SCOTUS: Some Employers Exempt From ACA’s Contraception Mandate

On Monday, the U.S. Supreme Court in a 5-4 decision ruled that closely held companies can claim a religious exemption from the Affordable Care Act's requirement that they offer birth control coverage in their employer health plans, Bloomberg reports (Stohr, Bloomberg, 6/30).

The majority opinion, by Justice Samuel Alito, said that the Obama administration had failed to demonstrate that the federal contraceptive coverage rules are the "least restrictive means of advancing its interest" in offering women no-copay birth control coverage (Bassett/Reilly, Huffington Post, 6/30).

Alito was joined in the majority opinion by Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Anthony Kennedy. Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented (Bloomberg, 6/30).

Background on Case

The ACA's contraceptive coverage rules require most for-profit, private businesses to offer contraceptive coverage in their employer-sponsored health plans. Houses of worship are exempt from the requirement, and religiously affiliated not-for-profits are eligible for an accommodation that ensures they do not have to pay for or directly provide the coverage to their employees.

The Supreme Court case involved two corporations:

• Hobby Lobby, an arts-and-crafts retail chain; and
• Conestoga Wood Specialties, a cabinet maker.

The owners of both companies oppose the use of intrauterine devices and emergency contraceptives, which they claim are tantamount to abortifacients, and thus object to offering comprehensive contraceptive coverage to their employees.

The justices examined four central questions in the case. First they considered the threshold question of whether companies are entitled to protections under the 1993 Religious Freedom Restoration Act. They then considered whether the companies are substantially burdened by the federal contraceptive coverage rules; whether the rules represent a "compelling" government interest; and, if they do, whether they are executed in the "least restrictive" way of accomplishing that interest (California Healthline, 3/26)

Alito's Opinion

In the majority opinion, Alito said that RFRA does not allow the federal government to require companies to provide coverage for contraceptives that company owners believe are tantamount to abortion (Carlson, Modern Healthcare, 6/30).

Alito said that the Obama administration failed to demonstrate that the rule was the "least restrictive" way to achieve the law's goals (SCOTUS blog, 6/30). 

Alito said that protecting the right of such organizations "protects the religious liberty of the humans who own and control those companies" (Bloomberg, 6/30). He said that the government could ensure women had access to contraceptives either by paying for the coverage itself or by extending to eligible for-profit companies the same accommodation it offers religiously affiliated not-for-profits (Sherman, Associated Press,  6/30).

However, Alito also restricted the decision, ruling that the exemption applies only to "closely-held organizations," which are defined by IRS as companies in which five or fewer individuals own a majority of the company's stock (Kliff, Vox, 6/30).

In addition, Alito wrote that the decision was limited to contraceptives and "should not be understood to hold that an insurance-coverage mandate must necessarily fall if it conflicts with an employer's religious beliefs" (Associated Press, 6/30).

The decision does not apply to challenges filed by several not-for-profit organizations (Modern Healthcare, 6/30).

Ginsburg's Dissent

In her dissent, Ginsberg argued that the contraception coverage requirement is vital to women's health and reproductive freedom (Liptak, New York Times, 6/30).

Ginsburg also argued that Congress never intended for for-profit corporations to receive religious-based exemptions. If it had, "a clarion statement to that effect likely would have been made in the legislation," she said (Huffington Post, 6/30).

Reading aloud from the bench, Ginsburg noted that the majority opinion could be "potentially sweeping" because it minimized the government's interest in mandating uniform compliance from employers to federal laws.

She added, "And it discounts the disadvantages religion-based opt outs impose on others, in particular, employees who do not share their employer's religious beliefs" (Associated Press, 6/30).