Contraception Ruling’s Impact Seen as Limited

July 03 - Posted at 2:01 PM Tagged: , , , , , , , , ,

In the recent U.S. Supreme Court’s ruling in Burwell vs. Hobby Lobby, it was ruled that closely held for-profit companies have the right to refuse to offer insurance coverage for specific birth control methods if they conflict with the owner’s religious beliefs. Many benefits attorneys expect the impact of this ruling to limited for employers—despite what some political reps might suggest.


The June 30, 2014 ruling pertains to the Affordable Care Act (ACA) mandate that employers who provide medical coverage to employees must provide contraceptive coverage to female full-time employees with no cost-sharing. The U.S. Department of Health and Human Services (HHS) regulations had set forth an expansive interpretation of contraceptive coverage, including so-called “morning-after pills” and intrauterine devices (IUDs).


The ruling was limited to closely held companies (those with a limited number of shareholders) whose owners hold sincere religious beliefs, such as the firms that sued HHS in this case: Hobby Lobby, an arts and crafts chain that says it is run on biblical principles, and Conestoga Wood Specialties, a Pennsylvania cabinet-making company owned by a Mennonite family.


Few Employers Affected

“The Hobby Lobby ruling has a direct impact on a relatively small number of employers—as a percentage of total employers across the country there are very few that can be considered faith-based employers,” advised a recent alert from a law firm.


 “Employers who do not have objections to the mandate are most likely able to continue with their plans without any changes merely because of this decision,” concurred another benefits attorney. “Employers who wish to take advantage of the ruling may want to amend their plans in order to make them clear about what is and is not covered.”


Why have there been apparently overwrought reactions to the ruling? Supreme Court decisions implicating any of the Affordable Care Act’s provisions are routinely  used both by proponents and opponents of the act as evidence of the correctness of their position. Their positions are then picked up by and amplified in media coverage, often resulting in confusion on the part of the public.


Contraceptives Only

The opinion “seemed to limit itself to the contraceptive mandate only, likely quelling the concerns of many who argued a broader decision may put in jeopardy other items typically covered under group plans, such as vaccinations and blood transfusions,” according to a post by attorneys at Fisher & Phillips. In addition, the court warned that its decision should not be interpreted to provide a shield to employers to cover up illegal discrimination under the appearance of claimed religious beliefs (for example, companies claiming to object, on religious grounds, to same-sex marriage).


This decision on contraceptives likely will not seem to extend to larger corporations with diverse ownership interests. The court noted the difficulty of determining the religious beliefs of, for example, a large publicly traded corporation, and pointed out that the corporations in this case were all closely held corporations, each owned and controlled by a single family, with undisputed sincere religious beliefs.


Attorneys expect that “there may be relatively few employers that fit the exemption created by the court’s decision,” and that “HHS will likely draft new regulations to comply with [the] decision, and it remains to be seen whether new plaintiffs will challenge the contraception requirements or other requirements under the ACA on similar grounds.”


The Administration’s Options

The Supreme Court decision cited the federal Religious Freedom Restoration Act (RFRA) requirement that any laws that substantially burden a person’s exercise of religion must be justified by a compelling governmental interest and be the least restrictive approach to furthering the governmental interest. The majority opinion, written by Justice Samuel Alito and signed by three other justices, suggested that one “least restrictive” approach would be for the government to directly pay for contraceptives when an employer has religious objections to providing them.


A concurring opinion by Justice Anthony Kennedy suggested that the administration extend an accommodation already made available to religiously affiliated nonprofit organizations more broadly to private employers who claim that purchasing insurance that covers contraception, or certain types of contraception, would violate their religious beliefs.


The Hobby Lobby decision should stand as a reminder that while there may be differences of opinion about specific rules and requirements under the ACA, and some of those differences may be decided against the government, the law itself is not going away. Employers need to continue to monitor new developments and implement strategies for complying with the ACA.

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