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Supreme Court Voids ACA's Contraceptive Mandate

    Client Alerts
  • July 04, 2014
In perhaps its most anticipated decision of the current term, on Monday the U.S. Supreme Court held 5-4 that the Affordable Care Act’s employer contraceptive mandate violates the religious rights of owners of closely-held private corporations. Burwell v. Hobby Lobby involved a challenge to DHHS rules issued under ACA. The plaintiffs claimed that funding certain contraceptive methods violated religious principles of their owners. The Court majority found that the contraceptive mandate was contrary to the Religious Freedom Restoration Act.
 
The decision concludes for the first time that private corporations can exercise religious beliefs. However, the decision went to great lengths to narrow its applicability to the specific law in question. It does not apply to publically-held companies or private companies with dispersed ownership. The Court stated that RFRA will only supplant other legislation where there is no compelling governmental interest, or if the law in questions is not the least restrictive means of furthering that interest For example, the Court noted that employer objections on religious grounds to paying for blood transfusions or vaccinations would not meet this test.
 
The majority decision also directly addressed the question of whether corporate religious beliefs overcome anti-discrimination laws. Some commentators feared that a decision for the plaintiffs would open the door to claims by companies that laws prohibiting discrimination in employment or providing services to the public based on gender, sexual orientation or other grounds would be subject to legal challenge. Anticipating these claims, the Court directly stated that such challenges would not meet the standard required for a religious exception under this decision.
 
Practically, this decision may not have much impact. DHHS has already devised a method for employees of companies claiming a religious exception to the contraceptive mandate to obtain coverage without the employer directly paying for it. The long-term importance of this case may be the recognition of exercise of corporate religious beliefs. Future plaintiffs will surely attempt to use this precedent to challenge laws and other legal requirements in ways not directly anticipated by the Supreme Court.