Supreme Court Limits ACA’s Contraception Mandate

Bernadette Hunton
Bernadette Hunton

On Monday, June 30, 2014, the Supreme Court issued its highly-anticipated decision in Burwell v. Hobby Lobby Stores, Inc., U.S., No. 13-354, 6/30/14, ruling 5-4 that owners of closely held for-profit corporations with sincerely held religious beliefs can opt out of the Affordable Care Act mandate that requires them to provide employee health insurance coverage for contraception.

Under the Affordable Care Act, employers with 50 or more employees must offer health insurance coverage to their employees. Plans are required to cover all FDA-approved contraception methods for women without any cost-sharing to the employee. Coverage includes “emergency” contraception drugs which can prevent implantation of an already fertilized egg. Failure to offer coverage consistent with the mandate results in steep fines to the employer. Prior to Monday’s decision, only religious organizations were exempt from the mandate, and non-profit organizations with religious affiliations could object to contraception coverage, placing responsibility for providing such coverage on the insurance company.

Employers challenging the contraceptive mandate included the Green family, Christian owners of the Oklahoma-based national craft store chain Hobby Lobby, and the Hahn family, Mennonite owners of Conestoga Wood Specialties located in Pennsylvania. Both originally filed claims in their local federal courts, alleging that the contraceptive mandate, specifically the requirement to cover emergency contraception, violated their religious beliefs. Appeals followed, and though the claims were the same, the two appellate courts reached opposite conclusions, with the Tenth Circuit validating the Green family’s claim (Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013), and the Third Circuit concluding that the Hahn family’s claim failed because the Religious Freedom Restoration Act (RFRA)only applies to persons, and a corporation is not a person within the meaning of RFRA. (Conestoga Wood Specialties Corp. v. Sec’y HHS, 724 F.3d 377, 121 FEP Cases 66 (3d Cir. 2013).

The Supreme Court consolidated the cases for review and found in favor of the employers, holding that:

(1)   Closely held for-profit corporations are persons within the meaning of the Religious Freedom Restoration Act because corporations and organizations are regularly considered “persons” under federal law.

(2)   The contraceptive mandate substantially burdened the employers’ free exercise of religion because the employers had sincerely held religious beliefs that life begins at conception.

(3)   The contraception mandate is not the government’s least restrictive means of guaranteeing cost-free access to contraception.

It was a purportedly “narrow” holding, applicable only to closely held for-profit corporations opposing the ACA’s contraceptive mandate, however, Justice Ginsberg, writing for the dissent, rejected this view, stating that the majority’s opinion is one of “startling breadth” that would allow corporations “to opt out of any law . . . they judge incompatible with their sincerely held religious beliefs.”

Justice Alito, writing for the majority, attempted to quell such fears, stating that the decision should not be understood to include other insurance mandates, like those for blood transfusions or vaccinations. Ginsburg pointed out that other issues will arise because “[a]pproving some religious claims while deeming others unworthy of accommodation could be ‘perceived as favoring one religion over another,’ the very risk the Establishment Clause was designed to preclude.”

The immediate impact of the decision includes the Supreme Court’s issuance of six orders in cases involving challenges to the contraceptive mandate. Three petitions, filed by the government, were denied review, while the other three, filed by employers, were sent back to the appellate courts for reconsideration in light of the Hobby Lobby decision. Only after the lower courts begin to apply the holding in similar cases will we be able to fully assess the reach of this headline-grabbing decision.

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