On June 30, 2014, the United States Supreme Court held that the Religious Freedom Restoration Act of 1993 ("RFRA") prevents the federal government from requiring Hobby Lobby Stores, Inc. (and two other closely held corporations) to provide coverage for certain types of contraceptives to participants in Hobby Lobby's health and welfare plan. See Burwell v. Hobby Lobby Stores, Inc. Although the Court's written opinion attempted to limit the decision to the facts and circumstances of the case, some speculate that the case could be used by others going forward to challenge other provisions of the Affordable Care Act ("ACA").
RFRA provides that, if an otherwise religion-neutral law is found to burden the religious exercise of any person, the law may be applied to that person only if the law serves a compelling interest and is the least restrictive means by which the government may meet its compelling interest.
The ACA, as administered by the Department of Health and Human Services ("HHS"), requires non-grandfathered health and welfare plans to provide coverage of all FDA- approved prescription contraceptives to female participants without cost sharing ("Contraceptive Mandate"). However, the law contains an exception for churches and houses of worship ("religious entities"). In response to objections to the Contraceptive Mandate by entities that did not qualify for the religious entity exception, HHS crafted an administrative exception to allow entities controlled by religious institutions to avoid the Contraceptive Mandate by filing a form with HHS. Importantly, this administrative exception would not be extended to private corporations.
Hobby Lobby Stores, Inc. ("Hobby Lobby") is a private, closely held corporation that is owned and operated by members of the Green family. The Greens profess to be devout Christians whose faith prevents them from offering two types of emergency contraception and intrauterine devices because, Hobby Lobby argued, the contraceptives could cause the "death" of an already fertilized egg. As such, Hobby Lobby argued that RFRA prevented the application of the Contraceptive Mandate to Hobby Lobby's health and welfare plan. The Court held that the Contraceptive Mandate as applied to Hobby Lobby violates RFRA. The Court found that RFRA could extend to protect the religious beliefs of a closely held corporation, through the Greens, as the owners of Hobby Lobby.
The Court accepted that the Contraceptive Mandate was a compelling government interest. However, the Court held that the government failed to meet its duty to show that the Contraceptive Mandate was the least restrictive means to meet that interest, in part, because HHS had already granted an administrative exception to entities that had not been expressly excepted under the ACA.
The extent to which this decision will affect the Contraceptive Mandate as applied to other private employers, or other provisions of the ACA, remains unclear.