The 7th U.S. Circuit Court of Appeals on Dec. 28 said the owners of an Illinois construction firm deserved a reprieve from the Obamacare mandate that for-profit employers provide contraception coverage in their health plans.
The owners, Cyril and Jane Korte, are claiming that the Religious Freedom Restoration Act (RFRA) allows them to avoid the mandate because it violates their religious freedom, according to Reuters.
The Kortes violated the Patient Protection and Affordable Care Act (PPACA) by no longer offering a health insurance plan to its 20 employees that covered contraception for women.
Under the PPACA, employers must pay for health plans that offer preventive services like contraception with no copay as of Jan. 1. The Kortes gained a temporary halt to the application of the law to their company.
Hobby Lobby Defiance
The Korte case comes on the heels of the Supreme Court turning away a similar challenge by Hobby Lobby owner David Green. Justice Sandra Sotomayor on Dec. 26 rejected the company’s emergency request for reprieve from the law.
Green then vowed not to comply with the law anyway – a move that will not only bring millions in fines under PPACA, but will also expose the company to liability under the Employee Retirement Income Security Act, according to Julie Gonen, acting director of government relations for the Center for Reproductive Rights in New York.
“Any time an employee is denied a benefit that they are entitled to under an employer-based plan (such as health care or retirement benefits), the employee can sue under ERISA to obtain that benefit,” Gonen says.
In the case of Hobby Lobby, such a suit would likely be successful, Gonen adds, and “the employer would be under court order to provide coverage for contraception to that employee.”
Same Facts, Different Outcomes
The Korte and Hobby Lobby cases are similar in that “they both involve closely held, for-profit companies arguing that because the company owners have a religious objection to contraception, the companies they own should not have to provide a health insurance plan that covers contraception,” Gonen explains.
“But the two appellate courts reached opposite conclusions as to whether the plaintiffs in these cases should get a preliminary injunction and thus avoid complying with the rule while the cases are still being litigated,” she says.
In the Hobby Lobby case, the 10th Circuit thought it was doubtful that Green would ultimately win on his claim that his religious freedom is burdened by an employee’s use of contraception; in the Kortes’ case, the 7th Circuit said that having to provide such coverage was enough of a burden under RFRA.
Only the Beginning
Gonen warns that these are only preliminary findings. “In the cases where the employers have ‘won,’ all they have won at this stage is a temporary reprieve from the rule until the court can review the entire factual record and hear all of the legal arguments and make a final ruling on the merits,” she says.
“As with other contentious issues, the cases will continue to work their way through the lower and appellate courts,” Gonen continues. “If there ultimately ends up being a circuit split then perhaps one or more of the parties might seek [review] at the Supreme Court, but it is premature to speculate on that now.”