June 30th, 2014
Today, the United States Supreme Court ruled that for-profit companies may avoid providing contraception coverage to employees if the companies sincerely object on religious grounds. At its narrowest interpretation, this decision is a significant but remediable setback for women’s reproductive health. At its broadest (but least likely interpretation), the decision has the potential to wreak havoc on public health regulation.
The legal challenges to the Affordable Care Act’s (ACA’s) contraception mandate have been well described in three previous Health Affairs Blog posts. To briefly recap, though, the ACA requires preventive services to be covered without copayments or other cost sharing in most employer-supported health plans. To implement this requirement, the Department of Health and Human Services (HHS) issued regulations that include all FDA-approved contraceptives, and a company that does not provide no-cost coverage of contraception is subject to substantial penalties.
Three groups of employers are exempt from the mandate: small businesses with less than 50 employees, purely religious employers, and “grandfathered” plans that have not changed meaningfully since the ACA was passed. Additionally, religiously affiliated non-profits (such as universities and hospitals) received a special accommodation from HHS by which women can receive contraception from third-party insurers at no extra cost to employees or the organization if the organization objects to covering contraception and identifies an alternate insurer.
Shortly after enactment, dozens of challenges were mounted to the contraception mandate under both the constitution’s Free Exercise Clause and the Religious Freedom Restoration Act (RFRA). On Monday, the Court decided Burwell v. Hobby Lobby Stores in favor of three for-profit corporate challengers: Hobby Lobby Stores, Mardel, and Connestoga Wood Specialties. Additional challenges by religious non-profits, who argue that the accommodation HHS has granted them is insufficient, are still pending, including a 10th Circuit Court of Appeals case that resulted in the Supreme Court staying application of the accommodation until the case is resolved.
What did the Supreme Court decide?
As a beginning matter, it is important to recognize that the Court did not consider the First Amendment challenges to the contraception mandate. Rather, it decided Hobby Lobby under only RFRA, so Congress could override the Court’s decision should it desire to. For those who see the decision as beyond the scope of RFRA’s intent, this means Congress could limit the law’s scope. Conversely, for those who see Hobby Lobby as an important protection of religious liberty, that protection is only as solid as political support for the Court’s interpretation of RFRA in Congress. As a practical matter, of course, a divided Congress will take no action on religious freedom, contraception, or health care reform in an election year.
The most important aspect of the Hobby Lobby decision is the Supreme Court’s recognition that for-profit companies are entitled to religious freedom protections. Never before had the Court squarely considered this issue, and there were many legal scholars (including me) who believed religion to be something only human beings could practice, either individually or collectively through organizations with religious purposes. Writing for the majority of the Supreme Court, though, Justice Alito disagreed, determining based on RFRA’s text that Congress did not intend to reserve religious freedom only to individuals or draw a distinction between non-profit and for-profit corporations. Rather, any corporation is protected by RFRA if a federal law burdens its owners’ sincerely held religious beliefs.
The Obama Administration had argued that the contraception mandate did not “substantially burden” the owners’ religious beliefs because they were only offering health insurance, not requiring employees to use contraception. In essence, the Administration argued that a company is no more implicated in how an employee uses her health insurance than how she uses her salary. The Court rejected this argument, refusing to assess how great or slight a burden on religious practice the contraception mandate imposes; rather, Justice Alito held that the burden is substantial if a person (or corporation) believes it to be incompatible with his or her religious obligations.
It is correct for the courts not to second-guess how substantial an intrusion on religious belief is, but this approach requires the courts to be very careful when they consider the burdens created on third parties by religious exemptions from the contraception mandate or other laws and whether less restrictive alternatives exist to a challenged law (both of which are discussed below). The Supreme Court rightly recognized that the courts can only weigh how substantially a law burdens religious belief if they consider doctrinal issues of faith. But evaluating religious doctrine is far outside the scope of what the courts or any other American government entity can legitimately do without violating the First Amendment’s Establishment Clause, which guarantees governmental non-interference in matters of religious doctrine. Rather, the courts’ inquiry should be limited to the sincerity of a religious objection.
Having decided that the contraception mandate burdened Hobby Lobby and Conestoga’s religious beliefs, the Court then considered whether there existed an alternative that would be less restrictive of religious practice but still achieve the government’s goals. If a less restrictive alternative exists, RFRA requires it to be used instead of the contraception mandate as currently written. Justice Alito identified the accommodation offered to religiously affiliated non-profits as an alternative that would satisfy the government’s reproductive health interests while avoiding the contraception mandate’s imposition on religious beliefs. As a result, the Court ruled that the contraception mandate cannot be enforced against companies that sincerely object to it on religious grounds.
What does the decision mean for contraception access?
