High court lets Hobby Lobby, others opt out of contraception coverage under ACA

The U.S. Supreme Court reviewed the Affordable Care Act (ACA) again this term, and today, it held in Burwell v. Hobby Lobby Stores, Inc. that the ACA’s contraceptive mandate violates the Religious Freedom Restoration Act of 1993 (RFRA) as it is applied to “closely held corporations.” According to the Court’s 5-4 opinion, the mandate “substantially burdens the exercise of religion.”

Under the ACA (and related Department of Health and Human Services (HHS) regulations), many health insurance plans must cover certain preventive services for women without cost sharing (e.g., coinsurance, copayments, and deductibles). These preventive services include contraceptive methods and counseling—or more specifically, “all Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.”

However, there are exceptions to the mandate. For example, the requirement to cover such preventive services doesn’t apply to grandfathered health plans or to certain religious employers. Additionally, HHS has provided an accommodation to religious nonprofit organizations with religious objections to providing such contraceptive coverage.

The contraceptive mandate has been the subject of quite a few lawsuits across the country since the ACA became law. In Hobby Lobby, the Supreme Court combined two cases challenging it—Burwell v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Burwell. In both cases, the owners of closely held (i.e., family) for-profit corporations argued it would violate their religion to facilitate access to certain contraceptive drugs or devices.

The Supreme Court notes that although HHS argued that the companies couldn’t sue because they are for-profit companies and the owners couldn’t sue because the regulations apply only to the companies themselves, this view would leave the owners with the difficult choice of either giving up the right to seek protection of their religious liberty from the courts or forgoing the benefits they receive from operating as corporations. Further, according to the Court’s interpretation, the U.S. Congress included corporations within the RFRA’s definition of “persons” and thus intended to protect the rights of people associated with the corporation, including shareholders, officers, and employers (i.e., the people who own and control them).

The Court states that HHS did not show that it lacks other ways of achieving its goal of contraceptive coverage without imposing a substantial burden on the exercise of religion. The Court then appears to offer a couple of suggestions. First, it notes that the government could assume the cost of providing the contraceptives to women who are unable to obtain coverage because of their employer’s religious objections. Second, the Court suggests that HHS could extend the accommodation it has already established for religious nonprofit organizations to certain for-profit employers with religious objections to the contraception mandate. The Court states that this accommodation doesn’t impose on the plaintiffs’ religious beliefs that providing coverage for certain contraceptives violates their religion.

The Court also provides a couple of important clarifications. It makes clear that its decision in Hobby Lobby concerns only the contraceptive mandate. It states that the decision does not hold that all mandates must necessarily fall if they conflict with an employer’s religious beliefs. (The Court gives the example of mandates regarding vaccinations and blood transfusions.) It also stresses that the ruling does not allow employers to illegally discriminate and claim they were doing so as part of a religious practice.