Five Questions on the Hobby Lobby Ruling

By Lauren Ingeno

In a divided 5-4 decision, the Supreme Court ruled last week that certain for-profit companies, if they have religious objections, do not have to provide women the contraceptive coverage that is required under the Affordable Care Act.

While the court ruled that the Affordable Care Act’s contraceptive mandate as applied to “closely held” businesses violates the Religious Freedom Restoration Act, the court—and the public—have divided opinions on the ruling’s potential implications. While some say that the ruling will enable business owners to invoke their religious rights to deny other types of medical services, other experts believe that the majority of American workers’ health care benefits will not change significantly.

Sara Rosenbaum, a professor of health policy at the Milken Institute School of Public Health, sat down with George Washington Today to clear up five questions about the court’s controversial ruling.

Q: What types of contraceptives may be excluded from private, for-profit businesses’ employee health plans as a result of the Supreme Court’s ruling?
A: Although Hobby Lobby objected only to certain types of contraceptives (methods that it views as abortive such as Plan B and Ella), nothing in the decision would bar a closely held company from refusing to cover all FDA-approved contraceptive methods.?

Q: What types of businesses does the court’s decision apply to?
A: The decision applies to private, for-profit businesses that are “closely held.” The companies involved in the case are all owned and controlled by the members of a single family, but as the Wall Street Journal has noted, closely held businesses can take a number of different forms and can be extremely large. The Journal reports that 90 percent of all U.S. businesses meet the definition of “closely held.” This, of course, does not mean that all closely held businesses would claim a religious exemption from the contraceptive coverage benefit. The great majority of companies today—of all types—provide contraceptive coverage under their health plans.

Q: Do you think that the ruling opens the door for employers to challenge other federal requirements under the Affordable Care Act? For example, might companies try to deny services, such as vaccines or blood transfusions, if they conflict with the owners’ religious beliefs?
A: Although Justice Alito, writing for the majority, stressed that the decision was a narrow one and applied only to contraceptives, Justice Ginsburg noted in her dissent that in fact the majority opinion set out no real principles by which the holding could be limited just to contraceptives. Many employee benefits could be at issue ultimately, as could other workplace protections to which some employers may object on religious grounds.?

Q: What are some other potential short-term and long-term implications of this law for workers?
A: In the near term, the decision means that workers at for-profit companies that are “closely held,” as ultimately defined by the Obama administration (which has pledged to carry out the court’s ruling), may find that their contraception coverage is limited or terminated. Experts believe that this will be a very rare occurrence, since, as noted, the vast majority of employers already cover contraceptives. In the long run, other benefits could be affected. But again, it is probably rare for closely held for-profit companies to imbue company operations with their private owners’ religious beliefs.?

Ironically, the workers most likely to be affected are those employed by religiously affiliated nonprofit corporations, such as religiously affiliated hospitals and universities. But this group of employers already is treated separately under the law. In the case of religious nonprofit employers, the law provides a special religious accommodation, which enables an employer to opt out of paying for contraceptive benefits. In such a case, the worker receives her coverage directly from the insurer, which pays for the benefit, and would not notice the difference. This fact figured prominently in the court’s reasoning.

Q: What is your opinion on the ruling? Is there a way to balance the protection of employers’ religious beliefs with the protection of their workers’ health?
A: As the majority notes, religious freedom is a core value in the U.S., one that we all treasure. In this case, however, the concept of religious freedom has been stood on its head, in my view. If a closely held employer, acting on the religious beliefs of its family owners, can curtail workers’ federally guaranteed benefits because of the owners’ personal religious views, the situation stops being about freedom of religion. It is transformed into one of religious intolerance, where workers effectively are forced to subsidize (in this case, through the loss of coverage for valuable benefits) the owners’ own religious beliefs.

For this reason, it is essential that the Obama administration move expeditiously to create a religious accommodation for all companies, not only those that are nonprofit. It is through an accommodation, such as the one available to nonprofit corporations, that workers can hope to realize the restoration of their benefits, even as the company owners are permitted to opt out of paying for contraceptive coverage.

Q. What about the court’s July 3 decision in the Wheaton College case? What effect will it have?
A: On July 3, six members of the court, over the strong dissent of the female justices, barred the federal government from enforcing the contraceptive coverage guarantee against Wheaton College, a religious non-profit college that objected to the religious accommodation available to all non-profit religiously-affiliated entities under federal regulations. The majority instead allowed Wheaton College to notify the Secretary of Health and Human Services that it refused to cover contraceptives in its plans, thereby enabling the Secretary to directly instruct the plan administrators to comply with the coverage guarantee. The majority indicated that it was not ruling on the substance of the claim that the government’s accommodation, which has employers notify their own plan administrators and insurers directly, fails to satisfy the Religious Freedom Restoration Act. The legality of the government accommodation is expected to reach the court in 2015.?

The dissenters noted that not only was this type of stay extraordinarily unusual under the court’s own practices, but that it ran directly counter to the majority opinion in Hobby Lobby, gave far too much deference to the “substantial burden” claims of the college,? and substituted the court’s own ideas about what was an acceptable accommodation for those developed through the normal rulemaking process.??

While women are protected for the time being under the Wheaton College plan, observers expect that thousands of religious nonprofits, who object to the? accommodation because in their view it makes them complicit in contraceptive coverage, will rush to Health and Human Services with similar notices.?