While it is not clear that the Court’s decision strikes as dire a blow against contraception as some advocates have argued, it will clearly limit access to contraception—at least until the Obama Administration can write new regulations. And limiting contraception access either means substantial out-of-pocket expenses for many women to obtain the most effective family planning options, an increase in abortions and unintended pregnancies, or both. How severe these consequences are depends on how the courts decide another contraception mandate case and whether the courts interpret ambiguities in Hobby Lobby broadly or narrowly.
At least in the short term, companies with sincere religious objections do not need to provide contraception coverage to their employees. As a technical matter, the decision is limited to a class of companies called “closely held corporations,” which are companies with only a small number of majority shareholders and which employ more than half of Americans in the workforce. This limitation is only because the three companies whose challenges the Court considered are all closely held; Justice Alito was clear that RFRA excludes no company from protection (but it is unlikely that a company with thousands of shareholders will come to consensus about religious beliefs).
In principle, the Administration could restore contraception access through regulations that extend its accommodation for religiously affiliated non-profits to for-profit companies, too. Because contraception use pays for itself by avoiding unintended pregnancies, this approach should be viable, though the added steps of enrolling in separate contraception insurance may cause more women to fall through the cracks. However, there is a separate set of 51 challenges by religiously affiliated non-profits to their accommodation, and it is not certain how they will be decided under RFRA.
In fact, aspects of the Hobby Lobby decision make it less likely the accommodation would be upheld. Because the Court declined to second-guess whether a subjectively perceived substantial burden on religion is, in fact, “substantial,” the Administration has lost its strongest argument in defense of the accommodation — that having to identify a third-party insurer over the organization’s objection is such small involvement that it is not a substantial burden.
On the other hand, the Administration still has two strong arguments remaining. First, the government can persuasively argue that there exists no alternative to the accommodation that is less restrictive of religious practice but still achieves the government’s compelling interest in contraception access. Second, it can — and should — argue that invalidating the accommodation would violate the constitution’s Establishment Clause by making a contraception entitlement women would otherwise have contingent on government recognition of employers’ religious beliefs. Justice Alito was able to dodge this argument by holding out the accommodation — which is broadly considered to be acceptable under the Establishment Clause — as an alternative to the contraception mandate, but the issue will have to be squarely addressed in the next round of cases.
The upshot is that the Hobby Lobby decision will temporarily impede contraception access for some women in the short term, and that is a loss for public health and women’s autonomy. However, these losses are remediable so long as the courts uphold broadening the third-party payer accommodation against future legal challenges.
How broad are the impacts on public health policy?
Dissenting from the decision in Hobby Lobby, Justice Ginsburg noted that the decision could have far-reaching impacts. She raised concerns that companies might object to covering blood transfusions, vaccines, mental health drugs, products derived from swine (such as intravenous fluids), or other products and procedures that run counter to some owners’ religious beliefs. The Hobby Lobby decision provides no explicit limiting principle to prevent companies from denying coverage for any of these.
There is language in Justice Alito’s decision that one possible alternative to any health coverage mandate is the government just paying for that service itself. This could be interpreted by other courts as a directive to exempt companies from providing any health service to which they object so long as the government could theoretically pay for that service, and such an interpretation would have dire consequences for public health. Congress will not rapidly create separate programs to cover blood transfusions or mental health treatments.
However, it is a mistake to read the decision this broadly. While Justice Alito floated the possibility of “let the government pay” as a general alternative to any health coverage requirement, this discussion does not bind other courts and should not be considered part of the ruling. Justice Kennedy, the fifth vote for the Court’s majority, wrote a separate opinion specifically to disclaim this line of argument. Kennedy argued that the Hobby Lobby decision does not automatically extend to cases “in which it is more difficult and expensive to accommodate a governmental program to countless religious claims…” Hobby Lobby is unusual in that the government had already identified a no-cost means of providing contraception to employees of religious non-profits, which undercut its claim that it would be impossible to extend the same accommodation to for-profit companies.
Fears that Hobby Lobby will eviscerate civil rights laws are also unlikely to come to pass. Various federal laws prohibit discrimination on the basis of race, sex, and other characteristics, and sometimes they have been challenged on religious grounds. But even if religious objections to civil rights laws were sincerely held, RFRA does not require them to be accommodated. There is no plausible alternative approach that does not involve discrimination, and RFRA would permit the government’s compelling interest in preventing discrimination to outweigh a for-profit company’s religious preference for discrimination.
All in all, Hobby Lobby is an important religious freedom case, and it significantly expands the religious protections afforded for-profit companies under federal law. It may have substantial impacts on women’s access to contraception, but the Obama Administration can mitigate these by acting quickly to expand the contraception accommodation it has already granted non-profit religiously affiliated organizations. There is some danger that accommodation may, itself, be invalidated under RFRA in the future, but it is unlikely.Email This Post Print This Post
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