Supreme Court: Religious exemption can be claimed for Affordable Care Act mandate

The U.S. Supreme Court ruled Monday that certain for-profit companies can claim a religious exemption to the Affordable Care Act mandate that their health plans covers contraception without requiring employees to pay out-of-pocket costs for that birth control.

The greatly anticipated 5-4 ruling in the so-called Hobby Lobby case was a blow to the Obama Administration’s landmark health-care reform law. But a number of qualifications in the majority decision written by conservative Justice Samuel Alito mean that the Affordable Care Act contraception mandate will still apply to most employers.

The decision only applies to so-called “closely held corporations,” such as the ones in this case, which are each owned by a single family, whose sincerity about their religious views is not in dispute.

The ruling also was careful to note that it only applied to the question of whether for-profit companies could claim a religious exemption for the Affordable Care Act contraception mandate, not on other potential controversial questions related to vaccination or blood transfusions.

The ruling came in response to lower-court cases brought by two for-profit companies that each challenged, on religious freedom grounds, the the Affordable Care Act requirement that their health plans for workers now cover contraception without requiring employees to pay out of pocket costs for it, or that the companies pay a fine if they fail to do so.

While the Obama Administration had granted a qualified “accommodation” to religious non-profit entities that allowed them under circumstances to avoid complying with the contraception mandate, there is no such provision for for-profit companies such as the ones in the Supreme Court cases. The court had never before said that such corporations have religious rights under the Religious Freedom Restoration Act, the 1993 law signed by President Clinton

In a recent Reuters/Ipsos poll, 53 percent of Americans said they opposed letting employers using their religious beliefs to decide what kinds of contraceptives should be covered by their health plans, while 35 percent said they agreed with that idea.

The companies in the cases decided Monday, large arts-and-crafts store operator Hobby Lobby and cabinet manufacturer Conestoga Wood Specialists, specifically objected to the mandate that their plans cover two particular types of emergency contraceptives, Ella and Plan B, which they consider to be abortofacients (a drug or an agent that causes premature delivery), or pay a fine.

Hobby Lobby also objected to the mandate that intrauterine devices, IUDs, be included in the contraceptives covered by their employee health plan.

Hobby Lobby, which employs more than 13,000 people, has 514 crafts stores in 41 states. The Protestant family that owns Hobby Lobby, the Greens, also runs a small, 35-store chain of Mardel book stores, which specializes in Christian books.

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Conestoga Wood Specialists is owned the Hahns, a family of Mennonites in Pennsylvania, and has about 950 workers.

The Obama Administration asked the Supreme Court to hear its appeal of a 10th Circuit Court of Appeals decision that Hobby Lobby was likely to succeed in its claims

The cases was argued before the High Court on March 25, with former Solicitor General Paul Clement representing Hobby Lobby and Conestoga, and current Solicitor General Donald Verrilli representing the US government.

Getty Images Protesters from both sides of the birth control issue Leah Hughs (L) and Kristin Hughs (R) chant for their side in front of the U.S. Supreme Court June 30, 2014 in Washington, DC. The high court is expected to hand down its ruling on whether a private company can, on religious grounds, be exempted from health care reform's requirement that employer sponsored health insurance policies cover contraception.

Getty Images
Protesters from both sides of the birth control issue Leah Hughs (L) and Kristin Hughs (R) chant for their side in front of the U.S. Supreme Court June 30, 2014 in Washington, DC. The high court is expected to hand down its ruling on whether a private company can, on religious grounds, be exempted from health care reform’s requirement that employer sponsored health insurance policies cover contraception.

It was a return match for the two high-powered lawyers, who had last squared off before the Supreme Court in 2012 to argue over the constitutionality of the Affordable Care Act itself.

That case ended in a split decision, albeit a lop-sided one in Verrilli’s favor. A majority of the justices, including, surprisingly, Roberts ruled that the Affordable Care Act mandate compelling most Americans to buy insurance or pay a fine was constitutional.

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However, a majority of the justices ruled that the federal government could not compel individual states to expand Medicaid eligibility to include all poor adults, as the ACA called for. Instead, it was left up to each state to decide that question: so far, 26 have either expanded Medicaid eligibility, or moved to do so in one shape or form.

During the Hobby Lobby/Conestoga arguments, the court’s liberal female justices, including Sonia Sotomayor and Elena Kagan, challenged Clement with concerns that ruling in the two companies’ favor would open a Pandora’s Box in which privately held businesses use the the religious freedom argument to challenge requirements that they cover a slew of medical procedures or other aspects of employment law.

Clement had just barely begun making his oral arguments, which noted how contraception was “religiously sensitive,” when Sotomayor interrupted him to ask, “Is your claim limited to sensitive materials like contraceptives, or does it include items like blood transfusions, vaccines?”

“For some religions, products made of pork?” she asked.

But several male conservative justices, among them Chief Justice John Roberts and Alito, pressed Verrilli on questions about why a corporation should be barred from exercising a constitutional claim such as freedom of religion, and why there was good reason to believe that ruling in favor of a company that is closely held by a family would open the door to similar claims by large, publicly traded corporations.

Justice Anthony Kennedy, who so often has been the swing vote in the ideologically divided court, asked pointed questions of both side.

On Friday, three days before the Supreme Court ruling, the Obama Administration issued a press release that prominently mentioned data showing that women had saved nearly a half billion dollars in 2013 because of the ACA mandate that oral contraceptives be covered by health plans without out-of-pocket cost sharing by the covered individual.

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The Health and Human Services Department said in a related report that the total number of prescriptions for oral contraceptives bought with no co-payment grew from 6.8 million in 2012 to 31.1 million last year. The number of individual women who made such purchases without co-payments grew from 1.2 million in 2012 to 5.1 million in 2013.

“By making preventive services more affordable and accessible, this is one way the Affordable Care Act is helping women,” HHS said in its report.

–By CNBC.com

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