Supreme Court Appears Divided in ACA Contraceptive Coverage Case

On Tuesday, the U.S. Supreme Court justices appeared divided during oral arguments over whether businesses owned by individuals who oppose contraception on religious grounds should be exempt from the federal contraceptive coverage rules, Reuters reports (Hurley/Biskupic, Reuters, 3/25).

Background

The contraceptive coverage rules, which are being implemented under the Affordable Care Act, 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.

Legal Challenge

The case before the high court involves 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 (California Healthline, 11/27/13).

According to CQ Roll Call, the justices will have to examine four central questions in the case. First they must consider the threshold question of whether companies are entitled to protections under the 1993 Religious Freedom Restoration Act. If yes, they will consider 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 (Gramlich, CQ Roll Call, 3/25).

Justices Split

The justices' comments and questioning on Tuesday left "very little doubt" that the liberal and conservative justices will split 4-4 for and against the contraceptive coverage rules, according to SCOTUSblog (Denniston, SCOTUSblog, 3/25).

As such, the deciding vote in the cases is likely Justice Anthony Kennedy, who "asked questions helpful to both sides," the New York Times reports.

The justices at least appeared "ready to accept" the idea that some for-profit companies can base claims on religious freedom, according to the Times. Their divide came on the issues of whether the particular claims before them held merit.

The court will likely release its opinion in June.

Companies' Arguments

Justice Sonia Sotomayor questioned attorney Paul Clement, who represented the companies, about what other medical services employers might refuse to cover if they are permitted on religious grounds to object to providing birth control. Justice Elena Kagan noted that if corporations could object to what they consider morally objectionable treatments, "everything would be piecemeal, and nothing would be uniform." She suggested that under Clement's reasoning, employers could raise religious objections to laws on child labor, sexual discrimination, family leave and minimum wage (Liptak, New York Times, 3/25).

Clement argued that courts could decide the legitimacy of any such claims. He noted that on the contraceptive coverage issue, the government already has allowed a number of exemptions to the federal rules (Bravin, Wall Street Journal, 3/25).

Sotomayor and Kagan also pointed out that companies that object to providing contraceptive coverage could elect not to offer any health coverage and pay the penalty for not providing employer-sponsored health insurance under the ACA (SCOTUSblog, 3/25). Kennedy also seemed skeptical that the companies were burdened by the requirement, as they could decline to offer health insurance coverage (New York Times, 3/25).

However, Clement argued that Hobby Lobby would sustain serious harms if it did not offer insurance, such as difficulty attracting employees.

Kennedy also pressed Clement on whether the rights of the employer should trump employees' rights. "The employee may not agree with these religious beliefs of the employer," Kennedy said (Wall Street Journal, 3/25).

Government's Arguments

In arguing in support of the contraceptive coverage rules, Solicitor General Don Verrilli refuted assertions by Chief Justice John Roberts and Justice Samuel Alito that the government had already allowed many exceptions to the contraceptive coverage requirement, including churches, "grandfathered" health plans and religiously affiliated not-for-profits. Verrilli said that churches have always received special treatment, that the number of grandfathered plans is diminishing and that employees of the not-for-profits are still receiving the coverage without their employers contributing to it directly.

Meanwhile, Kennedy said that under the government's legal reasoning, a company "could be forced in principle to pay for abortions." Verrilli replied that there are laws against that, but Kennedy persisted that Verrilli's "reasoning would permit that" (Barnes, Washington Post, 3/25).

On the issue of whether a ruling in favor of the companies would open the floodgates for other religious exemptions, Roberts said the high court could avoid that by issuing a narrow ruling limited to closely held corporations, a view that Kennedy and Alito "seemed to share," according to Reuters (Reuters, 3/25).