Last week the Supreme Court ruled, 5-4, in Burwell v. Hobby Lobby Stores, Inc., et al., that closely held corporations cannot be required to provide contraceptive coverage as mandated by the Affordable Care Act (ACA) because the requirement violates the Religious Freedom Restoration Act of 1993 (RFRA).  At issue in the case were regulations promulgated by the Department of Health and Human Services under the ACA requiring group health plans to provide preventive care for women without cost-sharing.  The regulations specified 20 FDA approved contraceptive methods, including four methods  that may have the effect of preventing implantation of a fertilized egg.  The Hobby Lobby appellants, a Christian- owned arts and crafts chain store, and a wood specialty store owned by a Mennonite family, challenged the contraceptive mandate on the grounds that that the mandate violated their religious freedom under the RFRA by requiring them to pay for methods of contraception that they believe are morally objectionable.  The Court held, first, that closely held corporations are “persons” for purposes of the RFRA. The Court further held that the ACA’s significant penalties for failure to comply with the contraceptive mandate constituted a substantial burden on the employers, and that the government had failed to demonstrate that the contraceptive mandate was the least restrictive method of advancing its interest in guaranteeing access to contraceptive coverage without cost-sharing, as required by the RFRA.  The Court noted that HHS provided a regulatory accommodation for religious non-profits, but had provided no meaningful rationale for failing to extend the same accommodation to for-profit, closely held corporations that have religious objections to providing some or all methods of contraception. The regulatory accommodation provided in the HHS regulations provide that a religious non-profit (such as schools, hospitals, colleges) that self-certifies its objection to providing the coverage does not have to contract for or pay for contraceptive coverage – the coverage is then required to be provided by that employer’s insurer or third-party administrator.  See our article “Supreme Court Rules Closely Held Companies Not Subject to Contraceptive Coverage Mandate of Health Care Reform Law” for additional information.   

On July 3, in Wheaton College v. Burwell, Et al., the Supreme Court issued an emergency injunction to Wheaton College, a Christian college in Illinois, holding that the college could not be required to fill out the self-certification forms required by the HHS regulations to qualify for the religious non-profit accommodation pending full resolution of their lawsuit against the government. The Court noted that the insurer or third party administrator of an objecting religious non-profit was obligated to provide the contraceptive coverage regardless of whether the certification form was filed as provided in the regulations.  The ruling was sharply criticized by the three female Supreme Court justices in a dissent authored by Justice Sotomayor stating that the Wheaton College ruling “did not square” with the Hobby Lobby decision which endorsed the regulatory accommodation provided to religious non-profits and suggested that it could easily be extended to closely held for-profit corporations with religious objections.   

The Obama Administration is reported to be weighing options that would provide contraceptive coverage to all American women.  Jackson Lewis is closely tracking further developments around Hobby Lobby and Wheaton College and related ACA requirements.