Last week the U.S. Supreme Court decided Burwell et al v. Hobby Lobby Stores, Inc., et al 573 U.S. _____ (2014), a/k/a The Contraceptive Mandate Case. In the week and a half since that ruling misconceptions, (pardon the pun) abound. Many are under the impression that employers now do not have to provide any contraception coverage under the Affordable Care Act as long as they say it’s for religious reasons. Others think that the case by definition has far-reaching implications for employers and employees. What did the Supreme Court in Hobby Lobby actually rule, who is actually impacted by the ruling , what were the actual issues decided and why? Join The Emplawyerologist for that discussion after the jump!
First, cast of characters: In addition to Hobby Lobby was another employer, Conestoga Wood Specialties Corporation, who sued the United States Department of Health and Human Services, challenging regulations it designed implement the Patient Protection Affordable Care Act of 2010 (ACA).
The issues: Certain employers group health plans must provide “preventive care and screenings” for women without any cost sharing requirements”. (See 42 U.S.C. Section 300gg-13(a)(4). The ACA itself does not specify exactly what types of preventive care must be covered, but Department of Health and Human Services (DHHS) regulations require that covered employers provide coverage for the twenty contraceptive methods approved by the Food and Drug Administration, including 4 that inhibit a fertilized egg from attaching to the uterus and developing into a full-term baby. Religious employers, such as churches, and religious non-profit organizations with religious objections to providing such coverage are exempt from this mandate.
Now, here is where (in my humble opinion) things start to get interesting: Employees of these employees can still get contraceptive coverage. Wait a minute. How would they get coverage if their employers are exempt from the contraceptive mandate? HHS regulations provide an accommodation, whereby the insurance issuer excludes coverage from the plan, but provides participants with separate payments for contraceptive services without imposing cost-sharing requirements on the employer the insurance plan or the beneficiaries. (We’re going to return to this point shortly, because it plays an important part in the Supreme Court’s decision.)
Hobby Lobby and Conestoga are not religious employers and they are not religious non-profit organizations. They are closely held for-profit corporations. Their owners are religious Christians, who firmly and sincerely believe that a) life begins at conception and b) facilitating access to contraceptives that operate after the egg is fertilized facilitates abortions, in violation the tenets of their faiths.
Now here is an interesting point: the U.S. Supreme Court did not decide this case under the First Amendment. The Court decided the case under the Religious Freedom Restoration Act (RFRA). The RFRA prohibits the Federal Government from acting in a way that substantially burdens a person’s exercise of religion unless that action constitutes the least restrictive means of serving a compelling government interest. In a nutshell the court held that the a) regulations at issue substantially interfered with these employers’ exercise of religion; b) while the government has a compelling interest to provide access to contraception without requiring cost-sharing that c) the mandate was not the least restrictive means for serving that interest.
How did the court reach its conclusion? First it had to decide whether a corporation is a “person” as defined by the RFRA. While the RFRA itself does not define “person” the Dictionary Act, which essentially provides definitions for such terms when federal laws do not, includes corporations in its definition of “person” . You can get more details from the Court’s opinion here. The Court also noted DHHS’s willingness to exempt non-profit religious corporations from the mandate. While DHHS argued that the exemption should not apply to a for-profit corporation, to which the Court said:
Although HHS has made this system available to religious non-profits that have religious objections to the contraceptive mandate, HHS has provided no reason why the same system cannot be made available when the owners of for-profit corporations have similar religious objections”.
The Court also reasoned that the government itself could opt to cover the cost in such cases. Both options showed that there are clearly less restrictive means available for providing women access at no cost to all 20 of the FDA approved contraceptive methods. The Court essentially balanced the equities. The mandate would have forced Hobby Lobby and Conestoga to choose between violating their religious beliefs and paying between $1.8 million and $33 million in penalties, whereas the government could simply provide the same exemption it was already providing religious non-profit corporations or cover the cost.
What can (and should) we take away from this ruling?
- The case does not hold that all employers can avoid offering health plans that provide contraceptive coverage. It applies to employers who can demonstrate a sincere religious belief that providing such coverage violates the tenets of their faith. The majority ruling also made it clear that its ruling applied to the specific facts of this case and should not be interpreted to allow businesses to “opt out of any law (saving only tax laws) they judge incompatible with sincerely held religious beliefs” as argued by Justice Ginsburg in her dissenting opinion.
- This case involved 4 specific types of contraceptives, 2 of which were emergency contraceptives, such as the “morning-after” pill. The employers raised no argument as to coverage of the other 16 FDA-approved contraception methods.
- The case applies to closely held corporations. It is extremely unlikely that a publicly held corporation could invoke the protections afforded here.
- This case will have no impact whatsoever on employers who are not subject to the ACA –or their employees. How many people will actually be impacted by this ruling, at this time is not clear. .
- If the government is serious about ensuring availability of contraceptives at no cost, then one would think it would follow the Court’s suggestion about extending the existing exemption or simply covering the cost. Will it do so? Time will tell.
Hopefully we’ve cleared up some mistaken beliefs, and you can now make your own informed opinions on this case!
Next week we’ll talk about Harris v. Quinn (the public union dues case). See you then!
Disclaimer: This post’s contents are for informational purposes only, are not legal advice and do not create an attorney-client relationship. Always consult with competent local employment counsel on any issues discussed here.
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