Hunton Employment & Labor Perspectives

On Wednesday the Supreme Court agreed to hear two cases involving religious objections made by corporations to a provision of the 2010 Patient Protection and Affordable Care Act (the “Affordable Care Act”), which requires employers to provide health insurance for employees that covers contraceptives.  The central issue in both cases is whether a secular for-profit corporation may be exempt from complying with the contraception mandate under the Constitution because of the owner’s religious views.

The Supreme Court took up the issue after the 10th and 3rd Circuits issued differing opinions on the matter.  In Hobby Lobby Stores, Inc. v. Sebelius, the 10th Circuit held that the retail arts and crafts chain, which is owned by a Christian family, was exempt from the contraception mandate under the 1993 Religious Freedom Restoration Act.  The court also relied in part on the Supreme Court’s recent decision in Citizens United v. Federal Election Comm’n, equating a corporation’s right to free political expression with the right to free expression of religion.  In Conestoga Wood Specialties v. Sec’y of U.S. Dep’t of Health and Human Servs., the 3rd Circuit held that a cabinet company owned by a Mennonite family had to comply with the contraception mandate in the Affordable Care Act.  The court held that secular for-profit corporations could not exercise religion and thus, were not entitled to an exemption.

In both cases, the plaintiffs are willing to offer most of the contraceptives that the Affordable Care Act requires, but object to certain products that prevent implantation of a fertilized egg, specifically, intrauterine devices (“IUDs”) and the emergency contraceptives commonly known as Plan B and Ella.  The consequence of non-compliance for each of the plaintiffs consists of a regulatory tax of $100 per day for each employee.

Regardless of how the Supreme Court rules, its decision will affect what is required of employer health care plans and could alter approach corporations take in implementing the requirements and policies spelled out in the Affordable Care Act.