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What kind of precedent does the Hobby Lobby ruling set?

Supreme Court rules that family-owned companies can’t be forced to pay for contraception coverage against their beliefs

The justices of the Supreme Court of the United States waited until the last day of this year's term to release their decision in the case originally called Hobby Lobby v. Sebelius. 

The Affordable Care Act (ACA) requires employer-provided health insurance plans to cover a variety of birth control methods for employees. The crafts store Hobby Lobby is owned by Christians who say their religion forbids using some of those methods. 

In a 5-4 decision, the high court ruled in favor of the corporation, saying the Religious Freedom Restoration Act (RFRA) gives employers the right to restrict insurance coverage of certain kinds of birth control. 

The ACA changed the rules of the game in health insurance. How does the Hobby Lobby case change them again?

Does this religious exemption affect how the law is implemented?

Will other companies use this case to fight other laws on the grounds that they violate their religious liberty?

We consulted a panel of experts for the Inside Story.

Do we have any idea how quickly this ruling can spread to other companies or open the possibility of others’ claiming exemptions for other provisions of the law?

Kavita Patel: It does bring up the question of how widespread or how many employers might come forward. Hobby Lobby was the main plaintiff, but others came forward with them. It is not clear how widely its impact will be felt by Americans and especially American women.

The most important takeaway in the Supreme Court decision is that private employers may take religious exception to the contraception mandate. The question remains as to how widely they will be interpreted.

However, if you look at those other essential benefits, it is hard to see how they will be subject to religious exception. We know employers have objected to coverage for in vitro fertilization, but that is not an essential service. The court tried to be very specific to this particular aspect. Whether that can be widened — that would still need to be interpreted through the legal system and not be subject to legal ruling.

Does the Obama administration have any options for circumventing this decision?

That is the important question to ask — whether there is some kind of administrative or executive decision. There is already an exemption for nonprofits, and what they end up doing is using a third party for those provisions. It is not clear whether the Obama administration could offer additional tax benefits or other incentives for for-profit employers to provide the care without doing so directly. 

How widely can this ruling be interpreted in terms of provisions in the law? Does it cover all 20 forms of FDA-approved contraception?

Eric Baxter: I think it can be interpreted to include all 20 contraception drugs. The court was careful to limit its decision to contraception. There were concerns raised by the U.S. Health and Human Services that this could be extended to blood transfusions and immunizations and other provisions in the ACA. The court made very clear this did not apply to those services.

What about how widely this could apply to companies? Could this extend to publicly held companies as well as family-owned businesses?

The court addressed that question and said that it is not before it now. It said it is very unlikely that a publicly traded company could have a distinct set of beliefs because a diverse group of shareholders is unlikely to have a common religious belief that is central to the corporation.

Would you have wanted anything else from the court?

The court really followed quite closely our analysis in this case — that you do not lose your right to free exercise of religion because you incorporate, that imposing a fine of millions of dollars is a substantial burden and that even if the government had a compelling interest, there were other means they could use. If the government really wants people to have these drugs, the government can pay for it itself.

Was this a narrow ruling?

Ira Lupu: I think in some respects, it is quite broad. It will cover any and all contraceptives, not just the four these companies objected to. And I think it will cover all corporations, publicly or privately held.

I think where it is narrow is on the emphasis of alternative ways to get contraception to employees and particularly female employees. That emphasis on the feasibility and availability is what narrows this opinion. They discussed the possibility of government paying for it directly or paying for it through a third party.

Why did the ruling mention publicly held corporations?

Because the logic of the opinion leaves no real room to exclude them. Corporations are persons, the court rules over and over again. There is no real room to exclude them.

I think the court is absolutely right that publicly traded corporations will rarely, if ever, try to make religious claims. There are too many owners and managers to develop such a cohesive set of religious principles. But that is a corporate structure point, not a legal point.

Even if the company is a person, the government argues that it does not substantially burden Hobby lobby’s exercise of religion. That is because the burden is remote and temporary. The government says, "We will not make you use them, but we are making you buy an insurance policy that includes them."

Religious exemptions under RFRA have to be understood in light of prior cases that say that the First Amendment limits the extent to which religious accommodations harm third parties. Accommodating Hobby Lobby harms Hobby Lobby's female employees. That harm violates the establishment clause. That is why I am on the government’s side of this case.

The above panel was assembled for the broadcast of “Inside Story” to discuss.

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