The Supreme Court’s controversial Hobby Lobby decision sent shockwaves throughout the country as the Justices, split 5-4, found that the Religious Freedom Restoration Act (RFRA) applies to closely held for-profit corporations.
Justice Alito’s opinion in Burwell v. Hobby Lobby Stores, Inc. found that the regulations promulgated by the Department of Health and Human Services under the Affordable Care Act (ACA) requiring employers to provide their female employees with no-cost access to contraception violate the RFRA when employers object to the regulation due to their religious beliefs.
The implications of this ruling may be fairly dramatic, as closely held entities employ millions across the United States, and the broad holding can have far reaching implications where diverse religious beliefs are at issue. Additionally, the Court did not answer the question of whether publicly traded companies also fall under the statute’s protections.
Justice Ginsberg, writing in dissent, detailed the fear that many critics of the decision share – the holding has broad possibilities for companies to use their new corporate religious rights to refuse to comply with other provisions of the ACA. For example, they may refuse to cover antidepressants, blood transfusions, or vaccinations.
However, others believe that Justice Alito crafted a narrowly tailored opinion that will not open the floodgates for new RFRA claims and believe the decision will only impact smaller businesses that employ less than 50 people and are already exempt from the ACA’s mandates. The Supreme Court did recognize that large corporations will be unlikely to assert RFRA objections to federal regulations, as investors don’t want their companies run based on religious beliefs.
Either way, employers should regard the Hobby Lobby decision as significant because it limits the reach of the ACA’s regulations and affords employers considerable autonomy in running their businesses.
House Democrats did not take long to respond. On Wednesday July 9th, 2014, they introduced legislation that would override the Hobby Lobby decision and make employers responsible for providing contraceptive protection under the Affordable Care Act. The act, known as the Protect Women’s Health and Corporate Interference Act, reinstates the ACA’s contraceptive coverage.
If successful, the law would require employers to cover their workers’ health insurance as required by the ADA, and states that federal laws, including those protecting the freedom of religion, cannot shield employers from paying for services they find objectionable. Houses of worship and religious nonprofits would still be exempt from the requirement.