On June 30, 2014, the U.S. Supreme Court issued a ruling on the Health and Human Services (HHS) contraceptive mandate. The Court ruled (5-4) that that employers with religious objections can opt out of providing contraception coverage under the Affordable Care Act.
1. Although the focus was primarily on one plaintiff, Hobby Lobby, the case actually combined three separate lawsuits by three different companies (Conestoga Wood, Hobby Lobby, and Mardel). In the three cases before the Supreme Court, the Court agreed that the owners of three closely held for-profit corporations have sincere Christian beliefs that life begins at conception and that it would violate their religion to facilitate access to contraceptive drugs or devices that operate after that point. Of the 20 contraceptive methods approved by the FDA and required to be covered by the HHS mandate, four may affect an zygote from developing by inhibiting its attachment to the uterus. The belief that these four contraceptive cause an abortion was the religious reason these three companies opposed the contraceptive mandate.
2. The Religious Freedom Restoration Act of 1993 (RFRA) prohibits the government from substantially burdening a person’s exercise of religion even if the burden results from a rule of general applicability unless the government demonstrates that application of the burden to the person:
(1) is in furtherance of a compelling governmental interest; and
(2) is the least restrictive means of furthering that compelling governmental interest.
The decision of the Court is that, as applied to closely held corporations (e.g., 50 percent of the value of its outstanding stock owned directly or indirectly by 5 or fewer individuals), the Health and Human Services (HHS) contraceptive mandate violates RFRA.
3. HHS argued that the companies cannot sue because they are for-profit corporations, and that the owners cannot sue because the regulations apply only to the companies. The Court recognized that this would leave merchants with a difficult choice: give up the right to seek judicial protection of their religious liberty or forgo the benefits of operating as corporations.
RFRA’s text shows that Congress designed the statute to provide very broad protection for religious liberty and did not intend to put merchants to such a choice. Protecting the free-exercise rights of closely held corporations, says the Court, protects the religious liberty of the humans who own and control them. Business practices compelled or limited by the tenets of a religious doctrine fall comfortably within the understanding of the “exercise of religion,” says the Court.
4. The Court found that the HHS mandate violated RFRA because it imposed a substantial burden (i.e., if the companies refused to violate their beliefs, they would face severe economic consequences: about $475 million per year for Hobby Lobby, $33 million per year for Conestoga, and $15 million per year for Mardel). The government also failed to satisfy RFRA’s least restrictive-means standard, since the government could assume the cost of providing the four contraceptives to women unable to obtain coverage due to their employers’ religious objections or extend the accommodation that HHS has already established for religious nonprofit organizations to non-profit employers with religious objections to the contraceptive mandate.
5. This decision concerns only the contraceptive mandate and should not be understood to hold that all insurance-coverage mandates, e.g., for vaccinations or blood transfusions, must necessarily fall if they conflict with an employer’s religious beliefs. Nor does it provide a shield for employers who might cloak illegal discrimination as a religious practice.