Hobby Lobby case has little impact on ACA

Supreme Court Justices today will hear oral arguments in Sebelius v. Hobby Lobby Stores Inc. and Conestoga Wood Specialties Corp. v. Sebelius, in which the for-profit employers say they should be allowed to refuse to offer their workers no-cost contraceptive coverage-which is guaranteed by the Affordable Care Act (ACA)-based on the company owners' religious beliefs.

Background:In certain situations, the Obama administration has permitted religiously affiliated, not-for-profit employers a workaround that places the mandate on the organizations’ health insurers rather than the employers themselves to offer and fund the workers’ no-cost contraceptive coverage separately. But a for-profit company like Hobby Lobby does not qualify for the workaround.

The Issue For Insurers: Some wonder if a ruling in favor of Hobby Lobby will create a slippery slope, in which insurers will be picking up the tab on contraceptives for all types of employers.

Stuart Gerson, senior partner of EpsteinBeckerGreen, and former acting U.S. Attorney General under President George H.W. Bush, says a point of discussion today will be an assessment of the burden on Hobby Lobby in providing health coverage that includes no-cost contraceptives. The administration will argue that the burden is slight.

Although he doesn’t have a prediction on how the court will rule later in the spring or early summer, Gerson says the burden does seem small because ultimately the individual employees of Hobby Lobby will decide for themselves whether to obtain and use contraceptives.

While ACA guarantees no-cost access to most contraceptive services, the companies object to the emergency contraceptives known as Plan B and Ella as well as two types of intrauterine devices. Company owners believe the therapies are the equivalent to abortion, which violates their deeply held religious convictions.

Any Supreme Court ruling has national impact, but Gerson says the decision on the case won’t significantly disrupt health reform either way.

“I know there are people out there wringing their hands [about the case], and others are celebrating that a victory for Hobby Lobby will spell doom for the Affordable Care Act, but I see no reasonable basis to accept such an argument,” he says. “This is an outlier issue. It’s profoundly important to the people involved in it-I don’t belittle that. But the rest of the Affordable Care Act is going to be unharmed.”

He also says the economic impact is small. The outcome of the case will not materially affect employers’ decisions to offer health insurance or increase the numbers of the uninsured.

NEXT: Do corporations have religious freedom? >>>

Another point the court will examine is whether it must differentiate a for-profit, privately held entity-while considering the proprietors' strong religious orientation-from a not-for-profit, religiously affiliated entity. The ACA workaround for religiously affiliated employers is seen by the plaintiffs as setting a precedent.

“The fundamental issue is, under the governance of the Religious Freedom Restoration Act of 1993, whether that kind of company enjoys the same protection as a not-for-profit, cause-oriented entity,” Gerson says. “A lot of people liken this to the issue that was in the Citizens United v. Federal Election Commission case.”

In the Citizens United case from 2010, the court held that the First Amendment does not allow the government to restrict political independent expenditures by corporations. He says the case examined a company’s right of free speech, while today’s Hobby Lobby case examines the corporate entity’s right of religious freedom.

“I don’t see a reason in the law to distinguish under the Religious Freedom Act a closely-held for-profit from a not-for-profit entity,” he says. “Both can have deeply held beliefs that are projected into their policies. That said, that really doesn’t decide the case.”

Gerson says the case will likely be decided on the burden the ACA provision imposes on the corporations. The high court is expected to issue its ruling in June.

Related links:

C-SPAN video reaction on the steps of the court on 3-25-14

More Coverage:

Administrative burden for insurers related to the contraceptive workaround