What does Hobby Lobby decision mean for HR pros?
At this point, even the HR pros enjoying their summer vacations have heard about the Supreme Court ruling on the Affordable Care Act’s contraceptive coverage mandate. But just what does this ruling mean for employers?
Here’s some background on how this Obamacare-related case wound up in front of the High Court in the first place:
The case was brought before the Supreme Court by Hobby Lobby, a nationwide arts-and-crafts store, and Conestoga Wood Specialties, a Pennsylvania cabinet-making company.
Both stores said they aren’t opposed to offering coverage for most contraceptives. However, both companies refuse to offer coverage for emergency contraceptives that endanger a fertilized egg, such as Plan B or Ella, which the healthcare reform law requires employer-sponsored health plans to cover without cost sharing.
An appeals court ruled in favor of Hobby Lobby, saying political speech rights allow companies like it to refuse to offer contraceptive coverage if it interferes with their religious practices.
But another appeals court ruled against Conestoga, saying companies like it can’t claim to exercise religion.
The conflicting rulings eventually wound up in front of the High Court.
The decision
In a 5-to-4 decision, the Supreme Court ruled that requiring family-owned businesses to pay for insurance coverage for contraception under Obamacare violates the Religious Freedom Restoration Act (RFRA), a federal law protecting religious freedom.
Writing for the majority, Justice Samuel A. Alito Jr., said the Affordable Care Act’s contraceptive coverage requirement would place a “substantial burden on [Hobby Lobby and Conestoga Wood Specialties's] religious liberty.”
Specifically, Hobby Lobby could be forced to offer coverage that goes against their beliefs or face annual fines of $475 million if it failed to comply with the health reform requirement, Alito Jr. said.
Opens the door for other lawsuits …
Critics of the ruling believe the High Court’s decision has the potential to open the floodgates for companies to challenge any law that they claim violates their religious liberty.
In her 35-page dissent, Supreme Court Justice Ruth Bader Ginsburg acknowledged the potential for abuse.
Justice Ginsburg noted that this was the first time the High Court applied religious-freedom protections to “the commercial, profit-making world.”
She also said:
“The court’s expansive notion of corporate personhood invites for-profit entities to seek religion-based exemptions from regulations they deem offensive to their faiths.”
Ginsburg even offered some examples of potential religion-based exemptions based on things various religious faiths object to, such as:
- blood transfusions (Jehovah’s Witnesses)
- antidepressants (Scientologists), and
- vaccinations (Christian Scientists, among others).
… Or a very limited scope?
Despite criticism that this ruling could have major implications for employers in the for-profit sector, Justice Alito Jr. emphasized the limited scope of the decision. He stressed that the RFRA only applied to “closely held” for-profit corporations that are run on religious principles.
Even those businesses were unlikely to prevail if they objected to comply with other laws on religious grounds, Alito Jr. added.
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