• Affordable Care Act Contraceptive Mandate Violates Employers' Rights to Religious Exercise
  • July 15, 2014 | Author: David J. Ledermann
  • Law Firm: Barley Snyder - Lancaster Office
  • By a margin of one vote, the U.S. Supreme Court ruled yesterday in Hobby Lobby Stores that closely held businesses, whose owners object on religious grounds to contraception, cannot be required to pay for contraceptive coverage under their group health plans. As applied to the employers involved in the case, the Supreme Court majority found that the contraceptive mandate under the Affordable Care Act substantially burdened the employers’ exercise of religion in violation of the Religious Freedom Restoration Act. In so ruling, the majority determined that an existing exemption from the ACA’s contraceptive mandate, available to certain religiously-based non-profit corporations, could readily be extended to closely held for-profit corporations whose owners have sincerely held religious objections to contraception.

    Under the existing rules, employees of religiously-based non-profit organizations that object to contraception still have access, without cost-sharing and without contribution from their employers, to all of the otherwise ACA-required contraceptive methods (through a requirement that the insurer bear the cost of the services, presumably at no net expense because the savings from the services will exceed their cost). Therefore, because a means less burdensome to religious exercise is readily available to achieve the governmental interest in the provision of contraceptive services without cost-sharing, the majority held that the contraceptive mandate, as applied to these for-profit employers, violated their right to religious exercise. Closely held corporations whose owners oppose contraception on religious grounds can now avoid penalties for failing to provide contraceptive coverage under their group health plans.

    It may become necessary for such business owners to certify their religious objections on a Department of Labor form similar to one currently used by non-profit organizations seeking exemption from the contraceptive mandate. Interestingly, this procedure itself is under legal challenge in separate cases involving religious organizations who maintain that by signing the forms, they are designating someone else to provide contraceptives to which the organizations object, and that the penalties that may be imposed for refusing to sign the forms constitute a substantial burden on their exercise of religion. It remains to be seen how these cases will be resolved in light of the Supreme Court’s decision in Hobby Lobby Stores.