On June 30, the U.S. Supreme Court handed down a ruling that has the potential to undermine an important provision of the Affordable Care Act (ACA) that establishes for women a federal guarantee of coverage for their full range of contraceptive methods, services, and counseling without any out-of-pocket costs. This guarantee is administered through private health plans, whether purchased in the individual market or made available through the insurers and plan administrators that provide group coverage.
The 5-4 ruling in Burwell v. Hobby Lobby Stores, written by Justice Samuel Alito on behalf of the Court’s conservative bloc, held that closely held for-profit corporations that assert a religious objection to some or all forms of contraception cannot be required to include such coverage in the health plans they sponsor for employees and their families. As emphasized by Justice Ruth Bader Ginsburg in her dissent (joined in whole by Justice Sotomayor and in part by Justices Kagan and Breyer), the Court’s decision could have serious and widespread consequences.
In the long term, it could encourage a broad range of efforts by employers to exclude, on religious grounds, benefits that they otherwise would offer, either as a matter of federal right (such as the immunization benefits that are part of the same preventive benefit requirement that establishes the right to contraceptive coverage) or because they are part of standard employer plans, such as blood transfusions, treatment for HIV/AIDS or mental health care).
Justice Ginsburg noted that the Court’s holding also could reach other employee protections and rights outside of the health benefits realm. Justice Ginsberg stressed that more directly and immediately, the Court’s decision singled out contraceptive care for special and inferior treatment and gave employers professing a sincere religious belief the leeway to interfere not only with how their employees make use of benefits that are their right, but also with the relationship between health care providers and their patients.
This leeway runs counter to the ACA’s overarching goal— to improve access to appropriate health care — and to the specific purpose of the preventive benefit guarantee, which is designed to eliminate barriers to the use of effective, needed care. From a legal perspective, there may be some faint silver linings in the decision. First, the Court did not threaten the existence of the federal coverage guarantee itself, only the means used by Congress to effectuate coverage.
Second, the Court did not reject the notion that the federal government has a compelling interest in promoting contraceptive coverage. This is a crucial finding for future cases that will test the impact of any effort to fashion a religious accommodation that uses employer plans as the means of securing access to contraceptives for women and families.
Third, although the decision spoke about completely alternative approaches to coverage, such as a new governmental program, the majority left the door open to a religious accommodation that continues to utilize group plan issuers and third-party health plan administrators as the pathway to coverage, even if employers object to offering such coverage themselves.
By contrast, Justice Ginsburg’s dissent highlighted the compelling nature of contraceptives to the health of women, children, and their families and sought to make clear that the basis on which the contraceptive coverage right rests — as laid out in our own amicus brief, among others — was quite strong. By eliminating cost barriers to contraceptive care and by facilitating access to contraception in conjunction with other primary and preventive services, the guarantee can help women and couples choose a method of contraception that they will be able to use most consistently and effectively.
And that matters because decades of scientific evidence and the life experiences of millions of women and families demonstrate that effective contraceptive use helps women to prevent unplanned pregnancies and to time and space wanted ones. That, in turn, improves the health of mothers and children, promotes women’s educational, economic and social advancement, and ultimately benefits families, employers, and society.
The Decision’s Scope
The actual scope of the ruling is far from certain at this point. It does not impact women who work for employers that do not impose their religious beliefs on their workers. Nor does it apply to women who receive coverage for contraceptive care through Medicaid, nor does it affect any of the women insured through the ACA’s new health insurance marketplaces or through other insurance purchased by individuals and families in the private market. All of those women are still guaranteed coverage of contraceptives without out-of-pocket costs.
The decision should not affect the vast majority of women with employer-sponsored insurance, either, although the number of companies and employees that could be affected is impossible to quantify. Notably, the Court did not actually define what it means by a “closely held” corporation.
The Internal Revenue Service has a definition tied to the number of people collectively owning a majority interest in the company, but the Court implied a narrower definition limited to corporations controlled by a single family. Either way, corporations such as the arts and crafts chain Hobby Lobby — and the several dozen others that have brought lawsuits against this federal requirement — may employ tens of thousands of people.
Yet, it seems doubtful that large numbers of other companies will decide to identify themselves as religious and claim an objection to contraception. In fact, corporations have numerous incentives to include contraceptive coverage in their health plans — as the vast majority already did, even before the federal requirement — including potential cost-savings from unplanned pregnancies averted, better employee productivity along with reduced leave time and turnover, and avoiding negative fallout among their employees and customers. After all, in everyday life, contraception is far from controversial: More than 99 percent of women aged 15–44 who have ever had sexual intercourse have used at least one contraceptive method.
Policy Makers’ Response
Also unclear at this point is how federal policy makers will respond to the Court’s decision, and whether they will take steps to mitigate the harm to women and families. Justice Alito (in writing for the majority) and Justice Kennedy (in his concurrence) both emphasized that there are other ways the government could ensure contraceptive coverage that would be less objectionable to these companies.
Specifically, they both zeroed in on the fact that the Obama administration has already established an “accommodation” for nonprofit organizations — such as universities, hospitals, and social relief agencies — that object to contraception on religious grounds.
That arrangement, established through regulations in July 2013, is designed to ensure that employees of these organizations have seamless coverage of contraceptive care without out-of-pocket costs. (This is separate from the complete exemption given to a narrow group of religious employers closely tied to houses of worship).
This accommodation itself is now the subject of more than 50 separate legal challenges, but in recent weeks two important decisions in the Administration’s favor, handed down by Courts of Appeal in the Sixth and Seventh Circuits, have provided support for the Administration’s approach, which essentially protects health plan coverage while enabling employers that object to coverage on religious grounds to take themselves out of the picture entirely, so that the plans act directly in accordance with federal law rather than through their employer agreement. It seems increasingly certain that the Court will decide the accommodation question during the next term.
The Obama Administration has stated that it “will work with Congress to make sure that any women affected by this decision will still have the same coverage of vital health services as everyone else.” Numerous advocacy groups and members of Congress supportive of contraceptive access have similarly declared that they will press for a legislative solution to protect employees and their family members from their employers’ religious objections, although details about what such a solution might entail have not yet been made public.
New law—assuming it is even possible, given the current political climate—would be the most certain and lasting way to address the problems that the Court has created. In the meantime, the decision is certain to be fodder for politicians of all parties in the fall elections.
In the short term, the most obvious path to mitigate the decision’s harm is for the Obama Administration to follow the Court’s suggestion and expand the existing accommodation to closely held for-profit corporations that assert a religious objection to some or all contraceptive services and methods. Yet, that accommodation can only limit the harm to the extent that it actually works in practice.
To date, there has been no publicly available information about how many nonprofit organizations are making use of the accommodation, how many employees and family members are affected, or whether third-party insurers and administrators are appropriately complying with their obligations. Indeed, there is no obligation under the federal rules for this sort of information to be reported to federal or state regulators.
Therefore, it is incumbent on the Administration to add requirements to ensure appropriate notice whenever the accommodation is used and to collect information about who is affected. That transparency would allow for appropriate oversight and enforcement, and provide important information to the current and potential employees and customers of objecting employers.
It would also enable lawmakers, the courts, the media and the public to gauge whether this arrangement is working as intended, among the nonprofit organizations currently taking advantage of it and any for-profit corporations that may be given that option going forward.