Courts Split On Whether Mandatory Contraceptive Coverage Violates Religious Freedoms Of For-Profit Corporations

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Under the Patient Protection and Affordable Care Act’s preventive services mandate, non-grandfathered group health plans must provide 100% coverage of contraceptives for women, subject to exemptions and safe harbors for certain religious employers and certain non-profit entities with religious objections to covering contraceptives. The exemptions do not apply to group health plans established or maintained by for-profit employers. Employers that do not comply with the contraceptives mandate may be subject to substantial penalties. In Newland v. Sebelius, a secular, for-profit corporation and its controlling shareholders and officers sought an exemption from the contraceptives mandate, arguing that it conflicts with their religious beliefs. The Tenth Circuit, consistent with its prior ruling in Hobby Lobby, upheld the district court’s injunction staying enforcement of the contraceptives mandate, on religious freedom grounds.  Earlier in 2013, the Third Circuit Court of Appeals reached an opposite determination involving a for-profit employer. Given this split in the Appellate Courts, the U.S. Supreme Court is likely to grant the petition to hear the Hobby Lobby case which is currently pending before it.