Four Myths of the Hobby Lobby Decision: Separating Fact from Fiction

by Baker Donelson
Contact

Unless you have been living on another planet the past few weeks, you have probably heard that the United States Supreme Court rendered a decision in a case involving the arts and crafts store Hobby Lobby pertaining to contraception coverage for its employees under the Patient Protection and Affordable Care Act (ACA). Burwell v. Hobby Lobby Stores, Inc., ___ U.S.__ (June 30, 2014). Although the ACA itself is silent on the issue of contraception, the Department of Health and Human Services (HHS) passed a regulation that requires ACA-covered employers to provide 20 types of birth control, including four which may prevent an already fertilized egg from developing further, including certain intrauterine devices (IUDs) and what is commonly referred to as the "morning after" pill. For religious reasons, the family owners of Hobby Lobby objected to paying for the four types of contraception which are considered to be abortifacients.

Hobby Lobby is a closely-held corporation. It is owned exclusively by a married couple and their three children. Hobby Lobby provided the 16 other methods of birth control to its employees as part of its health care plan at no charge. Hobby Lobby filed a lawsuit in federal court seeking to restrain the enforcement of the HHS regulation against it only as it pertained to the four methods of contraception which it found to be objectionable. The case wound its way through the federal court system until it landed before the United States Supreme Court.

In addition to First Amendment objections, Hobby Lobby's opposition to the contraceptive regulation was based upon the Religious Freedom Restoration Act of 1993 (RFRA). The RFRA "prohibits the "Government [from] substantially burden[ing] a person's exercise of religion even if the burden results from a rule of general applicability" unless the Government "demonstrates that application of the burden to the person (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest." 42 U.S.C. §§2000bb-1(a),(b).

The Court first had to determine whether a closely held, for-profit corporation is a "person" entitled to protections under the RFRA. Because the RFRA does not define the term "person," the Court turned to the Dictionary Act for guidance. Federal courts are required to consult the Dictionary Act "[i]n determining the meaning of any Act of Congress, unless the context indicates otherwise." 1 U.S.C. § 1. Under the Dictionary Act, the term "person" includes "corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals." In light of this definition and the HHS's concession that "person" included nonprofit corporations, the Court determined Hobby Lobby was a "person" entitled to protections under the RFRA.

The Court further determined the contraceptive regulations substantially burdened the exercise of religion. In so doing, the Court emphasized the harsh financial penalties ranging in the millions of dollars that Hobby Lobby would be required to pay if it either refused to provide objectionable contraceptives at no cost or failed to offer insurance coverage to its employees.

The Court next had to determine whether the contraception regulation was is in furtherance of a compelling governmental interest, and, if so, if the regulation was the least restrictive means of furthering that compelling governmental interest. The Court assumed, without expressly deciding, that guaranteeing cost-free access to the four challenged contraceptive methods is a compelling government interest. However, the Court determined that mandating that all ACA-covered employers provide all 20 forms of contraception was not the least burdensome means to accomplish its goal. Specifically, the Court noted the federal government could assume the cost of providing the four contraceptives at issue. The Court also noted that, in the alternative, the federal government could shift the costs of objectionable contraceptives to the insurers as it had done for religious non-profit organizations. Ultimately, by a narrow 5-4 majority, the Court held "[t]he contraceptive mandate, as applied to closely held corporations, violates the RFRA." The Court did not reach Hobby Lobby's constitutional arguments under the First Amendment.

The decision has evoked strong sentiments in favor and against the Court's ruling. In the wake of all of the hype, misinformation abounds concerning what the decision means for employers and their obligations under the ACA. We will dispel some of the common misperceptions about the ruling.

1. Any employer that does not want to provide contraceptive coverage to its employees is free to ignore the ACA regulation mandating that certain forms of birth control be provided at no cost to its employees. This is false. The Court's decision was extremely narrow. It applies only to closely held companies. The Court specifically noted that it would be unlikely that a publicly traded company would or could successfully assert the objections raised by Hobby Lobby.

In addition, the closely held company must have bona fide religious objections to the contraceptive mandate. Hobby Lobby has a formal mission statement that states it operates under Biblical and Christian principles. It adopted other practices, such as remaining closed on Sundays, to adhere to these principles.

2. The Hobby Lobby decision changes the contraceptive coverage requirements for all employers. This is false. The decision only impacts ACA-covered, closely held companies with bona fide religious beliefs. Companies with 50 employers or less are not required to provide health insurance at all under the ACA. Also, employers with grandfathered health plans, those that existed prior to March 23, 2010, and that have not made specified changes thereafter, are not required to comply with many parts of the ACA, including the contraceptive mandate. In the decision, the Court noted that roughly 84 million of 154 million employees who have insurance coverage under employer-sponsored health care plans fall into these latter categories and thus were not covered by the contraceptive mandate even before the Hobby Lobby decision.

3. The Hobby Lobby decision likely paves the way for employers to avoid other parts of the ACA. This is false. The Court cautioned that its decision was concerned "solely" with the contraceptive mandate and that it "should not be understood to hold that insurance-coverage mandate must necessarily fail if it conflicts with an employer's religious beliefs." As an example, the Court pointed to immunization as an area in which a religious objection may very well fail as there may be no less restrictive means to preventing the spread of infectious diseases.

4. The Hobby Lobby decision is likely the final word on whether or not all employers will be required to provide no-cost contraceptive coverage to employees in the future. This is likely untrue. The Supreme Court's decision was based upon a federal statute instead of constitutional grounds. Thus, Congress could amend the RFRA or the ACA to expressly exempt the contraception mandate from religious objections. Congress could also amend the RFRA to exclude coverage of for-profit companies. Indeed, Senate Democrats have already proposed legislation to bar for-profit corporations from seeking exemptions from the ACA's mandate that their health plans cover contraception costs.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Baker Donelson | Attorney Advertising

Written by:

Baker Donelson
Contact
more
less

Baker Donelson on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!