How Does the Hobby Lobby Decision Affect My Business?

The Supreme Court recently announced its decision in the landmark Hobby Lobby case, where Hobby Lobby and several other for-profit corporations argued that the companies should not be legally required to provide certain health insurance coverage options which do not comport with the owners' religious beliefs. The Hobby Lobby decision has been touted by some as a significant win for religious freedom and decried by others as a setback for women's rights. Regardless which side of the fence you are on, the question for most business owners is how the decision affects their businesses.

What was the underlying issue in the Hobby Lobby case?

The legal requirement in question came from the Affordable Care Act, which is usually referred to as Obamacare, and generally requires nonexempt employers to provide coverage for the 20 contraceptive methods approved by the U.S. Food and Drug Administration. The approved contraception methods include 4 methods which effectively prevent an already fertilized egg from developing further. One of these 4 methods is the so-called morning after pill. Hobby Lobby's small group of owners essentially argued that the morning after pill amounts to abortion, which squarely conflicts with their Christian beliefs.

Many employers were already exempted

Religious employers, such as churches, were already exempt from the contraceptive mandate portion of Obamacare. Other religious nonprofit organizations with religious objections to contraception were also exempted. (Those employers still had to comply with the other portions of Obamacare as applicable.)

The exempt religious organizations' health insurance providers had to exclude contraceptive coverage from the employers' plans and give employees the option to make separate payments for contraceptive services. The employers could not be required to participate in cost sharing for such services.

The exemption is now extended to closely held for-profit corporations

The Supreme Court decision extends the exemption to closely held corporations, holding that the Obamacare requirement violates the Religious Freedom Restoration Act of 1993 (the RFRA). The court based its decision, in part, on the premise that closely held corporations are persons within the context of the RFRA. Making such companies comply with the contraception mandate would leave those business owners with a difficult choice: “give up the right to seek judicial protection of their religious liberty or forgo the benefits of operating as corporations.”

Because the government, in its defense, failed to prove the contraceptive mandate was the least restrictive means of accomplishing its purpose, the court found that requiring a business owner to either give up religious freedom or give up the benefits of operating as a corporation was patently – and unlawfully – unfair.

The bottom line is that the majority of Supreme Court justices voted to protect the religious liberty of the humans who own and control closely held corporations.

What if I object to the Affordable Care Act for other reasons?

The Supreme Court's decision in the Hobby Lobby case specifically addresses the Christian belief that life begins at conception and any contraceptive method which terminates life contradicts that belief. Under the court's logic, other reasons to object on religious grounds may exist. You would have to prove that a requirement in Obamacare violates your sincerely held religious beliefs and that the government's purpose can be accomplished by less restrictive means.

For assistance making sure your business is meeting its compliance requirements under the Affordable Care Act or other legislation, call our experienced  Bryan-College Station, Texas business law attorneys  at Peterson Law Group at 979-703-7014” target=”_blank”>979-703-7014, or fill out our online contact form. Our attorneys analyze legal requirements for your business and provide sound advice for compliance, including any alternatives which may apply to your situation.