employer will be paying for these services.  It will pay for them by procuring its insurance contract.  And it will pay for them in the form of increased premiums (again, whatever may ultimately be the case for the insurer's bottom line).  I am not familiar with what an insurer is required to disclose to an employer about the reasons for an increase in premium.  But it would surprise me if the insurer needed to say to the employer, "We hereby increase your premium by X in order to cover the costs of contraceptive services which we must now provide to your employees."  But whether the terms of the premium increase are explicit or implicit, I am having difficulty escaping the conclusion that it is the employer who will be paying.  

UPDATE: Having read Robby's helpful discussion above, which analyzes what the insurer needs to do as making an "offer" which the employee can then "accept," I thought to reemphasize those features traditionally necessary to make a contract: offer, acceptance, and bargained-for consideration.  As a general matter, there is no contract without the last component.  But in Robby's description, the offer and acceptance are incident to the insurance contract proper itself.  So the bargained-for consideration is the money that the employer has paid to procure the policy.  That's as it had to be, of course, since a separate contract would require separate consideration, and could not be procured for free.