06.30.14

The Supreme Court Deals a Blow to the Affordable Care Act and Access to Contraceptives

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HobbyThis morning the Supreme Court handed down its most anticipated decision of the term.Burwell, Secretary of Health and Human Services, et al. v. Hobby Lobby Stores, et al. dealt with the application of the Religious Freedom Restoration Act (RFRA) to the contraceptive mandate established under regulations promulgated by HHS under the Affordable Care Act (ACA).
The Supreme Court’s decision that closely-held corporations could not be compelled to provide contraceptives to their employees against the corporation’s religious beliefs may have far-reaching impacts on access to birth control, and could open the door for a wide range of corporate claims to religious exemptions. It also deals a symbolic blow to the ACA in the run-up to the contentious mid-term elections. This post summarizes the decision and its context. Watch the O’Neill Institute Blog this week for further analysis of the decision.
Hobby Lobby in Context
The ACA mandates that all employers with more than 50 full-time employees offer health insurance to these workers or pay a tax penalty. As part of this mandate, HHS established rules defining the basic package of services that must be provided as part of employer-provided health insurance. A required element of that package is coverage without any co-pay for all FDA-approved contraceptive devices, including intrauterine devices (IUDs) and emergency contraceptives (e.g. Plan B).
As a part of the regulations, HHS recognized the concern among some religious people, who believe IUDs and emergency contraceptives can prevent a fertilized egg from attaching to the uterus–constituting an abortion. (As an aside, a growing body of scientific evidence calls into question this supposed abortifacient effect). As a result, HHS created an accommodation for religious non-profit entities that allows them to continue to provide health insurance whilst opting out of the requirement to cover contraception. In these cases, they need merely notify HHS which has decided to provide contraceptive coverage to employees of these non-profits, thereby ensuring comprehensive coverage to all women.
For-profit corporations, however, were granted no such accommodation. Hobby Lobby (along with Conestoga Woods Specialities and Mardel) are closely held corporations (essentially single-family owned and not publicly traded) whose Christian owners believe that providing potentially abortifacient forms of contraception violates their religious liberty, forcing them to choose between running their businesses and adhering to their religious beliefs.
Case Summary
The core of the case turned on whether for-profit corporations could be considered “persons” under RFRA. The Supreme Court ruled that, at least in the case of closely held corporations, they could. (With more than 50% of workers employed by “closely-held” corporations, this limitation leaves an enormous potential range of exemption). Because such closely held corporations are directly controlled by their owners, the corporation can hold the religious beliefs of the owners. Moreover, the Court found that for-profit status doesn’t inherently mean that the companies have no interest other than profit, noting that corporations frequently engage in non-profit motivated activities such as charitable work.
Once the Court determined that corporations like Hobby Lobby were “persons” under RFRA, it turned next to the analysis of whether the ACA’s Contraceptive Mandate constitutes a substantial burden on the exercise of freedom of religion. At no point was there any challenge to the sincerity of the beliefs at issue in this case (this despite the fact that until 2012, Hobby Lobby covered the very emergency contraceptives that it objects to in this case). As a result, the court found that the mandate does impose a substantial burden by requiring religious employers to choose between engaging in conduct that they believe violates their religion, facing a substantial financial penalty, or foregoing the benefits of incorporation.
Having found a substantial burden, the mandate could have survived on the grounds that it was the least restrictive means to achieve the legitimate government interest. The Court decided that it was not. While making clear that ensuring that women had cost-free access to the full range of contraception approved by the FDA was a legitimate government interest, the Court used the accommodation provided to religious non-profits to illustrate why the mandate was not the least restrictive alternative. In particular, the Court emphasized that the non-profit accommodation could simply be extended to for-profit corporations who desire to opt-out of contraceptive coverage due to the sincere religious beliefs of the corporation’s owners.
The Court did attempt to limit the impact of its argument, but without providing much reasoning or guidance. Without additional argument, the decision states that it does not extend to any other religious objection to employer mandates (e.g. blood transfusions, vaccinations, etc.) for which other arguments may apply.
The majority decision was written by Alito joined by Roberts, Scalia, Kennedy, and Thomas. Kennedy filed a separate concurrence. Ginsburg filed a dissent with Sotomayor in which Breyer and Kagan joined in part. The full opinion is available here.

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The views reflected in this blog are those of the individual authors and do not necessarily represent those of the O’Neill Institute for National and Global Health Law or Georgetown University. This blog is solely informational in nature, and not intended as a substitute for competent legal advice from a licensed and retained attorney in your state or country.

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