Contraceptive Health Care Coverage Dominates High Court Hobby Lobby Case

WASHINGTON –Contraceptive coverage under the Affordable Care Act – and whether for-profit corporations must provide it in their health insurance – dominated debate at the U.S. Supreme Court when the justices tackled the Hobby Lobby case on March 25.

The issue is important to workers, since unions bargain over health insurance coverage with their employers, and a court ruling could let employers with “religious objections” deny contraceptive coverage to their woman workers.

The case is also important as the first High Court case since the justices, in June 2012, rejected a challenge by the right-wing National Federation of Independent Business that the whole health care law was unconstitutional.

This time, the justices combined appeals from two lower-court rulings on the ACA, Sebelius vs. Hobby Lobby Stores, and Conestoga Wood Specialties Corporation vs. Sebelius.  Both address if regulations implementing ACA can compel for-profit corporations that provide workers with health insurance to provide policies covering all FDA-approved contraceptives, including those which the corporate owners object to on religious grounds.

Hobby Lobby runs arts-and-crafts stores and, through an affiliate, religious bookstores. Conestoga Wood sells wood cabinets.  Both are closely held, family-run corporations.  Both companies’ owners object only to four FDA-approved contraceptives, which the owners believe prevent implantation of a fertilized egg and therefore cause an abortion.

Nevertheless, if the justices rule for the two firms, whenever employers claim a religious objection to contraceptives, unions would have to negotiate separate health-insurance policies that include contraceptives.

And as Justices Elena Kagan and Sonia Sotomayor suggested during the court’s hearing, a ruling for Hobby Lobby and Conestoga Wood could also let employers, on religious grounds, reject health insurance that covers blood transfusions or vaccines.

Unlike the 2012 challenge to ACA, Hobby Lobby does not primarily raise constitutional issues.  Instead, it focuses on the Religious Freedom Restoration Act (RFRA), which Congress passed in 1993.  RFRA overturned a 1990 High Court ruling – involving a Native American tribe’s use of peyote for sacramental purposes – that held the Constitution does not permit anyone, on religious-freedom grounds, to violate neutral laws of general applicability.

That means the two firms had to show the justices that ACA’s contraceptive mandate makes impermissible distinctions among religions.

Lawyers for Conestoga Wood made that argument, pointing to the mandate’s exceptions for firms with fewer than 50 employees and religious nonprofits like churches.  But federal law has many exemptions for small businesses and religious nonprofits.

So the two companies came to the justices citing the religious freedom act, instead.

RFRA says that even a generally applicable law, such as one that bans people from smoking peyote, cannot “substantially burden a person’s exercise of religion” unless that burden furthers a “compelling government interest” by the “least restrictive means.”  Hobby Lobby and Conestoga Wood argue the ACA’s contraceptive regulations violate RFRA.

That claim, in turn, raises the question of whether for-profit businesses, or for-profit business owners, are “persons” with the right to “exercise…religion” in operating their businesses.  For a century, the court has treated corporations as “persons” in other areas, including, notably, campaign finance in the infamous Citizens United case four years ago.  Another federal law defines common words in laws.  One is “persons” to include corporations.

But the justices have never upheld the right to practice religion in the operation of a for-profit business.  Corporations have no soul, relationship with God, or prospects of heaven.  As Justice  Antonin Scalia pointed out during argument, the court never expressly ruled that a for-profit enterprise cannot make a freedom-of-religion claim.

Besides claiming religious-freedom rights for their companies, Hobby Lobby’s and Conestoga Wood’s owners argue that it would “substantially burden” their own individual freedom of religion if they had to direct their businesses to comply with the ACA’s contraceptive mandate.

That led Justice Kagan, questioning Hobby Lobby attorney Paul Clement, to observe the contraceptive mandate applies only to employers who provide health insurance.  Hobby Lobby, she noted, could avoid the mandate by not providing insurance, and the cost of insurance exceeds the penalty Hobby Lobby would have to pay for not offering insurance.

The contraceptive mandate would not “substantially burden” Hobby Lobby’s religious freedom if, to comply, Hobby Lobby could save money.

U.S. Solicitor General Donald Verrilli, speaking for the government and defending the Affordable Care Act and its rules, countered that for-profit business owners who use the corporate form to shield themselves from personal liability cannot then claim an identity between the corporation and its owners.

If the court decides that, applied to for-profit businesses, the contraceptive mandate does “substantially burden a person’s exercise of religion,” then the justices must decide the RFRA issue: Whether the mandate furthers a “compelling government interest” by the “least restrictive means.”

Verrilli argued that cost greatly influences women in choosing a contraceptive method, and that the most effective method, the IUD, has the highest initial cost.  Enabling woman workers to exercise their constitutional right to use contraceptives is a “compelling government interest,” he added.  The companies counter the government has multiple ways to further that interest without interfering with religious freedom.  For example, the government could simply directly provide women with access to contraceptives.

Hobby Lobby and Conestoga Wood object only to health-care options for women.

But friend-of-the-court briefs filed by interested outsiders assert that preventing discrimination against women is a compelling government interest.  Those briefs add the government can only further that interest by requiring businesses to treat men and women equally.  Forcing women – but not men – to seek aspects of their health care outside the health-insurance system perpetuates discrimination.

A decision is expected in June.