In a highly controversial, but very specific ruling, the Supreme Court struck down Obama administration regulations requiring for-profit corporations to provide insurance coverage for certain forms of contraception. The case arises out of the tension between the Affordable Care Act’s contraception mandate, on the one hand, and the Religious Freedom Restoration Act’s broad protection of free religious exercise on the other hand. Three closely-held corporations sued challenging the administration’s ACA regulations requiring for-profit corporations to provide employee insurance coverage for contraception. The companies argued that the regulations forced them to violate their religious beliefs by forcing them to make it easier for their employees to obtain contraceptives. The Court agreed, finding that forcing the companies to choose between their religious beliefs against abortion versus facing the substantial ACA penalties for failing to provide contraception coverage unduly burdened the companies’ free exercise of religion.

This decision is extremely limited on its facts. The Court held that the Health and Human Services Regulations exemption from ACA’s contraception mandate for closely-held non-profit corporations could not be squared with HHS’s opposite treatment of closely-held for-profit corporations. The decision is noteworthy in several respects: (1) the decision arises under the extremely broad provisions of the Religious Freedom Restoration Act rather than the Constitution, meaning Congress can respond however it sees fit; (2) the decision involves only closely-held for-profit companies, and not publicly-traded companies; and, (3) the decision involves only four of the twenty forms of HHS-approved contraceptives, those that terminate pregnancy post-conception. Justice Bader-Ginsburg’s blistering dissent portends much broader implications for creative employers who seek to take advantage of the decision, but Justice Alito’s 5-4 majority decision maintains that the parade of horribles is unlikely and implausible. Burwell v. Hobby Lobby Stores, Inc., No. 13-354 (U.S. June 30, 2014).

 

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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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