|Earlier today, the U.S. Supreme Court made a decision in the case of Burwell v. Hobby Lobby, ruling 5-4 that the requirement in the Patient Protection and Affordable Care Act (PPACA) for closely held for-profit employers to provide contraceptive services violates the Religious Freedom Restoration Act of 1993 (RFRA). To provide some background, the PPACA mandates that non-grandfathered group health plans must cover women’s preventive services, including FDA-approved contraceptives, without any cost-sharing for the participant. On the contraceptive services, there is a limited exception for religious employers and their affiliates. However, that exception does not extend to private for-profit employers.In this case, various for-profit employers (including Hobby Lobby Stores and Conestoga Wood Specialties Corporation), based on their owners’ sincere religious beliefs, objected to covering some or all contraceptive services mandated by PPACA. The main issue examined by the court was whether profit-making companies can be regarded as “individuals” who are able to hold and practice their own religious convictions — a privilege safeguarded by the RFRA. To put it simply, the RFRA generally forbids the government from heavily impinging upon a person’s faith, unless the government can prove that such infringement serves a vital state interest and is the most minimal restriction in advancing that interest.
The U.S. Supreme Court determined that the government did not provide enough evidence to show that requiring contraceptive coverage is the least restrictive way to ensure free access to birth control. Therefore, closely held for-profit companies are not obligated to provide contraceptive coverage without cost sharing. It is important to note that this ruling only applies to the contraceptive mandate and should not be interpreted to mean that all insurance mandates (such as those for blood transfusions or vaccinations) automatically fail if they conflict with an employer’s religious beliefs.
In the end, the decision specifically pertains to “closely held corporations,” which are typically defined by state corporate laws and generally consist of privately owned companies controlled by a single family or a small group of investors, and whose stocks are not traded publicly. Thus, the ruling does not appear to apply broadly to other for-profit companies, such as publicly traded corporations; rather, it applies only to those that are closely held by families and limited investors with sincere religious beliefs. It remains unclear whether closely held corporations will be required to certify their religious objections; future guidance will hopefully address that issue.
NFP Benefits Compliance will continue to monitor these developments and will provide additional information in Compliance Corner, our biweekly benefits compliance newsletter.
Frequently Asked Questions
What was the main decision in the Burwell v. Hobby Lobby case?
The U.S. Supreme Court ruled 5-4 that the requirement in the Patient Protection and Affordable Care Act (PPACA) for closely held for-profit employers to provide contraceptive services violates the Religious Freedom Restoration Act of 1993 (RFRA).
What does the Patient Protection and Affordable Care Act (PPACA) mandate in relation to contraceptive services?
The PPACA mandates that non-grandfathered group health plans cover women’s preventive services, which includes FDA-approved contraceptives, without any cost-sharing for the participant. There’s a limited exception for religious employers and their affiliates, but it doesn’t extend to private for-profit employers.
On what grounds did Hobby Lobby Stores and Conestoga Wood Specialties Corporation object to the PPACA’s mandate on contraceptive services?
These for-profit employers objected based on their owners’ sincere religious beliefs against covering some or all of the contraceptive services mandated by the PPACA.
How did the court view the concept of profit-making companies in terms of holding and practicing religious convictions?
The main issue the court examined was whether profit-making companies can be considered as “individuals” capable of holding and practicing their own religious convictions, a privilege protected by the RFRA.
To whom exactly does the Supreme Court’s decision apply?
The decision specifically applies to “closely held corporations.” These are usually private companies controlled by a single family or a small group of investors and don’t have publicly traded stocks. It doesn’t apply broadly to all for-profit companies like publicly traded corporations. It’s primarily for those closely held by families and limited investors with genuine religious beliefs.