Supreme Court: Companies Can Refuse to Pay for Contraception

Supreme Court Issues Rulings, Including Hobby Lobby ACA Contraception Mandate Case
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A divided Supreme Court ruled that certain types of companies can refuse to pay for contraception, a form of mandated preventative care under the Affordable Care Act. In a 5-4 decision, the Court said closely-held companies can claim religious rights that exempt them from federal legislation that would "burden" the expression of that religion.

This is the first time the Supreme Court has recognized a religious right of any corporation. The decision stated that it was only applicable to the case of contraception. That limitation, if it ultimately holds over time, could be important because various religions hold beliefs that would forbid a range of medical practices, whether specific, like blood transfusion, or broader, like the Christian Science prohibition against traditional medical practice.

The case had gained wide attention both because some companies have bridled under the ACA's insurance requirements and the personal and gender-specific nature of contraceptive coverage. However, specifics of the ruling make it applicable only to contraception that acts after fertilization. There are other lawsuits by companies challenging whether they can be compelled to supply any form of contraception.

Two companies -- Hobby Lobby Stores and Conestoga Wood Specialties Corp. -- are both closely-held companies. That means more than 50 percent of outstanding stock is owned by 5 or fewer people, according to the IRS. The families that own the companies are Christian. According to the Court, the families "have sincere Christian beliefs that life begins at conception and that it would violate their religion to facilitate access to contraceptive drugs or devices that operate after that point."

The companies argued that under Religious Freedom Restoration Act of 1993 (RFRA), the government could not "substantially burden a person's exercise of religion even if the burden results from a rule of general applicability." The only exception would be if the government could demonstrate that the "application of the burden to the person-(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest."

The Obama administration argued that the companies should not have been able to sue because they were for-profit corporations, not people, and that the families should not have been able to sue because the regulations applied to the companies, not them.

Writing the majority opinion, Justice Samuel Alito wrote that because the courts had held that non-profit corporations were considered persons under the RFRA, for-profit corporations would also have to be considered the same. He further wrote that a pursuit of profit did not prohibit such a company from an interest in other goals.

In the dissenting opinion, Justice Ruth Bader Ginsburg said the ruling allowed companies to "opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs," a result she characterized as having "startling breadth."

"In the Court's view," Ginsburg wrote, "RFRA demands accommodation of a for-profit corporation's religious beliefs no matter the impact that accommodation may have on third parties who do not share the corporation owners' religious faith--in these cases, thousands of women employed by Hobby Lobby and Conestoga or dependents of persons those corporations employ."

Critics of the ruling have pointed out that Hobby Lobby has invested in companies that develop and profit from contraceptives, as CBS MoneyWatch has reported, raising the question of how sincere the corporate religious belief is.
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