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Supreme Court Says For-Profits Can Avoid ACA Contraception Mandate

The Supreme Court ruled earlier this week 5-4 in favor of Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. in the case of Burwell v. Hobby Lobby (formerly named Sebelius v. Hobby Lobby). The case was the strongest legal challenge to the Affordable Care Act since 2012.

The case concerned the Department of Health and Human Services contraception mandate, which mandated that employers provide certain forms of contraception at no cost to their employees. Hobby Lobby and Conestoga both previously claimed that the contraception mandate violated their religious freedom because both companies believe that certain forms of contraception induce abortion, which violates the religious convictions of the companies’ owners.

Amongst other things, the Court found that:

  1. For-profit corporations are persons protected under the Religious Freedom Restoration Act (“RFRA”);
  2. Closely held for-profit corporations are capable of engaging in an exercise of religion protected by the RFRA; and
  3. The Department of Health and Human Services contraception mandate substantially burdens the exercise of religion.

Justice Samuel Alito wrote in his majority opinion:

“This decision concerns only the contraceptive mandate and should not be understood to hold that all insurance-coverage mandates e.g., for vaccinations or blood transfusions, must necessarily fall if they conflict with an employer’s religious beliefs. Nor does it provide a shield for employers who might cloak illegal discrimination as a religious practice.”

Therefore, while many consider the decision a victory for employers and religious freedom activists, it is important o remember that this decision is strictly limited to closely-held for-profit corporations, not non-profits, and also limited to the issue of the contraception mandate, not other medical practices.

For additional information about, please contact attorney Steve Theising at stheising@KDDK.com or (812) 423-3183.

About the Author

Steve Theising

Steven M. Theising, an attorney at Kahn, Dees, Donovan & Kahn, LLP (KDDK), in Evansville, Indiana, practices primarily in the areas of business, construction, real estate, tax, and collection and creditors’ rights law. Steve utilizes his accounting and financial background to provide both legal and practical business analysis in negotiating, resolving and closing business, construction and real estate transactions and disputes. He also assists clients with addressing and resolving environmental and estate planning issues.