Supreme Court to Decide Hobby Lobby’s Challenge to Affordable Care Act

The United States Supreme Court will decide whether a business such as Hobby Lobby is required to provide its female employees with health insurance that includes access to birth control, even if doing so violates the religious beliefs of the company’s owners.

Oral arguments in the case of Sebelius v. Hobby Lobby Stores were heard on March 25, 2014.

The owners of Hobby Lobby and the Christian bookstore chain Mardel, object to the provisions of the Affordable Care Act (ACA) that require companies to provide their female employees with health insurance that includes no-cost access to 20 forms of birth control, including two types of the “morning after pill” and two kinds of interuterine devices (IUDs). The owners of Hobby Lobby believe that human life begins at conception, so their compliance with the ACA in providing these forms of birth control would make them “complicit in abortion.”

Hobby Lobby argued that the mandate to provide birth control to its employees violated the Religious Freedom Restoration Act (RFRA) and the individual’s religious rights under the First Amendment. RFRA provides that the government cannot impose a “substantial burden” on the exercise of religion unless that burden uses the narrowest possible way to promote a very important interest of the government.

During oral arguments, three of the Court’s more liberal Justices (Sotomayor, Kagan and Ginsburg) focused on the potential scope of allowing companies to refuse medical treatment on religious grounds. The Justices were concerned opening the door would lead to refusals to cover vaccinations, blood transfusions or other potentially objectionable procedures. They worried that a decision in Hobby Lobby’s favor would result in religious objectors coming “out of the woodwork.”

The Justices also examined the “substantial burden” on Hobby Lobby for exercising its religious beliefs. If the company decided not to provide insurance for its employees at all, the cost would be a penalty of $2000 per employee, which is likely less expensive than paying to provide insurance. Thus, the Justices reasoned there may not be a substantial burden.

The Court also discussed whether a corporation has the right to exercise religion, but seemed to believe this case could be limited to corporations that are owned entirely by one family, as is the case here.

Justices Breyer and Kennedy appear to hold the swing votes. Breyer asked few questions during arguments and they did not reveal which way he is leaning. Kennedy’s only indication of his thoughts occurred when he mentioned that under the government’s view of the case, a for-profit company like Hobby Lobby could also be required to pay for insurance that would cover abortions.

Check back in June for an update on the Court’s ruling.

If you have any questions about this case or would like to discuss your company’s policies, please contact me, or the Scarinci Hollenbeck attorney with whom you work.