Stay Tuned: Impact of Supreme Court Decision on ACA's Contraceptive Mandate Uncertain


It’s too soon to know the impact on the workplace of the U.S. Supreme Court’s recent decision that certain businesses may opt out of the Affordable Care Act’s (ACA) requirement to pay for birth control in their healthcare plans if it violates their religious beliefs.

In a 5-4 vote, the Court agreed with the plaintiffs, an arts-and-crafts retailer and custom-cabinet supplier, that the ACA’s "contraceptive mandate" is a form of religious discrimination that forces them to violate deeply held religious beliefs protected under the Religious Freedom Restoration Act (RFRA).  Consequently, the Court ruled that for-profit “closely held” corporations with religious objections are exempt from the federal requirement.

Although the Court's opinion offers no clear definition of what exactly it considers a "closely held" corporation, the Internal Revenue Service defines it as one in which five or fewer individuals hold more than 50% of all outstanding shares directly or indirectly.

Most likely, those agencies charged with enforcing the ACA will be left with the task of deciphering which companies are covered by the Court's ruling and which are not. The ruling, however, is much clearer in stating that the decision applies to the "contraceptive mandate" as a whole — without limitations — despite the fact that the plaintiffs only objected to four of the 20 types of contraception covered under the mandate.

Central to the Court's consideration, was the fact that the government has less restrictive options for ensuring free access to contraceptive coverage. These include a government-paid benefit or an arrangement for individuals to obtain contraception directly from the employer's insurer, rather than through the plan itself.

Only time will determine how this ruling will play out, both logistically and legally. One potential conflict not addressed by the Court is the Equal Employment Opportunity Commission’s (EEOC) position that any plan that covers preventive prescription drugs — such as vaccinations and blood-pressure medication — must also cover contraceptives; those that do not may be accused of discrimination in violation of Title VII of the Civil Rights Act and the Pregnancy Discrimination Act.

Until the courts analyze these conflicting positions, employers who may be free to exclude contraception coverage under the ACA may still face challenges from the EEOC.


Overall, the Court’s decision will likely apply to a very small category of businesses, namely, closely held, faith-based, for-profit corporations. Religious, nonprofit employers (such as churches) are already exempt from the contraceptive mandate. Yet, any employer may feel the impact of the ruling if it arises during the hiring process.

While companies are not permitted to question prospective employees about their religious views, candidates are free to question hiring managers and human-resources representatives about anything, including the owners' religious beliefs and how they impact the workplace. As a result, employers may expose themselves to liability when responding to an applicant's questions about the employer's contraceptive coverage. Any attempt to use the applicant's questions to pry — or even appear to pry — into a candidate's personal religious beliefs or other protected information could end up in a claim of discrimination.

Such nuances in employment and discrimination laws can be confusing, which makes compliance training crucial in educating employees and managers on the key issues.

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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.

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