Supreme Court Sides With Hobby Lobby in Affordable Care Act Contraceptive Coverage Case

Author: Gloria Ju

July 1, 2014

In a 5-4 decision, the Supreme Court sided with owners of closely held for-profit corporations with religious objections to birth control over the Affordable Care Act's (ACA's) contraceptive coverage mandate. The Court held in Burwell v. Hobby Lobby Stores, Inc.that the ACA requirement for certain employers' group health plans to provide preventive care for women (including contraception under US Department of Health and Human Services (HHS) regulations implementing the ACA) without any cost-sharing requirements violates the Religious Freedom Restoration Act of 1993 (RFRA). This decision consolidates Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Burwell.

The RFRA prohibits the government from taking any action to substantially burden a person's exercise of religion, unless the action constitutes the least restrictive means of serving a compelling government interest. The Court held that closely held for-profit corporations fall under the law's definition of persons. "[P]rotecting the free-exercise rights of [closely-held] corporations...protects the religious liberty of the humans who own and control those companies," the Court majority wrote.

The Court also concluded that the contraceptive coverage mandate substantially burdens the exercise of religion because the corporate owners were faced with the choice of either engaging in conduct that would seriously violate a sincere religious belief or else face severe economic consequences in terms of penalties for refusing to provide contraceptive coverage or dropping insurance coverage completely.

Finally, the government failed to show that the contraceptive coverage mandate is the least restrictive means of furthering the government's interest in guaranteeing cost-free contraception access. For example, the government could assume the cost of providing contraceptives to female employees who could not get coverage due to their employers' religious objections. Or, for-profit corporations could be given the same accommodation as nonprofit religious organizations - the organization certifies that it opposes providing contraceptive coverage, and the insurance issuer excludes contraceptive coverage from the employer's plan and provides plan participants with separate payments for contraceptive services without imposing any cost sharing requirements on the employer, its insurance plan or its employee beneficiaries.

The Court made it clear that this decision concerns only the ACA's contraceptive coverage mandate and does not apply to an employer's religious objection to vaccinations or blood transfusions, for example. "Our decision should not be understood to hold that an insurance coverage mandate must necessarily fall if it conflicts with an employer's religious beliefs." It also does not provide a shield for employers to engage in illegal discrimination "cloaked as a religious belief to avoid sanction."