Taking on a new constitutional dispute over the Affordable Care Act (ACA), the Supreme Court Nov. 26, 2013, agreed to hear challenges to the requirement that employer-provided health insurance include birth control and related medical services.
The court will consider two cases; the central question in both is whether a for-profit, secular corporation can claim an exemption from the contraceptive mandate on religious grounds.
Religious Exemption Does Not Extend to Private Employers
The ACA requires employer-provided insurance to cover preventive care, and agency regulations implementing the statute extend this requirement to the provision of contraception. The regulations provide two exemptions. Certain “religious employers,” primarily houses of worship, may exclude contraceptive coverage from their health plans for their employees and their dependents. In addition, a limited accommodation is provided to certain religiously affiliated nonprofit organizations.
But the regulations do not extend the religious exemption more broadly to private employers who claim that providing insurance that covers contraception would violate their religious beliefs.
Courts Reach Differing Conclusions
On June 27, 2013, the 10th U.S. Circuit Court of Appeals issued a temporary restraining order exempting Hobby Lobby, a family-owned business that operates more than 500 arts and crafts stores nationally, and Mardel, a Christian bookstore chain, from the contraceptive mandate.
The companies claimed that the requirement that they cover post-fertilization contraceptives violated their rights under the Religious Freedom Restoration Act (RFRA), which prohibits the government from substantially burdening “a person’s exercise of religion.”
The appellate court held that the companies had "established a likelihood of success that their rights under this statute are substantially burdened by the contraceptive-coverage requirement, and have established an irreparable harm."
The court found that the companies were “persons exercising religion” under the RFRA. The court cited the Supreme Court’s ruling in the Citizen’s United case, in which it recognized a First Amendment right of for-profit corporations to express themselves for political purposes. “We see no reason the Supreme Court would recognize constitutional protection for a corporation’s political expression but not its religious expression,” the court said.
On July 22, the district court entered an injunction barring the federal government from enforcing the contraceptive mandate against the companies.
However, on July 26, 2013, the 3rd U.S. Circuit Court of Appeals reached the opposite conclusion, ruling that Conestoga Wood Specialties Corp., a wood cabinet company with 950 employees, was not entitled to a preliminary injunction barring the regulation’s requirement that they cover all contraceptives. Conestoga objected only to contraceptives that operate post-fertilization. Conestoga is 100 percent owned by a Mennonite family, who claim that the contraceptive mandate conflicts with its religious beliefs.
The 3rd Circuit found no basis for a for-profit, secular corporation’s exercise of religion. Even though Conestoga was a closely held, family-owned company, it was the company, not the owners, that was subject to the contraceptive mandate, and the company did not have an independent right to protection under the Free Exercise Clause.
The court also held that the corporation did not have a right to protection under the RFRA.
“The fundamental question presented by these cases is, 'What is a person for purposes of the RFRA and the First Amendment?,' ” Peter J. Marathas Jr., an attorney in Proskauer’s Boston office told SHRM Online. “Can a secular private company be described as a person?”
The high court will review the rulings in these two cases in one argument, which will most likely be scheduled for March 2014.
Joanne Deschenaux, J.D., is SHRM’s senior legal editor.