• Supreme Court Rules Contraception Coverage Violates Employers' Religious Freedom
  • July 21, 2014
  • Law Firm: Kohrman Jackson Krantz PLL - Cleveland Office
  • On June 30, the U.S. Supreme Court issued its decision in Burwell v. Hobby Lobby Stores, holding that the Patient Protection and Affordable Care Act’s (ACA) contraceptive coverage mandate violated the religious freedom of family-owned corporations.

    Facts of the Case:  Under the ACA, employers’ group health plans must provide coverage for preventive care for women.  The ACA’s implementing regulations, issued by the Department of Health and Human Services (HHS), require employers to provide coverage for the 20 contraceptive methods approved by the Food and Drug Administration, which includes four methods that prevent a fertilized egg from implanting in the uterus.  Churches and religious non-profit organizations with religious objections were exempted from this coverage requirement.

    The owners of three family-owned corporations - Hobby Lobby Stores, Conestoga Wood Specialties, and Mardel - argued that the contraceptive coverage mandate violates their religious belief that life begins at conception.  These companies sued HHS under the Religious Freedom Restoration Act (RFRA) of 1993, which prohibits the “Government [from] substantially burden[ing] a person’s exercise of religion” unless the Government can show that there is a “compelling government interest” and that the burden is “the least restrictive means of furthering” that interest.

    The Court’s Decision:  The Supreme Court first held that “person” under the RFRA includes not only individuals, but also corporations.  According to the Supreme Court, the RFRA was intended to provide very broad protection for religious liberty, and extending those protections to corporations “protects the religious liberty of the humans who own and control those companies.”

    The Supreme Court then found that the contraceptive mandate substantially burdened the exercise of religion, by requiring the owners of the corporations either to engage in conduct that seriously violates their sincere religious belief that life begins at conception or to suffer severe economic penalties for refusing or failing to provide insurance coverage for contraception.

    Finally, although the Supreme Court assumed that there is a compelling government interest in guaranteeing cost-free access to the contraceptive methods at issue, it found that “the Government has failed to show that the contraceptive mandate is the least restrictive means of furthering that interest,” which the Court observed is an “exceptionally demanding” standard.  It noted that there were other means available, such as the Government assuming the cost of providing the four challenged contraceptive methods, for example.

    Thus, the Supreme Court held that “[t]he contraceptive mandate, as applied to closely held corporations, violates RFRA.”  (The Supreme Court declined to address whether this mandate also violated the First Amendment right of freedom of religion.)

    Lessons Learned:  Of interest, the Supreme Court specifically stated that this decision concerned only the contraceptive mandate, and it should not be understood to say that all insurance mandates (like vaccinations or blood transfusions) would necessarily fail if they conflict with an employer’s religious beliefs.  In addition, the Supreme Court cautioned that the decision does not provide a “shield” for discrimination “cloaked as a religious practice.” Nonetheless, it is not hard to imagine that some companies will be emboldened to invoke the RFRA in challenging other federal statutory requirements.